Marketing Project
How to penetrate the market with an existing product BiFri and two strong competitors through social networks.
Riga, 2009
Abstract
Our group has studied new ways of attracting customers to Bite mobile network through promoting prepaid card BiFri. The analysis includes SWOT and marketing mix, as well as competitor analysis. The image perception of Bite and BiFri brands was gained through a survey. The results were gathered and we could conclude that during the slowdown in the economy existing promotion channels were unable to attract significant amount of new clients. Therefore we suggested improving the BiFri brand by attaching a word “flying” to its image as well as distributing tangible flying items such as kites and boomerangs. The innovative idea would be able to attract new groups of customers.
Table of Contents Abstract 1 Introduction 4 About Bite Latvija 5 Methodology 6 Present situation 7 Target group 7 Positioning 7 SWOT analysis 8
Strengths 8
Weaknesses 9
Opportunities 9
Threats: 10
Conclusion of the SWOT analysis 10 Marketing mix 11
Product 11
Price 11
Place 12
Promotion 12 Innovations 13 Ansoff’s Strategic Opportunity Matrix. 14 Competitors’ analysis 14 LMT 15
Background 15
Strengths 15
Weaknesses 15
Opportunities 16
Threats 16
Information from the survey. 16 TELE2 17
Background 17
Strengths 17
Weaknesses 17
Opportunities 18
Threats 18
Information from surveys 18 Marketing strategy 19 Has Bite reached its target audience? 19
What are the expectations of the target audience? 19
What message the target audience has got from Bite? 19
What is the first association with Bite for the audience? 19 Competitive advantage. 20
Cost advantage 20
Product/ service differentiation advantage. 20
Targeted to groups. 21 BiFri launcing. 21 Brand values and message 21 Brand identity support - implementation of the flying issue in reality: 21
First idea:Use BiFri to fly 21
Second idea:Kites and a festival 22
Third idea: BiFri objects. 22
Fourth idea: BiFri as a gift 23
Fifth idea: Targeting existing groups. 23 Conclusion 25 Reference list 26 Appendices 28
Introduction
As a part of the marketing course our group had to find and research a marketing issue in an existing company and give solutions how to prevent possible problems. We chose the company Bite Latvija because in 2008 they had a brand remake and are currently promoting their new prepaid phone card BiFri. Our group members all had seen the new BiFri advertisements and were curious about the brand and its position in Latvian market.
In recent years all Latvia has witnessed how a third operator entered the mobile telecommunication market where LMT and TELE2 dominated and had the Latvian market pie sliced in just two pieces. This third operator was Bite and in 2008 it launched a new prepaid phone card and created a marketing mix targeting young customers. However, as we researched their strategy had some flaws that could be improved like appealing to the target audience through social networks
The purpose of this report is to determine how to penetrate the market with an existing product BiFri and two strong competitors through social networks. To analyze this issue we used in depth interviews with the marketing specialists from Bite Latvija and conducted a questionnaire as primary data sources and to verify the results we used literature about marketing issues as secondary data sources.
About Bite Latvija
Bite Latvija was established when Bite Lietuva, telecommunication service provider in Lithuania since 1995, has expanded to Latvia in summer 2005. Both branches had set up a Bite Group the same year which has become one of the biggest companies in the industry. Bite Group is offering “modern, high-quality and customer-friendly services” (Bite Group, n.d.). In order to accomplish that the company has a strong mission to deliver clients the best service every day, which is built on four cornerstones that service is simple and transparent, customer has the control, he can get more benefits from the money he pays and he is able to change the tariff plan anytime to suit him the best (Bite Latvija, n.d.). Then we have looked how Bite Latvija has become as competitive as it is now.
In 2005 Bite Latvija has started with prepaid card Toxic, postpaid tariff plan Bite and exclusive product in the market Bite Online, mobile service paid through internet, in order to attract first customers. First 10 outlets were opened as well. At the end of the year the company has already attracted 50 thousand customers (Bite Latvija, n.d.).
In 2006 Bite Latvija established a partnership with Vodafone and became the first and fastest broadband and mobile internet provider in Latvia through 3G system. Services had expanded to business customers and a possibility for international calls was developed as well. Bite Latvija had provided telecommunication services during the respectful event of the year the NATO summit. However, the financial year was not so successful e.g. revenues of EUR 6.7 million could not cover all the expenditures, thus EBITDA (earnings before amortization, interest and tax) were negative amounting EUR 11.7 million, while the total investment has reached EUR 30 millions in a development of the network and client service infrastructure. For example, the building of 3 new stations every week. Still this allowed to gain customer base for almost 200 thousand (Annual report, 2006).
During 2007 several innovations and improvements to the network system has given the possibility for the customers to talk with internet e.g. Skype and MSN. A new launch of Customer Care service for free has taken place as well. That year Bite Latvija was an internet connection provider for unique MTV B-Day music festival.
In 2008 Bite gains a new look and brand image with the slogan “You can more”. This year is also significant with the launch of a new prepaid card BiFri, where clients can talk and send SMS for free in Bite network. By Bite Open Art project a new all year-round museum in Pedvale was opened. JeJoue 2008 event of art organized by our school students also was sponsored by Bite Latvija that year (Bite Latvija, 2008). And most significant innovation is the expansion of the network which covers now 96% of the territory in Latvia and maintenance of quality of calls by using the newest equipment that allows building fewer stations then competitors Tele2 and LMT have.
Currently Bite Latvija is providing mobile communication services such as postpaid card Bite, prepaid card BiFri, online services Bite Online, USB modem Vodafone for PC’s, data card Mobile Connect for laptops. The quality of the service provided by Bite Latvia is admitted to be the best among current players in the market by the recent research of Public Utilities Commission, but still there are some prejudices that hinder Bite to become the market leader. (Bite Latvija, 2009).
Methodology
Our team used primary and secondary data to answer the research question Primary data was gathered using qualitative data gathering method in-depth interviews with Bite Latvija representative branding manager Edgars to focus our research question, to understand the habitat of work and to know some information that is not published on the home page. Additional information was gathered by quantitative method e.g. questionnaire which was distributed in social network websites such as draugiem.lv to observe customers attitude towards Bite Latvija and their competitors services. 50 people participated in this survey, 26 of them were male, 24 –female. The average age of the respondents was 22.4 years (Appendix 2). The company’s website and other internet sources were used to reassure the data gathered from first two methods and to add some financial data. As for secondary data Marketing course book by Perreault & McCarthy, presentations from lectures and guest lecturers was used to add theoretical background to answer the research question.
Present situation
Target group
Bite’s prepaid phone card BiFri was launched in 2008 and replaced the forerunner Toxic. Bite marketing managers decided that Toxic had exhausted its resources and had no competitive advantage. It was easier for them to start a new product than to change the existing one. The company studied the Latvian market and found a place for an inspiring new brand (Interviews, 2009).
Bite segmented the market into several categories depending on age and chose the one they would like to appeal to. The company saw a possibility to make a product that would appeal to young active persons that had a desire to be independent and seek low prices and flexible tariffs from their mobile communication company. The company decided that they would aim at young adults mainly in the age group from 16 to 35, the core group being from 19 to 25 year old. The segment is not divided between genders (Interviews, 2009). Moreover, the target group is the one who is the most flexible of the whole market. In general young people find it easier to change operators than older people who have an established routine. Still the mobile communication market in general is less flexible than most other markets, because customers are restricted with contracts with their current operators.
Positioning
Bite’s prepaid card BiFri is positioned to give open minded, spirited young adults the self belief and courage as well as the freedom to express themselves and reach for what they desire. The slogan of the brand is „Be who you want to be“. (Interviews, 2009). In addition the brand wants to emphasize on four objectives. Firstly, the brand is created to be simply transparent, supplying a very simple offer without any hidden conditions. The brand wants to seem trustable. Secondly, BiFri offers value for money. The values they offer are free calls to other BiFri users, customer care service and many other features that other operators charge a lot of money Bite includes in the price of the prepaid phone card. The third objective is to put customers in control. This is done letting the customer choose between different tariffs without charging additional fees. And the forth value Bite tries to implement into its prepaid phone card is bringing fresh experience. It is more an objective to bring innovations into the market and also corresponds with all previous objectives.
Simplifying the positioning of the brand, BiFri is a simple, value for money offering brand that emphasizes on customers satisfaction and innovation. The brand is positioned especially to appeal to the selected target group. SWOT analysis
Before evaluating the marketing strategies for the product, we should evaluate the product itself. This will be done using the SWOT analysis which is a strategic planning method that will help us to understand the strengths and weaknesses of BiFri prepaid phone card and the opportunities and threats from the external environment. The results of the analysis will provide important factors that help to evaluate whether the objectives of the venture can be reached (http://www.quickmba.com/strategy/swot/ QuickMBA SWOT Analysis).
Strengths:
Price
BiFri has one amazing advantage that none of the competitors has so far dared to offer – BiFri users call each other for free. This can be perceived as a price advantage. Even if price is rarely perceived as a sustainable advantage in this case the competitors are in different positions than BiFri where market growth is not as important as profit margins. So it can be claimed that the price advantage will remain unless Bite decides to raise the price.
Flexibility
Another advantage is the flexibility of Bite offers. In is possible to change between different tariffs and different types of connections without additional charges. This is especially appealing to those customers who do not want to settle on one connection but want to adjust according to situation.
Transparency
The company tries to implement transparency into its products. This counts also for BiFri. All the offers and all details are clearly stated. The company creates the image that is does not have anything to hide to its customers. Some customers find trustworthiness a strong argument that makes them choose one brand over another.
Weaknesses:
Reputation of Toxic card
As Bite came to Latvia it started with the Toxic card. The promotion was to give it for free to everyone who was interested and hoping they would start using it and switch from their previous operator. Unfortunately this strategy did not work as people did not see the card as preferable (Interviews, 2009). Even worse, people might have perceived the card as being cheap and not serious. In 2008 the company decided to make a new prepaid phone card but the reputation of the previous card still may affect the way customers perceive Bite and BiFri. To diminish this bad perception it the solving of the issue must be implemented in the marketing strategies of Bite and BiFri card.
Opportunities:
Crisis
Although the economic crisis has an overall negative effect on the economy of Latvia and the consumption decreases, some companies can benefit from the changes. The recession influences people to change their consumer behavior. People use phones to call for business purposes and to reach family, so they, with few exceptions, will not reduce the amount of calls they make. However, people evaluate all their spending and many might consider to change their operator to the one who offers the lowest prices. An indicator of that are the growth in turnover by mobile phone operators and the contrary decrease in profits as customers have chosen the lowest tariffs (NRA, 2009). As the low price is one of BiFri strengths, the company could win customers over from their competitors and thereby profit from the overall crisis and change in consumer behavior.
Landlines substitution
A recent study in the United States shows a trend that people use mobile phones to replace the usage of stationary landlines (Post tribune, 2009). This is as well connected to the worldwide economic crisis. With Latvia being in a similar situation it can be expected that a similar trend is evolving.
Phones in planes
The European Union is about to allow mobile phone use in airplanes (EU Business, 2009). This may seem as a minor change that favors the communication companies, but it still is a possible increase in the amount of calls made. In an airplane people would like to use their free time communicating with family or business partners. If the European Union allows calling people during flights this can definitely be seen as an increase in the market. Bite might even inform their clients about such change and influence them to call more.
Threats:
Heavy phone usage linked to cancer
In many recent studies heavy cell phone usage has been linked to increased risk of getting cancer (National Cancer Institute, 2008). Cell phones use a radiofrequency that emits energy which is a form of radiation. In certain cases this radiation may cause cancer. The link between usage of phones and cancer is not consistent and has not been proven yet. If it will be proven that cell phones cause cancer or even the buzz about the possibility increases, it will have a negative effect on consumption in the whole market, also decreasing the revenues for Bite. However, the threat is not substantial because in future new phones would be produced that use safe frequencies.
