Singapore Telecommunications Limited or SingTel is a telecommunications company based in Singapore. It has a mobile subscriber base of more than 500 million subscribers from its own operations and those of its associated companies located in 25 countries worldwide. It is the largest communications company in Singapore and among the top 30 in the world. The company offers mobile and fixed telephone services, fixed line and broadband internet services, IT, digital TV and network services.
The company has plans to introduce a product into the market. The product is a self service mobile application that integrates regular phone services, credit card and transportation card. The application seeks to serve the customers’ need for a secure way to pay for services using credit cards and transport cards that are integrated into the phone. The phone minimizes the risk of loss of cards and the hassle of having to recall several passwords for your cards. In this software, the only security level is the SIM card which then allows for the integration of other cards (Au & Kauffman, 2008).
The “One SingPhone” application may be installed on all phones that are compatible with the NFC technology and which have a SingTel SIM card. The software allows the consumer to use the service to pay for services by touching the phone onto a secondary device that is programmed to identify payment cards installed on the phone and deduct charges as appropriate. Its advantage is that it is hassle free and may be used to store several consumer cards onto one phone and to pay for a variety of transport services. Businesses that have the devices that accept payments from NFC activated phones will be able to take advantage of the product (Chen & Adams, 2004).
The one problem that has challenged mobile payment applications has been the fact them are power consuming and will often lead to power drainage hence lending them useless (Dahlberg & Oorni, 2007). The NFS platform however resolves this problem in part since it consumes little power. It however remains challenged by the fact that the method cannot be used in cases where the battery power drains out due to other reasons. For consumers who intend to take advantage of this method of payment should be willing to carry with them power back-up to ensure that the battery does not get drained in the process of a transaction or before hence lending them confused.
Technology is taking the world by storm. One SingPhone is the technology of the future. The NFC technology has been adopted widely in many countries including the USA, Canada and the UK (Dahlberg, Mallat, Ondrus & Zmijewska, 2008). The adoption of this technology is expected to be embraced speedily by both consumers and business people. For businesses that need to take advantage of the software, they will need to buy a device that is meant for receiving payments from phones through the NFS platform. Singtel will make the devices available while at the same time making their software usable on various other devices.
According to Carlisle and Galagher Consulting group (n.d.), the purchases that were made in the USA for the year 2012 equaled more than $73 trillion dollars. The market has been growing steadily and slowly capturing the non-cash market. During the growth period, banks, mobile operators and handset manufacturers try to take a part in it. In the opinion of SingTel, it is better to integrate all three institutions in the creation of a good product that is beneficial to all. This way, consumers from a variety of interests stand to benefit since they may feel included through the inclusion of their preferred institutions.
It has been noted that while in 2007 consumers carried a total of seven cards to cater for their non-cash payments, today consumers carry an average of two cards with one being a back-up plan in case one failed to work. On the other hand, consumers have turned to mobile applications to store the rest of their cards. They have only used their plastic cards in situations when they have no access to their phones or there is no provision for making mobile payments.
The NFC technology comes installed on many devices and offers a platform for the One SingPhone product. The technology has been used previously on the mobile wallet and on the digital wallet. The product has been used for various purposes including obtaining tickets, vouchers and loyalty cards as part of loyalty campaigns. The introduction of this technology to the Singaporean market will provide a foundation for most of these services in the future.
The possible market for the product includes those consumers who have mobile handsets. The NFS platform however limits the market since not all phones have the NFS capability. The market can be segmented into various categories according to their needs. There are various ways in which the market share can be segmented.
The first segment is that of youths. According to Carlisle and Galagher Consulting group (n.d.), the youths are more comfortable using their mobile payment applications. They spend more time with their devices and therefore stand the chance of understanding such applications more easily compared to their older counterparts.
The middle aged persons are the second customer segment. The importance of targeting this market would be due to the fact that they have more chances of making payments since they are in their earning stages are more likely to be supporting a family and probably a business. Such people also stand a higher chance of having a regular travel pattern and are therefore more likely to facilitate the growth of the product.
The final segment is the older persons. These people have a high purchasing power. However, they stand reserved to traditional methods of payments. They are however still a good market especially for the company to introduce as business partners who adopt the platform as a means of doing business (Mallat, 2007).
To position this product to the market segments, several strategies may be employed. First, the consumers trust for Singtel may contribute to make the product more preferred by consumers sooner. Being the largest provider of communication services in Singapore, SingTel is in a better position than any other company to market a similar product. Currently, the major competitors include companies that offer plastic cards and those companies that use other platforms like the HCE. Since only plastic cards are presently in Singapore, introduction of this kind of payment systems will most likely be a starter for the citizens. It is therefore going to raise a lot of interest for consumers.
