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The Marketing Plan on the Fiber Network Products in Singapore Telecommunications
1.1 Company profile
The SingTel Group is Asia’s leading communications group, providing a diverse range of communication services and solutions, including fixed, mobile, data, Internet, info-communications technology, satellite and pay TV. We are the largest listed company on the Singapore Exchange by market capitalization. We are also listed on the Australian Securities Exchange as a result of our acquisition of Optus, the second largest communications provider in Australia, in September 2001. In addition, the SingTel Group is a long-term strategic investor in six regional mobile operators in India, Indonesia, the Philippines, Thailand, Pakistan and Bangladesh. To serve the needs of multinational corporations, SingTel has a network of 36 offices in 19 countries and territories throughout Asia Pacific, in Europe and the USA (Singtel.com 2010).
1.2 Product introduction
Figure 1 The function demonstration of the Next Generation Network (NGN)
Source: Pacnet.com 2011
The fiber network or fiber ultra-high-speed broadband network is the open high quality fiber platform of Singapore’s Next Generation Nationwide (NextGenNBN) built and managed by the OpenNet Pte Ltd which is appointed by the Infocomm development Authority of Singapore (IDA). While OpenNet is in charge of the construction of the infrastructure of the fiber network, other telecommunication service providers will then offer broadband services using this network platform (OpenNet.com.sg 2011). And ExStream (Fibre) Services is a form of fiber optic communication delivered by SingTel. Through this infrastructure (Fiber to the Home), consumers can enjoy upload and download speeds far superior to that of any other existing DSL broadband network available, making this the superior technology for ultra high speed internet access, digital voice, internet television services and home networking. But as in an equal status with other competitors as a provider of the fiber service, SingTel needs to compete with other suppliers in the fiber internet market.
2. Background to the research problems
In Singapore, SingTel has 130 years of operating experience. SingTel has played an integral part in the development of the country as a major communications hub in the region. Today, SingTel continues to shape the digital media and ICT market in Singapore. Despite full liberalization since 2000, SingTel remains the leading mobile, broadband and fixed line operator and in July 2007 ventured into home entertainment with the launch of our Mio TV. In September 2010, SingTel launched high-speed fiber services, with distinctive applications focusing on entertainment, convergence and productivity enhancement for home and business users (SingTel Annual report 2009). Given this market and industrial background, this thesis is dedicated to reviewing and critically criticizing the marketing strategy currently adopted and tries to proposed a comprehensive marketing plan of the new fiber network products in SingTel as a market leader based on the literature review to provide a careful examination of the competitive marketing strategy which depends on a company’s industry and on whether it is a market leader (Kotler & Armstrong 2008, p.599).
3. Problem Definition
And a well structure marketing plan which is well written could help avoid inconsistencies, unknowns, gaps and implausibility and provide solutions to such possible difficulties and also a good marketing plan also help the management to focus on the organization’s strategic business goals and the changing market conditions. What’s more it provides a well arranged implementation timetable that ensures that tasks and goals are completed within a certain period of time.
3.1 Research Question
What’s the market position held by SingTel?
What are the current marketing strategies adopted by SingTel in the matured products?
How to design a pragmatic and viable marketing plan for the new fiber network products?
3.2 Research Objectives
To probe into the difficulties and challenges faced by the organization
To provide an overall situational analysis of SingTel in the new generation network product market
To evaluate the case using the relative major marketing theories such as Porter (1980)’s generic strategy
To provide a comprehensive marketing plan using Philip Kotler’s marketing plan framework on the new generation network product
4. Situational analysis
4.1 PEST analysis
PEST analysis Political PEST stands for, Political, Economic, Sociological and Technological analysis which examines factors under these four headings and how they might affect an organization. PEST analysis is useful to check the environmental influences especially to the internet industry which is subject to rapid changes (Birkholz 2004, p.7).