Competitors try to fill the niches
The competition in the mobile communication market in Latvia consists of two very powerful companies that currently divide the majority of the market between themselves. These competitors are LMT and TELE2 and their current prepaid phone cards are Okarte and Zelta Zivtiņa. If these companies realize that Bite is gaining market share, they will respond. If they realize that they have left a market niche unfilled, they will copy Bite’s product BiFri and offer close substitutes. However, this threat can be partially avoided if Bite gains customers fast and the market share grows rapidly. The competitors will not be able to respond in time before Bite owns a substantial share of the market segment and cannot be pushed out of the market any more.
Conclusion of the SWOT analysis
The objectives of the venture are to conquer market share and attract young customers that qualify the target group of the product. In the analysis we found that the main advantage of the card is the price and the philosophy of the concept that might attract their target group. The weakness that we identified was the reputation of the previous Bite prepaid phone card Toxic but, the issue must is best resolved using marketing. The analysis also shows that the opportunities and threats of the market are substantial and must not be ignored. Overall the trend of the market changes in favor of Bite and BiFri and help to conclude that the business venture has a high possibility to succeed. The SWOT analysis also shows the strengths the marketing strategy can be based on, like price, transparency, flexibility.
Marketing mix
The marketing mix is a combination of product, distribution, promotion and pricing that is intended to best satisfy the target group (William D. Perreault, Jr., E. Jerome McCarthy, 2002). Bite prepaid phone card BiFri has a particular target market – young adults in the age from 16 to 35 – and their marketing is designed to especially satisfy the needs and wants of the target group.
Product
The product consists of the physical part, which is the BiFri SIM card, and the services it provides. The service part is by far the more important part of the product. Customers are interested in the variety of services and the quality of them. Bite provides a large range of services starting from the basic ones like calls, messaging and mobile internet and also services like Customer Care service and My Bite credit reload option. Mobile communications is a market where operators can introduce new services even after a person has bought the product. Bite emphasizes on offering all services the customer desires. Quality standards in mobile communications are mostly connected with the coverage of the network. Bite Latvija has network coverage of 96% of Latvian population (Bite Latvija, 2009) and Bite Latvija claims that in many aspects their network is better than the competitors.
Price
The price is the easiest to change prom the four parts of the marketing mix (Marketing lecture, 2009). Bite Latvija uses price as its largest competitive weapon, as BiFri users communicate between themselves for free. The price for a BiFri card is LVL 2 and after one month it has to be renewed with the sum of at least LVL 1.
The price determines the profit and is the only revenue generating part of the marketing mix (Marketing lecture, 2009). It is logical that if Bite Latvija is offering low prices also the revenue of the company is lower.
Place
Bite Latvija owns its own retail stores. Currently there 36 Bite Latvija stores around the country and there are also other stores where it is possible to buy the card. For ease of usage a credit reload can be purchased via SMS or through the internet.
Promotion
Since coming to Latvia Bite has done five advertising campaigns. The main reason for the advertisement was to inform about Bites presence in the market and for potential customers to consider Bite when choosing their mobile operator. Each campaign had also an individual message to deliver to the audience. For example, one campaign tries to educate the viewer about the coverage of Bite’s network; another tells that BiFri is for active people.
I can. Can you?
In the beginning of 2008 Bite launched an advertising campaign for BiFri “I can. Can you? (“Es varu. Vai tu vari?” - in Latvian)” The idea behind it was to challenge people to participate in three competitions. They were called “I can jump”, “I can run”, “I can love” (I can. Can you?, 2008). People were dared to set records in a public location in the longest time spent jumping on a trampoline while talking on a mobile phone, the longest time spent running on a treadmill while talking on a phone and longest time kissing. The last activity was scheduled for Valentine’s Day. The campaign was designed to create a lot of publicity for the event in the media and between people and Bite being the organizer would also be promoted. This is a form of buzz marketing and it was successful in the way that people truly discussed the event and created an association for Bite in their minds. The advertisement campaign was intended especially for the BiFri target audience – spirited young adults.
It’s getting greener. Here also.
Bites latest advertisement campaign is called “It’s getting greener! Here also” (“Kļūst zaļāks! Arī te” - in Latvian). The reason for the campaign is a recent study by Bite that revealed that 50% percent of respondents had no opinion about how large the coverage of Bite’s network is (7guru, 2009). The ideal of the campaign is to inform that Bite’s coverage is available to 96% of the Latvian population. Because the brand color is green and the coverage is expanding the slogan says “It’s getting greener!” In advertisements on television a women in a green dress walks through different cities in Latvia with her green silk dress. This represents not only that the coverage is getting larger but also reveals Bites effort trying to convince people outside Riga to join Bite. In addition to conventional above the line advertisement in media the campaign also includes below the line advertising elements. Cars, busses and trams colored in green color drive through cities. In parks there are green benches. Even some buildings are covered in green cloth with the text “It’s getting greener! Here also.” All these are symbols of Bites network expanding. In contrast to the previous advertisements, this one is not targeted to a specific audience, it rather informs everybody about the brand. This kind of promotion is usually done when using an undifferentiated targeting strategy.
Innovations
Bite Latvija has brought many positive changes into our mobile communication. Bite personnel was quite surprised when entering the Latvian market many features from mobile service providers had extra charge although a lot of European countries see that as a normal thing to have for free. Bite wanted to penetrate the market and show people how civilized and convenient communication via mobile phones should be. That is why basic tariff for Bite Latvija clients would be cheaper than for other mobile communication operators. For example, phone number identifier of a person who is calling other is free of charge and is already in a basic package of the tariff, there is no difference of the tariff if calling during day time or at night. These are not the only things what are different for Bite clients.
Customer Care service is free of charge, and works day and night all week. Using prepaid card BiFri customers can pay for others if the credit has ended or use network even at empty credit.
My Bite service providing several advantages that makes lives of the customers easier e.g. person can look at the bills, call and SMS statistics, send SMS for free and reload others with credit.
Various payment options are possible like Direct Debit, Payment order, Cash, Internet banking, ATM (Bite Latvija, 2009).
Other innovative offers include free of charge call forwarding option if the phone is lost or stolen, Skype internet calls for 0.21 LVL per 30 minute and no subscription fees and ability to call abroad with no subscription needed.
Ansoff’s Strategic Opportunity Matrix.
Figure 1 Ansoff’s strategic opportunity matrix (Marketing Slides, 2009)
Bite has chosen to use the market penetration strategy with respect to the product BiFri. This means that Bite is seeking for opportunities to increase the amount of customers who are using exactly this product. As the mobile phone/population ratio stood at 139% already in 2007 (Zauers, 2008), Bite has a challenge to attract customers from competitors. That’s why a competitors’ analysis is necessary.
Competitors’ analysis
There are three main players in the Latvian mobile telecommunications market: Latvijas mobilais telefons (LMT), TELE2 and Bite. Triatel is potentially the fourth operator which mainly deals with mobile internet connections and mobile solutions and a bit with mobile telecommunications, but it is not a direct competitor of Bite and therefore not observed in this report. According to a research handed out by Data Serviss the market shares in the mobile phone service market were as follows: Zelta Zivtiņa – 31%, LMT - 27%, TELE2 – 21%, OKarte – 14%, Amigo – 5%, Bite 2%, BiFri 1%. This accumulates to 52% of the market for TELE2, 45% to LMT and only 3% to Bite (Financenet, 2009). LMT was the first company to enter the market in 1992 and is now considered to be the most trustworthy and prestigious (Appendix 2). TELE2 is an international company based in Sweden and they entered the Latvian market in 2000 (Tele2, 2009a). They are considered to be rather qualitative and less expensive than LMT (Appendix 2). Now, the market tendency is to create more offers with lower prices to satisfy the needs of the customers.
LMT
Background
Being the first mobile phone operator in Latvia, they had a fast growing market for themselves and until now LMT has been the market leader among the mobile phone operators for a long time and they gave up the leading positions to TELE2 in the past years. In the last three years LMT has generated extremely high profits of 60.75, 63.4 and about 61 millions LVL (Gaile, 2009). Now LMT has been recognized as too expensive and the customers started to prefer other operators. That is the reason for the offer of new, less costly tariffs called “Vienādais”. They also offer two types of prepaid cards – Okarte and Amigo.
LMT is sponsoring mostly sport events as hockey, basketball, football. It also sponsored bringing giraffes to Riga zoo (Rigas Nacionālais Zooloģiskais dārzs, 2008) and an international organization “Livslust”. It has its televisions ads and launched its webpage (www.lmt.lv). There have been separate commercials for Okarte and Amigo. Okarte is all about “green”- joy, while Amigo is about friendship. Now the company has decided to launch new advertising campaign since its market share has decreased (Financenet, 2009) due to an increase of the Tele2’s market share. LMT has already changed its webpage and set a new fans’ record of the world. (DDB, 2009).
Strengths
The position as a market leader in monthly payable services gives LMT the opportunity to offer more useful benefits in between their own clients. The number of users is important when offering lower prices for calls between LMT users (Financenet, 2009).
As LMT is the operator who has been in this market for the longest time they have managed to create a credible and reliable image of themselves. The respondents of our survey recognise them as qualitative (97.6%), reliable (97.4%) and prestigious (85.7%) (Appendix 2).
LMT has a wide coverage and it has been stable for a long period of time. This is one of the most important aspects in a mobile phone operators’ offer and therefore the one of the main reasons for many people to favour LMT (Appendix 5).
Weaknesses
The main weakness of LMT is their overpriced tariffs. While BiFri offers phone calls in their network for free and 8 santims to other operators, Okarte can counter only with 1.6 – 2.6 santims in between their users and 7.69 santims to other operators and LMT (not OKarte) users in the most efficient case. (Appendix 3)
The prices are way too differentiated and the offers are hardly understandable. For instance, OKarte’s Tariff “Lovely” has different fees for calls to Okarte, for calls to LMT, for calls other operators, for different loyalty levels, for calls payphones, even for day and night and more (Appendix 1). That is just too messy and not really understandable, because the costs for LMT are the same in each case.
According to the survey, the smallest part, only 18%, of the respondents valued ads of LMT as attractive. Plus, regularly ads of Okarte or of LMT itself get in the worst ads top (Akmentiņš, 2009).
Opportunities
They have the opportunity to secure and expand their market share by offering low tariffs in their network, because of the large amount of consumers. It seems more appealing to have the opportunity to call every LMT user for free than to call every BiFri user for free. (Financenet, 2009)
LMT can afford to pay a lot for its advertising campaigns and sponsor huge events, invest in development and in charity in a way that constantly improves its character in the eyes of society. (Gaile, 2009)
Threats
A potential threat could arise if the Latvian population would become more aware about the costs of mobile telecommunication services and the difference between foreign and domestic prices. A discussion about these topics could persuade many LMT users to switch to a less expensive operator. It is especially important to be aware of this treat during the crisis.
Information from the survey.
The result from our survey is the best way to reflect the public opinion about the companies. The most popular associations with LMT were “high quality” (97.6%) and “reliable” (97.4%). Many people also thought that they have a large variety of offers (96.8%). LMT is also seen as rather prestigious (85.7%), friendly (83.3%), but expensive (84.8%). All in all they are considered to deliver a very good service for a relatively high price. As the largest part of the respondents (66%) consisted of LMT clients, we can conclude that they are rather loyal to the company (Appendix 2).
TELE2
Background
Since they entered the market in 2000 they have developed their services in form of different connection types for individuals and businesses, and a prepaid card – Zelta Zivtiņa. Lately the prepaid card has been very successful and the company itself has introduced some noticeable offers called “Brīvais” with low tariffs to all operators.
