Cellular Telephone Bundled Features and the Young Consumer

By Stark, Jerrold; Rumpel, Joan H. et al. | Competition Forum, July 1, 2009 | Go to article overview

Cellular Telephone Bundled Features and the Young Consumer


Stark, Jerrold, Rumpel, Joan H., Meier, Robert J., Bell, Reginald L., Competition Forum


EXECUTIVE SUMMARY

Useable surveys were completed and returned by 330 (174 rural and 156 urban) consumers at two Midwestern universities. ANOVA tests revealed young consumers' perceptions of the importance of cellular telephone features were significantly different between rural and urban young consumers, males and females, and among age groups (p< .05; p< .001). Furthermore, regression analysis revealed among ten features young consumers reported available on the phones they owned, EARPIECE was significantly predictive (p< .001) of perceptions of importance of bundled features. Recommendations were proposed that could help marketers develop strategic marketing mixes of phone features targeted to young consumers, rural or urban.

Keywords: Millennials, Product differentiation, Adopters, Cellular telephones, Bundled features, Technology, Segmentation, Strategy, Marketing mix

INTRODUCTION

Executives seeking marketing strategies to retain or gain market share in the highly competitive cellular telephone business need to understand young consumers' perceptions of the importance of bundled features on the cellular telephones (phones) they sell. Are demographic variables in any way predictive of the bundled features young consumers perceived important? Does the combination of cellular telephone features make a difference to young consumers in rural or urban markets? Can pre-existing phone features present on the phones young consumers already own be used to predict their perceptions of the importance of bundled phone features? This study was conducted at two Midwestern universities in order to answer these and related questions.

The explosive growth in the use of cellular telephones is well documented (Anderson & Jonsson, 2006; Joseph & Prakash, 2006). Eighty percent of Americans subscribe to a wireless service; ninety-nine percent of the U.S. population has access to at least one mobile carrier (Albanesius, 2008). McCasland (2005) believes young consumers aged between 18 and 22 are often the architects of change in the US culture. Cellular telephones have changed the US culture, and they have become a ubiquitous commodity. Thus, cellular telephone marketers must continue to change their strategic foci from routine product differentiation strategies (Reiner, Natter, and Spectrum, 2007).

Globally, cellular telephone use is also pervasive (Chintagunta, and Desiraju, 2005; Joseph and Prakash, 2006; Landale, 2006; Miller, 2006). Nokia predicted that by 2010, world-wide usage of mobile phones will reach three billion users (Associated Press, 2005). Cellular telephones have developed beyond basic voice communication. Wireless carriers routinely offer additional features such as instant messaging, video, camera and music players. The CW network has partnered with Sprint to launch a mobile series spin-off from its drama, Smallville, with the aim of reaching their young core audience (Shields, 2007).

Cellular phones have always been used for communication, but they are used for online social networking as well. One of the most popular uses of the computer by college students, other than for class assignments, is accessing MySpace (with over 110 million users) and/or Facebook (with 70 million users). AT&T, Sprint Nextel, and Verizon Wireless have started a service that will allow users to post messages on Facebook's home pages or search for other users' phone numbers and e-mail

addresses from a cellular telephone. MySpace has a pact with Hello, a wireless joint venture between SK Telecom and Earthlink, that will allow users to send photos and update their blogs or profiles by cellular telephone (Knowledge@Wharton, 2006). Sprint Nextel internet-accessible phones now have access to MySpace Mobile (MSM), the "first free direct access" to MSM through a U.S. wireless carrier, providing a rich set of features now available on a mobile devise (Kansas City Business Journal, 2008). …

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