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Marketing Plan for Public Wireless Internet Access Points

In: Business and Management

Submitted By scoffman2001
Words 3919
Pages 16
Public Wireless Internet
Marketing Plan
By: Stephenie Coffman
August 13, 2014
MKT 500
Heather Teague

Table of Contents

1. Executive Summary 2 2. One-Page Plan 4 3. SWOT Analysis 5 4. Target Market 6 5. Competitive Analysis 7 6. Financial Analysis 9 7. Pricing Structure 11 8. Channels of Distribution 12 9. Integrated Marketing Communications (IMC) Promotion Plan 13 10. IMC Budget 16 12. Works Cited 17

Executive Summary

Public wireless internet provides accessibility regardless of the consumer’s device and salary range. Technology is becoming an integral part of everyday life and being connected to everything 24 hours a day seven days a week is a necessity. In order to assist with this consumer desire this marketing plan is designed to provide viable solutions for rolling out a nationwide public wireless service that will connect everyone without the need of public hotspots or cellular coverage.
Today, while there have been advancements in cellular technology into 4G and LTE coverage, there are still areas of the country that still do not have cellular service at all. By providing nationwide wireless internet, these areas will no longer be complete dead zones. Consumers will be able to connect their smart phones and wireless devices to the internet and enjoy the same connectivity as if they were still on the cellular network. Executives will still have the option of being connected to their offices and projects while on vacation on remote areas of Montana, South Dakota or even Alaska without the high cost of satellite phones and services.
This marketing plan includes the following information: * A one page plan that outlines the key categories and the strategy to drive results for the public wireless service proposed. This section provides a brief overview of the proposed market and roll-out strategy, as well as pricing. * A SWOT analysis that outlines the strengths, weaknesses, opportunities and threats to the public wireless internet service proposed. The goal of this analysis is to provide a realistic assessment of the strengths and weaknesses of this proposed service. * A detailed breakdown of the target market for the proposed service with specific details on how to attract consumers to public wireless service. * A competitive analysis to compare the proposed service with what is currently available. This analysis compares the two key competitors with the public wireless alternative. In addition, this analysis looks out how the competition may react to the introduction of this new service. * The financial analysis outlines the financial impact of the proposed service. This includes information regarding the projected market for the introduction of public wireless service. * The pricing structure outlines the “average” price per consumer and the factors used in determining the price and providing for a reasonable profit margin. Include in this section is a breakdown of the anticipated revenue and profitability in the first year of service. * An analysis of the channels of distribution that will optimize and be cost efficient for the roll-out of the public wireless internet service which includes the plan for promoting this product along multiple channels. * A breakdown of the promotion plan and the anticipated costs of the marketing plan to assist in advertising the public wireless internet service.

This marketing plan is only meant to be a starting point for the introduction of public wireless internet. It is anticipated that this will be a living document that will grow and evolve, just as the consumer and market evolves. Technology advancements will also have a significant impact on this proposed service. Being open to change and adapting will make this service roll-out a success for the company, as well as consumers.

One-Page Plan

Category | Strategy | Target Market | Consumers from all salary ranges that use smart phone technology | Positioning Statement | Public wireless internet capabilities regardless of cellular coverage without the need for hotspots | Offering to customers | Create a tiered model that is based on bandwidth utilized | Price Strategy | Currently consumers use mobile hotspots for wireless internet service, pricing should be approximately 10%-20% lower than their hotspot costs (costs would include the amortization of the equipment needed to provide their own hotspot service) | Distribution | Nationwide (U.S. roll out primarily) | Sales Strategy | Provide nationwide wireless internet service for everyone to access the internet without the need for a mobile hotspot | Service Strategy | Available from most cellular companies and pre-paid services | Promotion Strategy | Develop a campaign that will emphasize wireless internet anywhere without having to connect to a hotspot | Marketing Research | Conduct focus group analysis of various consumers groups to determine bandwidth tiers |

SWOT Analysis | Strengths | External * New service – a new service that has unlimited potential * Target consumer group is large * Public wi-fi can be more affordable than data plans for portable devices * Offers service in areas where cellular service can be spottyInternal * Realistic goals based on perceived consumer needs | Weaknesses | External * New service that will require the need to build brand awarenessInternal * Limited number of experts in this field | Opportunities | * A chance for non-cellular users to access the web when not at a hotspot * A currently un-tapped market with unlimited potential | Threats | * Cellular companies will lower data plans to compete with public wi-fi * Potential limit to number of users permitted to use satellite services at a given time * Constant evolution of technology – will need to provide continuous improvement to keep up with the constant technology improvements |
SWOT Analysis