Tele2 sponsors several music festivals, such as, “Beach Party”, concert of Brainstorm, “Knock Out”, etc. It has supported a group of active and young people like Junior Achievement Latvia. A loyalty programme with different types of discounts has been launched as well as (Tele2, 2009b). There is also a campaign, which offers people to come from other operators with their old phone numbers and get 30% lower bills.
Strengths
One of the main strengths that guarantee good services to its customers is the high coverage. According to TELE2 itself, the network reaches 99.6% of the population and covers 98% of the territory of Latvia (Appendix 4).
An additional strength of the current offer is the possibility to pay nothing for calls and SMS between up to 5 family members or up to 3 friends. For people who mainly call their family members, paying only 2.05Ls for all 5 phones is a great opportunity. As well as 2Ls per month for 3 friends (Tele2, 2009c)
In 2008 Zelta Zivtina (Tele2) has been announced as the best brand of telecommunication in Latvia, in 2007 it got Cicerona award and award of the best marketing campaign in Latvia. (7guru, 2008) Therefore, one of the Tele2 main strengths, which has pushed its market share up, is its appealing image.
Weaknesses
A service that is charged for in TELE2 and LMT is the use of a number detector, which is not charged for in the most European countries. And that is a relative weakness when compared to Bite that has no extra fees for that.
Another weakness we discovered is the weak loyalty programme – for every level (which takes at least a year of being a client) one can choose only one of the discounts and they are only available for the TELE2 network (Tele2, 2009b).
TELE2 also has a bad reputation from the past concerning the coverage rates. They used to have problems in the beginning of this decade, which is still believed to be true by many potential customers.
Opportunities
Tele2 has developed a great marketing. Due to that, it has gained the biggest market share and can afford to launch more risky and extreme projects.
It also can afford to invest in huge projects and continue to polish its image so that the market share increases even more.
Threats
They could suffer from changes in the offers of LMT and from Bite gaining a larger market share that would make their offers (talk for free for life) more attractive.
LMT starts to be active to improve its marketing and may be a serious competitor.
Information from surveys
According to our survey, people think that TELE2 has a large variety of offers (100%) which have a low price (86.2%). The company seems to be friendly (79.6%) and easy understandable (80.8%). Only 61.2% of the respondents think of them as qualitative and 55.5% call them prestigious rather than the opposite (Appendix 2).
To sum it up, TELE2 is the operator with the largest variety for a low price, but seems like they fail to show themselves as qualitative and reliable.
Marketing strategy Has Bite reached its target audience?
According to the questionnaire (Appendix 2), made for a group of Bite target audience, one can tell the values, which are important for these people.
What are the expectations of the target audience?
Primary factors: * Figure 2
“Perfect Mobile phone operator”
Figure 2
“Perfect Mobile phone operator”
Wide coverage * High connection quality * Low tariffs
Secondary factors: * Special offers * Attractive style * Good service
What message the target audience has got from Bite?
A question in the survey asked to note the things a person links with Bite and the options were given. The most popular answers were as follows: * Low tariffs * Low quality of connection * Unprestigious
What is the first association with Bite for the audience?
The respondents associate Bite with the following concepts: green; cheap; Lithuania; unreliable; small coverage; an insect; free conversations; expensive calls to other operators. Some people did not have any associations.
As it was previously mentioned, Bite has tried to bring a definite message to its audience but, as the respondents’ answers show, the message that people have got is rather different. According to the gathered data, one can see following information. People believe that Bite’s coverage is small and quality of the connection is low. Meanwhile, Bite reports that it has almost the same coverage as other operators and quality of signal is high. People also found Bite as rather unreliable operator and unbelievable the offer of free conversations. At the same time, Bite states transparency as one of their core values. Despite all improvements and new advertising, the old impression, based on mistakes and gaps of the newcomer in the mobile telecommunication market, still plays a significant role. Bite has a serious competitive advantage (Figure 3), but it also has the big challenge to create more attractive and reliable impression of the brand.
Competitive advantage.
Figure 4 Types of Competitive Advantage (Marketing Slides, 2009)
Figure 4 Types of Competitive Advantage (Marketing Slides, 2009)
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
Cost advantage
The mobile phone operators’ costs are close to zero, therefore there is no real costs advantage for any of the companies.
Product/ service differentiation advantage.
BiFri has a clear price advantage over the competitors, because no other competitor can offer calls for free in the whole network. Also most additional services are offered by Bite for free while other competitors do charge for many small services, for instance, the number detector (Latvijas Mobilais Telefons, 2009).
The services from Bite and BiFri are easier to understand, as they do not contain many different pricing levels to different networks or to different amount of minutes talked per month. There is just one tariff for the Bite network, one tariff for SMS and one tariff for other networks. That is a clear product advantage.
An offer that distinguishes Bite from others is the possibility for calls to Skype. The software has become very popular all around the world and could become even more used in the future and the possibility to reach people through Skype could become an important feature of the operators’ offer.
Targeted to groups.
BiFri is targeted at a large audience and does not work on niche marketing.
BiFri launcing.
Brand values and message
After doing the survey, it was clear that the brand name Bite does no good for the launching of its product, a prepaid card, BiFri. Therefore, it could be advisable not to stress or even not to mention the real operator’s name.
“BiFri”, which is a pronunciation of the English words “Be Free” easily makes an association with flying, be free as a bird. Bite can paraphrase this expression as “be free as a bee”. Young adults like the feel of freedom- it is rather typical and appealing especially for the definite target audience. Being free could be translated in two directions: one meaning talks about being free from limits to talk, no worries about paying the bills, which is the actual offer: talks for free; the other meaning talks about real flying, which adds the image to BiFri. Both of the meanings should have to be fulfilled. The first already is implemented, but the problem is that people still do not believe in Bite. It sounds tricky and cheap to them. And even if one gets a BiFri card for free, the feeling is not like having something valuable and stylish. The image is not attractive enough. Therefore, in order to differentiate BiFri from the already existing reputation of Bite, the second meaning - the image issue- has to be created, as well.
Brand identity support - implementation of the flying issue in reality:
First idea:Use BiFri to fly
There is an announcement that a definite amount of people who uses their BiFri cards the most in the following 6 months will have a flight with a paraglide or other kind of flying attributes according to the weather conditions. On the website there should be the possibility to register your phone number and follow the process, to see the leaders table and your own position as well as the time spent on the phone.
Second idea:Kites and a festival
There are special kites made to represent BiFri, these can be made in the form of bees in order to improve the image of Bite. A new flyer society will develop! Everyone, who uses BiFri is invited to the flying gathering- bee (kite) festival. Everyone gets his or her Bee, which is to be used as a kite. They could run with it, make it fly, play with it, compete with others. Of course, several interesting attractions should be organized during the festival; some nice bands, which symbolize freedom and a bit of craziness, and fancies young and modern people, like Laime Pilnīga, Double Faced Eals, etc, should be attracted. The other open question is where to get these kite- bees to distribute to people? They can be sponsored by Bite itself or a competition could be announced where artists send in their designs and models. Maybe everyone can be invited to make their own kite like a bee by providing them with some kind of materials and instructions, how to do that. At the festival the kites could be handed in and each group of people gets a kite back, which was made by somebody else. The festival itself is a huge advert, but when people continue playing with kites also afterwards, the advertisement gets even more recognizable. The association with flying, with something creative and nice would be established. Even more, if a person creates something from the heart for a product or brand, he or she will strongly stick to that brand (Stendzimieka Lecture, 2009). Furthermore, talking about polishing the image: BiFri prepaid cards could be made in a light blue colour, which symbolizes the sky and a young man in the paraglide could be presented. Also the other commercials should be made in the sky or it should represent something connected to flying.
Third idea: BiFri objects.
The idea is aimed to improve BiFri character in the eyes of any potential customer.
Expanding the idea of freedom as flying, one of the steps BiFri could innovate is to introduce new, stylish, interesting and most importantly flying objects. The objects, which represent the flying issue, could be a boomerang, a Frisbee disk and a kite. To make these objects more attractive and personal, BiFri could initiate a project, where people are invited to send in their written poetries, songs, stories, etc. These performances together with the authors’ signatures would be printed on the flying objects. In that way, objects will become more interesting and special. In addition, young artists are supported and recognized. As a result, the idea of being free and daring to be who you are is supported and the relationship between BiFri and audience are improved.
The objects could be great gifts and an interesting conversation topic for the audience. The best place for selling these objects could be BiFri or Bite’s retail shops, but in order to inform people about such objects, draugiem.lv and any kind of news could be used.
To promote the objects in draugiem.lv our group suggests to create an online game, which can be played in the groups of people and evolve the idea of catching and throwing Frisbee or single player game with an idea of making a perfect kite and then trying to make it fly in the wind. There should also appear the invitation to participate in creating such kind of objects.
Fourth idea: BiFri as a gift
Although the objects, previously mentioned, could be great gifts to some people, BiFri could create the prepaid card in the format of a really funny, witty and attractive gift. Mostly these could be sculptures of different people holding BiFri cards. The presents could be differentiated in several kinds, for instance, a present for a mother, which says “Be free to reach me, whenever you want”; a present for a friend, which says “You’re great company” or “It is so great to talk to you, that I just can’t stop”; a nasty one, which says “This will be our secret call line- no limits”; a present for a girlfriend, which says “I will always love our conversations”, etc.
These objects could be great presents and sold in BiFri retail shops. If one buys such a present, most probably one will also buy a BiFri for him or herself. To inform people about such an option an ad should be placed in draugiem.lv and BiFri shops which are already spread in the cities, should change its usual image to a more interesting one. Some signs should lead consumers to the BiFri shops.
Fifth idea: Targeting existing groups.
After the image will be refreshed, the company has to make the offer more interesting for the potential customers. The service BiFri offers can only be more appealing than others if it is used in groups since there are not many users right now who you could call for free. Therefore the most effective way how to attract more customers to the product is to target already existing groups, not individuals.
A very important part of the new marketing plan is to offer different youth groups, most probably non-governmental organizations as “Rīgas skolēnu Dome”, “Latvijas Jaunatnes Padome”, “AIGEE”, “ES Klubs “Māja””, a partnership – every member of the organization gets a BiFri card for internal usage for free. In addition BiFri sponsors some of its activities in exchange for the status of an official sponsor and some publicity from the organization. Non-governmental organizations are often perceived as free, since they make their own rules and set their own aims. People in these organizations are more open to innovations and they do communicate a lot. That is why they are the right channel for communicating the image further. If the organization keeps the same members and is active, they will most probably stick to the possibility to call each other for free and start persuading others to use BiFri. As these non-governmental organizations are mostly located in large cities, there should be no problem with the approximately 3% lower territory coverage or other technical quality differences.
This effect could get the ball rolling and bring positive publicity and strengthen the image of being free. If the partnerships work out positively, there could be different events organized in the future with the main message:“Be Free”.
Conclusion
Our group has looked at many issues and used several models from marketing course such as SWOT analysis and 4 P’s to answer the research question how to penetrate the market with existing strong competitors with already existing product prepaid card BiFri.This theoretical part allowed us to understand why Bite Latvija is still the 3rd player in the market and not a leader after launching a unique product a year ago. Firstly, Latvians are quite lazy and slow “moving” by nature and it takes time to make people think what is good and what is better. Moreover, people are used to existing standards of the 2 mobile telecommunication providers in Latvia and not willing to change the situation.
