The Maxis Communication Berhad

Published Date: 02 Nov 2017

To outline the who, what, where, when, why, and how

This report was commissioned to examine why Maxis has an opportunity to produce their own bran smart phone, since none of all telecommunication company has the same strategy yet and a way to recommend ways of increasing sales and revenue.

Who is the company targeting? Of course we separate the market according to different market segmentation. So we will target most on teenagers and low income market, which are under demographic segmentation.

What product is the company selling? The company is selling its own brand Smartphone. Instead of sub selling other manufacturer’s Smartphone, they decided to produce a Smartphone of their own name; first entry of their own produce may have dominated the market.

Where is the company doing the promotion? The company are going to promote their product according to demographic segmentation, which is more focusing on teenager where university and colleges around Malaysia. Furthermore they also are setting up booth in a mall where teenagers used to hang around.

When is the product launched and releasing? The product is releasing at end of year 2013, and will be launched at the same time.

Why is the company come out with this idea, It is because as said at the beginning of this proposal, first entry of the market will lead to market domination. Plus, there also will be more opportunity for the company to success.

And lastly how this product is going to success, there is few steps for how the product is going to success, firstly show it to potential buyers, next is determine the correct price, and third is to compare the product with other product on the market. And lastly is to take the product to a trade show. A sixth way to test market a product or service is take it to a trade show. There are 15,000 trade shows per annum all over the country. Sophisticated buyers go to trade shows and they will tell you rapidly whether or not you have a winner.

2.0 Company Overview

2.1 History/Background

Maxis Communication Berhad is the leading telecommunications service provider that started in the year 1993. Maxis Communication Berhad is the son Company of Usaha Tegas Group Holding Berhad, majority stake of the company, 70%, owned by Malaysian tycoon Tatparanandam Ananda Krishnan (richest man in Malaysia) Maxis have possession of 40% market share of telecommunication industry which converts to 10 million of users out of 28 million of population of Malaysia.

Since the commencement of commercial operations, Maxis provide varieties of mobile telecommunication products and services such as broadband, international roaming, MMS and so on. They started with the phone number starting with the prefix 012. Later they purchased Timecel which is another mobile services provider and that is when they started offering phone number starting with prefix of 017.

In 1999, they introduce the prepaid service. As competitors such as Digi, Celcom Telecommunication which offer lower prices and lots of offers and promotion, this forced Maxis to sell their prepaid starter pack as low as RM8.

In addition, the company also operates in international gateway services. Its geographical operations spread across Malaysia, Indonesia and India. In2006, Maxis achieves prestigious from the public. The readers of the Wall Street Journal Asia have rated Maxis as Malaysia’s most admired company in The Wall Street Journal Asia 200 survey in 2006.

2.2 Vision

The vision of Maxis to bring the future to our customers’ lives and businesses, in a manner that is simple, personalized and enriching, by efficiently and creatively harnessing leading-edge technologies and delivering a brand of service experience that is reliable and enchanting.

Besides that, there are several visions have been pronounced by Maxis which is:

To be the communications company every customer prefers above all others

To be the organization every employee aspires to work for, where they can maximize their full potential

To be the corporation every shareholder seeks to invest in

To be the partner every shareholder seeks to invest in

To be recognized domestically and internationally by everyone, within and across all industries.

To be the success story every Malaysian can be proud of

This is what we at Maxis strive for every single day. It might seem a tall order, but at Maxis, we believe in setting high goals and standards. By pushing the limits and breaking new ground, we will become the company we aspire to be.

2.3 Mission

The mission of Maxis is:

Today : Malaysia’s leading mobile communications service provider

Tomorrow : The nation’s premier integrated communications service provider

2.4 Objectives

The Objectives of Maxis is:

Connected to mainstream Information and Communications Technology (ICT) development Enabling an empowering these "connected communities"

Bring about socio-economic development for those communities in the various sectors such as agriculture, education, health, and business, amongst others.