Target Market

Businesses likely already offer wi-fi and do not have a need to access a public wi-fi connection, however, they may opt to subscribe to public wi-fi to cut down on their overhead cost. Many businesses currently offer wi-fi to their patrons, such as Chik-fil-a, which offers free wi-fi to customers. In addition, there are places like Penn State campus that offer free wi-fi on campus via a contract with AT&T.
The target for my product is the consumer market via the use of behavioral segmentation. “Behavioral segmentation …divide[s] buyers into groups on the basis of their knowledge of, attitudes toward, use of and response to a product” (Keller, 2012, p. 227). To determine the target market, we need to know who would use the public wi-fi. More than likely the consumers would be those who are part of Gen Y. “Gen Y's total[ally] comfort[able] with technology. While boomers may expect a phone call or in-person meeting on important topics, younger workers may prefer virtual problem solving” (Armour, 2005). Having this “plugged in” background makes them ideal consumers for public wi-fi.
Continual growth is expected due to the fact that as Gen Y gets older, there is a new generation of tech savvy users following in their wake. This next generation does not “remember a time without the constant connectivity to the world that these technologies bring… They're growing up with expectations of always being present in a social way — always being available to peers wherever you are” (Jayson, 2010).
Based upon the criteria for behavioral segmentation, this product is likely to be a success. First the market needs to be measurable and substantial. There needs to be a large enough pool of consumers with the ability to afford the product to be a success (Keller, 2012, p. 231). Based upon numbers released June 2013, there are approximately 42.8 million people that make up the age group of 25-34. There are plenty of people in the Gen Y group that would benefit from the availability of public wi-fi (So How Many Millennials Are There in the US, Anyway? (Updated), 2014). It is anticipated that Gen Y will spend approximately $2.45 trillion in 2015 (Donegon, 2013).
Additional criteria that needs to be met in order to be successful is that the segments can be reached and can attract the consumers (Keller, 2012, p. 232). A product is only as good as the marketing campaign. If the marketing campaign cannot draw the consumer in then the product will be unsuccessful. Marketing to Gen Y is different than what you would do for Baby Boomers. Consumers in Gen Y do their homework; and will look for other consumer reviews and compare pricing (Donegon, 2013). Gen Y is all about accessibility and wanting everything now but they still want to keep the quality and the ability to access a live person for customer service (Donegon, 2013). To successfully market to Gen Y, your product has to be available on-line, and the marketing campaign needs to be clear (Donegon, 2013). This generation wants to know what the product is, how can this product make their lives easier and ultimately, what does it cost? In addition, if there is a problem, this consumer group wants to know that they have a live person that they can call for product support.
To be a successful product and marketed to the large pool of Gen Y consumers, this product needs to be easily accessible, provide excellent product support and clearly address a need. Public wi-fi will be accessible to everyone, not just Gen Y but specifically geared towards them. It clearly addresses the need for an internet option that does not tie consumers to a hotspot. The majority of cellular phone companies recognize a need for live product support and already provide good, if not excellent, product support for their offerings.
Competitive Analysis

The top two competitors for public wi-fi are not specific companies but rather other services offered. These competitors would be the public hotspot offered by many restaurants and businesses, and the use of cellular hotspots. The following is a SWOT analysis of the two services.

SWOT Analysis
Public Hotspot | Strengths | * Majority of hotspots are free for the consumer * Consumer group is large * Increased business in with consumers looking for internet access | Weaknesses | * Consumers are tied to the specific business * Depending on the users in the business service could be slow * Limited bandwidth allowance per user * Unsecure connection, rarely encrypted | Opportunities | * Increased traffic into a business due to offering free or reduced hotspot access | Threats | * Cellular companies are turning phones into mobile hotspots * Constant evolution of technology – will need to provide continuous improvement to keep up with the constant technology improvements | SWOT Analysis
Cellular (Mobile) Hotspot | Strengths | * Accessibility through cellular companies * Consumer group is large * Internet portability to allow the consumer to define when to use the service * Potentially a secure connection | Weaknesses | * Consumers are tied to the cellular company * Depending on the data allowance the connection could be slow * Mobile hotspots, depending on the allowance can be costly * Consumer may have to buy and maintain additional equipment | Opportunities | * Portability * Accessibility | Threats | * Increased cost of data plans and equipment to the consumer * Constant evolution of technology – will need to provide continuous improvement to keep up with the constant technology improvements |

Mobile hotspots and public hotspots are not marketed by specific companies. Instead they are marketed as added features that businesses and cellular providers offer. With regards to mobile hotspots, all popular cellular providers offer the option as an additional feature that can be added to a current cellular plan. Public hotspots are usually free services offered to patrons that purchase something from their establishment, whether it be food or a hotel room.

