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Table of Contents

I. Marketing Background

Intro

A. Overview of the Industry

Organizational Chart of the Telecommunications Industry in the Philippines

Source : Datamonitor

Global M obile Phone I ndustry

The following tables will show the global market value from 2001 u p to 2005

TelecommunicationsIndustry

Landlines Mobile Phones

Analog

1G

Digital

2G

3G

Internet Trunk Radio


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Based on the data from Datamonitor, the global mobile phones market grew by 20.1% in

2005 Furthermore, the compound annual growth rate of the market volume during the period

of 2001-2005 was ...


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Here, it can be seen that the global mobile phones market grew by 13.7% in 2005

reaching a value of

The following pie chart shows a market segmentation of the different regions included in

the g lobal market for mobile phones


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Based on the study conducted by Datamonitor, the Asia-Pacific region has the highest

percentage of market share by value for mobile phones accounting for 42.0%. Second is Europe

which accounts

Mobile phone market shares

Vendor Q2 2005 Q3 2005 Q4 2005 2005 Q1 2006 Q2 2006

32.5% 31.7% 34.1% 32.4% 33.3% 33.3%

18.1% 18.4% 18.2% 17.9% 20.4% 22.1%

13.0% 12.8% 11.1% 12.6% 12.8% 11.2%

6.3% 6.6% 6.6% 6.3% 5.9% 6.7%

6.5% 7.4% 6.6% 6.7% 6.9% 6.5%

Fractionof the

remaining23.6%

Fractionof the

remaining23.2%

Fractionof the

remaining23.5%

Fractionof the

remaining24.1%

Fractionof the

remaining20.6%

Fractionof the

remaining20.3%

Fractionof the

remaining23.6%

Fractionof the

remaining23.2%

Fractionof the

remaining23.5%

Fractionof the

remaining24.1%

Fractionof the

remaining20.6%

Fractionof the

remaining20.3%

Fractionof the

remaining

23.6%

Fractionof the

remaining

23.2%

Fractionof the

remaining

23.5%

Fractionof the

remaining

24.1%

Fractionof the

remaining

20.6%

Fractionof the

remaining

20.3% Fraction

of theremaining

23.6%

Fractionof the

remaining23.2%

Fractionof the

remaining23.5%

Fractionof the

remaining24.1%

Fractionof the

remaining20.6%

Fractionof the

remaining20.3%

Fractionof the

remaining23.6%

Fractionof the

remaining23.2%

Fractionof the

remaining23.5%

Fractionof the

remaining24.1%

Fractionof the

remaining20.6%

Fractionof the

remaining20.3%

Total Market Share 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Strategy Analytics

Nokia still continues to be the global market leader in mobile phones despite the increase

in the market shares of other major competitors such as Motorola and Sony Ericsson. Motorola

today remains to be the second largest mobile phone company in the worl d with a
http://www.philips.com/global/index.html


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Asia-Pacif ic M obil e Phone I ndustry

The emerging economy of majority of the Asian countries accounts for the rapid increase

in the regions global market share for mobile phones since many of the consumers here are first-

time mobile phone buyer s

In 2005, the Asia-Pacific mobile phones market grew by 33.2% reaching a value of $24.8 billion

and the compound annual growth rate from 2001 up to 2005 was 10.6%...


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Regarding mobile phone models, the mobile phones market in Asia-Pacific grew

by 43.3% in 2005

T

Phil ippine Mobile Phone In dustry

1. Market Size

The Philippine mobile phone industry is estimated to have 35 million mobile phone

subscribers by the end of 2005


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Majority of the Philippine mobile phone subscribers fall under the category of prepaid

subscribers

NO. OF CELLULAR MOBILE TELEPHONE SUBSCRIBERS 2005

OPERATORS YEARS2002 2003 2004 2005

SMART 6,825,686 10,080,112 14,595,782 15,424,196GLOBE 6,572,185 ** 8,800,000 ** 12,513,973 ** 12,500,000PILTEL 1,773,620 2,867,085 4,612,450 4,984,425DIGITEL not operational 732,467 1,200,000 1,860,000EXTELCOM 29,896 * 29,896 13,670 10,374ISLACOM 181,614 - - not operational

BAYANTEL not operational not operational not operational not operationalTOTAL 15,383,001 22,509,560 32,935,875 34,778,995

POPULATION 79,476,271 81,054,329 82,652,033 84,214,778CMTS DENSITY 19.36 27.77 39.85 41.30

Population Source: NSCB** Globe & Islacom subscribers combined under Globe;

No report submitted; based on old report.

Source: NTC

The following table on the other hand shows the market structure of the mobile phone

industry in terms of its distribution in various markets namely...