4.1.1 Political factors
Singapore is a republic with a parliamentary system of government with political power being invested in the Prime Ministers and his Cabinet ministers who are responsible collectively to supervise and manage the country (Singapore International Chamber Of Commerce 2009, p.2). It is believed that Singapore has the most competent government in Asia and under such a strong government Singapore has achieved superior political stability since independence which has helped attract the foreign investors to the island as claimed by Frankham (2008, p.620). The strong government could be seen from the political ruling status and the compatibility of politics and culture. Following the expulsion from the Federation of Malaysia, Singapore’s political ruling party, the PAP, has in all the time won more than 90% of the seats in the parliamentary elections resulting in aura of prestige and legitimacy to one party ruling (Haas 1999, p.45). What’s more, the government also plays an important role in creating a vivid, free and open economy that Singapore has today, for example, essentially there are no rules and regulations restricting a foreigner from owning any firms and foreign investors may incorporate enterprise on a 100% ownership basis (Tan 2000, p.493). Such government policies have contributed to the increase of the attractiveness of Singapore as a destination of the foreign investment. The strong influence of the government of Singapore not only could be found in the politics but also in every other aspect of the country which will be elaborated below.
4.1.2 Economy factors
Chart 1 Singapore Gross Domestic Product (GDP)
Source: TradingEconomics.com 2011
Singapore together with Hong Kong, South Korea and Taiwan are known as the Four Asian Tigers because of the economy miracle that they achieved. Singapore has a highly developed and successful free-market economy. It enjoys a per capita GDP higher than that of most developed countries. According to the data released in 2009, with a per capita GDP of $48,500 Singapore was ranked in the 9th in comparison with other countries (The World Factbook 2009) suggesting the country creates GDP much more than the other developed countries at a per capita basis. In term of the nature of the economy in Singapore, the economy focuses heavily on exports, especially in the consumer electronics, information technology products, pharmaceuticals, and on a growing service sector.
Chart 2 Singapore historical GDP Growth Rate
Source: TradingEconomics.com 2011
As illustrated in the chart above that from 2007 until 2010, Singapore’s economy managed to bounce back from the influence of the US led worldwide economy downturn and Singapore’s average annual GDP Growth during this period was 5.47 percent reaching an historical high of 19.40 percent in June of 2010 after a record low of -8.90 percent in March of 2009.
4.1.3 Social and cultural factors
As claimed by Huff (1994, p.369) that the clear policy lesions of Singapore’s achievement of economic development were adaptability to world conditions, pragmatism and a relative absence of ideology. And like many other Asian countries, cultural traditions such as extended families, filial piety, discipline, respect and the most significantly, the Asian work ethic (Frankham 2008, p.620). The point of view that there is a unique and commonly found Asian political system in the Asian countries rests on the premise that Asia and the West have fundamentally different traditions, cultures, and values. And it is generally believed that the western countries are too much democracy which usually ends up with chaos while the many Asian countries would act differently by preferring more political stability and ideological control and focus on the societal needs. The Asian style stereotype of culture and social conventions could also be found in Singapore. And it is claimed that the core values of Singapore are defined in the Confucian ethics such as the good social conduct defined by the elders (Regnier 1991). In the field of the social and cultural factors, the government also plays an important role in shaping the country’s cultural and social system. In 1991, the Singapore government introduced a Confucian based national ideology which was then known as the “shared values” which were initiated to reinforce the Confucianism in term of high collectivity and group oriented value amongst the Singaporeans (Dent 2002, p.74) to protect the basis of the developmental statism: the integrity of Singapore’s paternalistic Confucian state and relative core values.
Needle (2010, p.92) concluded a number of features to describe core values which originated from the Confucianism, these features include the importance family, education, hard work and personal saving, perseverance, adaptability and long-term orientation. Just like what is written in the song “one people, one nation, one Singapore” that “We have built a nation with our hands, The toil of people from a dozen lands, Strangers when we first began, Now we’re Singaporean”, the citizens of Singapore on one hand feel safe as secure and they also on the other hand they also believe that hard work could bring success and a better life. The hard work that the Singaporean value is also necessary under the high survival pressure in life, as described by Kau, Jung, Tambyah and Tan (2004, p.207) that life in Singapore is extremely competitive for the majority of people who will have to work hard and smart. And approximately 80 percent of the Singaporeans stay in HDB buildings and most of them are average wage earners. And it seems that most people have to be content with what they and being an ordinary person and work hard and keep a high productivity at work and high efficiency in life.