That is why we conducted a survey to understand what is better to be implemented to enrich the audience of BiFri e.g. to stick to earlier promotion methods or introduce something new. The survey has showed that people do not see BiFri as a brand or something valuable, although usually very low prices are a substantial competitive advantage in the mass market. That is why we propose to give people a story about flying and introduce flying items from BiFri so that this brand becomes more than just a prepaid card for mobile phones. We want to make word “flying” instantly been associated with BiFri, so that this brand “owns” this word as P.Mihailovich would have said. This new method of promoting the product would not only attract individuals but also their friends and media for free, because people like to talk about something famous, unique and outstanding. We believe this to be successful way of promoting the BiFri card and essentially increasing its market share.
Reference list
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Interviews with Edgars Kalniņš, May 20, 2009
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Appendices
Appendix 1 http://www.okarte.lv/flash.php/en/okarte/cenas_un_tarifi/tarifi/tp_smukais Tariff plan | Favourable for calls in LMT network!
All tariffs are in lats (VAT inclusive) | Day tariff | Night tariff | Calls in LMT network | 0.0240 - 0.0369 | 0.0240 - 0.0369 | OKartes draugi | 0.0166 - 0.0256 | 0.0166 - 0.0256 | Tele2, BITE Latvija, Telekom Baltija mobile phone | 0.1641 | 0.1641 | Lattelecom payphones | 0.2215 | 0.2215 | Fixed network phone 113, 132, 155, 1859, 1878, 1880, 1898, 1899, 8338, 8383, 8444 | 0.1641 | 0.1641 | SMS | 0.0400 | 0.0400 | SMS (OKartes draugi) | 0.0103 | 0.0103 | GPRS (1MB) | 0.3999 - 0.6153 | 0.3999 - 0.6153 | MMS + fee for amount of GPRS | 0.0300 | 0.0300 | 1187 | 0.4600 | 0.4600 | 1180, 1188 | 0.4600 | 0.4600 | 1189 | 0.4200 | 0.4200 | 123 | 0.2871 | 0.2871 | 177 | 0.2707 | 0.2216 | 114, 121, 143 | 0.0000 | 0.0000 | Exact time: 82154 - in Latvian, 82174 - in Russian (price for call) | 0.2900 | 0.2900 | 80X0XXXX | 0.0000 | 0.0000 | 116111 | 0.0000 | 0.0000 |
Tariff in LMT network is indicated from minimum to maximum possible. Scroll with the cursor on the tariff with interrupted line underneath and you will find a definite tariff, taking into account a discount of OKarte discount program. * Calls are billed in seconds. * Data transmission is billed for 1 KB.Foreign operators, whose subscribers can send short messages.Day tariff - 07.00 – 00.00
Night tariff - 00.00 – 07.00 | |
Appendix 2 www.visidati.lv survey.
Respondentu statistika: Respondentu skaits | 50 | Vīrietis: | 26 | Sieviete: | 24 | Vidējais vecums: | 22.4 gadi |
Rezultātu kopsavilkums:
1. Kāda mobilo telefonu operatora pakalpojumus Jūs izmantojat? (vairākas atbildes iespējamas) LMT | 35 | 66% | Tele2 | 16 | 30% | Bite | 1 | 2% | Neviena | 1 | 2% | Iesniegto atbilžu summa | 53 | |
2. Ko Jūs izmantojat – pieslēgumu vai priekšapmaksas karti? (vairākas atbildes iespējamas) Pieslēgumu | 33 | 65% | Priekšapmaksas karti | 18 | 35% | Iesniegto atbilžu summa | 51 | |
4. Ko Jūs asociējat ar mobilo telefonu operatoru „LMT”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema Kvalitāte | 1 | 0% | Augsta kvalitāte | 41 | 15% | Zema cena | 5 | 2% | Augsta cena | 28 | 10% | Vienkārši saprotami piedāvājumi | 19 | 7% | Sarežģīti piedāvājumu | 14 | 5% | Uzticams | 38 | 14% | Neuzticams | 1 | 0% | Pretīmnākošs | 25 | 9% | Neatsaucīgs | 5 | 2% | Prasts | 5 | 2% | Prestižs | 30 | 11% | Šaurs piedāvājumu klāsts | 1 | 0% | Plašs piedāvājumu klāsts | 31 | 11% | Viegli nomainīt tarifus | 17 | 6% | Sarežģīti nomainīt tarifus | 14 | 5% | Iesniegto atbilžu summa | 275 | |
5. Ko Jūs asociējat ar mobilo telefonu operatoru „Bite”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema kvalitāte | 17 | 8% | Augsta kvalitāte | 8 | 4% | Zema cena | 28 | 14% | Augsta cena | 6 | 3% | Vienkārši saprotami piedāvājumi | 17 | 8% | Sarežģīti piedāvājumi | 11 | 5% | Uzticams | 8 | 4% | Neuzticams | 18 | 9% | Pretimnākošs | 23 | 11% | Neatsaucīgs | 3 | 1% | Prasts | 17 | 8% | Prestižs | 5 | 2% | Šaurs piedāvājumu klāsts | 11 | 5% | Plašs piedāvājumu klāsts | 12 | 6% | Viegli nomainīt tarifus | 12 | 6% | Sarežģīti nomainīt tarifus | 11 | 5% | Iesniegto atbilžu summa | 207 | |
6. Ko Jūs asociējat ar mobilo telefonu operatoru „Tele 2”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema kvalitāte | 12 | 6% | Augsta kvalitāte | 19 | 9% | Zema cena | 25 | 12% | Augsta cena | 4 | 2% | Vienkārši saprotami piedāvājumi | 21 | 10% | Sarežģīti piedāvājumi | 5 | 2% | Uzticams | 16 | 8% | Neuzticams | 10 | 5% | Pretimnākošs | 20 | 10% | Neatsaucīgs | 6 | 3% | Prasts | 12 | 6% | Prestižs | 15 | 7% | Šaurs piedāvājumu klāsts | 0 | 0% | Plašs piedāvājumu klāsts | 23 | 11% | Viegli nomainīt tarifus | 13 | 6% | Sarežģīti nomainīt tarifus | 8 | 4% | Iesniegto atbilžu summa | 209 | |
7. Kas ir vissvarīgākais mobilo telefonu operatora piedāvājumā?
Labs tīkla pārklājums Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 8 | 16% | Ļoti svarīgs | 40 | 82% |
Augsta signāla kvalitāte Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 19 | 39% | Ļoti svarīgs | 29 | 59% |
3G, HSDPA datu pārraide Nesvarīgs | 8 | 16% | Mazsvarīgs | 17 | 35% | Vidēji svarīgs | 11 | 22% | Svarīgs | 10 | 20% | Ļoti svarīgs | 3 | 6% |
Labs serviss Nesvarīgs | 0 | 0% | Mazsvarīgs | 1 | 2% | Vidēji svarīgs | 12 | 24% | Svarīgs | 19 | 39% | Ļoti svarīgs | 17 | 35% |
Izdevīgi tarifi Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 19 | 39% | Ļoti svarīgs | 29 | 59% |
Uzrunājošs Stils Nesvarīgs | 5 | 10% | Mazsvarīgs | 9 | 18% | Vidēji svarīgs | 22 | 45% | Svarīgs | 9 | 18% | Ļoti svarīgs | 4 | 8% |
Patīk draugiem un ģimenei Nesvarīgs | 10 | 20% | Mazsvarīgs | 12 | 24% | Vidēji svarīgs | 13 | 27% | Svarīgs | 10 | 20% | Ļoti svarīgs | 4 | 8% |
Lieliski īpašie piedāvājumi Nesvarīgs | 1 | 2% | Mazsvarīgs | 11 | 22% | Vidēji svarīgs | 11 | 22% | Svarīgs | 18 | 37% | Ļoti svarīgs | 8 | 16% |
8. Kuram mobilo telefonu operatoram ir vispiesaistošākās reklāmas aktivitātes? Tele2 | 29 | 59% | Bite | 11 | 22% | LMT | 9 | 18% | Iesniegto atbilžu summa | 49 | |
9. Kāda ir Jūsu pirmā asociācija ar „Bite”?
1) lēts
2) Zaļās reklāmas pa ceļam uz Beach partyu!
3) lietuva
4) agresīvi ienāk tirgū
5) kukainis
6) Baigi ok
7) zaļā josla
8) Labas reklamas
9) Nekāda!
10) Zaļš.
11) Lēts
12) Zaļš
13) Āķis.
14) kukainis
15) lēts, izdevīgs, bet nav daudz cilvēkiem vēl!
16) zaļš
17) Kož. Un koks. Zaļš.
18) neizdevīgi zvanīt no zitiem tīkliem uz Biti
19) nekāda
20) Dārgi zvani uz citiem tīkliem
21) Lēti un labi
22) jauns operators, nestabila pārklājums
23) bezmaksas sarunas
24) Nevieš uzticību.
25) Kaut kas lēts.
26) zemas cenas
27) kkas sanošs
28) Lēti tarifi, bet nav pārklājums visā Latvijā
29) jauniešiem
30) Zaļā krāsa, var runāt par velti, tikai joprojām nesaprotu, kā tas iespējams, jābūt kādam āķim, jo no kā gan tā kompānija gūst peļņu?
10. Cik Jūs vidēji mēnesī tērējat mobilo telekomunikāciju pakalpojumiem? līdz 5 Ls | 7 | 14% | no 5Ls līdz 10Ls | 14 | 29% | no 10Ls līdz 15Ls | 7 | 14% | no 15Ls līdz 25Ls | 16 | 33% | no 25Ls līdz 50Ls | 4 | 8% | virs 50Ls | 1 | 2% | Iesniegto atbilžu summa | 49 | |
Appendix 3 Tariff plan | | Favourable for calls in all mobile communications networks!All tariffs are in lats (VAT inclusive) | Day tariff | Night tariff | Calls in LMT network | 0.0500 - 0.0769 | 0.0240 - 0.0369 | OKartes draugi | 0.0166 - 0.0256 | 0.0166 - 0.0256 | Tele2, BITE Latvija, Telekom Baltija mobile phone | 0.0769 | 0.0769 | Lattelecom payphones | 0.2215 | 0.2215 | Fixed network phone 113, 132, 155, 1859, 1878, 1880, 1898, 1899, 8338, 8383, 8444 | 0.0769 | 0.0769 | SMS | 0.0400 | 0.0400 | SMS (OKartes draugi) | 0.0103 | 0.0103 | GPRS (1MB) | 0.3999 - 0.6153 | 0.3999 - 0.6153 | MMS + fee for amount of GPRS | 0.0300 | 0.0300 | 1187 | 0.4600 | 0.4600 | 1180, 1188 | 0.4600 | 0.4600 | 1189 | 0.4200 | 0.4200 | 123 | 0.2871 | 0.2871 | 177 | 0.2707 | 0.2216 | 114, 121, 143 | 0.0000 | 0.0000 | Exact time: 82154 - in Latvian, 82174 - in Russian (price for call) | 0.2900 | 0.2900 | 80X0XXXX | 0.0000 | 0.0000 | 116111 | 0.0000 | 0.0000 |
Tariff in LMT network is indicated from minimum to maximum possible. Scroll with the cursor on the tariff with interrupted line underneath and you will find a definite tariff, taking into account a discount of OKarte discount program. * Calls are billed in seconds. * Data transmission is billed for 1 KB.Foreign operators, whose subscribers can send short messages.Day tariff - 07.00 – 00.00
Night tariff - 00.00 – 07.00 | |
Appendix 4
Appendix 5
Riga, 2009
Abstract
Our group has studied new ways of attracting customers to Bite mobile network through promoting prepaid card BiFri. The analysis includes SWOT and marketing mix, as well as competitor analysis. The image perception of Bite and BiFri brands was gained through a survey. The results were gathered and we could conclude that during the slowdown in the economy existing promotion channels were unable to attract significant amount of new clients. Therefore we suggested improving the BiFri brand by attaching a word “flying” to its image as well as distributing tangible flying items such as kites and boomerangs. The innovative idea would be able to attract new groups of customers.