The company may further help to position the product by advertising its advantages in terms of its speed, ease of use and convenience. Portraying the product as a better product than traditional cards will provide consumers with better reason to adopt it (Ellson, 2004).
While the product can be used by various consumers, it is best reserved for customers aged between 20 and 50. These customers are likely to be more welcoming to change since they are more informed about it. The consumers are also in a better position to use the services regularly since they are in the working stage. Being in the working stage, they are expected to have a regular income and likelihood to be bread winners hence the possibility of frequently using their credit cards (Dibb & Simkin, 2013). Their daily travel to and from work provides a market that can be tapped using this product.
Another customer segment that may be considered is the segment of frequent travelers. These consumers are likely to become regular users of the product but must identify its advantages beforehand. The usability of this product in various countries further makes it relevant to them especially in countries where the product has been embraced.
SingTel stands to benefit from the market of the new product for two reasons. First, the company commands a lot of consumer trust due to the standard of products offered and its huge customer share. For this reason, it is most likely that consumers of its other products are going to subscribe to its new product.
Second, the company will be the first company to provide a digital platform for making payments in Singapore. For this reason, it will be much easier for consumers to associate the technology with SingTel. Association of a product with a company in most cases leads to product equity which is a good thing for the company.
The company should be prepared for customer fallout that will be necessitated by realization that the product does not serve the needs of specific consumers (Kotler & Armstrong, 1997). It should however seek to maintain a specific niche of customers who are likely to like the experiences provided by the new product. This is supposed to be the target market of the company and will most likely include the consumers in their middle age and who have a foundational understanding of technology.
4 P – Marketing Mix (Marketing Strategy)
The marketing mix attempts to identify the major aspects of a company. The four aspects of the marketing mix are the product, place, price and promotion (Luan, & Sudhir, 2010).
The product in this case is the One Singphone software. It sets to satisfy a need in the market to allow consumers to access their credit cards and transport cards even when they do not have them physically (Ondrus & Pigneur, 2006). The product also seeks to reduce the number of cards that consumers have to carry with them either for purchase or for identification. The One Singphone software stands to benefit a wide customer base by offering a platform for them to access their funds and make payments.
The product in this offering will be a free product. It will however offer the company several ways to make an income. First, the product will attract consumers from competing service providers. This way, the company stands to create a large customer base for its other SIM based products. The larger the customer base a company has, the higher the revenue it collects and the higher the profits it makes. Second, the company intends to negotiate for payments from the financial and transport companies for which it is going to host the payment services. For every transaction made on the software, the company will make a small percentage of the charges incurred by the consumer or a standard amount depending on the negotiation with the company (Varshney, 2002).
In some cases, therefore, this might call for a raise in the costs charged on the consumer. To compensate for the higher prices, the company is bound to offer a superior product, better services, improved and prompt customer service and regular updates to the product. The product will in that case accumulate a loyal customer base. A loyal customer base is often worth more than a new customer since new customers often buy a product with the intention of measuring its value. Once they determine that it has sufficient value for them, they become return customers and probably loyal to the company. If they determine that the product does not meet their expectations, they opt for traditional methods or seek other options. New customers are therefore unreliable compared to old and loyal customers.
The product will mainly be made available online on the company website. This will ease the process of obtaining the product especially for young people who have a foundational knowledge of computers and the internet. It will also be made available on new devices that are purchased from the company. Consumers will also be able to obtain the product for free from all dealers of the company’s products. Businesses that receive payment through the software will also be able to provide the product to the consumers. All banks and travel agencies that use the service will also assist customers in obtaining and installing the product. The intention of the company is to ensure that the product is as readily available for the consumers as possible.
The product will be promoted through all available channels. First, it will be advertised on the internet. This will provide information about the usability of the product as well as provide a link to the download site. Promotion will also be done on television to create awareness about the product and its importance. The company will also advertise the product on daily newspapers to create awareness, offer detailed information on the product and provide download instructions. Finally, the company will engage in road shows and other campaigns to inform the people about the product.
Financial software is performing extremely well in other countries. It has proven that it is a good business venture and one that is worth investing. The number of consumers who are subscribing to the idea is gradually increasing while that of those who subscribe to traditional methods like plastic cards falls.
Carlisle and Galagher Consulting group argue that within five years, a majority of smarphone users will rely on their phones and mobile applications as their preferred means of payment. In the mean time, checks, cash and plastic will continue to be irrelevant. This assumption can be supported by the trend that has been seen with smartphones and tablets. Once a technology is accepted, its adoption starts rising gradually and surely.
