Marketing Strategy of a Wireless Consortium
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Company Profile: North American Wireless Telephone Consortium Industry Background: In the early to mid-1990s, the wireless telephone business was highly fragmented with hundreds of operators, each with a defined territory. The Baby Bells had only a few states. The service was expensive and unreliable compared to today’s standards. Early adopters were business people, particularly highly mobile sales people who could justify the expense required. But, the process of crossing wireless provider boundaries was a major headache involving dropped calls, steep roaming fees, and cumbersome access codes. A consortium of independent entrepreneurs started a Wireless Voice Service Consortium to build national brand around independent service providers. In addition to creating a national shared brand, the Wireless Consortium aimed at creating cooperative agreements and technology to allow more seamless handoff of customer between members to eliminate the barriers noted earlier. Recognizing the competitive challenge that the Wireless Consortium would present, the larger independent wireless providers formed a competing Rival Consortium (Client). The Rival Consortium also represented a shared national brand (much like VISA is for its bank owners) and technology standards and hand-off agreements between its members. Client Situation:
- After a few months of operation, the Rival Consortium (Client) began to fragment. Larger members became restless regarding the cost of supporting a brand other than their core brand.
- Client felt pressure from the consortium members to modify the strategy from a branding organization to an engineering organization that focused on creating solutions that allowed member companies to share standards of operation, thereby allowing customers from all members companies to use their phones seamlessly across the footprint of the consortium
- Met with the Board of Directors to define a new operating strategy for Client, which focused marketing efforts on creation of national campaigns that could be used by member organizations and their dealers/agents and on accelerating national product and standards development.
- Cut marketing budgets from $30 million to $10 million. Constructed engineering and customer service teams from conscripted experts from key member organizations.
- Implemented product development research to prioritize development, fine-tune the feature set and marketing messages for new shared-products. Research was successful in directing product development teams.
- Engaged attorneys and consultants to draft cooperative agreements between members to ensure compliance while avoiding risk of issues rising such as price fixing or monopolistic behavior.
- The organization swiftly modified its strategy to the satisfaction of its membership:
- Allowed the organization to not only retain all members, but also quickly grow the membership 10% to a size representing 84% coverage of the U.S. population (POPs).
- Developed new national products on schedule, which were launched by member companies.