Table of Contents Abstract 1 Introduction 4 About Bite Latvija 5 Methodology 6 Present situation 7 Target group 7 Positioning 7 SWOT analysis 8
Strengths 8
Weaknesses 9
Opportunities 9
Threats: 10
Conclusion of the SWOT analysis 10 Marketing mix 11
Product 11
Price 11
Place 12
Promotion 12 Innovations 13 Ansoff’s Strategic Opportunity Matrix. 14 Competitors’ analysis 14 LMT 15
Background 15
Strengths 15
Weaknesses 15
Opportunities 16
Threats 16
Information from the survey. 16 TELE2 17
Background 17
Strengths 17
Weaknesses 17
Opportunities 18
Threats 18
Information from surveys 18 Marketing strategy 19 Has Bite reached its target audience? 19
What are the expectations of the target audience? 19
What message the target audience has got from Bite? 19
What is the first association with Bite for the audience? 19 Competitive advantage. 20
Cost advantage 20
Product/ service differentiation advantage. 20
Targeted to groups. 21 BiFri launcing. 21 Brand values and message 21 Brand identity support - implementation of the flying issue in reality: 21
First idea:Use BiFri to fly 21
Second idea:Kites and a festival 22
Third idea: BiFri objects. 22
Fourth idea: BiFri as a gift 23
Fifth idea: Targeting existing groups. 23 Conclusion 25 Reference list 26 Appendices 28
Introduction
As a part of the marketing course our group had to find and research a marketing issue in an existing company and give solutions how to prevent possible problems. We chose the company Bite Latvija because in 2008 they had a brand remake and are currently promoting their new prepaid phone card BiFri. Our group members all had seen the new BiFri advertisements and were curious about the brand and its position in Latvian market.
In recent years all Latvia has witnessed how a third operator entered the mobile telecommunication market where LMT and TELE2 dominated and had the Latvian market pie sliced in just two pieces. This third operator was Bite and in 2008 it launched a new prepaid phone card and created a marketing mix targeting young customers. However, as we researched their strategy had some flaws that could be improved like appealing to the target audience through social networks
The purpose of this report is to determine how to penetrate the market with an existing product BiFri and two strong competitors through social networks. To analyze this issue we used in depth interviews with the marketing specialists from Bite Latvija and conducted a questionnaire as primary data sources and to verify the results we used literature about marketing issues as secondary data sources.
About Bite Latvija
Bite Latvija was established when Bite Lietuva, telecommunication service provider in Lithuania since 1995, has expanded to Latvia in summer 2005. Both branches had set up a Bite Group the same year which has become one of the biggest companies in the industry. Bite Group is offering “modern, high-quality and customer-friendly services” (Bite Group, n.d.). In order to accomplish that the company has a strong mission to deliver clients the best service every day, which is built on four cornerstones that service is simple and transparent, customer has the control, he can get more benefits from the money he pays and he is able to change the tariff plan anytime to suit him the best (Bite Latvija, n.d.). Then we have looked how Bite Latvija has become as competitive as it is now.
In 2005 Bite Latvija has started with prepaid card Toxic, postpaid tariff plan Bite and exclusive product in the market Bite Online, mobile service paid through internet, in order to attract first customers. First 10 outlets were opened as well. At the end of the year the company has already attracted 50 thousand customers (Bite Latvija, n.d.).
In 2006 Bite Latvija established a partnership with Vodafone and became the first and fastest broadband and mobile internet provider in Latvia through 3G system. Services had expanded to business customers and a possibility for international calls was developed as well. Bite Latvija had provided telecommunication services during the respectful event of the year the NATO summit. However, the financial year was not so successful e.g. revenues of EUR 6.7 million could not cover all the expenditures, thus EBITDA (earnings before amortization, interest and tax) were negative amounting EUR 11.7 million, while the total investment has reached EUR 30 millions in a development of the network and client service infrastructure. For example, the building of 3 new stations every week. Still this allowed to gain customer base for almost 200 thousand (Annual report, 2006).
During 2007 several innovations and improvements to the network system has given the possibility for the customers to talk with internet e.g. Skype and MSN. A new launch of Customer Care service for free has taken place as well. That year Bite Latvija was an internet connection provider for unique MTV B-Day music festival.
In 2008 Bite gains a new look and brand image with the slogan “You can more”. This year is also significant with the launch of a new prepaid card BiFri, where clients can talk and send SMS for free in Bite network. By Bite Open Art project a new all year-round museum in Pedvale was opened. JeJoue 2008 event of art organized by our school students also was sponsored by Bite Latvija that year (Bite Latvija, 2008). And most significant innovation is the expansion of the network which covers now 96% of the territory in Latvia and maintenance of quality of calls by using the newest equipment that allows building fewer stations then competitors Tele2 and LMT have.
Currently Bite Latvija is providing mobile communication services such as postpaid card Bite, prepaid card BiFri, online services Bite Online, USB modem Vodafone for PC’s, data card Mobile Connect for laptops. The quality of the service provided by Bite Latvia is admitted to be the best among current players in the market by the recent research of Public Utilities Commission, but still there are some prejudices that hinder Bite to become the market leader. (Bite Latvija, 2009).
Methodology
Our team used primary and secondary data to answer the research question Primary data was gathered using qualitative data gathering method in-depth interviews with Bite Latvija representative branding manager Edgars to focus our research question, to understand the habitat of work and to know some information that is not published on the home page. Additional information was gathered by quantitative method e.g. questionnaire which was distributed in social network websites such as draugiem.lv to observe customers attitude towards Bite Latvija and their competitors services. 50 people participated in this survey, 26 of them were male, 24 –female. The average age of the respondents was 22.4 years (Appendix 2). The company’s website and other internet sources were used to reassure the data gathered from first two methods and to add some financial data. As for secondary data Marketing course book by Perreault & McCarthy, presentations from lectures and guest lecturers was used to add theoretical background to answer the research question.
Present situation
Target group
Bite’s prepaid phone card BiFri was launched in 2008 and replaced the forerunner Toxic. Bite marketing managers decided that Toxic had exhausted its resources and had no competitive advantage. It was easier for them to start a new product than to change the existing one. The company studied the Latvian market and found a place for an inspiring new brand (Interviews, 2009).
Bite segmented the market into several categories depending on age and chose the one they would like to appeal to. The company saw a possibility to make a product that would appeal to young active persons that had a desire to be independent and seek low prices and flexible tariffs from their mobile communication company. The company decided that they would aim at young adults mainly in the age group from 16 to 35, the core group being from 19 to 25 year old. The segment is not divided between genders (Interviews, 2009). Moreover, the target group is the one who is the most flexible of the whole market. In general young people find it easier to change operators than older people who have an established routine. Still the mobile communication market in general is less flexible than most other markets, because customers are restricted with contracts with their current operators.
Positioning
Bite’s prepaid card BiFri is positioned to give open minded, spirited young adults the self belief and courage as well as the freedom to express themselves and reach for what they desire. The slogan of the brand is „Be who you want to be“. (Interviews, 2009). In addition the brand wants to emphasize on four objectives. Firstly, the brand is created to be simply transparent, supplying a very simple offer without any hidden conditions. The brand wants to seem trustable. Secondly, BiFri offers value for money. The values they offer are free calls to other BiFri users, customer care service and many other features that other operators charge a lot of money Bite includes in the price of the prepaid phone card. The third objective is to put customers in control. This is done letting the customer choose between different tariffs without charging additional fees. And the forth value Bite tries to implement into its prepaid phone card is bringing fresh experience. It is more an objective to bring innovations into the market and also corresponds with all previous objectives.
Simplifying the positioning of the brand, BiFri is a simple, value for money offering brand that emphasizes on customers satisfaction and innovation. The brand is positioned especially to appeal to the selected target group. SWOT analysis
Before evaluating the marketing strategies for the product, we should evaluate the product itself. This will be done using the SWOT analysis which is a strategic planning method that will help us to understand the strengths and weaknesses of BiFri prepaid phone card and the opportunities and threats from the external environment. The results of the analysis will provide important factors that help to evaluate whether the objectives of the venture can be reached (http://www.quickmba.com/strategy/swot/ QuickMBA SWOT Analysis).
Strengths:
Price
BiFri has one amazing advantage that none of the competitors has so far dared to offer – BiFri users call each other for free. This can be perceived as a price advantage. Even if price is rarely perceived as a sustainable advantage in this case the competitors are in different positions than BiFri where market growth is not as important as profit margins. So it can be claimed that the price advantage will remain unless Bite decides to raise the price.
Flexibility
Another advantage is the flexibility of Bite offers. In is possible to change between different tariffs and different types of connections without additional charges. This is especially appealing to those customers who do not want to settle on one connection but want to adjust according to situation.
Transparency
The company tries to implement transparency into its products. This counts also for BiFri. All the offers and all details are clearly stated. The company creates the image that is does not have anything to hide to its customers. Some customers find trustworthiness a strong argument that makes them choose one brand over another.
Weaknesses:
Reputation of Toxic card
As Bite came to Latvia it started with the Toxic card. The promotion was to give it for free to everyone who was interested and hoping they would start using it and switch from their previous operator. Unfortunately this strategy did not work as people did not see the card as preferable (Interviews, 2009). Even worse, people might have perceived the card as being cheap and not serious. In 2008 the company decided to make a new prepaid phone card but the reputation of the previous card still may affect the way customers perceive Bite and BiFri. To diminish this bad perception it the solving of the issue must be implemented in the marketing strategies of Bite and BiFri card.
Opportunities:
Crisis
Although the economic crisis has an overall negative effect on the economy of Latvia and the consumption decreases, some companies can benefit from the changes. The recession influences people to change their consumer behavior. People use phones to call for business purposes and to reach family, so they, with few exceptions, will not reduce the amount of calls they make. However, people evaluate all their spending and many might consider to change their operator to the one who offers the lowest prices. An indicator of that are the growth in turnover by mobile phone operators and the contrary decrease in profits as customers have chosen the lowest tariffs (NRA, 2009). As the low price is one of BiFri strengths, the company could win customers over from their competitors and thereby profit from the overall crisis and change in consumer behavior.
Landlines substitution
A recent study in the United States shows a trend that people use mobile phones to replace the usage of stationary landlines (Post tribune, 2009). This is as well connected to the worldwide economic crisis. With Latvia being in a similar situation it can be expected that a similar trend is evolving.
Phones in planes
The European Union is about to allow mobile phone use in airplanes (EU Business, 2009). This may seem as a minor change that favors the communication companies, but it still is a possible increase in the amount of calls made. In an airplane people would like to use their free time communicating with family or business partners. If the European Union allows calling people during flights this can definitely be seen as an increase in the market. Bite might even inform their clients about such change and influence them to call more.
Threats:
Heavy phone usage linked to cancer
In many recent studies heavy cell phone usage has been linked to increased risk of getting cancer (National Cancer Institute, 2008). Cell phones use a radiofrequency that emits energy which is a form of radiation. In certain cases this radiation may cause cancer. The link between usage of phones and cancer is not consistent and has not been proven yet. If it will be proven that cell phones cause cancer or even the buzz about the possibility increases, it will have a negative effect on consumption in the whole market, also decreasing the revenues for Bite. However, the threat is not substantial because in future new phones would be produced that use safe frequencies.
Competitors try to fill the niches
The competition in the mobile communication market in Latvia consists of two very powerful companies that currently divide the majority of the market between themselves. These competitors are LMT and TELE2 and their current prepaid phone cards are Okarte and Zelta Zivtiņa. If these companies realize that Bite is gaining market share, they will respond. If they realize that they have left a market niche unfilled, they will copy Bite’s product BiFri and offer close substitutes. However, this threat can be partially avoided if Bite gains customers fast and the market share grows rapidly. The competitors will not be able to respond in time before Bite owns a substantial share of the market segment and cannot be pushed out of the market any more.