The differentiator that will allow public wi-fi to be different is that you don’t need to have cellular service to access this feature. It will be something entirely separate and all you need is a wi-fi enabled device such as a Barnes and Noble Nook or Amazon Kindle and the applicable subscription. While it can be purchases as an additional feature through a cellular carrier, it will not be the only avenue available. Access can be purchased as something entirely separate from cellular and if desired, at a reasonable pay per use rate. The goal is not to compete with the current products on the market but instead to provide an additional access point for information. The ultimate goal of this service will be to eliminate those dead zones where there is no cellular service or data service. Public wi-fi will be very similar to services that are offered by companies like HughesNet, who pioneered getting internet access into areas where DSL and Fios availability were lacking. HughesNet does not replace DSL and Fios but instead provides access in the areas where otherwise there would not be any. Public wi-fi access would not require any additional equipment or the need to be tired to a business or location. All the consumer would need is a username and password to gain access to the service.
Financial Analysis

Currently, wireless providers are offering data plans starting at $20.00 per month. These data plans only work when the consumer is located within a cellular service area. By bundling a public wi-fi service with current data plans, consumers would no longer be tied to the coverage area provided by their cellular carrier. Adding this increased service option would increase the plan price. Will consumers be willing to pay more for this bundled service?
Based on an analysis conducted by Cisco, “by 2018, more than half of all traffic from mobile-connected devices… will be offloaded to the fixed network by means of Wi-Fi devices… each month” (Cisco, 2014). “By the end of 2014, the number of mobile-connected devices will exceed the number of people on earth, and by 2018 there will be nearly 1.4 mobile devices per capita” (Cisco, 2014).

Figure 1 – Estimated Smart Devices Globally
(Cisco, 2014)

The goal is to reach 25 percent of those users each year for three years as shown in Figure 2, with the understanding that should the 25 percent goal be met, then the goal will be increased. Costs with this service will be minimal. Overhead costs would be limited to the office space needed to maintain customer support, sales and rental payments to locations who contractually agree to be wireless router access points. Variable costs would be associated with the costs of accessing the satellites and the bandwidth costs per user who accesses the site. Figure 3 is an illustration of the financial analysis associated with public wi-fi service.

Figure 2 – Anticipated Market Share

Figure 3 – Financial Analysis
Based upon the market conditions, several different things could happen. First, an increase of competitors could cause the market price to drop. However, with the lower overhead costs and an increase in consumers, a drop in plan pricing would not be detrimental, instead it would allow for a more competitive marketplace.
The worst case scenario for this business would be the introduction of new technology that would advance the concept of public wi-fi, by a company other than ours. This can be averted by partnering with key technology designers and be the first to introduce the new technology. This will require the investment of profits for several years; however, the return potential would mitigate risks.
Pricing Structure

The goal of the pricing strategy is to maximize our market share. The goal with this strategy is to “have higher sales volume, [which will lead to] lower costs and long-term profits” that can be used to reinvest into the company (Keller, 2012, p. 389). Lower prices “stimulate market growth” and given the economy, consumers are looking for lower prices that will stretch their dollar farther (Keller, 2012, p. 389). As the company grows and the product becomes more reliable the variable costs will decrease and increase profits (Keller, 2012, pp. 389-390). In addition, by partnering with the three large cellular providers, the company will be able to keep competition to a minimum.
Figure 3 above shows the anticipated revenue, expenses, and profit for the next three years. To ensure that the partnership is successful, the company needs to ensure that everyone is benefiting. The best way to be part of a successful partnership is to make sure that everyone is profiting. Included in the expenses are variable costs that take into account the costs associated with the partnerships for distribution.
Currently, there are not any companies offering similar services so there is not a way to compare strategies.
Channels of Distribution

The introduction of public wi-fi will be based on a push strategy. Since this is a new concept, there will not be brand recognition or loyalty. Since the best way to distribute public wi-fi is via intermediaries and a value network, the goal is to partner with established brands and make the added value of public wi-fi be an impulse buy for consumers (Keller, 2012, p. 416). A value network is “a system of partnerships and alliances that a firm creates to source, augment and deliver its offerings” (Keller, 2012, p. 417). As mentioned earlier, the plan is to partner with companies such as AT&T and Verizon to have public wi-fi access be part of the add-on value offerings that their subscribers can access. The company will be using the brand loyalty and recognition of the giant cellular companies and internet providers to boost distribution and ultimately profits.
To provide the partner companies with an incentive for promoting public wi-fi for the first year, they will serve as “brokers.” They will receive six percent of the selling price, which amounts to approximately $1.1M of the total projected revenue. Following the first year, the incentive will based on the total number of subscribers per partner signed up the previous year. For example, should one partner have more subscribers than another, their percentage would be adjusted to be higher or lower with the minimum threshold being two percent and the maximum threshold being 11 percent.
These partners would not be responsible for anything other than the initial signing of the subscriber. All maintenance and support would be handled with the public wi-fi organization. In order to accomplish this, the company would be structured as follows:
Figure 4 – Organizational Structure with Corporate Partners
In order to provide the necessary services for the partners companies and the subscribers, the company would have several office spaces that will allow consumers to talk to a live person in the event that they are having difficulties or to report outages. There will be at minimum two facilities with the plan to expand to up to four facilities. These facilities will be strategically based to provide support in all time zones. Since the pilot program will be offered in the United States, the base facilities will be located on the East and West Coasts.
Integrated Marketing Communications (IMC) Promotion Plan

