Executive Summary
The primary purpose of this report is to give the reader advance information about the company’s communication plan for Motorola’s luxury phone the RAZR V3i Dolce & Gabbana.
Motorola is considered as the world’s first to offer sleek mobile phones, has now partnered with Dolce & Gabbana a world renowned style and fashion house, to offer to the market another first in the field of mobile communications, which is the RAZR V3i D&G, whose unique selling proposition is to deliver the ultimate combination of design and technology to its favored clienteles.
The following supporting documents will discuss about the targeted audience, the goals of the communication, the message and selection of the channels of communication to be used. The annexes hold information on the micro and macro environment with a brief discussion of the SWOT of the planned communication.
Identifying the Audience
According to Dr. Dan Herman (2006), the buying power of both developed and emerging economies are on the rise. And these have produced new levels of affluence. The strata of wealth is now categorized into six levels; billionaires (annual income over $1 billion), multi-millionaires (annual income over $100 million), millionaires (annual income over $1million), super affluents (annual income over $150K), affluents (annual income over $100K), and near affluents (annual income over $75K).
In a table classifying all World Bank member economies (see Table 1), these are the countries considered as high income groups; 1) ASIA – Australia, Japan, Korea, Rep., New Zealand, Brunei, French Polynesia, Guam, Hong Kong, Macao, New Caledonia, Singapore, Taiwan, China; 2) EUROPE & CENTRAL ASIA – Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Slovenia, Andorra, Channel Islands, Cyprus, Faeroe Islands, Greenland, Isle of Man, Liechtenstein, Monaco, San Marino; 3) MIDDLE EAST & NORTH AFRICA – Bahrain, Israel, Kuwait, Qatar, United Arab Emirates, Malta; 4) AMERICAS – Canada, United States, Antigua and Barbuda, Aruba, Bahamas, The Barbados, Bermuda, Cayman Islands, Netherlands Antilles, Puerto Rico, Virgin Islands
Every luxury brand must position itself vis-à-vis to a certain layer of wealth or several ones, explained by Dr. Dan Herman (2006). He further said that “One man’s luxury, is often another’s … everyday lifestyle.” Giving a good impression is one of the things buyers consider when buying a phone, as revealed by Jill Blumenfeld, retail manager of a shop in Paris. “Ask yourself how bad it looks at a meeting when you wear a Patek Philippe watch, carry an Hermès briefcase, use a Montblanc pen and then answer a plastic phone?” Blumenfeld said. One wealthy individual bought a gold colored, diamond studded phone costing €29,000 as a gift for his wife who considered the phone as jewelry. (Crampton, T, 2006).
For the first three upper levels of the rich and those who aspire to join them, jewel-encrusted gadgets are standard equipment. However, for the next three levels of affluents, many of whom came from middle-class background, it’s just not practical. According to a survey, many of these consumers see phones as a form of personal expression, and about 70 percent of them think materials like wood, precious metals and leather make phones more appealing. The affluent consumers frequently purchase luxury goods and spent an average of $8,641 on electronics in 2005. (Rosmarin, 2006)
The extremely affluent households with incomes in excess of US$150,000 are typically older, works from 40 to 65 hours per week and are already in their late thirties before they have children but it is the parents with only one child who spends the most. More than 50 percent of luxury spending comes from household with incomes of US$ 75,000 (near affluents) while households with incomes of $100,000 (affluents) accounts to 29 percent of luxury spending. Baby boomers grandparents also support luxury buying by giving indulgent gifts to celebrate a birth or birthday. (de Mesa, A., 2004).
The Target Market
In 2004, Motorola was able to sell 50 million units of the Razr which had a $500 price tag. (Rosmarin, 2006) These previous buyers are now targeted as market for the Motorola V3i Dolce & Gabbana fashion Razr handset. In addition to these Motorola users, it has been identified that the three levels of affluents namely; super affluents (annual income over $150K), affluents (annual income over $100K), and near affluents (annual income over $75K) will also be targeted and they are spread in the high income group countries (see Table 1).
In comparison to the competition, Motorola V3i Dolce & Gabbana fashion Razr handset has the right product attributes that the three levels of affluents are looking for in a luxury phone. Motorola V3i D&G it has a 1.3-megapixel camera, a digital music player with support for iTunes, Bluetooth, a MicroSD card slot, a speakerphone, basic organizer functions, text and multimedia messaging, and support for IMAP4 and POP3 e-mail. Not only does the phone have this technological enhancement that could not be found in most luxury phones but the stylish gold handset with D&G logo is what the fashion conscious phone user is looking for. In contrast to its competitor, Vertu phone which are priced at €4,000 up to €80,000, or $5,100 to $102,000 does not have cameras, and could not produce its phones fast enough to keep up with demand. (Crampton, 2006). Motorola V31 D&G unique selling proposition is delivering the ultimate combination of design and technology.