Conclusion of the SWOT analysis
The objectives of the venture are to conquer market share and attract young customers that qualify the target group of the product. In the analysis we found that the main advantage of the card is the price and the philosophy of the concept that might attract their target group. The weakness that we identified was the reputation of the previous Bite prepaid phone card Toxic but, the issue must is best resolved using marketing. The analysis also shows that the opportunities and threats of the market are substantial and must not be ignored. Overall the trend of the market changes in favor of Bite and BiFri and help to conclude that the business venture has a high possibility to succeed. The SWOT analysis also shows the strengths the marketing strategy can be based on, like price, transparency, flexibility.
Marketing mix
The marketing mix is a combination of product, distribution, promotion and pricing that is intended to best satisfy the target group (William D. Perreault, Jr., E. Jerome McCarthy, 2002). Bite prepaid phone card BiFri has a particular target market – young adults in the age from 16 to 35 – and their marketing is designed to especially satisfy the needs and wants of the target group.
Product
The product consists of the physical part, which is the BiFri SIM card, and the services it provides. The service part is by far the more important part of the product. Customers are interested in the variety of services and the quality of them. Bite provides a large range of services starting from the basic ones like calls, messaging and mobile internet and also services like Customer Care service and My Bite credit reload option. Mobile communications is a market where operators can introduce new services even after a person has bought the product. Bite emphasizes on offering all services the customer desires. Quality standards in mobile communications are mostly connected with the coverage of the network. Bite Latvija has network coverage of 96% of Latvian population (Bite Latvija, 2009) and Bite Latvija claims that in many aspects their network is better than the competitors.
Price
The price is the easiest to change prom the four parts of the marketing mix (Marketing lecture, 2009). Bite Latvija uses price as its largest competitive weapon, as BiFri users communicate between themselves for free. The price for a BiFri card is LVL 2 and after one month it has to be renewed with the sum of at least LVL 1.
The price determines the profit and is the only revenue generating part of the marketing mix (Marketing lecture, 2009). It is logical that if Bite Latvija is offering low prices also the revenue of the company is lower.
Place
Bite Latvija owns its own retail stores. Currently there 36 Bite Latvija stores around the country and there are also other stores where it is possible to buy the card. For ease of usage a credit reload can be purchased via SMS or through the internet.
Promotion
Since coming to Latvia Bite has done five advertising campaigns. The main reason for the advertisement was to inform about Bites presence in the market and for potential customers to consider Bite when choosing their mobile operator. Each campaign had also an individual message to deliver to the audience. For example, one campaign tries to educate the viewer about the coverage of Bite’s network; another tells that BiFri is for active people.
I can. Can you?
In the beginning of 2008 Bite launched an advertising campaign for BiFri “I can. Can you? (“Es varu. Vai tu vari?” - in Latvian)” The idea behind it was to challenge people to participate in three competitions. They were called “I can jump”, “I can run”, “I can love” (I can. Can you?, 2008). People were dared to set records in a public location in the longest time spent jumping on a trampoline while talking on a mobile phone, the longest time spent running on a treadmill while talking on a phone and longest time kissing. The last activity was scheduled for Valentine’s Day. The campaign was designed to create a lot of publicity for the event in the media and between people and Bite being the organizer would also be promoted. This is a form of buzz marketing and it was successful in the way that people truly discussed the event and created an association for Bite in their minds. The advertisement campaign was intended especially for the BiFri target audience – spirited young adults.
It’s getting greener. Here also.
Bites latest advertisement campaign is called “It’s getting greener! Here also” (“Kļūst zaļāks! Arī te” - in Latvian). The reason for the campaign is a recent study by Bite that revealed that 50% percent of respondents had no opinion about how large the coverage of Bite’s network is (7guru, 2009). The ideal of the campaign is to inform that Bite’s coverage is available to 96% of the Latvian population. Because the brand color is green and the coverage is expanding the slogan says “It’s getting greener!” In advertisements on television a women in a green dress walks through different cities in Latvia with her green silk dress. This represents not only that the coverage is getting larger but also reveals Bites effort trying to convince people outside Riga to join Bite. In addition to conventional above the line advertisement in media the campaign also includes below the line advertising elements. Cars, busses and trams colored in green color drive through cities. In parks there are green benches. Even some buildings are covered in green cloth with the text “It’s getting greener! Here also.” All these are symbols of Bites network expanding. In contrast to the previous advertisements, this one is not targeted to a specific audience, it rather informs everybody about the brand. This kind of promotion is usually done when using an undifferentiated targeting strategy.
Innovations
Bite Latvija has brought many positive changes into our mobile communication. Bite personnel was quite surprised when entering the Latvian market many features from mobile service providers had extra charge although a lot of European countries see that as a normal thing to have for free. Bite wanted to penetrate the market and show people how civilized and convenient communication via mobile phones should be. That is why basic tariff for Bite Latvija clients would be cheaper than for other mobile communication operators. For example, phone number identifier of a person who is calling other is free of charge and is already in a basic package of the tariff, there is no difference of the tariff if calling during day time or at night. These are not the only things what are different for Bite clients.
Customer Care service is free of charge, and works day and night all week. Using prepaid card BiFri customers can pay for others if the credit has ended or use network even at empty credit.
My Bite service providing several advantages that makes lives of the customers easier e.g. person can look at the bills, call and SMS statistics, send SMS for free and reload others with credit.
Various payment options are possible like Direct Debit, Payment order, Cash, Internet banking, ATM (Bite Latvija, 2009).
Other innovative offers include free of charge call forwarding option if the phone is lost or stolen, Skype internet calls for 0.21 LVL per 30 minute and no subscription fees and ability to call abroad with no subscription needed.
Ansoff’s Strategic Opportunity Matrix.
Figure 1 Ansoff’s strategic opportunity matrix (Marketing Slides, 2009)
Bite has chosen to use the market penetration strategy with respect to the product BiFri. This means that Bite is seeking for opportunities to increase the amount of customers who are using exactly this product. As the mobile phone/population ratio stood at 139% already in 2007 (Zauers, 2008), Bite has a challenge to attract customers from competitors. That’s why a competitors’ analysis is necessary.
Competitors’ analysis
There are three main players in the Latvian mobile telecommunications market: Latvijas mobilais telefons (LMT), TELE2 and Bite. Triatel is potentially the fourth operator which mainly deals with mobile internet connections and mobile solutions and a bit with mobile telecommunications, but it is not a direct competitor of Bite and therefore not observed in this report. According to a research handed out by Data Serviss the market shares in the mobile phone service market were as follows: Zelta Zivtiņa – 31%, LMT - 27%, TELE2 – 21%, OKarte – 14%, Amigo – 5%, Bite 2%, BiFri 1%. This accumulates to 52% of the market for TELE2, 45% to LMT and only 3% to Bite (Financenet, 2009). LMT was the first company to enter the market in 1992 and is now considered to be the most trustworthy and prestigious (Appendix 2). TELE2 is an international company based in Sweden and they entered the Latvian market in 2000 (Tele2, 2009a). They are considered to be rather qualitative and less expensive than LMT (Appendix 2). Now, the market tendency is to create more offers with lower prices to satisfy the needs of the customers.
LMT
Background
Being the first mobile phone operator in Latvia, they had a fast growing market for themselves and until now LMT has been the market leader among the mobile phone operators for a long time and they gave up the leading positions to TELE2 in the past years. In the last three years LMT has generated extremely high profits of 60.75, 63.4 and about 61 millions LVL (Gaile, 2009). Now LMT has been recognized as too expensive and the customers started to prefer other operators. That is the reason for the offer of new, less costly tariffs called “Vienādais”. They also offer two types of prepaid cards – Okarte and Amigo.
LMT is sponsoring mostly sport events as hockey, basketball, football. It also sponsored bringing giraffes to Riga zoo (Rigas Nacionālais Zooloģiskais dārzs, 2008) and an international organization “Livslust”. It has its televisions ads and launched its webpage (www.lmt.lv). There have been separate commercials for Okarte and Amigo. Okarte is all about “green”- joy, while Amigo is about friendship. Now the company has decided to launch new advertising campaign since its market share has decreased (Financenet, 2009) due to an increase of the Tele2’s market share. LMT has already changed its webpage and set a new fans’ record of the world. (DDB, 2009).
Strengths
The position as a market leader in monthly payable services gives LMT the opportunity to offer more useful benefits in between their own clients. The number of users is important when offering lower prices for calls between LMT users (Financenet, 2009).
As LMT is the operator who has been in this market for the longest time they have managed to create a credible and reliable image of themselves. The respondents of our survey recognise them as qualitative (97.6%), reliable (97.4%) and prestigious (85.7%) (Appendix 2).
LMT has a wide coverage and it has been stable for a long period of time. This is one of the most important aspects in a mobile phone operators’ offer and therefore the one of the main reasons for many people to favour LMT (Appendix 5).
Weaknesses
The main weakness of LMT is their overpriced tariffs. While BiFri offers phone calls in their network for free and 8 santims to other operators, Okarte can counter only with 1.6 – 2.6 santims in between their users and 7.69 santims to other operators and LMT (not OKarte) users in the most efficient case. (Appendix 3)
The prices are way too differentiated and the offers are hardly understandable. For instance, OKarte’s Tariff “Lovely” has different fees for calls to Okarte, for calls to LMT, for calls other operators, for different loyalty levels, for calls payphones, even for day and night and more (Appendix 1). That is just too messy and not really understandable, because the costs for LMT are the same in each case.
According to the survey, the smallest part, only 18%, of the respondents valued ads of LMT as attractive. Plus, regularly ads of Okarte or of LMT itself get in the worst ads top (Akmentiņš, 2009).
Opportunities
They have the opportunity to secure and expand their market share by offering low tariffs in their network, because of the large amount of consumers. It seems more appealing to have the opportunity to call every LMT user for free than to call every BiFri user for free. (Financenet, 2009)
LMT can afford to pay a lot for its advertising campaigns and sponsor huge events, invest in development and in charity in a way that constantly improves its character in the eyes of society. (Gaile, 2009)
Threats
A potential threat could arise if the Latvian population would become more aware about the costs of mobile telecommunication services and the difference between foreign and domestic prices. A discussion about these topics could persuade many LMT users to switch to a less expensive operator. It is especially important to be aware of this treat during the crisis.
Information from the survey.
The result from our survey is the best way to reflect the public opinion about the companies. The most popular associations with LMT were “high quality” (97.6%) and “reliable” (97.4%). Many people also thought that they have a large variety of offers (96.8%). LMT is also seen as rather prestigious (85.7%), friendly (83.3%), but expensive (84.8%). All in all they are considered to deliver a very good service for a relatively high price. As the largest part of the respondents (66%) consisted of LMT clients, we can conclude that they are rather loyal to the company (Appendix 2).
TELE2
Background
Since they entered the market in 2000 they have developed their services in form of different connection types for individuals and businesses, and a prepaid card – Zelta Zivtiņa. Lately the prepaid card has been very successful and the company itself has introduced some noticeable offers called “Brīvais” with low tariffs to all operators.
Tele2 sponsors several music festivals, such as, “Beach Party”, concert of Brainstorm, “Knock Out”, etc. It has supported a group of active and young people like Junior Achievement Latvia. A loyalty programme with different types of discounts has been launched as well as (Tele2, 2009b). There is also a campaign, which offers people to come from other operators with their old phone numbers and get 30% lower bills.
Strengths
One of the main strengths that guarantee good services to its customers is the high coverage. According to TELE2 itself, the network reaches 99.6% of the population and covers 98% of the territory of Latvia (Appendix 4).
