MGT 700 Improvement to the Value Creation PDF

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This course had a big project worth 30% of your grade and divided into 13 parts. This is part 5...

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Improvement to the Value Creation The ultimate goal is to bring maximum value to customers at the lowest possible cost to them. Over the years, T-Mobile has made huge changes in order to keep up with their competitors. One of the largest changes that their value chain has seen is when they introduced their “Un-carrier” approach in 2013. The “Un-Carrier” value approach is based on simplicity, fairness and value. And although this marketing effort brought the company 22 million new customers in just the first 2 years, there are still some downfalls of the T-Mobile brand when compared to its competitors. Coverage is one of the most important aspects customers will consider when choosing a carrier. T-Mobile's 4G coverage is currently 11% worse than the industry leaders Verizon. Even though their prices are lower for consumers, many users will not sacrifice service quality for a price cut, especially in certain states where it is significantly lower. If T-Mobile truly wants to be a Un-carrier with a competitive lead, they can’t just offer the lower price; they also have to offer superior service. They have to invest in improving their 4G coverage throughout the United States and communicate that to their customer’s base and target markets. In certain states where Verizon is the carrier leader that is essentially an opportunity for T-Mobile to make their service better and acquire those customers in untapped markets. They currently have the leading 5G coverage, which may open up that opportunity for them in the future as the use of that network expands, however if they can find a way to implement the same strategy for expansion to their 4G network they could look more appealing and effective to prospective customers. Another way to do this is by also improving their data and download speeds in the same way. Although they currently offer the lowest pricing, again data speed is something that many customers will not sacrifice. This is especially true when trying to entice consumers to switch carriers from Verizon. T-Mobile’s value chain needs to offer more than just the best price; they also need to offer the best service and coverage in order to achieve what UnCarrier represents. T-Mobile’s Value Creation Analysis Listed below is a chart describing T-Mobile’s Value Creation:

Market Segments T-Mobile has approximately 98.3 million customers as of 2020. This makes T-Mobile the second largest wireless carrier in the United States. With 98.3 million customers, T-Mobile overtook AT&T in total branded customers across both postpaid and prepaid services. T-Mobile has increased its customer base with the merger with Sprint. According to T-Mobile, its net customer additions were 1,245,000 in Q2 in 2020. Also T-Mobile increased its customer base because of the world pandemic, Covid-19 which led to new opportunities for T-Mobile because more people were working from home and needed cell and data coverage. (T-Mobile) T-Mobile continues to grow nationwide with its 4G and 5G network. Below is a chart from T-Mobile which is listed by state. This highlights in each state who area has no coverage, 4G LTE, and 3G/2G coverage.

(T-Mobile, 5G & 4G LTE Coverage Maps) T-Mobile is segmenting their customers by millennials, families, customers who wants new technology, and by who lives paycheck to paycheck. According to T-Mobile which stated Mobile realized the biggest value factors for most customers were a dedicated phone which could be accessed anywhere, broad access to internet connectivity, the ability to buy only as much data as needed, and the ability to share accounts with family.” (Francis & Francis, 2019) This is how T-Mobile segments its consumers. T-Mobile is also segmenting its customers by price. Some customers are live paycheck to pay which puts them on a tight budget. This allows for T-Mobile to price their plans accordingly knowing their customers wants ways to lower their costs but get great service as well as connectivity. Marketing Research

T-Mobile uses demographic information from a third-party source which include consumers age, household, education and personal preferences. T-Mobile also uses device data and location data to gain information about their demographics. (T-Mobile.com) T-Mobile demographics include millennials, young families, military and service personal. They are really striving to reach out to the millennial generation. Millennials which has an age range of 18-34 years old which include 28% of T-Mobile’s demographics. (Paonessa, 2020) T-Mobile is relying on millennials to purchase their service. They’re targeting millennials by taking a new aged branding approach in marketing. T-Mobile uses bold pink font and all of their ads are full of life. They’re creating incentives for millennials to purchase T-Mobile. For example, T-Mobile targeted millennials with BankMobile. T-Mobile is supplying BankMobile with marketing power and the 81.3 million customer base. BankMobile is offering a 4.00% annual yield on credit balances up to $3,000. BankMobile made this deal with T-Mobile to attract millennials. (TMobile targets Millennials with BankMobile, 2020) T-Mobile is also relying on millennials because of the latest pandemic in the United States. T-Mobile reported the amount of time spend on phone calls increased by 17 percent in March of 2020. T-Mobile is also reporting a text increase by 26 percent in March of 2020. A third-party agency did a study and found that an 88 percent of Millennials prefer texting over phone calls. (Kowalick, 2020) Lastly, T-Mobile is trying to target millennials because they offer many different services and devices and carter to everyone’s needs. Generation X, age groups range from 35-54 which make up of 47% of demographic for T-Mobile. Lastly, the baby boomer which age group is 55 and up, make up of 25% of the demographic for T-Mobile. (Paonessa, 2020) In 2017, T-Mobile targeted Baby Boomers and attracted new consumers by giving them the ability to pick up two unlimited lines for $60.00. TMobile stated that,” In 2017, those aged 55 and above can register for the first T-Mobile One plan for $50, with the second line costing just $10.00 after factoring in a $5 per line Autopay discount. (Jonnalagadda, 2017) In 2019, T-Mobile again target Baby Boomers by launching the Essentials Unlimited 55. T-Mobile is branding themselves to 55 and over consumers by trying to create the best deal for someone who is 55 and over. T-Mobile feels that boomers deserve respect from the wireless industry and T-Mobile is trying to create that.” According to T-Mobile, “roughly about 90 million people over the age of 55 in America demand more from their wireless carrier.” (T-Mobile)

