Executive summary
Cell phone industry is considered to be one of the fast growing and very perspective industry which remains attractive to investors regardless high competition. At the same time, competition, being a serious problem, may be overcome with the help of introduction innovations that make a new cell phone really different. In this respect, it is possible to suggest to introduce a new cell phone in American market which could be different from the competitors due to its beeper function which could help to locate cell phone in the case it were lost. Obviously, such innovation may really bring success to a new cell phone since, as researches show, the loss of cell phones is one of the problems the majority of Americans, up to 65%, face in their life regularly. Consequently, it is necessary to make it the target market of the new cell phone and potentially the number of units produced should coincide with the demand on such cell phones and, taking into consideration that the share of potential customers in the cell phone segment of the market may reach 65 %, it is possible to forecast that revenues could be about 600 million dollars.
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Naturally, to achieve positive results in the introduction of a new cell phone, it is necessary to apply proper market strategies that could help to make the new phone really popular among customers. Notably, it is worthy to use negative experience of many Americans that once have lost their cell phones and use the advantage of a new cell phone in the advertising campaign. In fact, advertising campaign plays an important role in the commercial success of a new product and this is why it should be carefully planned and conducted. Not less important are reliability of a new cell phone and possibly lower costs spent on its production without negative impact on the quality of the product.
Obviously, on creating such a product, it would be possible to start the market expansion and provide high percentage of growth that may reach 10-15% annually. Potentially, it is possible to expand sales of a new cell phone on the world market.
Product description
On introducing a new product in the market, it is apparently necessary to clearly define its main characteristics, functions and advantages compared to its competitors that could provide the possibility to develop an efficient market strategy and promote the product among consumers. It is particularly important for such a highly technological industry as telecommunication industry at large and cell phone industry.
First of all, it should be pointed out that the new cell phone is supposed to prevent the possibility of losing it by customers that could make it really attractive for customers within the US as well as in perspective in the world market. To make the cell phone really ‘findable’, it is recommended to introduce an innovative system which could help to locate the position of the phone if it is lost. Notably, instead of a traditional phone, it is suggested to create the BeepPhone which is dramatically different from the rest of cell phones.
The basic difference of the new product lies in the fact that the BeepPhone is actually a pager within a cell phone which helps to define where the phone currently is. In fact, it is a kind of chip that will be placed within a cell phone and will a wireless pager or beeper. As a result, such an innovation in the traditional device construction can provide the possibility to customer to easily find the BeepPhone when it is lost or misplaced since one of the main functions of the chip placed within the phone will be to alarm customer either by using a vibrating alert, a flash light, or simply some sound effects.
On the other hand, taking into consideration the fact that the placement of the chip within a cell phone may be accompanied by certain problems that would make the phone less competitive, such as larger size, for instance, it is possible to make the pager portable and thus, it can be attached to customer’s keys without being incorporated in the construction of the phone that obviously will need additional funding to create a really different cell phone that increase costs dramatically while the attachment may just use the same technology as for traditional phones with certain innovations and start the production of pagers separately from cell phones.
Obviously, the BeepPhone has a number of advantages compared to competitors. Firstly, it is really hard to get lost. Secondly, this will be a really new cell phone different from others that will attract customers that attempts to acquire the most technologically advanced cell phones. Finally, it will create the image of a reliable cell phone since customers, who have already lost their cell phones once, will really appreciate the new one that aims at not being lost.
Finally, it should be said that the introduction of the BeepaPhone is commercially justified since the development of telecommunication technologies is really significant part of the contemporary business and implementing new technologies in this sphere may open new perspectives for the company introducing them because it increase its opportunities to gain a new niche in the market, especially such a competitive one as that of cell phones, and create the popular brand. At the same time, the implementation of innovations is considered to be the most efficient way to increase the market share and start the market expansion which is practically impossible if a new company is entering the market of cell phones.
Target market
Naturally, it is impossible to introduce a new product without a profound market research. In this respect, it is worthy to note that primarily it is necessary to clearly define the target market which should be the basis for the further market analysis.
Speaking about the introduction of the BeepPhone and its target market, it is highly recommended to start with the American market and focus on the customers that have already lost their phones at least once in their life, especially on those who do it regularly since, unquestionably, they will be among the first customers who acquire the new product. The reason for orientation on the American market is not simply the high percentage (65%) of customers that lost their cell phones last year but, there is another even more serious reason. What is meant here is the fact that American market of cell phones is one of the largest if not largest in the world. Moreover, Americans are probably the most exposed to innovations because the national market is characterized by the wide implementation of high technologies, especially in the field of IT. It is not a secret that the newest technologies are accumulated and realized in this market.
In such a situation it is quite logical to start with such a technologically advanced country as the US since on the one hand, there are ample technological possibilities to properly realize the project, i.e. create a really reliable BeepPhone of a high quality, on the other hand, the American market would easily accept the new phone because it is overloaded with traditional cell phones that is explained by the high technological development of the country, presence of all leading companies operating in this field in the national market, and economic situation in the country which provides the possibility for customers to experiment with their cell phones without significant effect on their budget. In this respect, it is obviously unreasonable to introduce the BeepPhone which will not be cheap in the market of a developing country since there is a risk that such phone will have a very limited market, while in the US there will not be any problems of such type.
Obviously, the US market is probably the largest national market that can be sued as the target market for the introduction of the BeepPhone. At the same time, the potential of this market is really great since 65% of Americans that lost their cell phones are potential buyers of the new product – the BeepPhone. Consequently, speaking about the potential size of the national market it is possible to estimate that it may constitute 65% of Americans that have negative experience of loosing their cell phones and which undoubtedly have no intention to have the same experience once again if the BeepPhone is offered as an alternative prevented from being lost. In such a way, it is possible to potentially assess the size of the market approaching to 600 million dollars that Americans spend on acquiring new cell phones instead of the lost ones.
On the other hand, it is necessary to clearly realize that the introduction of the BeepPhone does not imply that all Americans that have once lost their phones will buy immediately this new product. In all probability, the first year share of the market may constitute up to 15 or even 20% and hardly more because the introduction of the new cell phone needs proper advertising campaign which should emphasize the main advantages of the product compared to competitors. At the same time, taking into consideration a stable trend to the growth of the national market of cell phones and the extent to which losses of cell phones in the US are regular and widely spread, it is possible to forecast that the annual growth of the share of the BeepPhone may reach 10-15% that can make the company one of the leaders of the cell phone industry in 4-5 years, naturally on the condition that innovations are keeping to be implemented.
Nonetheless, regardless really great perspectives of the American market, it is still necessary to remember about some serious risks the company introducing the BeepPhone may face. First of all, probably the most serious obstacle on the way to commercial success of the BeepPhone is extremely high competition within the American market of cell phones. Basically, it results in the presence of leading companies producing cell phones in the national market and high level of offer of cell phones. Furthermore, high competition also implies that some brands have already gained their own share of the market and it will be extremely difficult to change preferences of customers who get used to these brands which may seem to be more reliable than a new product such as the BeepPhone. In this respect, the assistance of one of the leading brands may be needed to create a reliable image of BeepPhone. Finally, there are simply technological problems to create an innovative product since to place a pager in a cell phone means changes of some characteristics of the cell phone, such as size, this is why it is possible to look for alternatives such as pagers that could be attachments to keys, for instance, that would minimize possible negative changes of cell phones technological characteristics, such as size. Not less important is keeping the pace of introduction of innovations which should be implemented regularly in order to keep the BeepPhone competitive.
In such a way, on preventing the risk and realizing strategies offered above the BeepPhone may gain commercial success.
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