The message that consumers need to remember is that the company is making internet accessible to everyone at an affordable level that will not break the bank. The promotional effort will be a mix of advertising, sales promotions and direct marketing. Once the program is rolled out there will also be personal selling.
Advertising will be limited to sales promotions, newspaper, and direct marketing. The program is designed to “piggy-back” off of current cellular promotions as an additional service that provides additional connectivity to subscribers. Should the program not be as successful as anticipated the option of expanding into television and radio will be analyzed and used when deemed appropriate.
Sales promotions will be offered through the partner companies and be used to encourage their current subscribers to try the public wi-fi for a trial period and offer their opinions. For a short time, there will be discounts offered for agreeing to one or two commitments. In addition, there will be promotions that will reward the sales people within the partner companies that promote the service the best (Keller, 2012, p. 478).
In addition to advertising via print ads and offering sales promotions, direct marketing will occur. Emails and postcards will be sent to all current subscribers of the partner companies offering the sales promotions and referral bonuses. The following gives a breakdown of the current subscriber load for the five top cellular companies just for the second quarter of this year.

Figure 5 – Total Subscriber Breakdown, Q2 2014
(Dawson, 2014)
The following is a description of the proposed promotion plan: * Weekly newspaper advertising – Advertising will begin with circulation in the top three newspapers in circulation (Newspapers: By the Numbers, 2012) * Wall Street Journal * Quarter page, black and white advertisement in the National Edition - $65,321. (Wall Street Journal Media Kit, 2014) * USA Today * Quarter page, color advertisement in the Friday Weekend Edition - $95,100 (USA Today Rate Table, 2014) * New York Times * Quarter page, color advertisement with a circulation of Nationwide on Sunday - $75, 993 (New York Times Media Kit, 2014)

* Sales Promotions * 10 percent off for a two year commitment – maximum anticipated discount $2M per year with the assumption that 1.75M devices are signed up * 5 percent off for a one year commitment - maximum anticipated discount $1M per year with the assumption that 1.75M devise are signed up

* Direct Marketing * Post Cards * Just by advertising to the new customers in the last quarter would amount to approximately reaching 370,000 subscribers and on the assumption that would be an average quarter direct marketing could reach 1.4M subscribers across the five major cellular carriers at a cost of approximately $0.429 per unit (1-800 Postcards, 2014). * Promote referrals from current customers - $50 per occurrence with a maximum of $150 per year * Emails * Subscribe to Constant Contact to market to customers – anticipated cost starting at $195 per month and increasing based upon customer base growth
IMC Budget

Works Cited

1-800 Postcards. (2014). Retrieved from 1-800 Postcards:
Armour, S. (2005, November 8). Generation Y: They've arrived at work with a new attitude. Retrieved July 12, 2014, from USA Today:
Cisco. (2014, February 4). Retrieved August 2, 2014, from Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013–2018:
Dawson, J. (2014, August 5). How Verizon, AT&T, Sprint, T-Mobile and TracFone stacked up in Q2. Retrieved from
Donegon, M. (2013, October 7). 5 Tips for Marketing to Millennials From a Millennial. Retrieved July 12, 2014, from The Huffington Post: The Blog:
Jayson, S. (2010, February 10). Tech-savvy 'iGeneration' kids multi-task, connect. Retrieved July 12, 2014, from USA Today:
Keller, K. L. (2012). Marketing Management. New York: Prentice Hall.
New York Times Media Kit. (2014). Retrieved from New York Times:
Newspapers: By the Numbers. (2012). Retrieved from The State of News Media 2012:
So How Many Millennials Are There in the US, Anyway? (Updated). (2014, June 30). Retrieved July 12, 2014, from Marketing Charts:
USA Today Rate Table. (2014). Retrieved from USA Today:
Wall Street Journal Media Kit. (2014). Retrieved from Wall Street Journal:

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