3.0 Market Opportunity

3.1 Maxis’s Smartphone

After a long term discussion, we believe that one of the opportunity of Maxis is to produce their own brand smartphone, after a series of research, we found out that among the competitors of Maxis, nobody had joined this market, so we do believe that smartphone will be a good opportunity for Maxis, since Maxis provide smartphones services, they can make some promotion for example Discount on smartphone if purchase their smartphone service package. Nowadays, telecommunication industry expands rapidly due to change of customer behavior and preference. More and more people tend to use smartphone and tablet online instead of netbook and notebook because smartphone are easier to carry compare to notebook. By providing the new technology 4G, Maxis will have more advantage by competing with other competitors. Now is a new generation of smartphone internet service in Market, 4G, it is a fourth generation of smartphone communications standards. It can provide you to online anytime and anywhere you want. So why don’t Maxis provide their own smartphones, by focusing on making it become a complementary product, we do believe that Maxis have the opportunity to earn more income in the market.

According to the Malaysia budget 2013, there are good news to Malaysia SME and younger generation. Firstly, the announcements of one-off smartphone RM200 rebate to individual age 21 to 30 with a monthly income of under RM 3,000. Within the rebate, RM300mil will be allocated for this initiative targeted to benefit 1.5 million youths nationwide. This will increase smartphone sales in future and also use of smartphone online services. Although this will cause short term drop of sales before the implementation of the rebate as consumer will stop to buy smartphone until 2013, but it will not affect the sales in the long run. Smartphones have become a necessity for us to connect, network, learn and do work. It should be a market opportunity for maxis to provide better package of smart phone online services before a coming boost up smart phone sales. According to Google Malaysia communications and public relation department head Zeffri Yusof, by signed up for the Google Malaysia " Get Malaysian Business Online" (GMBO) program can get more SMEs to use internet as a marketing platform to their products. He says that there are currently more than 17.5mil Malaysian Internet users who regularly search for products and services via online but there are not much local SME products that could be found on the World Wide Web.

By showing the research that we find, we once again make sure that by providing Maxis own mobile phone, it has a great potential to boost up their sales and lead up from the other competitors.

3.2 Market Growth Opportunity

In 2013, we have reached another level on technology era, from the newest research, we found that one quarter (23%) of teens 12 to 17 indicate that their phone is a smartphone, while 54% have a regular cell phone (or not sure what kind of phone they have), and another 23% of teens do not have a cell phone at all. From here we can see the potential of create a new phone by maxis.

Smartphone ownership is highest among older teens, as 31% of teens ages 14-17 have a smartphone, compared with just 8% of youth ages 12-13. The data suggest a cell phone ownership evolution by age. However, overall sales of mobiles phones fell 2.3% in the quarter as consumers held out of forthcoming devices. According to analyst firm Gartner "Demand slowed further in the second quarter of 2012," "the challenging economic environment and users postponing upgrades to take advantage of high-profile device launches and promotions available later in the year slowed demand across markets. Demand of feature phones continued to decline, significantly weakening the overall mobile phone market."

As the result we found, we know that, most of the teenagers are using smartphone now, so if Maxis do really can provide their own product. It will be the best opportunity to over pass their competitor and boost up the sales.

4.0 Target Market

Nowadays, most people have mobile phones and many have smartphones. Due to the technology innovations, telecommunication industry had launched smartphones instead of mobile phone. With the existing of smartphone, people do not have to bring their laptop or sit in front of the desktop to do their tasks since smartphones have combined multiple computing capabilities.

Maxis decide to focus on teenagers market. From the newest research, we found that one quarter (23%) of teens from 12 to 17 years old is using smartphone, while 54% have a regular cell phone (or not sure what kind of phone they have), and another 23% of teens do not have a cell phone. From here we can see that there have a number of teenagers prefer to use smartphone. However, most of the application of smartphone will function only when connecting with internet. Smartphones is very useful for teenagers’ todays. For example, Student’s text book is become more expensive especially for the students of University and college. So they like to download e-book through the smartphone to get the information instead of buying books. Besides that, teenagers need to keep up with their friends or colleagues by using smartphone with the social networking sites, Facebook. They can keep in touch and chat with their friends or have a discussion on Facebook via the smartphone wherever they are. So, Maxis will launch a package by given discount on smartphone if purchase their smartphone services package. This package will more focus on another 23% of teens that do not have a cell phone and for the 54% of teens whose maybe want to change their cell phone to smartphone. By using this package, teenagers can have a smartphone and use it online everywhere or do their work with no worry for the network connection.

