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MARKETING PLAN
"Brad, how would you market paging if this were your company? Would you please give me a marketing plan? I need it in one week!"

(México City, February 1994)

TABLE OF CONTENTS
I. Introduction
II. The Plan
III. Who Will Our Customers Be?
A. Traditional Paging
1. Business Paging
2. Consumer Paging
B. Nontraditional Paging - New Markets
IV. What Business Are We In?
V. How Will We Promote Our Service?
A. Traditional Advertising
B. Retail Distribution
C. Direct Sales
D. Targeting Special Markets
E. Electronic Advertising
VI. What Kind of People Do We Need?
A. Management
B. Sales
C. Administrative and Operations
D. Technical
VII. How Do We Plan for Expansion?
A. System Capacity
B. Coverage Area
VIII. The Future of Paging?
A. The Wheel of Fortune
B. New Paging Protocols
C. Infrastructure Adaptability
IX. Summary
X. Disclaimer
XI. Appendix "A"

Bradley Dye
Systems and Market Development Manager
Latin America and Caribbean Paging Products Division
Paging Products Group
Messaging, Information and Media Sector
Motorola Inc.

I. Introduction
I was recently honored by some of my customers who asked me how I would start a marketing program in a new paging company if it were my own. I am sure there are many academic papers that go into great detail about how to successfully market a new radio paging service. Most of these would be superior to anything that I could put together in a few pages, especially in one week's time. I hope, however, that the following ideas will be helpful in quick-starting new radio common carrier operations while more elaborate and thorough marketing plans are formulated. None of these ideas are entirely original. Someone taught me how to walk and talk. Motorola taught me a lot about paging, but my greatest teachers have been my wonderful customers in over fifty countries around the world -- spanning more than thirty years.


II. The Plan
Some new paging operations begin by putting an advertisement in the local newspaper and waiting for the telephone to ring. In a few countries the demand for paging has been so great that large common carriers have had virtually no outside sales force. When a new shipment of pagers arrived - the word got out somehow - and customers lined up at the door for their turn to buy or rent a new pager. Today's market demands a more aggressive approach. We need a plan.


III. Who Will Our Customers Be?
I believe that if we know the approximate makeup of paging customers by business segment, then our chance of success is enhanced if we actively solicit new subscribers from within these segments. Following is a graph (Figure 1) showing this makeup based on market surveys done in the United States. I understand that the business culture is different in other countries, and I am not suggesting that things should be done in other countries like they are in the U.S., but other studies done in Europe, Asia, and Latin America have shown very similar patterns. If we know where our potential customers work and what they do for a living, then our chances of finding them are better. If we can find them and explain the advantages of using a pager in their business segment, then many of them will become our customers. Note the italics above, an effective salesperson will understand the customer's business and will be able show - very specifically - the benefits of a pager in that business environment.

This can be studied in greater detail, but this is a quick-start plan. There were some excellent materials presented at the Latin America and Caribbean Paging Congress held in November of 1993 in Miami Beach, Florida, that should be helpful in forming a profile of who paging customers are. There are some very good companies who specialize in doing market surveys. This could be helpful in entering an already-established market.

I will give you a valuable hint here. If you start with a good classification system with your first subscriber, you will be able follow the composition of your subscriber base as it grows and evaluate which vertical markets you have been most effective in penetrating. A simple code placed in your subscriber data base will be invaluable in the future. Then you can make a graph of your own customers like the one that follows.

Market Pie Chart Image

Figure 1

A. Traditional Paging:

1. Business Paging
In the past, most of the paging subscribers around the world have been business users who sometimes use their pagers for personal use. Using the information on the graph above (Figure 1), we can probably identify, and then target potential customers in each Business Segment. There must be something special about each of these businesses. Somehow a pager helps these people to be more effective in their work.

2. Consumer Paging
Today more emphasis is being placed on the use of a pager to stay in touch with family members. Experts have been forecasting for several years that if we are ever truly successful in opening the consumer market, the total number of pagers in use will multiply by ten times.

B. Nontraditional Paging - New Markets
It is safe to say that we understand what paging is today. It is also clear that we do not have all the answers about what paging will be in the future. We do believe that Information Services will be an important part of what we now know as paging. One type of information service is already being widely done on ordinary pagers. This information service is provided by simply sending standard alphanumeric text to a pager where it will be read without any manipulation. A promising variation of this type of service is sending text, or even complete computer files, to the user who will then "manipulate" the text or "run" the file on a portable computer. This will obviously be of much more value to the subscriber. Several companies are "breaking the Ice" with Personal Digital Assistants (PDAs) equipped with the Motorola NewsCard receiver and with Palm Top Computers equipped with the Motorola NewsStream receiver.