Together with the widely appreciated hard work and high productivity that could be found in the commonly accepted social tradition and in the field of economy construction, it is concluded in some surveys that that Singaporeans are in favor of the penalty. The acceptance of strict penalty in the society strengthens the stability of the society as many disturbance factors are largely eliminated from the beginning when people get to know the possible extremely bad consequences with a sense of fear. In the report the death penalty: a Hidden toll of executions released by Amnesty International (2004), Singapore was given the reputation of having the highest execution rate per capita in the world as 408 people, mostly drug trafficking and murders, were hanged from 1991 to 2003.
So we can see that with the emphasis in an efficient life style and the highly desired high productivity and efficiency in the competitive working environment, the new ultra high speed broadband network would be highly desired by the Singaporean with their social and cultural background.
4.1.4 Technological factors
In the perspective of the technology capability development, Wong and Ho (2003) identified four major phases in the economic development that describe a series of structural transformation since the 1960s: industrial take-off, local technological deepening, applied R&D expansion and high-tech entrepreneurship and R&D intensification. The first stage began in the early 1960s and ended in the mid 1970s which was depicted by high dependence on technology transfer from the foreign multinational corporations (MNCs); the second technology development phase is the technological deepening which lasted from mid of 1970s to 1980s and this period was characterized by the rapid growth of local process technological development within the MNCs and the development of local supporting industries; and next stage is the applied R&D expansion in which MNCs, public R&D institutions and local firms all participated in the rapid expansion of the applied R&D; and the last phase started from 1990s and still continue to date, namely as the high-tech entrepreneurship and R&D intensification, this phase is characterized by the increasing emphasis on the high-tech start-up and change toward technology creation capabilities. The progress of the technology development comes with fast economic development and the change of economic growth mode as illustrated in the figure chart below.
Chart 3 Singapore economic development journey
Source: Singapore Development of Statistics 2009
While the technology capability of Singapore has been proved to have reached a high degree compared to other even many other developed countries, the government seems never want to stop its advanced pace by improving its technology innovation and infrastructure. This is even more obvious in the construction of the so called next generation network. In 2006 the plan of building up the “Next Generation National Infocomm Structure” initiated by an Intelligent Nation 2015 was announced to the Parliament which consists of two major parts: the first major component is a wired ultrahigh speed broadband network which is able to provide 1 Gbps or more to the end users and the other part is the a wireless broadband network that could be able to provide wireless connectivity across the island (Ibp 2009, p.78). To ensure the successful implementation of the blueprint, the Singapore government is prepared to provide a grant of up to SGD 750 million for the project. The infrastructure is expected to be fully available nationwide by 2015, supporting a range of new services such as high-definition video conferencing and telemedicine (Akhtar & Arinto 2009, p.313).
4.2 Competitive analysis using Five Forces model (Porter 1979)
After analyzing the environmental factors in term of political, economical, social and cultural and technological factors using the PEST analysis, it would be necessary to check with competition level for the specific industry (Stevens 2006, p.47), i.e. the internet network industry in this case. And it is believed that the competition level for the specific industry determines the level of the competitiveness of the collaborative network to define the expectation of attractiveness, profit and collaboration of the particular industry (Camarinha, Afsarmanesh & Ortizp 2005, p349).
Figure 2 Industry Competitiveness Analysis Using Michael Porter’s Five Forces Model
Source: (Lewis, Goodman, Fandt & Michlitsch 2007)
One of the best-known and widely used tools in assessing the competitiveness of a specific industry is the industry competitiveness analysis using Michael Porter’s Five Forces Model, and according to this model, the interaction among the five main competitive factors (The threat of the entry of new competitors, the threat of substitute products or services, the bargaining power of customers or buyers, the bargaining power of suppliers and the intensity of competitive rivalry) will together determine the nature and degree of the competition in the selected industry as illustrated in the figure above.
4.2.1 Competitive Rivalry within an industry
Singapore’s telecommunication policies which are enacted by the Info-communications Development Authority of Singapore have long been structured towards developing a “world class” telecommunication network with the aim of providing high quality telecommunication services which is of great importance to the policy makers’ eyes to the economy development of the city country. And since the liberalization of Telecommunication Sector in 1998 (full liberalization was witnessed two years later in 2000), over the past decade, the telecommunications industry has seen greater liberalization, deregulation and competition resulting in the increasing consumer choice and stimulating greater efficiencies in the use of the scarce resources (Logan 2008, p.436).
