Age, income, gender and location are among the familiar elements of demographic-based marketing across industries and, to an extent, the wireless industry has embraced the basics. One-touch dialing for pre-teens and seniors, feature-loaded, expensive gadgets for early adopters, pink handsets for (presumably) women, satellite phones for remote field workers all are based on different facets of this simple concept.
“My mother doesn’t want a phone with an MP3 player,” said Tuong Nguyen, analyst at Gartner. “She doesn’t care if her phone is cool, she just wants a phone that works.”
As the mobile industry matures, however, it may follow other mature industries that have evolved the concept of demographic-based marketing to the more granular approach of targeting “affinity groups,” or “communities of interest,” according to Bob Egan, research director for emerging technologies at Tower Group.
In a sense, this shift is already taking place as service providers promote handsets that focus on, say, music or games, and MVNOs target various communities such as the devotedly young-and-tech-savvy, fans of iconic entertainment companies, sports aficionados, even distinct cultural or ethnic groups.
But, Egan said, consider a real-life analogy: the credit-card companies’ approaches that create commercial tie-ins with retailers, airlines, dining organizations to create not only loyalty programs-fly a lot, get free air travel miles-but cross-promotional opportunities based on communities of interest that open new retail channels. Think L.L. Bean VISA card-can an L.L. Bean cell phone be far behind?
This direction is an inevitable aspect of a maturing industry, according to Egan.
“The mobile industry is finally growing up to be another integrated part of our society,” Egan said. “As mobility grows past 70-percent penetration in the United States, for instance, the carriers and handset vendors will increasingly seek to be integrated into traditional style-of-life distribution channels.
“Whenever you get major penetration of a market, the game is two-fold,” he added. “In our wireless market, how do you attract the `un-celled’-the last 30 percent-and how do you cannibalize your competitors’ customer list? One way is to take broad-based marketing efforts, where you try to be all things to all people. The next step is to begin drilling down into the touch points of consumers.”
In that sense, a perceptible shift is already apparent in carriers’ advertising campaigns, according to Egan.
“We’re moving from a technical-feature market to a love-thy-customer market, where the carriers are appealing to consumers’ sensitive touch points,” Egan said. “It’s already happening.”
Network operators are moving from specific claims about their network reliability, for instance, to assurances that that reliability supports an on-the-go lifestyle.
“The battlefront is being set based on the ability of the incumbent carriers to grow market share and for the MVNOs to actually get off the ground,” Egan said. “The method is to target various affinity groups. This battle is an attribute of a market that is reaching saturation.”
The analogy to the credit-card industry is strong, Egan said. Credit-card companies are working to figure out who’s buying what, why they are buying it and, increasingly, where else are they going to buy it? The credit-card companies are helping merchants to understand not only who their customers are, but who their competitors’ customers are, how they behave and how they might be lured away from competitors. And credit-card companies all offer their services through the face of the retailer or other businesses such as airlines, dining clubs, etc.
This more granular marketing direction, of course, has propelled the litany of MVNOs that now crowd the wireless landscape, though Egan and Nguyen are dubious about MVNOs’ general prospects based on their sheer numbers as well as the cost of handsets and service relative to the major carriers.
Right now, Egan, said the most obvious “breakout” lifestyle-affinity efforts have focused on pure style-the notion that toting the coolest handset is a way to express your personal panache, if you will. This in part explains an aspect of Motorola Inc.’s current status as a style-conscious, trend-setting handset maker.
Motorola clearly hit one out of the park with its clamshell-style, “thin is in” Razr products, hit pay dirt with a pink variant that continues to sell well and now, with its just-announced line of Razr follow-ups, has chosen to go narrower (that is, less wide) and offer handsets with innovative, eye-catching exterior finishes. Beyond these broad approaches to a lifestyle-conscious market, the handset maker also has announced a line of customized phones in conjunction with Miami Ink that will allow a slice of the young-and-hip crowd to personalize their phones with etched-in, tattoo-style designs.
Leslie Dance, vice president for global marketing and communications at Motorola’s mobile devices unit, confirmed that her company has evolved its thinking along these lines.
“In `marketing speak,’ we call it `attitudinal demographics,”‘ Dance said. “It’s all in your attitude and how you live your lifestyle.”
Several years ago, when Motorola did a consumer segmentation study, the company came away with a sense of the importance of this concept, according to Dance. Motorola subsequently put the concept into play by developing with Burton Snowboards “wireless, wearable technology”-a Bluetooth-enabled Audex Jacket Series launched last December that allowed the ultra-cool set to make or take calls or listen to music using a control panel on a sleeve of winter outerwear. The line’s success has led to a new line for the coming winter season, according to Motorola.
Part of Motorola’s strategy going forward is to extend the life of its winning Razr design by tweaking it for communities of interest, thus its gold Dolce & Gabbana Razr likely appeals to a different crowd than its upcoming offering of tattoo-style etched phones.
“In order to have relevance and create consumer demand, you have to meet people’s desire to personalize,” Dance said. “People are looking for ways to differentiate themselves. They make a statement about `who they are’ with their cell phone. So we want to connect with consumers in ways that are relevant to their lifestyle.”
“The name of the game is a very aggressive breakout focused on style,” Egan concluded.