Apart from that, Maxis also decide to focus on low income market. In recent years, the importance of emerging markets and increase of competition among companies are pushing most of the companies to serve the low income group. According to the Malaysia budget 2013, individual age between 21 and 30 and earning under RM 3,000 can purchase smartphone with the RM 200 government rebate. This rebate is given a chance to those low income people who have not own a smartphone. On the same time, Maxis will launch some packages with phone by given discount on smartphone if purchase their smartphone services package. This can increase the sale of smartphone in future and also the people use of smartphone online services. Discount and the price of the package are set affordable by all level income customers especially for low income customers for easily get attraction from them. By using this package, they can enjoy the online services with affordable price.

In conclusion, Maxis will more focus on teenagers and low income markets which are under Demographic Segmentation. With the constant technological innovation, almost everything can be done by using a smartphone and it is become more importance in our daily life. So, Maxis brand’s smartphone can be a good opportunity for them to boost up their sales

5.0 Marketing Mix Strategies

5.1 Product Strategies

Before Maxis announce the smartphone they produced, we will analyze the market needs which needed to fulfill. This is because Maxis have to fulfill the market needs to confirm the sales of the smartphone that we had produced.

Normally customer will purchase the smartphone according to their needs and budget. In this case, Maxis have to produce the smartphone to fulfill different level needs. For example, Maxis can produce the smartphone with high performance specification to fulfill the users who need smart phone to play games. Maxis also can produce the smart phone for the business usage user. This kind of smartphone will more focus on battery life time and office use function.

Other than that, Maxis also can choose to cooperate with smartphone manufacture to produce the phone with lower cost. Telecommunication providers from other country also use this strategy to produce the smartphone with lower cost. For example, AT&T from US had cooperated with Samsung to produce a special edition of Galaxy S2 for their sales usages. Maxis also can try to do so to reduce the cost of produce the smartphone.

Besides that, Maxis also can cooperate with those artist or designer to produce some special edition phone. In case of this, the sales of the smartphone will be increased because of the artist or designer reputation. For example, mobile phone manufacture from South Korea, LG had cooperated with Girls’ Generation, a famous female artist group from South Korea to promote their smartphone. Few years ago, Celcom also cooperate with LeeHom Wang, a Chinese artist from Taiwan to promote their product.

Maxis also find produce the smartphones that fully utilize the service that they provided. Nowadays, smartphone in the market mostly cannot fully utilize the technology that had introduced. In this case, Maxis can produce the smartphone which can fully use the technology in the market. By this, Maxis can fix the smartphone place in the market. For example, Nokia Lumia 920 and HTC One XL are the phones which can fully utilize the technology which is the 4G LTE. So, Maxis can try to cooperate with these smartphone manufactures to produce the smart phone which have this specification.

Packaging of a product also is an important issue for the product marketing. In case of this, Maxis can package the phone with some special design. For example, China mobile phone manufacture XiaoMi, they had packaged smartphone that they produced with a strong packing which can withstand 180kg of weight even it built with eco-friendly materials. With this kind of packaging, smartphone purchaser can have more

Confident to purchase online without worrying damages of product during transportation was done.

5.2 Pricing Strategy

Even that the product strategy is very important, pricing strategy of the product also very important for the new smartphone that Maxis will produce. As above there had mentioned that smartphone will produce to fulfill the different level needs, Maxis also have to price the smart phone according to the market that the smartphone have to face.

Maxis can choose the price leadership strategy as the pricing strategy. Price leadership strategy is an observation made of oligopolistic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others soon following. The context is a state of limited competition, in which a market is shared by a small number of producers or sellers. In case of this, Maxis can price the smartphone produced in different price of other phone manufacture’ phone.

Other than that, Maxis also can apply the bundle pricing strategy as the pricing strategy. As we know, Maxis is the telecommunication provider in the market. They also provided the internet service for user. In case of this, Maxis can bundle the smartphone that they produced with the talk and internet plan that they launched. By this, users can purchase the smartphone and the talk and internet plan at the same time.