Table 1 Telecommunication companies that provide optical fiber services
Source: (Ida.gov.sg 2011)
As we can see from the above table, with installation and construction of the quality passive optical fiber network by the appointed network constructor, OpenNet, there are a number of the existing Internet Service Providers who have already been providing the DSL broadband service in Singapore taking actions to become active fiber network builders by providing Residential and Business fiber plan on their own. Taking into consideration not only the number of existing Internet Service Providers who are eager in expanding their footprint in the fiber network industry but also the fact that the current nationwide DSL broadband network (the SingaporeONE plan) market is highly competitive after the ISP market liberalization that took place in 1998 (there had already been 18 licensed ISPs two years after the ISP market liberalization by June 2000) (Ida.gov.sg 2006), we can expect that the similar high degree of competiveness in the next generation network industry would also been found.
4.2.2 Bargaining Power of Suppliers
SingTel together with the other competitors that are shown in the table above, are all downstream operators that construct their business on same open and high quality fiber platform is under construction of OpenNet which is the joint venture company between four partners –Singapore Telecommunications (SingTel), Singapore Press Holdings (SPH), Axia NetMedia (Axia) and Singapore Power Telecommunications (SPT) (OpenNet.com.sg 2011). Though SingTel does hold the share of the supplier, but as the key foundation of the Next Gen NBN, OpenNet will have to provide a competitive but still neutral environment for all downstream operators, meaning to say that there will be much less bargaining power of supplier in the fiber network industry as it is promoted and closely monitored by the government.
4.2.3 Bargaining Power of Customers
The bargaining power of buyers refers to the ability of buyers to bargain down prices charged by companies in the industry or to raise the costs of companies in the industry by demand better product quality and service (Hill & Jones 2009, p.60). The bargaining power of customers will be medium which will be rationalized below. On one hand there are factors that reduce the bargaining power of buyers: firstly the customers are large in numbers in term of both residential and business customers; secondly the companies that provide the fiber internet service are large scaled telecommunication companies though they are in a competitive relationship; thirdly purchases by customers are in small quantities which means that every individual customer’s order will only occupy small percentage of the company’s total order so that buyers can not use their purchasing power as leverage to bargain for price reductions; On the other hand there are factors which are all concerned with the competitive relationship between the companies that contribute to the bargaining power of buyers: firstly, as mentioned above those fiber service providers are in a competitive relationship; secondly because like the current DSL broadband product, fiber network product will also provided to the customer in term of service in contract (2 years normally) which means that when the contract has ended the customers would have very low switching cost from one service provider to another so that they can play off the supplying companies against each other to force down the prices. With the interaction between the positive factors and negative factors to the increase of the he bargaining power of buyers we can see that bargaining power of customers will be medium rather than very strong or weak.
4.2.4 Threat of New Entrants
The threat of new entrants is high which is determined by the status of the telecommunication industry and the low cost of entry and exist. Singapore has taken a gradual, phased approached in liberalizing its telecommunication markets which started as early as 1989 with the removal of the restrictions on the sale of telecom consumer goods, and with more than one decade’s effort in April 2000 the restriction to require the telecommunication companies to be more than 51% Singaporean-owned was lifted representing that all the limits were lifted which became one strong motivation to attract greater foreign investment (Ure 2008, p.241). This means that the fiber network industry will be competitive and open to domestic and multinational players who are interested in the business. What’s more, as mentioned above the telecommunication service providers will offer fiber broadband services based on the network platform built by the passive constructor, OpenNet, this means that the service providers would not need to invest large money into the construction of the basic infrastructure and this represent a small cost of entry and exist due to the much less initiative investment and sunk costs.