IV. What Business Are We In?
The paging business as we know it today is really providing personal communications to people on the move. From a sales point of view, it is more successful to sell the service than to sell the pager. Most people respond to the idea of being able to stay in touch with clients or employers. There are obvious benefits to being available. Once convinced that this is a good thing to do, the thought of carrying around a pager all the time can be more easily accepted. Advertising people call this "selling the sizzle . . . not the steak."

So we sell the service. The service is sending messages to our customers. These messages get transmitted over a radio channel, so we are in reality selling little bits of time on the radio channel. Never forget that this radio channel is your most valuable resource. An hour only has sixty minutes and a minute only has sixty seconds. They cannot be stretched. Once the busiest hour of the day on the radio channel is fully occupied, no more customers can be added for personal messaging. It is important to carefully plan channel use. Channel saturation is a serious problem. In some countries one paging channel concession is all you will get -- ever.


V. How Will We Promote Our Service?

A. Traditional Advertising
The old standby is the newspaper ad. This still works well, especially in the business section of the newspaper. Television is probably too expensive unless you have really decided to go after consumer paging. Handbills and fliers seem to work in small towns but often are ignored in larger cities. Radio advertising is effective, especially during the hours that people are driving to and from work. Too much advertising can bankrupt a business; not enough advertising can stagnate one. Get an expert.

B. Retail Distribution
The hottest thing going in paging in the world today, is the retail distribution of pagers. Surprisingly many carriers are against it. In Asia where the highest penetration rates in the world exist, I have walked down crowded streets in the public markets and have seen many little stores selling pagers. Sometimes the stores are only two meters wide but inside they have a tremendous display of pagers to choose from. Here in the USA many large national department store chains are selling pagers right off the shelf. Put the product in front of the customer and they will buy it. If you are interested in this channel of distribution we have a special department dedicated to help you in it's development. Your primary goal should be to build a subscriber base, not to sell pagers. I recommend that you place the pagers at your cost, or below. Make your money on the service.

C. Direct Sales
This is still the best way to go after business accounts. Especially the very important multi-user corporate accounts. This is push Marketing. You must have good sales people, well-trained, motivated, and aggressive.

I know of one new RCC that did an in-depth survey of their competitors. They called every paging company in town and said they wanted to get a pager. None of the RCCs offered to come and visit the caller. Next they went to visit each RCC to see how long it would take to get a pager. The RCCs were hard to find. At most places, it took about two hours to get a pager, although at one RCC it only took 45 minutes (far too long). For the most part the RCC staffs were not very helpful, not very well trained, and there were too many paper forms to fill out. Make it an easy and pleasant experience for your customer to get a new pager and the word will get around.

D. Targeting Special Markets
Using the business categories from the "Subscribers By Business Segment," (Figure 1) an action plan can be formulated to find these people and sell them paging. It should not be difficult to find trade association meetings, trade association publications, and other places where people of the same occupation congregate.

E. Electronic Advertising
You may remember the Electronic Sign from the Wheel of Fortune presentation or you may have seen the AlphaLert Paging Message Receiver being demonstrated. These are giant pagers and can be used to promote paging all over your coverage area. The investment required is small, and the signs can be placed in public places such as shopping centers, bus, train, or plane terminals. It would be easy to change the messages over the air - on all the signs at the same time, and I believe this would attract much attention. I would start with messages like: "IF YOUR CLIENTS CANNOT LOCATE YOU THEY WILL CALL YOUR COMPETITOR. GET A PAGER TODAY. CALL 123-4567 XYZ BEEPER CO." I would have someone make the electronic sign look just like an extra large ADVISOR or a Memo EXPRESS pager.

Advisor Pager Image

VI. What Kind of People Do We Need?

A. Management
You find a good manager - a leader - one that can motivate people and understands business management and sales, then we will teach him (or her) paging. There is an excellent course at Motorola University for paging operations managers, and many seminars and other special courses are offered every year. We can teach them paging, but they must have the chispa (spark) of leadership.

B. Sales
The first three rules for the successful management of a sales team are:

1. Motivation
2. Motivation
3. Motivation

Keep the sales team smiling! The other important issues that follow may seem obvious, but it is surprising to see how often they are overlooked:

4. Commissions
This is the "carrot in front of the donkey." I am not saying a salesperson is a donkey because I am a salesperson myself. I am just saying that a generous commission plan will keep your sales team bringing in new business, and this new business is the "lifeblood" of the organization.