MARKET STRUCTURE

2003 2004 2005 2006

Total Market Size: 6.7 11.5 4.6 9.2

Legitimate Market (New) 50% 52% 55% 56%

Grey Market 25% 20% 15% 12%

2n Hand Mobile 25% 28% 30% 32%

Source: Philips Company Report


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2. Market Value

a. Mobile Telephone Retail Volume

Source: Euromonitor

b. Mobile Telephones Retail Value

3. Market Growth Rate

0

5000

10000

15000

2000 2001 2002 2003 2004 2005

5030

5966.136590.38

9690.76 10003.42

10775.39

I n M i l l i o n s

Year

Mobile Telephones Retail Volume - in '000 Units

Mobile Telephones Retail Value in Millions

161630.88

150051.3

145361.4

98855.7

89491.95

75400

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2000 2001 2002 2003 2004 2005

Year

P h p

Source: Euromonitor


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Source: Philips

4. Market Trend (in the last 3 years)

As mobile phone usage increased over time, the use of fixed telephone lines to make

outgoing calls conti nued to fall

Figure 1: National and International Phone Calls, Telephone Lines in Use and Mobile PhoneUsers: 1990/1995/2000-2003

Million 1990 1995 2000 2001 2002 2003International outgoing telephonecall (million minutes)

107 180 136 163 171 186

National telephone calls (millionminutes)

257 1,205 3,255 2,756 2,181 2,116

TOTAL 364 1,385 3,391 2,919 2,352 2,302Telephone lines in use (000) 610 1,410 3,061 3,315 3,311 3,381Mobile telephone users (000) 26 494 6,454 12,159 15,201 20,474Source: National statistical offices, International Telecommunications Union, World Bank, Trade sources, EuromonitorInternational

0

10

20

30

40

50

2003 2004 2005 2006

23.2

32.6 3541.5

i n m

i l l i o n s

Year

Mobile Phone Subcribers 2006 Forecast


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Figure 2: National and International Phone Calls, Telephone Lines in Use and Mobile PhoneUsers (Growth): 1990-2003/2000-2003

% Change 1990-2003 2000-2003International outgoingtelephone calls

73.82 36.55

National telephone calls 721.93 -35.01TOTAL 531.62 -32.13Telephone lines in use 454.15 10.46Mobile telephone users 79,565.51 217.23Source: National statistical offices, International Telecommunications Union, World Bank, Trade sources, EuromonitorInternational

The following table provides a forecast of how this trend will continue until the year 2015

Figure 3: Forecast National and International Phone Calls, Telephone Lines in Use and MobilePhone Users: 2004-2005/2010/2015

Million 2004 2005 2010 2015International outgoing telephone calls(million minutes)

201

National telephone calls (millionminutes)

1,956

TOTAL 2,157 Telephone lines in use ('000) 3,414 Mobile telephone users ('000) 25,062 28,587 36,606 40,820Source: National statistical offices, International Telecommunications Union, World Bank, Trade sources, EuromonitorInternational

The following table on the other hand provides information on how much Filipinos spend for

communications as compared t o other consumer expenditures

Consumer Expenditure by Purpose: 1990-2015Ps million 1990 1995 2000 2005 2010 2015Food and non-alcoholic

beverages293,607 541,604 896,164 1,215,415 1,343,614 1,590,772

Alcoholic beverages andtabacco

13,656 25,191 41,682 52,491 58,706 64,772

Clothing and footwear 25,061 42,347 63,045 88,882 104,429 122,704Housing 162,356 299,492 495,553 730,021 784,109 904,239Household goods andservices

37,934 69,975 115,783 159,749 173,416 193,523

Health goods and medicalservices

14,415 26,590 43,998 50,880 57,312 66,475

Transport 51,590 95,166 157,466 255,158 279,999 318,090


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Communications 3,811 7,849 19,343 27,397 31,612 35,176Leisure and recreation 3,793 6,997 11,578 15,208 16,630 18,108Education 31,864 58,779 97,258 125,012 143,490 173,937Hotels and catering 37,934 69,975 115,783 168,641 193,116 230,987Misc goods and services 91,041 167,939 277,880 358,692 380,586 426,652

Misc goods and services 91,041 167,939 277,880 358,692 380,586 426,652TOTAL 767,061 1,411,904 2,335,535 3,247,546 3,567,017 4,145,434Source:National statistical offices, OECD, Eurostat, Euromonitor International

B. Envir onmental Analysis

1. STEP Analysis

Socio-Cultural Demographics Technological Information Fast-paced society creates the need forreal-time demands and results

People aged 25-29 are in the career- building stage of their lives while peopleaged 30-34 feel the need to connect withmore of the world around them