4.2.5 Threat of Substitute Products
|Fixed line penetration||44%||1,864,344||Open market|
|Mobile market penetration||94%||3,935,400||Open market|
|Internet service penetration||60%||2.13 million||Open market|
|Broadband service penetration||43%||531,400||Open market|
Table 2 Telecommunications infrastructure status
Source: IDA Singapore: Telecoms Services Statistics for February 2005
Substitute products are those products that appear to be different but are not which means that they can satisfy the same needs as another product and hence pose a threat to the existing producers and providers of the services (Analoui & Karami 2003, p.83). From this definition and considering the current status of the telecommunication infrastructure as shown below, we can see that there are two major types of substitute products: mobile broadband and the current high speed home based broadband internet service.
220.127.116.11 Broadband on mobile
The first substitute product is mobile broadband which could be replace the fiber internet is due to its wide market penetration as above in the table below, almost every Singaporean will have one or more than one mobile phone but the mobile broadband could only to some extent replace the high speed fiber internet product because of the commonly slow connection speed (the widely used mobile broadband is in 3.6 mbps/s and 7.2 mbps/s) and what’s more though some Telecommunication Companies such as M1 does provide Mobile Broadband plans that can enable customers to surf the internet and email at download speeds of up to 21Mbps and upload speeds of up to 5.76Mbps (M1.com.sg 2011) but there is another two major constrains of mobile broadband that could make it possible and practical to replace the coming fiber internet service product: unstable internet connection and quota limit. On one hand because of the wireless connection that the mobile broadband is using, this type of internet service could become unstable due to the external environment change such as the weather factors, and on the other hand critical constrains is the quota limits such as the download quota limits that a mobile broadband would usually have, for example the 7.2 Mbps data plan that SingTel provides will come with a bundled data usage of 30 Gbps resulting in the great inconvenience for the usage of broadband on mobile as the substitute product of fiber internet product.
18.104.22.168 ADSL broadband and cable broadband
The second types of substitute products include two products: ADSL broadband and cable broadband. The first product is the current prevailing home based broadband that is functioning based on the (Asymmetric Digital Subscriber Line) ADSL technology that provides dedicated local bandwidth connectivity.
Table 3 ADSL providers and the plan
Source: (Ida.gov.sg 2011)
The advantages of ADSL broadband are obvious, it provides dedicated local bandwidth connectivity to the end user which means that using a 15 Mbps ADSL broadband service customers can expect that the download speed could reach up to 15 Mbps without sharing with other users living near to them. But the constrains that make it difficult to replace fiber internet in the future with the trend of increasing demand for higher connection speed is its commonly low speed, as the table above shows the current highest speed of ADSL product is 15Mbps home broadband product provided by SingTel.
Table 4 Cable broadband providers
Source: (Ida.gov.sg 2011)
The second type of home based broadband is the cable broadband that there are currently three telecommunication companies provide in the Singapore market, as seen in the table above, the current cable broadband products provide up to 100 Mbps which could be considered as very high speed compared to the ADSL connections and is comparable to the fiber products. But one disadvantage make it also hard to compete with the coming fiber technology is that the maximum speed is achievable theoretically rather than practically because the cable broadband is not dedicated connection which means that users need to share the speed with other users so that the seeming high speed could become very low especially when it comes to the busy hours.
In conclusion, with the features of ultra high speed and dedicated connection the fiber product enjoy preferable position when it is compared with the current internet products but if it comes with too high a price that exceed people’s expectation, the customers could still use the substitute products such as the ADSL broadband and cable broadband.
4.3 Analysis on customers
Satisfying customers is the focus of marketing as in the most strategic market-planning contexts the first logical step is to analyze the customers (McLoughlin & Aaker 2010, p.386). Below we will analyze the customer in three dimensions: target customer identification, customer needs analysis and the way iber network services satisfy customer needs.
4.3.1 Identify the target customers
There are two major types of internet product end users: business users and residential family users and both of which will be elaborated below. With more than 7, 000 multinational corporations (MNCs) from Japan, the United States, Europe and other countries operating out of Singapore employing more than 60 percent of the island’s workforce and producing 80 percent of the export of Singapore, the small island country has long placed it in an advantageous position in attracting foreign direct investment by providing quality service to the MNCs especially in term of the well known largely corruption-free government, skilled workforce and the advanced and efficient infrastructure (Weightman 2011, p.465). So the first type of end use, the business users are playing a more important role than in the same internet industry in other developed countries as Singapore itself is a highly developed large city making the business sector of great strategic importance. And the business users cover not only the large MNCs but also the small and medium local firms. According to my own survey “Customer Needs Analysis of Fiber Broadband Product (Business)” (sees appendix 2) which surveyed managers from 35 random companies, 17% of them are already using the fiber internet while 69% of the non-fiber corporate users have expressed their interests in using fiber network in the near future to facilitate the efficiency of the business communication.
