Winning through better value propositions<\/p>\n
Agus W. Soehadi
\nContributor
\nJakarta<\/p>\n
In the past decade the number of cell phone users in Indonesia
\nhas increased sharply. Compared with 33,000 in 1992, last year's
\nfigure was above 11 million.<\/p>\n
If each subscriber's bill reaches an average of Rp 130,000 a
\nmonth, the monthly revenue reaped by service providers could
\ntotal a staggering Rp 1.4 trillion (about US$165 million).<\/p>\n
Next to consumers' increasing need for mobile communications,
\nthis huge growth has been triggered by heavy promotions and
\nvarious efforts by major cell phone manufacturers and service
\nproviders to educate the target market. Another reason is the
\naffordable prices of the handsets and the SIM cards. All these
\nfactors, and the potential offered by the country's large
\npopulation, will lead to a larger market and eventually fiercer
\ncompetition.<\/p>\n
To come out as the winner, some strategies have to be
\nimplemented as an integral part of the overall corporate
\nmarketing strategy.<\/p>\n
Perhaps the phenomenal success of NTT Japan, in conjunction
\nwith DoCoMo i-mode, in the mobile phone and Internet market can
\nprovide some lessons. Since the launch of new services in
\nFebruary 1999, they have acquired more than 30 million new
\nsubscribers and the number of subscribers has been growing at the
\nrate of 50,000 per day. Their net profit has reached US$2.3
\nbillion.<\/p>\n
What is interesting is that not only has NTT become a business
\nwinner, but its services have become part of the Japanese
\npeople's lifestyle.<\/p>\n
The main element of this success story is the company's
\nsuperior values incorporated in the services offered to
\ncustomers, meaning quality and benefits that are much more
\nsuperior than competitors while being competitively priced. The
\nvalue proposition here is not merely to satisfy customers but to
\nexceed their expectations, and the delivery should be more
\neffective than that of competitors. Of course, through creative
\ncommunications and PR the value proposition has to be conveyed
\nmuch in advance to create the desired image in consumers' minds.<\/p>\n
No less important after the initial success is maintaining
\ncustomer loyalty by nurturing and constantly enhancing the value
\npropositions, so that consumers think more than twice before
\nshifting to competitors' products or services.<\/p>\n
In the case of DoCoMo i-mode, the value proposition offered
\nwas an entirely different mobile experience. The main target was
\nconsumers who were not too familiar with computer technology,
\nincluding the Internet. Different from what competitors were
\noffering, consumers did not have to dial up the Internet
\nprovider. Their cell phones were automatically and constantly
\nconnected with the Internet provider.<\/p>\n
In this way, for customer convenience, time is not wasted and
\ncosts are much reduced in accessing the Internet provider. This
\nis more effective than the Wavelength Routing Protocol (WaRP)
\nmobile Internet system made available by competitors.<\/p>\n
The rate applied is not based on duration of communication or
\nair time, but based on the quantity of data transferred. For many
\ncustomers this means they spend less than $13 a month. Another
\nsuperior value proposition is the wide range of features and the
\nconvenient mode of payment through one integrated billing system.<\/p>\n
Here in Indonesia, the recently launched service by the state-
\nowned company PT Telkom -- Telkom Flexi -- is another success
\nstory that is equally educational. Apart from being the talk of
\nthe town, the demand for Telkom Flexi has been instant, with the
\nestimated number of subscribers exceeding 100,000 by the end of
\n2003.<\/p>\n
With various superior features, like data transmitting speed
\nof 144 kilobytes per second, voice quality similar to fixed-line
\ntelephone, Short Message Service (SMS), voice mail, calling line
\nidentification (CLI) and many other facilities, Telkom Flexi is
\nquickly making significant inroads in the telecommunications
\nmarket, especially because the rates applied are the same as
\nthose for fixed-line telephones.<\/p>\n
These two examples prove that value propositions for products
\nand services that not only match consumer demand but, in fact,
\nexceed consumer expectations, at affordable prices, are one
\neffective strategy for winning the telecommunications battle. --
\nThe writer heads the School of Marketing at the Prasetiya Mulya
\nBusiness School<\/p>",
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