Shift from analog to digital system Integration with other communications andmultimedia devices and formats

Constant research and development to suitchanging lifestyle

Economic Political-Legal Mobile phones shift from being a luxury

good to a necessity Mobile phones become a substitute good

for landlines People aged 30-34 have the adequate

disposable income but concerns aregeared towards family life

National Telecommunications Commission(NTC)

Department of Trade and Industry (DTI) Bureau of Trade Regulation and Consumer

Protection (BTRCP)

Socio-Cultural Demographics

F ast-paced society creates the need f or real-time demands and resul ts

People today live in a fast-paced society wherein everything is


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People aged 25-29 are in the career-buil din g stage of their l ives

The number of young adults and their percentage in the total population is seen below

Young Adults: 1990-2015

'000 1990 1995 2000 2005 2010 2015

Male 8,792 9,712 10,664 11,662 12,685 13,422Female 8,818 9,707 10,602 11,551 12,559 13,390TOTAL 17,611 19,419 21,265 23,213 25,244 26,811As % of total population 28.92 28.30 27.80 27.55 27.57 27.35

Source: Euromonitor

People Aged 30-34 Feel the Need to Connect with more of th e World ar oun d Them

DISCUSS

Technological Information

Shif t from Analog to Digi tal System

DISCUSS

I ntegration wi th other Communi cations and M ul timedia Devices and For mats

DISCUSS

Constant Research an d Development Suit ChangingLifestyle

DISCUSS

Economics

M obile Phones Shif t f rom B ein g a Lu xur y Good to a Necessity


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Source: Euromonitor

M obile Phones Become Substi tute Good for L andlines

Source: Euromonitor

People Aged 30-34 have the Adequate Disposable I ncome but Concerns are geared towards

Famil y L if e

DISCUSS

Political-Legal

(NTC )National Telecommun ications Commission

0

20000

40000

1990 1995 2000 2005 2010 2015

3811 784919343

2738731612

35176

Ps Million

Year

Consumer Expenditure by Purpose (1990-2015) onCommunications

6101,410

3,061 3,315 3,311 3,381 3,414

0

26 4946,454

12,15915,201

20,474

25,06228,587

05000

1000015000200002500030000

1990 1995 2000 2001 2002 2003 2004 f 2005 f

i n M i l l i o n s

Year

Telephone Lines in Use and Mobile Phone Users

Telephone Lines in Use

Mobile Phones in Use


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Department of Trade and Industry (DTI )

DISCUSS

Bu reau of T rade Regulation and Consumer Protection (BT RCP)

The followin g table shows the bureaus three function divisions and their

responsibilities.

The Three Function Divisions Responsibilities1. Consumer Welfare Division

(CWD) Provides ample protection to the consuming public

through a massive tri-media consumer education andinformation dissemination program

Releases information materials such as ConsumerAlerts, consumer Tips flyers, calendars, films and

press release. Promotes consumer awareness on basic issues and

concerns Provides mechanism for the speedy resolution of

consumer complaints Prepares guidelines in the development and

strengthening of consumer organizations

2. Fair Trade Division (FTD) Oversees the effective implementation of Fair Tradelaws

Provides field offices with operating guidelines onthe implementation of laws on trade malpractices

Trains fields staff on enforcement of fair trade laws Formulates programs and policies on Fair Trade

Laws and other related provisions Monitors Congress bills and resolutions which

directly affect the consumers


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Conducts regional consultancy on enforcement Prepares position papers on domestic and fair trade

related bills and resolutions

3. Business Regulation Division

(BRD)

Oversees effective implementation of Trade

Regulation Laws Provides standards and systems in issuance oflicenses and permits for realty service practice, fireextinguishers, bonded warehouse, and retail tradenationalization

Oversees compliance of business name registration Develops modules on skills training of technicians Professionalizes the realty service practice by

administering examinations

II. Competitors Analysis

The mobile phone industry has four key competitors, namely:

Motorola, Nokia, Samsung and Sony Ericsson

The following tables show the competitive positioning and market

shares of each brand in the mobile phone industry.