Product line pricing strategy also can be applied as the pricing strategy in Maxis. Maxis can price the smartphone according to the market that the smartphone focused with. For example, smartphone for entry level user should be priced at the low price which allowed for the users who wish to entry and try the smart phone.

Loyalty of customer also can be a point to price the product. For the customer who had used the service long term can provide discount for them. Maxis One Club is the best example of this. Maxis can price the smart phone that produced into this club with a cheaper price and as rewards for the loyal customer.

Psychology pricing strategy can be introduced in this case. Normally purchaser only will purchase product that they felt cheaper and worth for it. In case of this, Maxis can price the phone with the price that can make user or purchaser felt that the phone is cheaper than other competitors. For example, a smartphone that having market price of RM1400, Maxis can price it as RM1399 or RM1299 that can make consumer feel cheaper even that actually Maxis do not have any loss in the case.

5.3 Place Strategy

In an increasingly competitive and complex communication industry, the pace of technological innovation is such that no single company can survive if it operates alone. And Maxis has long recognized the need to work with a range of different partners locally and globally to broaden our range of offerings and to enhance capabilities as the preferred communications solution provider. Thus, it is also can be a platform for Maxis to establish smartphone not only inside the country but also to the other country.

The strong distribution channels that work with Maxis are ZyXEL Communication Corporation (M) Sdn Bhd, Advanced Broadband Communication Sdn. Bhd, TechScience Consultants & Services Sdn. Bhd. All of them we already know they were also a company that provide a solution for communication. For example, ZxXEL is providing the architecture of making a modem to the Telekom Malaysia (TM). So, Maxis have found this is an opportunity to distribute the new smartphone to this company. In addition, because this is a new innovation by Maxis they can see a potential that is created by them so they tend to expand their product globally. It is possible because they already have strong partners and alliances including outside the country. It should not be a problem for them.

Another chances that Maxis have is by the used of internet as their marketing platform. Here they can place not only the smartphone but including the other entire product under their company. By doing so, people can neglect all the suspicious information about the product because each features about Maxis’s product is briefly showed. A series of research found that there are currently 17.5 million Malaysian Internet users who regularly search for products and service via online. This is from area inside the country but can we figure out what will happen if people from other country which is also as the Internet Users who regularly seeking for products and service. This is sure to make profitable for Maxis.

Besides, the headquarters which is main office of particular area can distribute these products. In addition, they also can pace the product to all the other offices which belong to their area. This is to make sure their product will be separated and expanded regularly.

From researched we’ve found, most of the smartphone users were highest among older teens, which is 31% of teens ages 14 – 17 have a smartphone. Thus, we look up this thing as a big opportunity for established our new product, smartphone to the teenagers. Maxis including whole the organization are work together on looking a place which is the most popular place for teens go. We already identified the potential places and we suggest placing the product on carnival, universities colleges around Malaysia.

For example, ‘Jom Heboh Carnival’ is a place that many people go especially teenagers and we also can focus on mall or supermarket where teenagers used to hang around. We can explain and describe briefly about the product and hope they will show an interested on our product.

5.4 Promotion Strategy

Promotion is the business of communicating with customers. It will provide information that will assist them in making decisions to purchase a product or service. The pace and creativity of some promotional activities are almost alien to normal business activities.

Maxis provide a variety of mobile communication products and services. They offer prepaid calls plans, monthly subscription plans, international roaming, mms, wap, residential fixed line services and broadband internet plans. All these have been done great fully and they just do a stunning work. Maxis comes these entire product with make some promotion. Therefore, the same method will be used to the new smartphone. This is because we found out that among the competitors of Maxis, nobody had joined this kind of market, so we believe that smartphone will be a good chance for Maxis. Since Maxis provide mobile services, they can make some promotion. As example, they can give discount on smartphone if customers purchase their mobile service package.

Another method that can be used is advertising. Maxis can make an agreement with the advertising sources like printing media , television , radio are effective ways to entice customers and make them aware of the brand’s existence. In addition , billboards , hoarding , banners installed intelligently at strategic locations like heavy traffic areas , crossings , railway stations , bus stands attract the passing individuals towards our product. Beside, taglines also increase the recall value of the product among the customers.

