A LWAYS L OCAL Eric Lee Eric Lemay Léa Leduc Berryman Sharon Luk Sarah MacKay

A GENDA The product Marketing Profile Marketing Mix Financial Analysis Foreign Entry Implementation

T HE P RODUCT : A LWAYS L OCAL New Add on for Rogers Wireless plans New SIM card technology Two Canadian phone numbers on one SIM Card Double the minutes on customer’s existing plan Local and long distance minutes

SWOT A NALYSIS Strengths Unique Technology Low price Customers do not have to change their phone Weaknesses Educate consumers Low profit margin product Small and specific niche market Product cannibalism of market plans Opportunities Consumer spending on cell phones is expected to grow 30% by 2015 License technology to other countries Unsaturated market - 75% of Canadians own cell phones Threats Required effort from consumer Competitors that offer dual SIM card technology Counter fit technology

M ARKET P ROFILE Market Profile Canadian wireless telecommunications services valued at$15 billion dollars 21.5 million subscribers Average of 400 minutes of monthly talk Growth in demand/value: Mobile subscription has risen 10.8% annually between 2003 and % of Canadian households own only cell phones (20% increase in 2 years) 75% of Canadian households have a mobile subscription Saturation point has not been reached Euromonitor. (2009 January 20). Consumer Lifestyles. Retrieved October 25, 2009, from Global Market Information.

M ARKET P ROFILE Direct competitors Market Share Rogers Communications : 37% BCE inc. : 30.3% Telus Corporation : 28.6% Indirect competitors Fixed-line telephony (traditional landlines) Voice over Internet Protocol (VoIP) E.g. Skype Datamonitor. (2009 July). Wireless Telecommunications services in Canada – Industry. Retrieved October 22, 2009.

C ONSUMER P ROFILE Target market People who make a lot of long distance calls 1. University students Spend 81% of their disposable income on communications 73% of cell phone owners are in age group High spenders: Cell phone bill between $41 to 50 monthly To compare, an average bill is under $36 monthly Supported by baby boomers (parents) 57.5% do not pay for their own cell phone bills PMB Online. (2009a Spring). Business Travel. Retrieved October 30, 2009, from Print Measurement Bureau. PMB Online. (2009c Fall), Occupation. Retrieved October 30, 2009, from Print Measurement Bureau.

CONSUMER PROFILE 2. Business professionals Represent 7.4% of cell phone users High spenders: 43% spend between $36 to 50 per month on cell phones 20% of Canadians between travel on business 5% travel over 5 times a year

C ONSUMER P ROFILE Amount of Canadians in University Amount of out of province students Total Canadian out of province students 978,480 (Statistics Canada 2009b) 12%117, Number of CanadiansBusiness travel over 5 times a year Total frequent business travelers 33,843,873 (Statistics Canada 2009a) 5% (PMB Online 2009c) 1,692, Students and Commuters Rogers Market Share Canadians who have cell phones Total target market 1,809, % ( PMB Online 2009b) 61.30% (PMB Online 2009b) 410,438

MARKETING MIX: PRICE $45 monthly service fee with Canadian Long distance Saver 125 $45 monthly service fee with AlwaysLocal Cost of the add-on$15$5 Short distance minutes Long distance minutes Monthly bill $60 $50 Cost per long distance minute $0.12$0.02 Cost per additional long distance minute $0.35

M ARKETING MIX : P RODUCT High switching costs Low switching costs Expensive Cheap Frequent traveler Infrequent traveler Long distance use Short distance use AlwaysLocal Nationwide 30 (Telus) 200 Canadian Long distance (Bell) My5 Local calls (Rogers) Product Positioning map

D ISTRIBUTION Sell directly to customers Online Purchase as an “Add-on” to existing plans Pick up SIM card in Rogers retail stores In-stores Product offered in all Rogers stores (35 000)

PROMOTION – COMMUNICATION FRAMEWORK Framework consisting of communication guiding principles to consistently and effectively convey key messages to potential and existing AlwaysLocal customers through the various promotional initiatives. PrincipleDescription Provides new information The launch of a new product or concept especially requires a concise and simple description to inform the customer of its benefits; a more thorough explanation should always be readily available (in-store and online) Promotes the benefits in a persuasive manner The various advertisements and promotions need to emphasize the benefits and tailored in a way to get the best response from the target audiences (i.e. students, business travelers, etc.) Explains the difference between AlwaysLocal and similar long distance plans Rogers is required to stress that this new feature allows a customer to call to/from two specific destinations and not everywhere in the world, but for a lower price; this differentiates this feature to long- distance plans. Emphasizes the minimal efforts for the customer It is essential to highlight the low switching costs and the simple feature-adding process to create a favorable perspective of this new concept.