Person (2013) argues that at the moment, over 70 % of smartphone users are interested in obtaining and using a mobile phone software for making mobile payments. 15 % of this group has already obtained a payment method that is convenient for them. She also argues that by 2020, the use of this method of patyment will have increased by over 127%.
The process of implementation would initially be involved with intense research and consultation on the best method to make the program. This would involve several steps before completion. First, the company should go into the Singaporean market and investigate the aspects that must be incorporated in the new product. The various dimensions of this research will include the level of security, the amount of information to be provided to the business to which purchases are being made and the costs of making transactions.
The second step would be to research on the formalities of the product and how to maximize the product according to the needs of consumers. Issues such as incorporation of loyalty programs into the application have been used before and the best program should be incorporated into the One SingPhone product. The inclusion of the most current developments into the first product will help to improve the uptake of the product by consumers.
Once the research has been completed, the company should go into development of the product. The company may opt to use its own programming staff to deal with the situation or contract another company to do this. The company should however have a clean record of good projects. It may also opt to select two companies in striving to provide consumers with their dream product. Upon completion, the company will have two options to choose from. If possible, the company should be one that has experience developing similar products.
The initial funding of the product should go into research. It would be advisable to contract an independent research company to do the research. For this, the company should be willing to provide a minimum of $100,000 depending on the parameters of the research. The creation of the product by a secondary company would cost a minimum of 250,000. SingTel may even consider contracting a company for its day to day operations with the product.
Once the product has been created, money should be set aside for marketing (about $1 million), installation on new devices (minimum of $200000 depending on the number of devices) and other operations which may take up to $2 million. The creation and implementation and creation of the new product should therefore be no less than $3.55 million. Other costs may arise in the form of transportation and decision making and recruitment exercises which should be covered up in the respective departments of the company.
conclusion, the world has been gradually embracing digital technology. Some
countries have shown an intention to migrate fully from the traditional methods
of payments using plastic cards, checks and cash (Zheng & Chen, 2003). With
this migration, different institutions have shown an interest in facilitating
in this migration. Among them are banks, phone manufacturing companies and telephone
service providers. SingTel intends to take advantage of this digital migration
by providing the very first product of its kind to the masses in Singapore.
This will give the company a chance of growth, innovation and experience with
the market (Zmijewska, 2005). The company has therefore prepared an intensive
plan that intends to see the company through the decision making process, the
research, the development and the implementation of the project. With its huge
market share, SingTel is just the best company to roll out the One SingPhone
product. With the current trends in mobile payment applications, there is a
very high chance of success.
Au, Y., & Kauffman, R. (2008). The economics of mobile payments: Understanding stakeholder issues for an emerging financial technology application. Electronic Commerce Research And Applications, 7(2), 141–164.
Carlisle & Gallagher Consulting Group (n.d.). Mobile Wallet Reality Check: How Will You Stay Top of Wallet?
Chen, J., & Adams, C. (2004). Short-range wireless technologies with mobile payments systems, 649–656.
Dahlberg, T., & Oorni, A. (2007). Understanding changes in consumer payment habits-do mobile payments and electronic invoices attract consumers?, 50–50.
Dahlberg, T., Mallat, N., Ondrus, J., & Zmijewska, A. (2008). Past, present and future of mobile payments research: A literature review. Electronic Commerce Research And Applications, 7(2), 165–181.
Dibb, S., & Simkin, L. (2013). Market Segmentation Success (1st ed.). Hoboken: Taylor and Francis.
Ellson, T. (2004). Culture and positioning as determinants of strategy (1st ed.). Houndmills, Basingstoke, Hampsre: Palgrave Macmillan.
Kotler, P., & Armstrong, G. (1997). Marketing (1st ed.). Upper Saddle River, N.J.: Prentice Hall.
Luan, Y, & Sudhir, K 2010, ‘Forecasting Marketing-Mix Responsiveness for New Products’, Journal Of Marketing Research (JMR), 47, 3, pp. 444-457.
Mallat, N. (2007). Exploring consumer adoption of mobile payments–A qualitative study. The Journal Of Strategic Information Systems, 16(4), 413–432.
Ondrus, J., & Pigneur, Y. (2006). Towards a holistic analysis of mobile payments: A multiple perspectives approach. Electronic Commerce Research And Applications, 5(3), 246–257.
Person, L. (2013). Mobile Wallet (NFC, Digital Wallet) Market (Applications, Mode of Payment, Stakeholders and Geography) – Global Share, Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2012 – 2020. Allied Market Research
Varshney, U. (2002). Mobile payments. Computer, 35(12), 120–121.
Zheng, X., & Chen, D. (2003). Study of mobile payments system, 24–27.
Zmijewska, A. (2005). Evaluating wireless technologies in mobile payments-a customer centric approachih, 354–362.
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