The second type of internet end users is the residential user. According to the Singapore Department of Statistics (2011), Singapore has a population totaled 5.08 million at the end of June 2010 with 3.77 million residents of which 3.23 million were Singapore citizens and 0.54 million were permanent residents. And among the population, according to Chang (1996) who had done a survey participated by the Singaporean Xers, it was believed that the city country’s 20s and the 30s all had extraordinarily high expectations in three major fields: career progression, remuneration and material possessions. And these young ages are the target customer group who are more acceptable to the new ultra speed fiber product due to their eager ambitions to improve the quality of life and focus on job efficiency. But according to my own survey “Customer Needs Analysis of Fiber Broadband Product (Residential)” (sees appendix 1) which was participated by 120 random customers through online survey, people aged from 30 to 40 also express desire to use the next generation broadband as illustrated in the chart below.
Chart 4 Fiber internet penetration rate and percentage of users interesting in using fiber
From the chart we can see that in Singapore not only the 20s to the 30s will be interesting in the new fiber product but also the 30s to the 40s also have strong desires to try to the new network system and similar case could also be found in the age group between 40 and 50 suggesting that in Singapore the residential market of fiber product has a broader customer basis.
4.3.2 Convey the needs of the target customers
The need of the target customers determinates the extent of successfulness to which a company could market its product, and such needs not only include the functions and quality of the product itself but also involve with the way the product is marketed and delivered and also the after sale service will also mattes. According to my own survey “Customer Needs Analysis of Fiber Broadband Product, when asked the major reasons the current fiber users are not satisfied with the fiber network service products, the most selected three reasons are: Connection is not stable (Frequent intermittence, totally not working sometimes) (78 percent), the monthly subscription is too high (56 percent) and the sale and after sale service is not good enough (32 percent), on the other hand the surveyed business user who were not satisfied with the fiber service list out these three reasons: Speed is not as high as in expectation (55 percent), the sale and after sale service is not good enough (47 percent) and Connection is not stable (Frequent intermittence, totally not working sometimes) (44 percent). And similarly for those who had not used the fiber products, the residential customers focus on these top three reasons: Price is too high for me (64 percent), The promotion is not attractive (45 percent) and Do not need such high speed (32 percent); while the business users focus more on these three issues: Do not need such high speed (43 percent), Price is too high for me (32 percent) and Contract issue (30 percent). From the survey results we can see that both residential and business users will care about the product quality and cost to obtain such products (price paid) as important factors when making the decision to purchase the product or not and the residential customers seems to be attracted more easily by the promotion while the business end users focus more on the functions of the fiber products in term of speed and stability of the connection.
5. Marketing objectives
A three years marketing plan will be discussed below starting from June 2011 to May 2014. And in term of the marketing objectives which include the corporate level and a product level. In the corporate level in which the objectives could be achieved by the joint effort contributed by various business sectors and product lines that it is currently focusing in the local Singapore market, the company is targeting to achieve the annual revenue growth of 10 percent compared to 8 percent in 2009 to 2010 financial years. And powered by the new fiber products in the next three years period, the company is expecting within these three year plan, the company could maintain the 27 percent proportionate contribution in term of EBITDA contribution from the Singapore market and this ratio keeps the trend decreasing in the past few years time. And in the next three years in the product level in term of its fiber product, the fiber exStream broadband network, SingTel is anticipating to achieve the major goals of market share growth and the net profit growth. In term of market share, it hopes that through the careful implementation of the three years marketing plan, it could increase its market share in the next generation fiber network to reach 37% in the residential sector and 46% in the business sector in the end of 2014. And in term of the net profit growth, the company expects to achieve an average 40% annual net profit growth as the fast growth in the industry is anticipated.