PROMOTION – MEDIA CHANNELS TELEVISION Emphasize corporate reputation i.e. Best signal, GSM Network, Largest Canadian network Introduce new phones/plans AlwaysLocal – Decision factors Specific/small target market Does not constitute Rogers core value propositions Relatively low potential profit margins Essential to keep advertising costs low to maintain profitability Conclusion Too expensive to advertise AlwaysLocal using television advertisements Not suitable to solely advertise a feature with low profit margins

PROMOTION Advertising accounts for 11% of revenue Promotional goals Educate about the new concept Promote the feature to Rogers/non-Rogers customers Retain existing AlwaysLocal users Remind target audience of corporate reputation

PROMOTION – MEDIA CHANNELS RADIO Hard to introduce a new technology and concept over a short period of time Not a conventional corporate media channel No visual element to effectively explain the function of the SIM card Does not constitute an effective media channel to target a specific audience AlwaysLocal target market is specific Conclusion Radio is not yet an effective promotional media channel for AlwaysLocal Potentially rewarding once AlwaysLocal concept is mainstream

PROMOTION – MEDIA CHANNELS NEWSPAPER/MAGAZINE One-time exposure; lack of sustainable exposure Not a conventional corporate media channel Does not constitute an effective media channel to target a specific audience AlwaysLocal target market is specific Conclusion Newspapers and Magazines do not offer Rogers a sustainable advertising option for AlwaysLocal

PROMOTION – DIRECT MARKETING IN-STORE Promote AlwaysLocal feature through informative signage Inform the customers through face-to-face explanations and pamphlets Drive sales of the feature to new and existing Rogers customers Identify customer behaviors to offer feature to individuals with high long-distance charges INTERNET Promote the feature on the Rogers website Option to add the AlwaysLocal feature upon subscribing to all phone plans to all Rogers customers to promote new feature Tailored communiqué will be sent to all Rogers customers with high long distance charges to promote AlwaysLocal AlwaysLocal will be advertised on Facebook Essential to attract specific target markets

PROMOTION - OTHER INITIATIVES SALES PROMOTION New/existing AlwaysLocal customers can get the feature for 3 months free upon satisfying the sales promotion condition Condition: Refer 10 individuals to add the feature on their phone plan Promotion will be advertised on the Rogers website, in-store and on university/CEGEP campuses PUBLIC RELATIONS : UNIVERSITIES Gain exposure at campus events Especially at the beginning of semesters Expose feature in campus newspapers and communications i.e. Articles on how to save money as a student

B REAK E VEN A NALYSIS ($1 M TECHNOLOGY ) 92,241Subscribers ($6,278,708 in Revenue) 1.20%of Rodgers customers 22.47%of Targeted Rodgers customers 0.445%of Canadians who own a cell phone

F INANCIAL A NALYSIS Unsure about new technology costs Would include SIM card technology and cell phone software $1 million $3 million $5 million

B REAK E VEN A NALYSIS ($1 M TECHNOLOGY ) 92,241Subscribers ($6,278,708 in Revenue) 1.20%of Rodgers customers 22.47%of Targeted Rodgers customers 0.445%of Canadians who own a cell phone

B REAK E VEN A NALYSIS ($3 M TECHNOLOGY ) 125,574Subscribers ($6,278,708 in Revenue) 1.64%of Rodgers customers 30.60%of Targeted Rodgers customers 0.605%of Canadians who own a cell phone

B REAK E VEN A NALYSIS ($5 M TECHNOLOGY ) 158,908Subscribers ($6,278,708 in Revenue) 2.07%of Rodgers customers 38.72%of Targeted Rodgers customers 0.766%of Canadians who own a cell phone