Communication Goals
Initially when Dolce & Gabbana and Motorola have partnered, to release one thousand limited edition of Motorola RAZR V3i “gold” phones, they planned these to be sold exclusively through Dolce & Gabbana boutiques in Italy, Spain, UK, France and Germany. But after its successful launch and high demand for the product it is now being released in unlimited edition.
There are four communication goals for this commercial which are; 1) to inform the market that the product is now available and where to buy it, 2) to persuade the market by building brand preference over the competition, and encouraging them to switch brands, 3) to remind the market of the unique features the product has over the competitors, and 4) to create top-of-mind recall when he decides to buy a luxury phone.
Conceive the Message
Dolce & Gabbana is known world wide as a fashion trend setter, by partnering RAZR V3i with D&G this move have already created an image that this luxury phone is fashionable. The slogan says: “Motorola V3i Dolce Gabbana associates the elegance and the unique design of the MOTOROLA V3i to the matchless style of DG.” Motorola V31 D&G unique selling proposition is delivering the ultimate combination of design and technology.
Type of Communication
A non-personal channel of communication will be used; mass media, print media (selected newspapers and magazines) and display media (billboards) will be used. We are aiming to deliver our message to the three large segments of affluents who buy selected newspapers and magazines preferably those dealing with business, fashion and style. Display media billboards will also be used, and installed in strategic places near shopping malls, and places where executives passes by on the way to work. Through these channels the audience will always see the commercial and increases the probability of passing through all the six buyer readiness states; 1) awareness, 2) knowledge, 3) liking, 4) preference, 5) conviction, and 6) purchase.
Newspapers have broad acceptability and high credibility. It gives a good local market coverage, and adaptable flexibility to scheduling our launch of the product. The magazines on the other hand have a high and demographic selectivity as we are targeting the fashion conscious affluents. It also gives credibility and prestige, able to produce high-quality reproduction. Magazines have a long life and good pass-along readership. The Billboards, offer us flexibility, have a high repeat exposure, low cost, low message competition and good positional selectivity.
Table 2: Average Costs for Advertising*:
Source: Profiles of major media types, n.d.
Media Type
Cost
Newspapers
$1,300 per week for 2” x 2” ad
Magazines
$1,200 to $5,000 per month or per issue (depends on ad size and demographics)
Outdoor (billboard)
$3,000 to do artwork and install media on billboard; rates depend on impress level, ranges from $5,000 to $500,000 (the higher the quality of the artwork and the larger the demographic group, the higher the price); minimum contract is 16 weeks
*Note: Prices reflected are negotiated prices for a 12-week campaign.
In the average costs for advertising (see Table 2) the prices are in ranges and would depend on many variables such as the country, specific newspaper, magazine, billboard location, size, and other factors. There are four stages a product goes through as its life cycle, these stages are; 1) introduction stage, 2) growth stage, 3) maturity stage and 4) decline stage. The amount of media attention each stage receives along with other factors will help influence its duration and profitability to the company.
Table 3: Frequency of Exposure
Media Type
Introduction
Growth
Maturity
Decline
Newspapers
3 months
6 months
3 months
3 months*
Magazines
3 months
6 months
3 months
3 months*
Outdoor (billboard)
3 months
6 months
3 months
3 months*
*Note: to be maintained up to 3 months or discontinued, until a new product is introduced to the market.
In the introduction stage a product may experience slow sales growth. This is the stage wherein we will promote extensively to inform the market of our product, selling to the affluents as they have the inclination to buy. After this the second stage is the growth stage wherein the early buyers influence the late buyers to buy when the later adopters follow the lead of the early buyers. At this stage we will expand the market and we will increase our promotion spending and continue to educating the market, by this time also competition will try to get a share of our market, so we need to improve or add more features and models. The third stage is when the product gets to mature; the slow down in sales growth would cause the normal production run to have inventories. It is now the time for the product to be positioned to enter new segments of the market, and also to reposition the brand and our channels of communication towards this new segments of the market. By this time, it is important that we should develop a new product to replace our aging product before it reaches the declining stage. The last stage of the aging product would be its decline; we can maintain the aging product in the market until a new replacement will take its place because we do not want our competitors to get our market share if we suddenly withdraw the aging product.
Annexes
Description of the micro environment
Who is the brand doing the commercial?
We now have two brands doing the commercial, Dolce & Gabbana and Motorola
What are its strength and weaknesses? (SWOT)
The strength of this commercial advertisement is the established names of the two brands in their respective industry; Dolce & Gabbana for fashion and style, and Motorola the very first to launch in the market the razor slim mobile phones. They already have a following for their respective product lines and these satisfied users will definitely try the RAZR V3i D&G.