Distribution Channel Utilization T-Mobile’s distribution channel utilization offers many different options. T-Mobile wants to be able to get its products and services out to their consumers as quick as possible. They also want to be able to generate potential new consumers to T-Mobile’s products and services. They are able to do this by having an online presence such as being able to sign up for services online. Online services include customer care, product information, service sign up and much more. TMobile’s consumers are able to go directly to the corporate stores. T-Mobile has indirect and direct retails stores. They have many indirect retail stores that sell T-Mobile services. T-Mobile offers kiosks, premium retail stores and business dealers. They offer many different options to consumers to offer their products and services. One of T-Mobiles advantages is that their consumers may never have to step into a store due to their online stores and direct customer service. If a customer chooses to go to their store in-person they have many different locations nationwide. T-Mobile also has kiosks inside malls which targets the younger generations to their product and services. T-Mobile just wants to provide the fastest, efficient customer service to satisfy their consumers. T-Mobile also partners with Netflix, celebrities, Lyft and many other companies to get their products and services noticed. Marketing Core Competencies Some of T-Mobile’s marketing core competencies are target market, marketing trends, marketing strategy, marketing objectives and positioning. As it has been established, T-Mobile target market are millennials, families and business owners. Millennials are going to be the newaged for T-Mobile. T-Mobile targets families because they want to provide families with the best cost-effective plans at the lowest cost. Businesses are being targeted by T-Mobile to provide the fastest 5G networks for their businesses. T-Mobile is also targeting a lot of businesses that need coverage due to the world pandemic, Covid-19. Some of T-Mobile marketing tends include data speed and plans. It also includes coverage and services. T-Mobile sells a wide variety of smartphones, tablets and accessories from vendors such as Apple, Samsung, LG and Google. This is a trend for T-Mobile because new technologies are always entering into the market. T-Mobile has to be creative in selling their products and services by having a positive promotional outlook. By selling new products and services, T-Mobile has to go with the trend of that time period I order to grow their business. TMobile also has to capitalize being the leader in 5G networks and pricing.

T-Mobile has to have a strong marketing strategy when it comes to 5G networks, pricing, and connectivity. T-Mobile has to be creative when introducing 5G networks to their consumers. They have to be able to produce a fast and low-cost coverage to their consumers. They also have to be able to ensure great service as well as blistering speeds and fast connections. When marketing to businesses T-Mobile must position themselves to be able to be reliable and ensure that businesses will always have affordability and convenient speeds of their network. T-Mobile's marketing objectives must include selling 5G networks at lowest price where everyone can afford their services. They must also increase their brand awareness of 5G products by partnering with their consumers favorite celebrities or major sport leagues. T-Mobile also must promote the merger with Sprint to gain awareness and try to compete with Verizon for the top spot in the telecommunication industry. Lastly, T-Mobile must position themselves to increase new consumers and provide exceptional service, fast connectivity and lead in 5G networks. They also must be able to position themselves in order to gain new customers for their competition. The telecommunication industry is saturated with competition, T-Mobile must ensure that their services are not overcrowded, fast and reliable.

Conclusion Listed below are strengths, weaknesses, distinctive competencies and issues for T-Mobile

T-Mobile has strengths such as leading in 5G network, cost effectiveness, and they’re the second largest carrier in the nation. Ranking these from most important to least important would

include leading in 5G network is priority. Cost effectiveness would be the second most important strengths. T-Mobile being the second largest carrier is least important in the grand scheme of things. These strengths are what makes T-Mobile gain customer awareness and would become their consumers. T-Mobile strides themselves in leading the 5G network. T-Mobile has weaknesses such as connectivity, poor service and competitors lowering prices. Ranking these from most important to least important would include connectivity as number one. Poor service is also important. These are weaknesses because customers complain about dropped calls, service outages in areas, and weak signal. Competitors are trying to lower their prices to compete with T-Mobile. T-Mobile distinctive competencies promotional effectiveness, brand awareness and TMobile Tuesday. Promotional effectiveness and brand awareness are most important. They are important because this attracts new consumers. This also brings attention to T-Mobile. T-Mobile Tuesday is the least important when it comes to distinctive competencies. Lastly, T-Mobile has issues such as competition will offer 5G network, the market is saturated and satisfying customers. Verizon & AT&T will eventually offer 5G networks and compete with T-Mobile this makes it a top issue for T-Mobile. Telecommunications industry is saturated which makes it an important issue because a new competition can enter the market. Satisfying consumers is the least important to T-Mobile when it comes to issues.

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