A. Competitive Positioning

B. Market Shares

COMPETITIVE POSITIONINGBrand Competitive Position

Motorola Market Challenger Nokia Market Leader

Samsung Market FollowerSony Ericsson Market Nicher

Others Market Followers

MARKET SHARESBrand Market Share

Connecting People 59%

Hello Moto16%


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Source: Philips Company Data

11%

Never A Dull Moment5%

Broaden Your Life Fraction of the remaining 9%

Invented For LifeFraction of the remaining 9%

Life s Good Fraction of the remaining 9%

Ideas For LifeFraction of the remaining 9%

Sense and Simplicity Fraction of the remaining 9%

Designed For Life Fraction of the remaining 9%Total Market Share 100%
http://www.philips.com/global/index.html


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MOBILE PHONE PLAYERS

BrandMarketShare Sales Level Competitive Position Target Market Relevant Products

Connecting People59% 6,357.25 Market Leader

13-55 years old Mass Market Average Market High-end Market All kinds of users - the young, the young-

at-heart, the gadget-savvy, the music

lover, the photo bug,

Mobile phones Smartphones

Hello Moto16% 1,724.0624 Market Challenger

13-55years old Mass Market Average Market High-end Market

Mobile phones

11% 1,185.2929 Market Nicher

15-55 years old Mass Market Average Market High-end Market

Mobile phones

Never A Dull Moment5% 538.7695 Market Follower

15-55 years old Average Market & High-end Market Working Class

Mobile phones

Broaden Your Life

Fraction oftheremaining

9%

Fraction of969.7851 Market Follower

15-25 years old Mass Market Average Market People looking for a cheap phone that

will suffice their call and text needs

Mobile phones

Invent

N/A N/A Market Nicher

20-55 years old Caters to classes A and B High-end Market People in the working class who usually

need an all-in-one phone with featureslike: email, messaging, and web access

White collar workers

Smartphones


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C . Marketing Strategies

MARKETING STRATEGIES (4Ps)Brand Product Price Place Promo Marketing Strategy

Connecting People

3G Technology Bluetooth WirelessTechnology

FM Radio Infrared

Mp3 Player Multimedia MessagingService

Polyphonic Ringtones VGA Camera Video Recording

Php2,500-45,000 Mass Market Average Market High-end Market

Mobile Phone Store (i.e.Semicon)

Retail Store (i.e.Greenhills)

Store of Operators (i.e.Globe, Smart, Sun)

Aggressive withtie-ups Billboards Concentrates on billboard, TV,

magazine andnewspaperadvertising Event Sponsorships Flyers Internet

Caters to all types ofusers on allcategories

Protects market share by offering the mostnumber ofdifferentiated phonesthat cater to eachindividual needs

Made tie-ups withoperators, Globe andSmart, early on

Hello Moto

3G Technology Bluetooth WirelessTechnology

iTunes Mp3 Player Multimedia MessagingService

Polyphonic Ringtones

VGA camera Video Capture MPEG4





Aggressive withtie-ups

Billboards Concentrates on billboard, TV,magazine andnewspaperadvertising

Event Sponsorships Flyers Internet

Focus on trendydesign with value-added features

Targeted to relevant people in society/aspiring socialites

3G Technology Bluetooth Wireless

Technology FM Radio Infrared Mp3 Player Multimedia Messaging

Service Polyphonic Ringtones





Aggressive withtie-ups

Billboards Concentrates on billboard, TV,magazine andnewspaperadvertising

Event

Aggressive on twofronts: walkmanand PDA phone

Sony WalkmanBrand recognitionas one of the bettermusic providers

P900 series rivals Nokia and other


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VGA Camera Video Recording

Sponsorships Flyers Internet

PDA brands as the best in its category

Never A Dull Moment

Bluetooth WirelessTechnology

FM Radio Infrared Mp3 Player Multimedia Messaging

Service Polyphonic Ringtones VGA Camera Video Recording

Php 7,500-35,000 Average Market

High-end Market




Aggressive withtie-ups Billboards Concentrates on billboard, TV,magazine and

newspaperadvertising Event Sponsorships Flyers Internet

Brand uniquenesssince they are mostknown for their flip

phones Phones are classy andtargeted to thesophisticated workingclass. Power-packedfeatures relevant tothe corporate market

Broaden Your Life

4K color screen 65K color screen 262K color screen Color film display FM Radio Image download Megapixel Mp3 melodies VGA camera

Php2,750 15,000 Mass Market Average Market




Flyers Internet Focus on low priceand design

Invent

Compact Mobile Phonewith email, an organiser,messaging, and webaccess Crystal-clear VGA andTFT screens Digital entertainment Lightweight, sleekdesigns Wireless productivity

Php 25,000 -40,000

High-end Market



Flyers Internet Magazine Ads

Association withtechnology

Capitalize on brandname

Focus on productfeatures

Bluetooth Technology Compact Mobile Phone

Php36,000-48,000 High-end Market


Flyers Internet

Technology-driven Mobile-PC features


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Source: Semicon

Its your O2. See whatyou can do.