6. Marketing strategies
6.1 Michael E. Porter’s generic strategy (1980)
Table 5 Michael E. Porter(1980)’s Typology and Generic Strategies.
Source: Porter 1985
According to Michael E. Porter’s generic strategy (1980), based on two strategic dimensions: strategic scope and strategic strength, Michael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage: cost leadership, differentiation strategy and segmentation strategy. The abundant empirical research findings have shown that there is a general consistency between commitment to one of Porter’s strategies and higher performance (Dess & Davis 1984; Hambrick 1983). And it is claimed that a company must make a choice between these three generic strategies or else it would be “stuck in the middle” and suffer from below average performance (Porter 1980, p.40).
For SingTel, in term of the competitive advantage, it would choose the differentiation rather than the lower cost given by the status that it is already Singapore’s largest telecommunication company, though lower cost will reduce the attractiveness of the industry to the potential entrants, but at the same time it will greatly reduce the profit of the company, so the differentiation competitive strategy would be a better choice compared to the lower cost; and in term of the competitive scope, SingTel have its product service covering a broad market rather than a narrow target which is in consistence with its past strategy and the company leadership status and also the corporate scale and it is not reasonable for it to give up any major market that it is already doing business in with successful experience. So with a broad target and a differentiation competitive advantage, it would be recommendable that SingTel chooses a differentiation strategy to strength its competitiveness in the fiber network industry.
6.2 Market segmentation
Market segmentation involves grouping heterogeneous customers in a market into smaller, more similar homogeneous customer groups. The customers in a specific segment should share similar product needs and buying characteristics (Dibb & Simkin 2001, p.56). There are six common business segmentation dimensions in action: geographic, business demographics, adopter categories, benefits, product usages and purchasing approaches (Weinstein 2004, p.6).
As in SingTel, before the release of the Fiber exStream Product, it has already had a detailed segmentation of the target market in the broadband product which is stated in the table below which could also be used in the new fiber product marketing plan:
|Student plan||Aged from 13 to 21|
|Staff plan||For staffs under eligible corporate schemes|
|ATL plan||Open to all eligible applications|
Table 6 Market segmentation of SingNet broadband (Residential sector)
|Small & Medium Enterprises||Large Enterprise|
|Bronze||Normal Business Users||Bronze||Normal Business Users|
|Silver||Long term partner||Silver||Long term partner|
|Gold||Long term partner with great revenue contribution||Gold||Long term partner with great revenue contribution|
|VIP 1-4||Strategic partner||VIP 1-4||Strategic partner|
Table 7 Market segmentation of SingNet broadband (Business sector)
6.3 Marketing mix
Marketing mix has also been classified as 4Ps of marketing to develop an appropriate action plan, which was what E. Jerome McCarthy termed the 4Ps as “product, price, promotion and place (or distribution)” about the controllable marketing variables in a marketing plan (McCarthy, 1960).
6.3.1 Product decisions
Product decisions deals with a number of variants such as packaging, color and brand names, but actually the most important about product strategy has been mentioned by the above discussion using Michael E. Porter’s generic strategy that it would be recommendable that SingTel chooses a differentiation strategy to strength its competitiveness in the fiber network industry. To differentiate the fiber product means that SingTel need to tailor or add additional service and products to offer a more customized end product according to different end users groups, i.e. the market segments. Before we can finalized the fiber product offered to the specific market segments, we need to see by what dimensions that we can classify the fiber product and what other products and services that we can add into the fiber products.
In term of classification dimensions of the fiber products, it could divide the fiber product using the speed: 50 Mbps, 100 Mbps, 200 Mbps, 300 Mbps, 500 Mbps and 1 Gbps. And in term of other services, right not SingTel has the following prevailing products and services that could be combined with the fiber products to make up new fiber plans. There are three five products: home telephone, broadband, mio TV, mobile phone service and other value added service.
|Home telephone service||Broadband|
|Analog line||Mio voice (Digital line)||5 MB||10 MB||15 MB|
|Mio TV service||Mobile|
|Normal plan||Sport plan (with BPL)||Prepaid||Post paid||Iphone|
Table 8 Current major products provided by SingTel
With these options, SingTel can make a number of plans that consists of different bundle of services to better meet different needs of different customers groups.
