The Marketing Strategy Survey On PHS Of Jilin Communications Corporation

With the deepening of China telecommunications system reform, the long-termmonopoly condition has been totally broken down, now the market competitionbecame intense. As the traditional communication operator, CNC JilinCommunications corporation (Abbreviated as: Jilin CNC) is in the inferior positionin competing with China Mobile and China Unicom, it's easily replaced by othercompetitors and business income declined. Jilin CNC has started the PHS(Personalhandy phone system) business within Jilin Province, in order to get rid of suchdisadvantageous situation, look for new growth chance and keep the sustainabledevelopment on business. Having the characteristics of "Low expenses and Greenenvironmental protection", it has been competing fiercely with China Mobile andUnicom in the private communication field. Presently the new consumer group havecome into being, PHS business effectively enhanced the enterprises'income, preventthe revenue from coming down, all these make Jilin CNC take on a new look andgreatly benefited financially.Although the PHS business developed further, it reached a stalemate from theyear of 2004 owing to some restrictions. How to start its business developmentclimax once more, and improve its market share and keep it going upward? It'sbecome the important task in front of Jilin CNC.1.The current status and dilemma of PHS business developmentAfter the rapid business development during the year of 2003-2004, the PHSclients quantity of Jilin Province is close to 1.5million. Taking the advantage of price,Jilin CNC shared some profits of wireless communications operators, by stimulatingthe demands of low-end consumer, improving the utilization ratio of current networkand finally bringing the increase on revenue. However, with its business expansion,more and more problems crop up, which troubles Jilin CNC management a lot, theyare mainly listed as follows: 1) PHS business is facing obstruction, its incomegrowth rate is being decreased, the monthly rate is reduced to be 20% comparedwith the average rate of 68% in 2003, in some months its increase rate even becomenegative. 2) The phenomenon of "network-evacuation"keeps worse and worse, atleast 10,000 customers evacuated from PHS network each month from Jan.2004. 3)The "zero time"PHS consumer become more and more, the ARPU rate keep slidingdown, from RMB51.6/people/month in Jan.2004 to RMB51.6/people/month inDec.2004, this not only reduced the PHS income contribution rate but alsoprolonged the cost recouping period.2.The analysis of the current problems of PHSAfter analyzing the relative factors on market environment, products, marketingstrategy and enterprise internal management of PHS business in Jilin, we can findthe underlying causes on restriction are in the following: 1) PHS market competitiveability is greatly undermined because of intense market competition and strictmarket supervision, which limited its business expansion. 2) Owing to the congenialdeficiency of PHS, the bad comments are widespread among consumers. 3) Sincethe radical marketing strategy was adopted in PHS business, the price of marketmaturity is put into operation just at the market primary stage. This not onlyimpaired the PHS brand value but also help to bring about the single sales channel,which dislocated the industry chain connecting manufacturer and operator. 4) It'shard to coordinate the internal enterprise management, which hampers the effectivedevelopment. All the above-mentioned causes make PHS business fall intodifficulties.3.The analysis of consumer behaviorIn order to know the true reason of customer's choosing/giving up PHS,understand their requests precisely and meet their requirements to the most extentand finally create more chances for PHS utilization, we have made sufficient marketinvestigation on the customers evacuating PHS in the late half year of 2004 andbeing in the process of dismantling phones, the PHS sales terminal and PHS phonesuppliers. The discoveries are as follows: Among the customers evacuating PHSservice in Jilin and Changchun, 59.67% of Changchun customers will choose PHSonce more; 53.52% of Jilin customers will do the same way. Main reasons forevacuation concerns network signal, hand phone quality and charges. Afterevacuation, they're diverted to Unicom and Mobile, the expenses they chose ofstrong characteristics of PHS. The PHS customers are mainly the administrators ofenterprises, institution, management, private-enterprises owner, employee onproduction and service.Through the above analysis of the PHS evacuators, we not only found thecauses restricting the PHS business developing smoothly, but also located its targetmarket and potential market, all these provided the sound basis for the integratemarketing of the next step.4.The integrate marketing strategy of PHS businessIn order to stimulate the PHS market and re-start its business developmentclimax, now we propose the integrate marketing strategy, in consideration of themarketing theory and practical condition of Jilin CNC.Marketing segmentation: For the business group clients, the PHS businessgroup network should be established, the consumers can talk with each other free ofcharge. It could be provided preferential treatments in the sales of combining otherCNC business; For the highly paid people including private enterprise owner,white-collar businessman, free professionals, the PHS handphones of better qualityshould be provided to promote its grade; For the civil servants, workers inenterprises/institution, the credit consumption could be applied; For ordinarysalary-earner, worker in private enterprise, the new paying method should be takenwhen favorable expenses policy is adopted; For the students, the SMS andlong-distance promotion will be emphasized to lower their mental endurance.Re-positioning the PHS service: Enhancing the network quality, optimizing thenetwork when enlarging it; Enriching and perfecting the terminal products, betteringits after-sales service; Further developing and promoting the value-added business,adjusting the PHS income structure to increase the potential values; Establishing thePHS brand through delicate operation.Setting up the reasonable price system: We'll adjusted the existing price tofurther develop its advantage on cheap price and low radiation. Relying on the hugefixed line network throughout Jilin Province and the relative broad-band business onit, the relevant market strategy should be made out to bring about the differentiationmarketing to meet customer's requirements.Altering the developing channel of PHS: Gradually withdrawing from theterminal sales market, breaking apart the channel monopoly, widening distributionchannel, totally marketizing its sales, altering the channel sales model and function,attracting more distributor to join, and transforming the value chain in the end.Working out the effective sales promotion policy: Stopping the current policyon sales, making the promotion on different target market, creating all kinds ofactivities in the target market to strengthen its influence.Today, 3G is ready to come out just at a call, if we want PHS business developin the market in the stable way and become the competitive products of great vitality,we must get to know the restricting elements and iron out all the obstructions,understand the consumers at their foots, develop the products'value aftersufficiently investigating the market, try to find the accessing point into market, andthese will guarantee the sound circulation of PHS business. In addition, Jinlin CNC...