with email, anorganiser, messaging,and web access

Digital Camera Mp3 Player Video


Magazine Ads

Bluetooth Technology Compact Mobile Phone

with email, an

organiser, messaging,and web access

Digital Camera Mp3 Player Video

Php20,000-35,000 Average Market High-end Market





Leverage on Brandassociation

Palm = reliable PDA Incorporated PDAfeatures into a mobile

phone Mobile phone =mobile computer aswell

Designed For Life

Infrared Mp3Player Multimedia Messaging

Service VGA Camera Video Recording

Php3,000-13,000 Mass Market Average Market





Low priced, goodquality phone

Relevant features


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DISCUSS


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DISCUSS


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Unit

Motorola RAZR V3i

Motorola RAZR V3x

Sony Ericsson K800i

Samsung D500

Call/SMScapability

SMS, MMS, EMS SMS, EMS, MMS SMS, MMS, e-mail SMS, MMS

3G Functionality No Yes Yes No

Battery Life

Standby Time: up toapproximately 200-310hours; Talktime: up toapproximately 200-400minutes

Talktime: up to 131minutes; Standby Time: upto 227 hours; Video talktime: up to 99 min

Standby time: 350 hours;talk time: 7 hours

Standby time: 300 hours;talk-time: 390 mins

Memory12MB (internal); 512MB(removable)

64MB embedded, 512MBadditional

64MB internal memory 96MB internal memory

LCD Resolution

262k TFT internal / 65kCSTN external

Large 240 x 320 TFT colourmain display; 2.2 inchexternal screen, 65K colorscreen

262,144-colour TFT,240x320 pixel

262,144-Colour TFT-LCDdisplay

Multimedia1.23 megapixel camera with8X zoom; video capture inMPEG format

Integrated digital camera(VGA) for 2-way videocalling; video capture

3.2MP camera, 16x digitalzoom

1.3-megapixel camera

ConnectivityBluetooth, GPRS Bluetooth, GPRS, Mini

USBBluetooth, GPRS, infrared,USB

Bluetooth, USB

Organizer Datebook with independent Datebook with independent Yes None
http://void%28launchwindow%28%27itemenlarge.asp/?ModelID=542%27,%27height=385,width=200%27))http://void%28launchwindow%28%27itemenlarge.asp/?ModelID=496%27,%27height=385,width=200%27))


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alarm alarm

Music None Support of AAC+, MPEG4,

WMV, WMA, MP3 andReal Video/Audio files

MP3, AAC MP3, MP4 and AAC player

GamesPre-loaded; downloads alsoavailable

None 3D games Java-enabled games

Price Php15,990 Php16,990 Php23,000 Php22,900*All specifications taken from company websites, Semicon.net, ZDNet, CNET.com, and Mobile-Review.com.

The Motorola RAZR V3i, when compared to the Philips Xenium 9@9d...


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The Motorola RAZR V3x is the com panys first 2 megapixel camera phone

The Sony Ericsson K800i is the first of the Sony Ericsson mobile phones to carry the

name of Sonys remarkable Cyber -shot digital camera series .

The Samsung D500 is uniquely designe its form factor is what gives it an edge


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Unit

Samsung E800Alcatel OT-S853 HP Ipac Hw6515A

Pocket Pc O2 XDA II mini

Call/SMScapability

SMS, MMS, EMS Yes Yes SMS, MMS

3G Functionality No No No No

Battery LifeStandby time: 5 days; talktime: 2.5 hours


Removable/rechargeable1200 mAh battery

Standby time: 180 hours;talk-time: 4-5 hours

Memory24MB 10 MB shared memory 64MB SDRAM, 64MB

Flash ROM64MB ROM, 64MB RAM

LCD Resolution

1.72 128X160 pixels 65536colours TFT LCD displayscreen

256K colors; 176 x 220 pixels

3.0" Transflective TFTcolor with LED backlight

2.8" Transflective TFTLCD display, 64K colourtouch screen with 240 x

320 dots resolutionMultimedia

VGA camera with flash (and15-multishot ability alongwith 4x zoom)

Video: MP4; Images:WBMP, PNG, JPG, GIF,GMP, aGIF; 1.3 MP camera

1.3 MP camera that saves pictures in JPEG format;voice-recording capability

1.3 mega-pixel camera

Connectivity

GPRS, infrared Proprietary USB port, PCSoftware Suite, IrDA Port,Bluetooth, WAP, GPRS

Integrated GPS antenna,GSM International quad-

band phone, Bluetooth,IrDA and USB

GPRS, Bluetooth, infraredUSB

OrganizerTo-do list To Do list, Scheduler,

Multi-field directory,Graphical agenda, Email

Powered by MicrosoftWindows Mobile 2003Second Edition - Phone

Microsoft WindowsMobile 2003 standardapplications
http://void%28launchwindow%28%27itemenlarge.asp/?ModelID=476%27,%27height=385,width=200%27))