An additional strength of the current offer is the possibility to pay nothing for calls and SMS between up to 5 family members or up to 3 friends. For people who mainly call their family members, paying only 2.05Ls for all 5 phones is a great opportunity. As well as 2Ls per month for 3 friends (Tele2, 2009c)
In 2008 Zelta Zivtina (Tele2) has been announced as the best brand of telecommunication in Latvia, in 2007 it got Cicerona award and award of the best marketing campaign in Latvia. (7guru, 2008) Therefore, one of the Tele2 main strengths, which has pushed its market share up, is its appealing image.
Weaknesses
A service that is charged for in TELE2 and LMT is the use of a number detector, which is not charged for in the most European countries. And that is a relative weakness when compared to Bite that has no extra fees for that.
Another weakness we discovered is the weak loyalty programme – for every level (which takes at least a year of being a client) one can choose only one of the discounts and they are only available for the TELE2 network (Tele2, 2009b).
TELE2 also has a bad reputation from the past concerning the coverage rates. They used to have problems in the beginning of this decade, which is still believed to be true by many potential customers.
Opportunities
Tele2 has developed a great marketing. Due to that, it has gained the biggest market share and can afford to launch more risky and extreme projects.
It also can afford to invest in huge projects and continue to polish its image so that the market share increases even more.
Threats
They could suffer from changes in the offers of LMT and from Bite gaining a larger market share that would make their offers (talk for free for life) more attractive.
LMT starts to be active to improve its marketing and may be a serious competitor.
Information from surveys
According to our survey, people think that TELE2 has a large variety of offers (100%) which have a low price (86.2%). The company seems to be friendly (79.6%) and easy understandable (80.8%). Only 61.2% of the respondents think of them as qualitative and 55.5% call them prestigious rather than the opposite (Appendix 2).
To sum it up, TELE2 is the operator with the largest variety for a low price, but seems like they fail to show themselves as qualitative and reliable.
Marketing strategy Has Bite reached its target audience?
According to the questionnaire (Appendix 2), made for a group of Bite target audience, one can tell the values, which are important for these people.
What are the expectations of the target audience?
Primary factors: * Figure 2
“Perfect Mobile phone operator”
Figure 2
“Perfect Mobile phone operator”
Wide coverage * High connection quality * Low tariffs
Secondary factors: * Special offers * Attractive style * Good service
What message the target audience has got from Bite?
A question in the survey asked to note the things a person links with Bite and the options were given. The most popular answers were as follows: * Low tariffs * Low quality of connection * Unprestigious
What is the first association with Bite for the audience?
The respondents associate Bite with the following concepts: green; cheap; Lithuania; unreliable; small coverage; an insect; free conversations; expensive calls to other operators. Some people did not have any associations.
As it was previously mentioned, Bite has tried to bring a definite message to its audience but, as the respondents’ answers show, the message that people have got is rather different. According to the gathered data, one can see following information. People believe that Bite’s coverage is small and quality of the connection is low. Meanwhile, Bite reports that it has almost the same coverage as other operators and quality of signal is high. People also found Bite as rather unreliable operator and unbelievable the offer of free conversations. At the same time, Bite states transparency as one of their core values. Despite all improvements and new advertising, the old impression, based on mistakes and gaps of the newcomer in the mobile telecommunication market, still plays a significant role. Bite has a serious competitive advantage (Figure 3), but it also has the big challenge to create more attractive and reliable impression of the brand.
Competitive advantage.
Figure 4 Types of Competitive Advantage (Marketing Slides, 2009)
Figure 4 Types of Competitive Advantage (Marketing Slides, 2009)
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
Cost advantage
The mobile phone operators’ costs are close to zero, therefore there is no real costs advantage for any of the companies.
Product/ service differentiation advantage.
BiFri has a clear price advantage over the competitors, because no other competitor can offer calls for free in the whole network. Also most additional services are offered by Bite for free while other competitors do charge for many small services, for instance, the number detector (Latvijas Mobilais Telefons, 2009).
The services from Bite and BiFri are easier to understand, as they do not contain many different pricing levels to different networks or to different amount of minutes talked per month. There is just one tariff for the Bite network, one tariff for SMS and one tariff for other networks. That is a clear product advantage.
An offer that distinguishes Bite from others is the possibility for calls to Skype. The software has become very popular all around the world and could become even more used in the future and the possibility to reach people through Skype could become an important feature of the operators’ offer.
Targeted to groups.
BiFri is targeted at a large audience and does not work on niche marketing.
BiFri launcing.
Brand values and message
After doing the survey, it was clear that the brand name Bite does no good for the launching of its product, a prepaid card, BiFri. Therefore, it could be advisable not to stress or even not to mention the real operator’s name.
“BiFri”, which is a pronunciation of the English words “Be Free” easily makes an association with flying, be free as a bird. Bite can paraphrase this expression as “be free as a bee”. Young adults like the feel of freedom- it is rather typical and appealing especially for the definite target audience. Being free could be translated in two directions: one meaning talks about being free from limits to talk, no worries about paying the bills, which is the actual offer: talks for free; the other meaning talks about real flying, which adds the image to BiFri. Both of the meanings should have to be fulfilled. The first already is implemented, but the problem is that people still do not believe in Bite. It sounds tricky and cheap to them. And even if one gets a BiFri card for free, the feeling is not like having something valuable and stylish. The image is not attractive enough. Therefore, in order to differentiate BiFri from the already existing reputation of Bite, the second meaning - the image issue- has to be created, as well.
Brand identity support - implementation of the flying issue in reality:
First idea:Use BiFri to fly
There is an announcement that a definite amount of people who uses their BiFri cards the most in the following 6 months will have a flight with a paraglide or other kind of flying attributes according to the weather conditions. On the website there should be the possibility to register your phone number and follow the process, to see the leaders table and your own position as well as the time spent on the phone.
Second idea:Kites and a festival
There are special kites made to represent BiFri, these can be made in the form of bees in order to improve the image of Bite. A new flyer society will develop! Everyone, who uses BiFri is invited to the flying gathering- bee (kite) festival. Everyone gets his or her Bee, which is to be used as a kite. They could run with it, make it fly, play with it, compete with others. Of course, several interesting attractions should be organized during the festival; some nice bands, which symbolize freedom and a bit of craziness, and fancies young and modern people, like Laime Pilnīga, Double Faced Eals, etc, should be attracted. The other open question is where to get these kite- bees to distribute to people? They can be sponsored by Bite itself or a competition could be announced where artists send in their designs and models. Maybe everyone can be invited to make their own kite like a bee by providing them with some kind of materials and instructions, how to do that. At the festival the kites could be handed in and each group of people gets a kite back, which was made by somebody else. The festival itself is a huge advert, but when people continue playing with kites also afterwards, the advertisement gets even more recognizable. The association with flying, with something creative and nice would be established. Even more, if a person creates something from the heart for a product or brand, he or she will strongly stick to that brand (Stendzimieka Lecture, 2009). Furthermore, talking about polishing the image: BiFri prepaid cards could be made in a light blue colour, which symbolizes the sky and a young man in the paraglide could be presented. Also the other commercials should be made in the sky or it should represent something connected to flying.
Third idea: BiFri objects.
The idea is aimed to improve BiFri character in the eyes of any potential customer.
Expanding the idea of freedom as flying, one of the steps BiFri could innovate is to introduce new, stylish, interesting and most importantly flying objects. The objects, which represent the flying issue, could be a boomerang, a Frisbee disk and a kite. To make these objects more attractive and personal, BiFri could initiate a project, where people are invited to send in their written poetries, songs, stories, etc. These performances together with the authors’ signatures would be printed on the flying objects. In that way, objects will become more interesting and special. In addition, young artists are supported and recognized. As a result, the idea of being free and daring to be who you are is supported and the relationship between BiFri and audience are improved.
The objects could be great gifts and an interesting conversation topic for the audience. The best place for selling these objects could be BiFri or Bite’s retail shops, but in order to inform people about such objects, draugiem.lv and any kind of news could be used.
To promote the objects in draugiem.lv our group suggests to create an online game, which can be played in the groups of people and evolve the idea of catching and throwing Frisbee or single player game with an idea of making a perfect kite and then trying to make it fly in the wind. There should also appear the invitation to participate in creating such kind of objects.
Fourth idea: BiFri as a gift
Although the objects, previously mentioned, could be great gifts to some people, BiFri could create the prepaid card in the format of a really funny, witty and attractive gift. Mostly these could be sculptures of different people holding BiFri cards. The presents could be differentiated in several kinds, for instance, a present for a mother, which says “Be free to reach me, whenever you want”; a present for a friend, which says “You’re great company” or “It is so great to talk to you, that I just can’t stop”; a nasty one, which says “This will be our secret call line- no limits”; a present for a girlfriend, which says “I will always love our conversations”, etc.
These objects could be great presents and sold in BiFri retail shops. If one buys such a present, most probably one will also buy a BiFri for him or herself. To inform people about such an option an ad should be placed in draugiem.lv and BiFri shops which are already spread in the cities, should change its usual image to a more interesting one. Some signs should lead consumers to the BiFri shops.
Fifth idea: Targeting existing groups.
After the image will be refreshed, the company has to make the offer more interesting for the potential customers. The service BiFri offers can only be more appealing than others if it is used in groups since there are not many users right now who you could call for free. Therefore the most effective way how to attract more customers to the product is to target already existing groups, not individuals.
A very important part of the new marketing plan is to offer different youth groups, most probably non-governmental organizations as “Rīgas skolēnu Dome”, “Latvijas Jaunatnes Padome”, “AIGEE”, “ES Klubs “Māja””, a partnership – every member of the organization gets a BiFri card for internal usage for free. In addition BiFri sponsors some of its activities in exchange for the status of an official sponsor and some publicity from the organization. Non-governmental organizations are often perceived as free, since they make their own rules and set their own aims. People in these organizations are more open to innovations and they do communicate a lot. That is why they are the right channel for communicating the image further. If the organization keeps the same members and is active, they will most probably stick to the possibility to call each other for free and start persuading others to use BiFri. As these non-governmental organizations are mostly located in large cities, there should be no problem with the approximately 3% lower territory coverage or other technical quality differences.
This effect could get the ball rolling and bring positive publicity and strengthen the image of being free. If the partnerships work out positively, there could be different events organized in the future with the main message:“Be Free”.
Conclusion
Our group has looked at many issues and used several models from marketing course such as SWOT analysis and 4 P’s to answer the research question how to penetrate the market with existing strong competitors with already existing product prepaid card BiFri.This theoretical part allowed us to understand why Bite Latvija is still the 3rd player in the market and not a leader after launching a unique product a year ago. Firstly, Latvians are quite lazy and slow “moving” by nature and it takes time to make people think what is good and what is better. Moreover, people are used to existing standards of the 2 mobile telecommunication providers in Latvia and not willing to change the situation.
That is why we conducted a survey to understand what is better to be implemented to enrich the audience of BiFri e.g. to stick to earlier promotion methods or introduce something new. The survey has showed that people do not see BiFri as a brand or something valuable, although usually very low prices are a substantial competitive advantage in the mass market. That is why we propose to give people a story about flying and introduce flying items from BiFri so that this brand becomes more than just a prepaid card for mobile phones. We want to make word “flying” instantly been associated with BiFri, so that this brand “owns” this word as P.Mihailovich would have said. This new method of promoting the product would not only attract individuals but also their friends and media for free, because people like to talk about something famous, unique and outstanding. We believe this to be successful way of promoting the BiFri card and essentially increasing its market share.