6.3.2 Pricing mix
Several skills could be used in forming the pricing strategy. Firstly, a bundle price could be use to cover a bundle of services. For example, when SingTel provides a bundle that consist of 100 Mbps Fiber internet, Sport plan (with BPL) Mio TV and Mio voice (Digital line), an overall price could be used here to cover all the monthly subscription of the three services that are in the bundle plan. Secondly, promotional pricing skill could also be used at the first stage to encourage the potential customers to make up the decision to sign up for the standalone or bundle products that are in a bundle plan, the promotional pricing could take two major forms: it could be lower than usual or it could add another services or gifts into the plan but keep the price unchanged. What’s more, psychological pricing as a type of pricing skills could also be used in the pricing mix. The nature of psychological pricing is widely used in the business practices, for example in Singapore with the major race of Chinese digits such as 8 and 9 would be more preferable to the Chinese customers.
6.3.3 Promotional mix
The promotional mix would be one of the major field in which the company needs to invest a large part of its money and effort in to increase the new product exposure into the market in a short period of time. In term of promotional channel, three major channels could be used to distribute the promotion information to the potential users. The first channel is through regular mail which could come along with bills that the SingTel customers receive every month. With the large customer base, SingTel could effectively promote the new fiber plan using this low cost but still effective traditional communication channel. Secondly, the company could use telephone sale to call the customers which could be more effective because the salesmen could answer the questions that the customers may have when signing up the plan. But obviously this way of promotion could incur high cost. Thirdly, the company could also hold activities especially in the festivals in an area such as taking the form as a road show that has been used for long in SingTel and other competitors.
Another important skill is the introduction of the regular premium plan which could offer gifts such as Iphon, Ipad, laptop and other valuable gifts. This skills is effective though costly but SingTel has to adopt because this has become a trend in Singapore and as every competitor is doing the same thing, so SingTel not only has to follow but also need to take the leadership of providing better gifts in term of better and more satisfactory premium plan.
6.3.4 Place mix
The placing strategy in the release of fiber products is of significant importance in term of the implementation of the installation timely and how the premium gifts and service and equipments could be distributed to the customers timely and appropriately. To achieve the fast and best placing mix, two fields need to be taken good care of. Firstly, the company needs to expand its installation team so that new sign-up customers even in the promotional period could expect that the installation could be finished within 12 working days. Secondly, Singpost (post office that is owned by SingTel) could be used to deliver the premium gifts but more close corporation is needed to ensure that no mistakes could be made during the delivery.
Below are the three years’ budgeting to support the whole marketing plan financially:
In thousands (SGD)
Table 9 2011-2012 Extreme Fiber marketing plan
In thousands (SGD)
Table 10 2012-2013 Extreme Fiber marketing plan
In thousands (SGD)
Table 11 2013-2014 Extreme Fiber marketing plan
8. Sale forecast
Table 12 Projected profit and loss statement
9. Marketing control process
Marketing control is a process management that is used to generate information on marketing performance which usually has two major forms: (a) control over the efficiency in allocation of the marketing effort; (b) comparison of planned and actual performance (Hutt & Speh 2010, p.443). And SingTel also could define its marketing control system along these two directions. On one hand, the company could refer to the profitability data in the past few years and according to which the future expenditures could be predicted and adjusted. For example, the projected cost could be adjusted in 2013 when the 2012 financial statement is out. And on the other hand, as mentioned above, SingTel is aiming at increasing its market share in the next generation fiber network to reach 37% in the residential sector and 46% in the business sector in the end of 2014 and in term of the net profit growth, the company expects to achieve an average 40% annual net profit growth as the fast growth in the industry is anticipated, to achieve these marketing objectives, SingTel would need to make comparison of planned and actual performance date on a yearly and monthly basis.
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 The SingTel Group is structured along three main markets – Singapore, Australia, and International.
 The 2010 to 2011 financial report is not yet available.
 Earnings Before Interest, Taxes, Depreciation and Amortization
 Above The Line plan (ATL) which is applicable to normal applicants
 Traditional telephone line using analog technolgoy
 Barclays Premier League