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client (optional), Directaccess keys to directorynumbers

Edition

Music

None Sound: SP-MIDI, SMAF,PCM, MP3, MIDI, i-Melody, AMRnb, AMR,ADPCM, AAC, FM radio

Windows Media Player 10(MP3, audio and videostreaming)

Windows Media Player

Games Downloadable Java MIDP 2.0 games Solitaire, Jawbreaker Jawbreaker, Solitaire

Price Php19,000 Php14,200 Php30,000 Php36,000*All specifications taken from company websites, Semicon.net, ZDNet, CNET.com, and Mobile-Review.com.


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DISCUSS


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Unit

Palm Treo 650Smartphone

Siemens C75 Siemens SL65

Call/SMS

capability

"See an entire conversation

in a chat-style thread."

SMS, EMS, MMS,Email, Instant

Messaging

SMS, MMS, Email,

Instant Messaging3G Functionality No No No

Battery LifeGSM/GPRS model: Up to6 hours talk time and up to300 hours standby time

Standby time: 300 hours;talk time: 5:30 hours


Memory22MB user-availablestored non-volatilememory

10 MB shared memory 11MB shared memory

LCD ResolutionColour TFT touch-screen,320 x 320 resolution, 16-

bit colour

TFT, 65K colors 65.536 color TFTdisplay

MultimediaVGA with 640x480 (0.3megapixels) resolution andautomatic light balancing

VGA, 640x480 pixels,video camera

VGA camera with 5xzoom

Connectivity Bluetooth GPRS, Infrared, USB Infrared, USB

OrganizerCalendar, Contacts, Tasks,Memos

Yes To-do list

MusicRealPlayer included requires SD memory card,sold separately

None None

Games Downloadable None NonePrice Php36,400 Php7,990 Php9,990

*All specifications taken from company websites, Semicon.net, ZDNet, CNET.com, and Mobile-Review.com.


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B. Strengths and Weaknesses Analysis of Competitors (4Ps)

STRENGTHS & WEAKNESSES AnalysisCOMPETITOR STRENGTHS WEAKNESSES

Alcatel has been a key player in

the mobile phone market since1998, thanks to its well-implemented strategy in the fast-developing consumer segment.(Source: Semicon website)

Provides mobile phones at arelatively low price but still takinginto consideration good enoughdesign

Though it has been around for

quite some time, Alcatel neverreally surpassed the othercompetitors

Promotions are not given muchfocus

HP has built a name for itself overthe years, in such a way, that

when one hears the two letters HP,computers, laptops and technologycomes to mind

Expensive price Not yet built a name for itself in

terms of their smartphones Only found in some stores

Motorola is the #2 manufacturerof wireless handsets after globalleader Nokia (Source:Euromonitor)

It is also a leading supplier of suchwireless infrastructure equipmentas cellular transmission basestations, amplifiers, and servers(Source: Euromonitor)

Known for its slim phones, mostespecially the Moto Razr (Motosmost successful phone to date, theRAZR has reportedly sold over 50million units since it debuted inthe market 18 months ago. Philippine Daily Inquirer,Lifestyle, Ringin in the style byAlex Vergara, Aug.11, 2006)

Incomplete features

Nokia is the world's #1 maker ofcell phones (Source: Euromonitor)

It commands nearly 40% of theglobal cell phone market (Source:Euromonitor)

Caters to all types of users on allcategories

Well-distributed since it is

Since most people buy Nokia phones in the Philippines, it cannot be avoided that its parts havenow been prone to piracy


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available anywhere andeverywhere

Has a lot of variety Known for its user -friendly

quality

With its windows compatibility,O2 makes for a better smartphonethan most

Expensive price Only found in some stores Does not focus much on promo

Established a good and trustedname for itself in the PDA market(ie Palm Treo)

Expensive price

Samsung is the world's top makerof dynamic random-accessmemory (DRAM) and othermemory chips, as well as a globalheavyweight in all sorts ofelectronic gear including LCD

panels, DVD players, and cellular phones (Source: Euromonitor)

Known to have the best LCD

Has yet to really challenge themarket leader

No 3G Technology yet

Siemens is one of the worldslargest public corporations, withover 900,000 shareholders.(Source: Siemens site)

Provides inexpensive phones

Though it has been around forquite some time, like Alcatel, itnever really surpassed the othercompetitors

Promotions are not given muchfocus

Sony Ericsson is considered a topseller of cell phones (Source:Euromonitor)

Known for its walkman music phones since they integrated sonytechnology with their cybershotcameras