F INANCIAL A NALYSIS Revenue Price Per annual Unit $ Number of total units sold Net Sales $ 12,313, Expenses: Variable Costs Price Per unit (SIM card) $ Cost of Goods Sold $ 3,078, Contribution Margin $ 9,234, Expenses: Fixed Costs Advertising Expenses $ 1,456, Cost of Technology $ 1,000, Total fixed costs $ 2,456, Profit Year 1 $ 5,322,521.27

F INANCIAL A NALYSIS Revenue Price Per annual Unit $ Number of total units sold Net Sales $ 12,313, Expenses: Variable Costs Price Per unit (SIM card) $ Cost of Goods Sold $ 3,078, Contribution Margin $ 9,234, Expenses: Fixed Costs Advertising Expenses $ 1,456, Cost of Technology $ 3,000, Total fixed costs $ 4,456, Profit Year 1 $ 3,322,521.27

F INANCIAL A NALYSIS Revenue Price Per annual Unit $ Number of total units sold Net Sales $ 12,313, Expenses: Variable Costs Price Per unit (SIM card) $ Cost of Goods Sold $ 3,078, Contribution Margin $ 9,234, Expenses: Fixed Costs Advertising Expenses $ 1,456, Cost of Technology $ 5,000, Total fixed costs $ 6,456, Profit Year 1 $ 1,322,521.27

F INANCIAL A NALYSIS : C ONCLUSION Technology is not very complicated Change SIM card formatting to roam simultaneously in two networks Ample space for another phone number since SIM cards hold address books, pictures and video Software already exist for dual SIM card phones Decide $3 Million is reasonable All break downs are profitable in the first year if Rogers upgrades over 160,000 of its existing customers Only 2.1% of their existing customers

F OREIGN E NTRY P OTENTIAL Country: Germany Extensive transportation infrastructure Protection of intellectual property Currency Entry Strategy: Licensing agreements with German firms for the new SIM card technology

IMPLEMENTATION DEVELOPMENT/DISTRIBUTION Technology facet already completed Quality control testing was completed successfully Rogers has secured distribution rights for AlwaysLocal SIM cards technology IDENTIFICATION PROCESS Instill a process to identify customer behavior in customer accounts Identify customers with high long-distance charges Automate process that will offer AlwaysLocal to customers enrolled in long- distance plans (i.e. Long-distance Saver 125) Goals Strengthen customer loyalty by helping Rogers customers save money Identify new behaviors to better direct R&D in developing new services for the new SIM card technology Timeframe: March - July

IMPLEMENTATION PRODUCT LAUNCH Planned for next back-to-school period Important spending period for students; especially non-local students Collaborate with universities to include the feature in campus publications and events Online initiatives to advertise AlwaysLocal on the website and through In-store informative signage and active selling to new and existing customers

IMPLEMENTATION PRODUCT LAUNCH Sales Promotion Advertise on campuses, online, in-store, by mail (with monthly phone bill) Create process to record referrals in respective accounts Goals Create demand Gain quick brand exposure Attract non-Rogers customers Timeframe: August to November (4 months)

B IBLIOGRAPHY Burns, Enid. (2006 August 25), Teen, College students are most active cell phone users. Retrieved November 1, 2009, from Datamonitor. (2009 July). Wireless Telecommunications services in Canada – Industry. Retrieved October 22, Euromonitor. (2009 January 20). Consumer Lifestyles. Retrieved October 25, 2009, from Global Market Information. Heller, David (2009 January 29), Grad school applications increase. Retrieved October 26, 2009, from School.Applications.Increase shtml School.Applications.Increase shtml K, Hercules. (2009 October 6), CDMA carrier Bell and Telus to launch iPhone in Canada. Retrieved October 25, 2009, from PMB Online. (2009a Spring). Business Travel. Retrieved October 30, 2009, from Print Measurement Bureau. PMB Online. (2009b Fall), Cell phones, smartphones, Hhld Organizers. Retreived October 25, 2009, from Print Measurement Bureau. PMB Online. (2009c Fall), Occupation. Retrieved October 30, 2009, from Print Measurement Bureau.