Calling A Phone A Dog Works For Some
Sydney Morning Herald
Monday October 13, 1997
Marketers are still divided about whether personality or technology will sell a mobile phone in Australia, writes KIRSTY NEEDHAM .
WHAT do you do if you are one of the world's largest communications companies and yet are barely recognised by consumers in a country with one of the highest penetrations of mobile phone usage in the world? Siemens's answer was to run a high-profile TV campaign for a full month before the launch of the S10 mobile phone in Australia this week.
Siemens GEC Communication Systems' manager of mobile business in Australia, Ernst Sangl, said that while the German company had been one of the drivers of the GSM digital platform, it did not support the analog AMPS standard used in Australia, Hong Kong and Singapore.
"Therefore, when we came into Australia with a digital phone we were seen as newcomers," Sangl said. A poor welcome for one of the top four manufacturers of mobile phones, with a third of the world's networks relying on its mobile phone switches.
The difficulty of coming late to a fiercely competitive mobile phone market showed up in the disappointing performance of Siemens's first offering, the S6, in June, despite strong marketing support.
"I can't say it has gone great in terms of market share. But it is a low-end phone and as an unknown brand it has done the basic ground-work of making us known to the dealer network," Sangl said.
"Being a single product, rather than a range, it did not have the total pull into the market that competitors with up to three models have."
The Siemens S10, advertised for the past month, will only become available through dealers this week. The heavy groundwork involved a 60-second TV commercial positioning Siemens as a company of inventors.
Siemens introduced to mobile phones the soft keys which change functionality and was the first to include lithium batteries as a standard feature, Sangl said. "What we are saying again with the Siemens S10 is that we have a world-first with colour display."
He described the phone as a mid- to high-end model for high-volume and business users, with key features of data transmission and power management. Siemens will continue to invest more than $5 million in brand advertising in the next 12 months as it issues up to three more mobile phone models. Tracking research company AIM Data estimates that $20 million was spent on mainstream advertising by mobile phone marketers in Australia in the 1996-97 financial year.
While much of that was press advertising, companies are increasingly taking to television to break through the clutter. Convinced that it has found the key to mass sales by positioning mobile phones with personality rather than technology, NEC will take its Fido to TV screens this week. The first of three animated cartoons in a million-dollar campaign is set to the soundtrack of How much is that Doggy in the Window?
NEC's marketing manager, John Haley, said that while Fido was not the market-leader, it had been the top-selling mobile phone in Australia in the past five months.
"Mid last year NEC had a market share of pretty well zip. At the time we did not have a digital phone. Over the space of 18 months we have captured, on our estimates, 12 to 15 per cent of the market. With one product."
The same phone had been marketed by NEC throughout Europe and in Japan using a model number instead of a name. "We have the leading market share of all our affiliates," Haley said.
Roger Barlow, the creative director of NEC's advertising agency Lintas Hakuhodo, explained the success of the Fido against a backdrop of a mobile phone market cluttered with a plethora of models, pseudotechno-talk, deals and promotions: "The brands were giving up their power to the retailers."
As long-term carrier plans took priority over the phone itself, which dropped through the floor in price, Barlow said product differentiation disappeared and there was no reason for brand loyalty among consumers. The success of the Fido concept to date would see NEC resist introducing a new model for the lead-up to Christmas selling period, instead upgrading a silent vibrating alert, a hands-free kit and new colours.
Research conducted in August by NEC showed only 40 per cent of Fido buyers had been aware of the product before walking into a retailer. By raising awareness of Fido, NEC aims to reach 20 per cent market share by Christmas.
Haley said NEC had been surprised by the high uptake of the phone by women. Half of Fido buyers are women, with 18 to 24 year-olds the peak age group. Women were buying the phone through department stores for personal rather than business use, with 75 per cent saying they are motivated by personal security considerations.
Figures from GfK Marketing Services on sales of mobile phones through the mass retail channel show Fido was the top seller in the two months to August, followed by Philips's Fizz phone.
NEC's own research showed that 55 per cent of Fido buyers were replacement buyers, 85 per cent of whom were replacing analog phones. Where 1.8 million handsets a year were manufactured for Australia, with an average retail price of $400, Haley said growth in Australian mobile phone connections had slowed.
"What will sustain manufacturers for the next three to four years is the migration process to digital."
NEC will join telecommunications companies in direct mailings to their databases of analog clients. A telephone survey of Fido buyers had found most mobile phones had an 18-month life cycle, with customers switching from analog not because they were aware of the phasing out of the platform by 2000, but because "their phone had had it".
Dealers were advising customers that it was cheaper to buy a new phone than to replace their battery, Haley said.
© 1997 Sydney Morning Herald