Reference list
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Akmentiņš A. (2009), LMT pātaga & ģitāra & motocikls. Retrieved May 24, 2009, from http://www.badad.lv/2009/05/06/lmt-sieviete-ar-patagu/
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Interviews with Edgars Kalniņš, May 20, 2009
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Marketing lecture slides, May 2009
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Tele2 (2009c) Mani draugi. Retrieved May 24, 2009, from http://www.tele2.lv/pakalpojumi/mani_draugi.html
William D. Perreault, Jr., E. Jerome McCarthy (2002) Basic Marketing. Boston. John E. Biernat
Zauers A. (2008), Eiropas acs Latvijas telekomunikāciju tirgū. Retrieved May 24, 2009, from http://www.nedela.lv/lv/rubrikas/index.html;jsessionid=E34D3BC173DDD87082C5A46184B2C4DA?news_id=240
Appendices
Appendix 1 http://www.okarte.lv/flash.php/en/okarte/cenas_un_tarifi/tarifi/tp_smukais Tariff plan | Favourable for calls in LMT network!
All tariffs are in lats (VAT inclusive) | Day tariff | Night tariff | Calls in LMT network | 0.0240 - 0.0369 | 0.0240 - 0.0369 | OKartes draugi | 0.0166 - 0.0256 | 0.0166 - 0.0256 | Tele2, BITE Latvija, Telekom Baltija mobile phone | 0.1641 | 0.1641 | Lattelecom payphones | 0.2215 | 0.2215 | Fixed network phone 113, 132, 155, 1859, 1878, 1880, 1898, 1899, 8338, 8383, 8444 | 0.1641 | 0.1641 | SMS | 0.0400 | 0.0400 | SMS (OKartes draugi) | 0.0103 | 0.0103 | GPRS (1MB) | 0.3999 - 0.6153 | 0.3999 - 0.6153 | MMS + fee for amount of GPRS | 0.0300 | 0.0300 | 1187 | 0.4600 | 0.4600 | 1180, 1188 | 0.4600 | 0.4600 | 1189 | 0.4200 | 0.4200 | 123 | 0.2871 | 0.2871 | 177 | 0.2707 | 0.2216 | 114, 121, 143 | 0.0000 | 0.0000 | Exact time: 82154 - in Latvian, 82174 - in Russian (price for call) | 0.2900 | 0.2900 | 80X0XXXX | 0.0000 | 0.0000 | 116111 | 0.0000 | 0.0000 |
Tariff in LMT network is indicated from minimum to maximum possible. Scroll with the cursor on the tariff with interrupted line underneath and you will find a definite tariff, taking into account a discount of OKarte discount program. * Calls are billed in seconds. * Data transmission is billed for 1 KB.Foreign operators, whose subscribers can send short messages.Day tariff - 07.00 – 00.00
Night tariff - 00.00 – 07.00 | |
Appendix 2 www.visidati.lv survey.
Respondentu statistika: Respondentu skaits | 50 | Vīrietis: | 26 | Sieviete: | 24 | Vidējais vecums: | 22.4 gadi |
Rezultātu kopsavilkums:
1. Kāda mobilo telefonu operatora pakalpojumus Jūs izmantojat? (vairākas atbildes iespējamas) LMT | 35 | 66% | Tele2 | 16 | 30% | Bite | 1 | 2% | Neviena | 1 | 2% | Iesniegto atbilžu summa | 53 | |
2. Ko Jūs izmantojat – pieslēgumu vai priekšapmaksas karti? (vairākas atbildes iespējamas) Pieslēgumu | 33 | 65% | Priekšapmaksas karti | 18 | 35% | Iesniegto atbilžu summa | 51 | |
4. Ko Jūs asociējat ar mobilo telefonu operatoru „LMT”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema Kvalitāte | 1 | 0% | Augsta kvalitāte | 41 | 15% | Zema cena | 5 | 2% | Augsta cena | 28 | 10% | Vienkārši saprotami piedāvājumi | 19 | 7% | Sarežģīti piedāvājumu | 14 | 5% | Uzticams | 38 | 14% | Neuzticams | 1 | 0% | Pretīmnākošs | 25 | 9% | Neatsaucīgs | 5 | 2% | Prasts | 5 | 2% | Prestižs | 30 | 11% | Šaurs piedāvājumu klāsts | 1 | 0% | Plašs piedāvājumu klāsts | 31 | 11% | Viegli nomainīt tarifus | 17 | 6% | Sarežģīti nomainīt tarifus | 14 | 5% | Iesniegto atbilžu summa | 275 | |
5. Ko Jūs asociējat ar mobilo telefonu operatoru „Bite”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema kvalitāte | 17 | 8% | Augsta kvalitāte | 8 | 4% | Zema cena | 28 | 14% | Augsta cena | 6 | 3% | Vienkārši saprotami piedāvājumi | 17 | 8% | Sarežģīti piedāvājumi | 11 | 5% | Uzticams | 8 | 4% | Neuzticams | 18 | 9% | Pretimnākošs | 23 | 11% | Neatsaucīgs | 3 | 1% | Prasts | 17 | 8% | Prestižs | 5 | 2% | Šaurs piedāvājumu klāsts | 11 | 5% | Plašs piedāvājumu klāsts | 12 | 6% | Viegli nomainīt tarifus | 12 | 6% | Sarežģīti nomainīt tarifus | 11 | 5% | Iesniegto atbilžu summa | 207 | |
6. Ko Jūs asociējat ar mobilo telefonu operatoru „Tele 2”? (izvēlēties vienu no katra atbilžu variantu pāra. Piem., zema vai augsta kvalitāte) (vairākas atbildes iespējamas) Zema kvalitāte | 12 | 6% | Augsta kvalitāte | 19 | 9% | Zema cena | 25 | 12% | Augsta cena | 4 | 2% | Vienkārši saprotami piedāvājumi | 21 | 10% | Sarežģīti piedāvājumi | 5 | 2% | Uzticams | 16 | 8% | Neuzticams | 10 | 5% | Pretimnākošs | 20 | 10% | Neatsaucīgs | 6 | 3% | Prasts | 12 | 6% | Prestižs | 15 | 7% | Šaurs piedāvājumu klāsts | 0 | 0% | Plašs piedāvājumu klāsts | 23 | 11% | Viegli nomainīt tarifus | 13 | 6% | Sarežģīti nomainīt tarifus | 8 | 4% | Iesniegto atbilžu summa | 209 | |
7. Kas ir vissvarīgākais mobilo telefonu operatora piedāvājumā?
Labs tīkla pārklājums Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 8 | 16% | Ļoti svarīgs | 40 | 82% |
Augsta signāla kvalitāte Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 19 | 39% | Ļoti svarīgs | 29 | 59% |
3G, HSDPA datu pārraide Nesvarīgs | 8 | 16% | Mazsvarīgs | 17 | 35% | Vidēji svarīgs | 11 | 22% | Svarīgs | 10 | 20% | Ļoti svarīgs | 3 | 6% |
Labs serviss Nesvarīgs | 0 | 0% | Mazsvarīgs | 1 | 2% | Vidēji svarīgs | 12 | 24% | Svarīgs | 19 | 39% | Ļoti svarīgs | 17 | 35% |
Izdevīgi tarifi Nesvarīgs | 0 | 0% | Mazsvarīgs | 0 | 0% | Vidēji svarīgs | 1 | 2% | Svarīgs | 19 | 39% | Ļoti svarīgs | 29 | 59% |
Uzrunājošs Stils Nesvarīgs | 5 | 10% | Mazsvarīgs | 9 | 18% | Vidēji svarīgs | 22 | 45% | Svarīgs | 9 | 18% | Ļoti svarīgs | 4 | 8% |
Patīk draugiem un ģimenei Nesvarīgs | 10 | 20% | Mazsvarīgs | 12 | 24% | Vidēji svarīgs | 13 | 27% | Svarīgs | 10 | 20% | Ļoti svarīgs | 4 | 8% |
Lieliski īpašie piedāvājumi Nesvarīgs | 1 | 2% | Mazsvarīgs | 11 | 22% | Vidēji svarīgs | 11 | 22% | Svarīgs | 18 | 37% | Ļoti svarīgs | 8 | 16% |
8. Kuram mobilo telefonu operatoram ir vispiesaistošākās reklāmas aktivitātes? Tele2 | 29 | 59% | Bite | 11 | 22% | LMT | 9 | 18% | Iesniegto atbilžu summa | 49 | |
9. Kāda ir Jūsu pirmā asociācija ar „Bite”?
1) lēts
2) Zaļās reklāmas pa ceļam uz Beach partyu!
3) lietuva
4) agresīvi ienāk tirgū
5) kukainis
6) Baigi ok
7) zaļā josla
8) Labas reklamas
9) Nekāda!
10) Zaļš.
11) Lēts
12) Zaļš
13) Āķis.
14) kukainis
15) lēts, izdevīgs, bet nav daudz cilvēkiem vēl!
16) zaļš
17) Kož. Un koks. Zaļš.
18) neizdevīgi zvanīt no zitiem tīkliem uz Biti
19) nekāda
20) Dārgi zvani uz citiem tīkliem
21) Lēti un labi
22) jauns operators, nestabila pārklājums
23) bezmaksas sarunas
24) Nevieš uzticību.
25) Kaut kas lēts.
26) zemas cenas
27) kkas sanošs
28) Lēti tarifi, bet nav pārklājums visā Latvijā
29) jauniešiem
30) Zaļā krāsa, var runāt par velti, tikai joprojām nesaprotu, kā tas iespējams, jābūt kādam āķim, jo no kā gan tā kompānija gūst peļņu?
10. Cik Jūs vidēji mēnesī tērējat mobilo telekomunikāciju pakalpojumiem? līdz 5 Ls | 7 | 14% | no 5Ls līdz 10Ls | 14 | 29% | no 10Ls līdz 15Ls | 7 | 14% | no 15Ls līdz 25Ls | 16 | 33% | no 25Ls līdz 50Ls | 4 | 8% | virs 50Ls | 1 | 2% | Iesniegto atbilžu summa | 49 | |
Appendix 3 Tariff plan | | Favourable for calls in all mobile communications networks!All tariffs are in lats (VAT inclusive) | Day tariff | Night tariff | Calls in LMT network | 0.0500 - 0.0769 | 0.0240 - 0.0369 | OKartes draugi | 0.0166 - 0.0256 | 0.0166 - 0.0256 | Tele2, BITE Latvija, Telekom Baltija mobile phone | 0.0769 | 0.0769 | Lattelecom payphones | 0.2215 | 0.2215 | Fixed network phone 113, 132, 155, 1859, 1878, 1880, 1898, 1899, 8338, 8383, 8444 | 0.0769 | 0.0769 | SMS | 0.0400 | 0.0400 | SMS (OKartes draugi) | 0.0103 | 0.0103 | GPRS (1MB) | 0.3999 - 0.6153 | 0.3999 - 0.6153 | MMS + fee for amount of GPRS | 0.0300 | 0.0300 | 1187 | 0.4600 | 0.4600 | 1180, 1188 | 0.4600 | 0.4600 | 1189 | 0.4200 | 0.4200 | 123 | 0.2871 | 0.2871 | 177 | 0.2707 | 0.2216 | 114, 121, 143 | 0.0000 | 0.0000 | Exact time: 82154 - in Latvian, 82174 - in Russian (price for call) | 0.2900 | 0.2900 | 80X0XXXX | 0.0000 | 0.0000 | 116111 | 0.0000 | 0.0000 |
Tariff in LMT network is indicated from minimum to maximum possible. Scroll with the cursor on the tariff with interrupted line underneath and you will find a definite tariff, taking into account a discount of OKarte discount program. * Calls are billed in seconds. * Data transmission is billed for 1 KB.Foreign operators, whose subscribers can send short messages.Day tariff - 07.00 – 00.00
Night tariff - 00.00 – 07.00 | |
Appendix 4
Appendix 5
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