Known to have the best camera phones

Has yet to really challenge themarket leader


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C . Attack and Avoid Matrix

ATTACK OR AVOID

COMPETITOR Year 1 Year 2 Year 3 REASONS

0.10376% 0.0889% AVOID

- Alcatel, like Philips, has asmall market share that wewould like to exploit

- They seem to be contentedwith their current positionand do not do a lot to gainmore market shares

AVOID AVOID AVOID

HP is an indirectcompetitor

Their product is not quitesimilar to ours since itcombines the functionalityof a mobile phone and aPDA

AVOID 0.2668% 0.5833%

- Since Motorola is a marketchallenger, we are notgoing to attack them inyear 1 first. We are

planning to attack them in

year 2 and 3 instead.

AVOID AVOID AVOID

- Nokia is the market leader- Their market share is too

large for us to penetrate

AVOID AVOID AVOID

- O2 is an indirectcompetitor

- Their product is not quitesimilar to ours since itcombines the functionality

of a mobile phone and aPDA

AVOID AVOID AVOID

- Palm is an indirectcompetitor

- Their product is not quitesimilar to ours since itcombines the


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functionality of a mobile phone and a PDA

0.2594% AVOID AVOID

- We, more or less, have thesame target market

- Since Samsung only has amarket share of 5% (2005) based on the PhilipsCompany Data, we are justgoing to attack 2% of their5%

0.02594% 0.0889% AVOID

- Siemens, like Philips, has asmall market share that wewould like to exploit

- They seem to be contented

with their current positionand do not do a lot to gainmore market shares

0.1297% 0.1779% 0.4167%

- Since Sony Ericsson has amarket share of 11%(2005), based on thePhilips Company Data, wewill be attacking themlittle by little

POSITIONMARKETFOLLOWER MARKETFOLLOWER MARKETFOLLOWER

TOTAL MARKETSHARES ACQUIRED 0.5188% 0.6225% 1%

- The total market sharesacquired is increasing peryear and this is because,throughout the span of threeyears, we are planning tomake a name for Philips inthe mobile phone industrythrough above-the-lineadvertising which would

help people learn moreabout our phones and whatwe have to offer


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III. Opportunity Analysis

A. Idea Generation

There has been an increase in cellphone subscription over these past years

B. Identification of Opportunity

Opportunities and Threats

OPPORTUNITIES THREATS Less operator-controlled Nokia parts made readily available Shift from subscriber to replacement

market

Initial tie-up of Nokia with service providers

Shift from subscriber to replacementmarket

Mobile phone industry has reached

maturity stage

L esser Operator-Control led (Opportu ni ty)

According to Angelo Valenton, general manager of Philips

Consumer Electronics, the mobile phone industry today has less operator-

control

Noki a Parts made readil y avail able (Opportun ity)
http://www.smart.com.ph/Smart/


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D. Key Success Factors

I nn ovative Techn ology Philips ultra -long battery life.Nationwide Di stri bution Should capture market outside Luzon.

Variety of M obile Phonemodels Catering to the peoples lifestyles.

Brand Buil ding throughAdverti sin g Str ategies

Philips establishing a name for itself in the mobile industry.

I nn ovative Techn ology

DISCUSS

Nationwide Di stri bution

DISCUSS

Variety of M obile Phone Models

DISCUSS

Br and Bu il ding thr ough Adverti sin g Strategies

DISCUSS


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IV. Target Market Selection

A. Identification of Target Market

1. Consumer Profile

The target market, chosen by the group consists of

Psychographics

We chose the age range of 20-34 since most

Based on our survey

Behavioral

1. Age 20-24, 25-29, 30-342. Gender Male and Female3. Civil Status Single, Married, Divorced, Separated, Widowed4. Income B, C5. Education College, Masteral, Doctoral, PhD,

6. Profession Young Professionals7. Locationa) Density Urban Areas

b) Geographic NCR, Major Cities8. Family Size N/A9. Religion N/A10. Nationality N/A

1. Social Class Class B and C2. Lifestyle Busy Lifestyle3. Personality Concerned with Social Status

1. Purchase Frequency Occasional2. User Status Regular Cellphone Users3. User Rate Medium to Heavy Users

4. Loyalty Status Medium5. Readiness to Buy Unaware


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Demographics

Source: Group Survey

QUALITIES THEY LOOK FOR IN A PHONE, Ranked from most significant to leastsignificance

Ranking Qualities they look for in a phone RATING1 Trusted brand 2.53312 Good price 2.66993 Ease of use 3.07824 Style/Design/Look 3.12395 Internal/Technical Features 3.33136 After sale support 5.3117


