Connecting People!

The decibel levels in the cellular market are increasing with service providers stepping on the gas. Not to be left behind, handset manufacturers are using precise segmentation to carve up their share. Divide and rule seems to be working!

According to a report published in May 2001, the all-India cellular subscriber figures stand at 38,71,514. With aggressive marketing by service providers, this figure is expected to increase at a very rapid rate. If current decibel levels in the market are anything to go by, these expectations are well on the way to being met. However, amidst this entire melee one cannot ignore the efforts of the handset manufacturers. Both service providers and handset manufacturers have been complementing each other well with each fuelling the demand for the other.

Industry observers attribute the success of handset manufacturers to shrewd market segmentation. The big three of the mobile handset market - Nokia, Ericsson and Motorola, have studied the market and segmented it precisely.

The story so far….

Connecting people!
Nokia, arguably the biggest player in the world, has divided the market into four segments:

• Hi-fliers: The biggest segment as far as Nokia is concerned consists of 'Hi-Fliers', corporate executives who use a mobile phone to increase productivity at work. Aged between 25-45, the segment looks for data transmission and other business-related features. In most cases, the company sponsors the handset, hence price is not a major consideration.
  
• Trendsetters: In any technology adoption cycle, the first segment to adopt an emerging technology is dubbed as 'the early adopters'. For Nokia, these early adopters are 'Trendsetters' who are most receptive to advanced models. This was the segment at which WAP-enabled models were aimed.
  
• Social contact: The third segment for Nokia is the upwardly mobile, socially-conscious segment that uses a mobile to stay in touch. Today's youth and affluent housewives constitute two major chunks of the segment.
  
• Assured: The fourth and last segment as defined by Nokia comprises of CEOs, high-profile celebrities, industrialists and other high "net worth" individuals. The fact that the segment cannot do without a mobile phone makes it the 'assured' segment.
  

Intelligence everywhere!
Motorola has a segmentation model similar to Nokia.

• Accompli: Early adopters (trendsetters in Nokia) are referred to as Accompli and as with Nokia, all advanced models are aimed at this segment.
  
• Timeport: The segment, similar to Nokia's hi-fliers, primarily uses the mobile phone to enhance their productivity.
  
• Talkabout: The segment again is similar to Nokia's Social Contact segment, which uses the mobile phone predominantly to keep in touch.
  
• V: Individuals who view their phones as an extension of their personality and therefore would prefer a model that makes a statement define the V-segment.

Ericsson!
Compared to the above players, Ericsson seems to have a straightforward segmentation.

• A-Segment: Individuals who are using the mobile for the first time and prefer an easy-to-use instrument are classified under A-segment. This is primarily the entry-level segment.
  
• R-Segment: Similar to Nokia's Trendsetters and Motorola's Accompli, this segment comprises of tech-savvy individuals who prefer their instruments to be feature-rich and state-of-the-art.
  
• T-Segment: Finally, the T-segment is defined by individuals who require their instruments to have some class and style. Similar to Motorola's V, users view the handset as an extension of their personality.
  

The paradox!

While the segmentation has been precise, it has been noticed that a majority of handset sales in India can be attributed to a very active 'Gray' market. The fact that Indian consumer is highly price-sensitive further complicates the matter.
Today the prices of handsets have fallen sharply making them more accessible. Smaller players are also making inroads in some segments. All these factors require companies to have a re-look at their segmentation and follow them up with elaborate branding strategies. No matter which company succeeds, the customer is not complaining.

Related reading:

1. "Divide and Cell"; Ganguli, Bodhisatva; Brand Equity; June 2000
2. "Upwardly Mobile"; Pande, Bhanu; The Strategist; May 2000
3. "Market segmentation"; MTP Online; 2001