The weakness of this commercial advertisement is that the three higher strata of wealth than the affluents might find the RAZR V3i more fitting to strata of wealth lower than them because the product does not have jewelries embedded on the phone.
The opportunity presented by the advertisement is that it can attract not only the affluents segment but also individuals in the lower strata who want to be like the affluents. And the channels that were chosen to deliver the message, reaches a wide spectrum of people, and in the case of billboards, on a longer period of time.
The threats are its competitors will try to imitate what Motorola and D&G did, improve their respective products by adding technological enhancements that RAZR V3i does not have. Or offer the same kind of product at a reduced priced to the market.
Who is the competition?
Competitors in the luxury phones are Nokia, Sony Ericsson, Samsung, LG, Vertu but none of them have partnered with a fashion and style house like what Motorola did with Dolce & Gabbana.
Who are the customers?
The customers are the satisfied users of Motorola products who considered RAZR V3i as an upgraded version of what they currently have. And also the targeted affluents that buys luxury phones from various competitors.
Description of the macro environment
The demographic composition of our target audience can be male or female, age ranges from 15 to 60 years old, these ages owned cellphones as presented in a survey by INSEE (see Table 4), they can be students or holders of baccalaureate or higher degree.
The economic structure of our target audience is the affluents with an annual income that ranges from (over $150,000 to over $75,000).
The technological frame of RAZR V3i D&G not only boasts of standard features found in other luxury phones but has an updated and streamlined design, offering consumers a large internal color screen, quad-band technology and Bluetooth wireless technology. According from the company’s online page it was designed for an enhanced imaging experience, the sleek handset comes complete with an integrated 1.23 megapixel digital camera with a full screen view-finder, zoom, and video capture and playback. It also has a complete mobile multimedia package, integrating mobile, camera, and MP3 player capabilities.
The Plan of Communication
The plan of communication is to reach the target audience, expose them to the message that RAZR V3i is the only luxury phone that delivers the ultimate in technology and design. The message will be conveyed in a time frame that is in harmony with the stages the targeted audience passes through until they prospective buyers purchase the product.
References
Crampton, T. (2006 August 21). Wireless: Luxury cellphones – If you have to ask, you can’t afford it. International Herald Tribune. Retrieved May 7, 2007. From http://www.iht.com/articles/2006/08/21/business/wireless22.php
de Mesa, A. (2004). Born into Luxury. Brandchannel.com. Retrieved May 7, 2007. From http://www.brandchannel.com/features_effect.asp?pf_id=230
Herman, D. (2006). The Eternal Principles for Creating Luxury Brands. Recklies Management Project GmbH. Retrieved May 5, 2007. From http://www.themanager.org/Marketing/Eternal_principles_for_luxory_brands.htm
Profiles of major media types. (n.d.) Retrieved May 8, 2007. From www.iesbdc.org/resources/Major%20Media%20Types.doc
Rosmarin, R. (2006 July 27). Market growing for luxury gadgets. Forbes.com. Retrieved May 7, 2007 from http://www.msnbc.msn.com/id/14049492
Table 1: High Income Groups, World Bank member countries
Source: economies2003, p. 297. Retrieved May 6, 2007 from http://www.iafn.org/membership/economies2003.pdf
Table 4: Household ownership of durable goods by age of reference person
Durable good
15-25 years
25-39 years
40-59 years
60 years and older
Total
Refrigerator with or without freezer
88,7
98,9
99,3
99,7
98,9
Freezer with or without refrigerator
39,6
78,0
86,2
79,9
80,1
Microwave oven
71,4
84,0
81,5
59,1
74,3
Washing machine
45,5
92,3
96,0
93,6
92,2
Color television set
87,3
92,3
94,8
97,6
94,8
Video cassette recorder (VCR)
47,0
77,3
81,1
56,5
70,6
Minitel (videotext terminal)
0,0
5,8
18,1
12,7
12,5
Fixed (land-line) telephone
37,0
77,2
90,2
95,5
86,5
Cellphone
94,3
87,6
80,9
39,9
69,6
Desktop computer (PC)
41,9
53,3
56,8
14,6
41,4
Laptop computer (PC)
15,5
11,4
9,2
2,5
7,8
PC (total)
54,2
59,3
59,7
16,2
45
Internet
29,2
39,8
42,1
9,8
30,3
Car
57,3
87,7
89,1
68,8
80,7
Scope of coverage: metropolitan France, all households
Source: INSEE, Continuous Survey of Living Conditions (Enquête Permanente sur les Conditions de Vie: EPCV), 2004