0

10

20

30

40

50

60

Twice A Year Yearly Every TwoYears

As Needed Others

R e s p o n

d e n

t s

How Often Respondents Change Phones


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Geographic

Source: National statistical offices/UN/Euromonitor International

B. Analysis and Rationale for choice

1. Identified Market Segments

42%

34%

14%10%

IMPACT OF BRAND NAME ON CHOICE

Moderate impact (39)

High impact (31)

No effect (13)

Just a bit (9)

42000

44000

46000

48000

50000

52000

54000

56000

2001 2002 2003 2004 2005 2006

P o p u

l a t i o n

i n T h o u

s a n

d s

Year

Urban Population in the Philippines


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Mobile phone buyers in the Philippines are divided into consumer segments. Each segment is

characteri zed by the consumers preference in terms of phone features and how they choose the products

based on their personalities

IDENTIFIED CONSUMER SEGMENTSSEGMENT PHONES TARGETING THE SEGMENT

Innovators Latest technology

Plugged-ins Making a fashion statement

SelectivesConcern for multifunctionality

EmpathizersAspire new features


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Basics Main concern is call and textUninvolved buyers No concern in a particular feature

2. Market Needs Being Addressed

WHAT QUALITIES DO YOU LOOK FOR THE MOST IN BUYING A MOBILE PHONE?

Ranking Qualities they look for in a phone RATING1 Trusted brand 2.53312 Good price 2.66993 Ease of use 3.07824 Style/Design/Look 3.12395 Internal/Technical Features 3.33136 After sale support 5.3117


WHICH FEATURES DO YOU CONSIDER MOST IMPORTANT?

RANK FEATURE RATING1 Call and text function 1.50592 3G Function 2.83 Battery Life 2.82794 Memory 3.07475 LCD Resolution 3.17126 Camera and Video Recording 3.27807 Bluetooth/Infrared/GPRS 3.67938 Organizer 3.76459 MP3 3.7778

10 Games 4.5


WHAT WOULD ENCOURAGE YOU TO SWITCH FROM ONE MOBILE PHONE BRAND TOANOTHER?

Ranking Quality of the other prospective phone replacement Overall Average


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3. Buying Patterns

Based on the survey findings

Income does not affect the buyers budget for a mobile phone


551

248

63

21

0 20 40 60

5000 below5001-15000

15001-2500025001-3500035001-4500045001-5500055001-6500065001-7500075001-8500085001-95000

95001-100000100001 above

Number of Respondents

I n c o m e

i n P e s o s

INCOME DISTRIBUTION

5000 below

5001-15000

15001-25000

25001-3500035001-45000

45001-55000

55001-65000

65001-75000

75001-85000

85001-95000

95001-100000

100001 above

1 More updated features 1.69352 Longer talk time and battery life 1.98333 A phone with the same features, but cheaper one 2.0896


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Aside from brand name, Filipinos also prefer brand new units when buying a phone

1030

2916

92

4

0 10 20 30 40

5,000 below5,001-10,000

10,001-15,00015,001-20,00020,001-25,00025,001-30,000

30,001 and above

Number of respondents

B u d g e

t r a n g e

BUDGET FOR A NEW PHONE

42%

34%

14%10%

IMPACT OF BRAND NAME ON CHOICE

Moderate impact 39%

High impact 31%

No effect 13%

Just a bit 9%


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4. Usage Habits

More people use Nokia as a primary phone than any other brand in the market

80%

18%

2%

CHOICE WHEN BUYING A PHONE

Brand new 80%

Second Hand 18%

Reconditioned 2%

41%

26%

18%

15%

PLACE WHERE THEY BUY A MOBILE PHONE

Flea market or tiangge 41%

Authorized seller 26%

From an operator 18%

From a friend 15%

59

1610

6 51 1 1

0

10

20

30

40

50

60

N u m

b e r o f u n i

t s p e r

b r a n

d

NUMBER OF PRIMARY PHONES PER BRAND

Nokia 59%

Sony Ericsson 16%

Samsung 10%

O2 6%

Motorola 5%

Alcatel 1%

Philips 1%

Siemens 1%


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REFERENCES

64%

22%

12%

2%

FREQUENCY OF CHANGING MOBILE PHONES

As needed 65%

Every two years22%

Yearly 11%

Twice a year 2%

3

4

8

15

23

32

0 10 20 30 40

Number of respondents

REASON FOR CHANGING MOBILE PHONES

Phone got damaged or broken 32%

I wanted to upgrade thefeatures of my phone 23%

My old phone got lost15%

I just wanted a new phone8%

Desire for a new design4%

Others 3%

Documents

Day9.Philips.sample Pass 1