Word of mouth is the most important method in our promotion strategy. We do believe that one satisfied customer brings ten more customers along with him whereas dis-satisfied customer takes away ten more customers. That’s the importance of word mouth. Positive word of mouth goes a long way in promoting our product among customers.

Another method that can be implemented is sponsorship. The meaning is, in this case, Maxis have to pay an organization to use their brand and logo .This organization usually has a high profile so that Maxis know that their product and brand will be seen by a large audience. Most common use of sponsorship is with sporting events. But seem that it is not suitable for Maxis. Maybe they can use sponsorship with celebrity awards events or any musical events as the events will attract wide audience around our country.

The next method is selling. Put simply, selling is the exchange of goods or services for an agreed of money. There have several stages that can be implement but Maxis take only the suitable for the goodness of their company. They can use presentation and demonstration approach. Here, presenting and demonstrating the features and benefits of their product which is smartphone in order to convince the prospect that people want or need can be satisfied.

The handling objections, closing and follow – up are the important elements that must have in a sale person or team.

6.0 Sales Forecast and Marketing Budget

6.1 Sales Forecast

The graph shows the forecast sales volume of Maxis Berhad for the smartphones from the years 2013 to 2015.

In the year 2013, Maxis had sold 50 million units of the smartphones. Maxis have 50% of sales volume, which has a lower volume of their sales. This is because Maxis is just launch the smartphones in the market. Since Maxis brand smartphones is unknown to the public, Maxis will use some promotions to stress information about the features of the smartphones. For examples Maxis use media advertising such as newspaper, television, radio and billboards advertising to reach audiences in different ways. Besides that, Maxis also implement sponsorship to attract wide audience. Sometimes the smartphones may discover some technical problems and get financial loss at the beginning as Maxis need to spend money on advertising.

In the year 2014, Maxis had sold 80 million units of smartphones and the sales volume of the smartphones will increase rapidly to 80%. The sales volume has increase 30% compare to year 2013 as the promotions are effectively reaches to the audiences. This will attract new customers to make purchases and some customer may make repurchases. Besides that, Maxis offer some sales promotion such as give discount on smartphone if purchase their smartphone services package. This can encourage hesitant customers to try their product and will boost up the sales.

In the year 2015, the forecast sales volume of the smartphones will increase to 90%, which has increase 10% compare to previous year. Maxis have created customer loyalty on the smartphone and those customers will influence other people to buy our smartphone. Most of the customers are more loyal to Maxis brand’s smartphones. Besides that, Maxis will focus on improve the quality and services of the product or redesign the product to maintain the sales volume of smartphones.

6.2 Marketing Budget

The graph shows the marketing expense budget of Maxis Berhad for the smartphones from the years 2013 to 2015.

In the year 2013, Maxis will have a higher marketing expense budget which cost RM 80million. Since the smartphones is first launch by the Maxis, it needs more costs to enter a new market. To promote customers awareness, Maxis has use advertising such as newspaper, television, radio, billboards, hoarding or banners advertising. Other than that, Maxis had implemented sponsorship to attract wide audiences. This will cost a very high cost in marketing a product.

In the year 2014, the marketing expense budget has decrease to the amount of RM 60million. They do not need to spend more marketing costs than previous year as most of the customer already aware of the new product launch by the Maxis through the promotion. However, Maxis still need to offer some sales promotion to attract the hesitant customers to try their products.

In the year 2015, there have a decrease to the amount of RM 20 million. Maxis already create customer’s loyalty and word of mouth advertising will take place in this stage to help Maxis to promote their products. So, Maxis will tend to reduce some expenses on promotion.

7.0 Conclusion

Maxis has matured rapidly and amassed the country’s largest subscriber base of more than 7 million users, go forward while its eyes are still on the mobile business. Maxis will also grow its smartphone business; invest selectively in its own fixed-line footprint and leverage on the HSBB initiative. It intends to capitalize on its large customer base to push more content and offer smartphone services. It has its eyes set on future growth and regional expansion – and there has been no shortage of rumors about its aggressive search for a new international partner.