5. Appearance
If your sales people are selling to ranchers, tell them to wear cowboy boots. If they are selling to the business community they must look sharp! This means, in most cities, suits and ties for men (and the equivalent business attire for women). Remember that they represent your company. If they look professional, it will help them be perceived as professionals. For several years, I have promoted the practice of hiring more qualified women in sales. It seems to me that most of the salespeople in this industry are men, and this is unfortunate. I have known several women salespeople who were very successful. The point that I am trying to make here is that salespeople (men and women) need to pay particular attention to their appearance and comportment. I mean: good grooming, conservative business attire, and a friendly, outgoing personality.

6. Attitude
This is a hard one. It is possibly the most difficult aspect of human behavior that we deal with. I have recently noticed businesses everywhere are starting to emphasize customer service. I remember when I was young and most of the businesses I went into were family owned. They treated their customers with great respect. It was obvious that their livelihood depended on these customers. Then it seemed that these small businesses were all bought out by large chain stores. The chain stores for many years employed low-paid and poorly trained workers. Many workers had an "I don't-give-a damn" attitude. They did not like their job, and they did not like their pay. They just wanted to put in their time and go home. These bad attitudes were nowhere more obvious than to the customer. Business suffered.

Now all of that has changed. Large chain stores are treating their customers like the small, family-owned business used to. Their employees are well-trained and helpful. Many of them are proud to be called "partners" or "part-owners." These titles come from the employer's profit sharing and employee stock grant programs. The employees act like they want the customer's business - the profit motive is back! In stores salespeople are polite. They help you find things. They ASK if they can help you. What a revolution! Should not it have been obvious?

Do you want to know one of the secrets of building a successful business? It is having friendly employees with a good attitude. But you say: "Everyone knows that!" Well if everyone knows it then why do not more practice it? I enthusiastically recommend a strategy patterned after Motorola's Total Customer Satisfaction policy. This policy is reproduced at the end of this paper (Appendix "A") for your reference. At Motorola we believe in this policy - it is not just to impress customers. Respect for human dignity and courtesy on the part of employees does not happen automatically. It must flow from the top down. I respect the company I work for because they treat me with respect.

C. Administrative and Operations
Often this part of the staff is considered to be "behind-the-scenes" and not important. Not so. These are support people and are vital to the organization. They must be chosen for their talents and personality. They should receive training in how to operate the equipment and in business telephone etiquette. The way your telephones are answered is a strong indication of what your company is like, and it may be the deciding factor in creating a good public image for your company.

D. Technical
No matter how good your suppler is, no matter how good the warranty program is, a highly-trained and highly-qualified technical staff is essential. The most disastrous situation that I have ever witnessed in business was when an RCC was off-the-air or having serious problems with their equipment. Our customers come to depend on their pager. Even the ones who just a few weeks before were not sure they even needed one, panic when the system is out of service. System reliability is not only good business, there is an ethical issue here. One of my mentors in paging once told me: "Remember how you would feel if your mother was critically-ill in the hospital, they needed to contact her Doctor, and the system did not work." A properly trained technical staff with adequate spare parts and test equipment can keep the system running. I have heard of RCCs losing 25% of their customers after being off-the-air for one or two days.

Get good technicians and engineers. They should be fluent in English. Unfortunately not all technical support materials are available in languages other than English. To keep up with all the latest technical information they will need to read many materials in English. I am not trying to be an ugly American, that is just the way it is. We can train them and make them paging experts. Several good technical training courses are available from Motorola.


VII. How Do We Plan for Expansion?

A. System Capacity
I recommend that your system capacity always be at least one year ahead of your growth rate, with an initial configuration sufficient for the first five years. After you are up-and-running, take the net number of subscribers that you add in one month and multiply by twelve ( Monthly Additions - Deletions X 12 = Annual Growth Rate). I cannot believe the number of customers that call us in a panic and say they are out of new pagers or that their system is saturated. Good planning is a good business practice. Obvious? Yes, but often overlooked.

B. Coverage Area
Once an acquaintance of mine came to visit me and told me he was ready to go into the paging business. He asked me to quote him the lowest-cost system possible so he could get started. I told him that I did not want any part of ensuring his failure in business. That certainly got his attention and it gave me a chance to explain how important I believe good coverage to be. Unfortunately there are many paging operators in the world who are using only one transmitter to cover an area that requires several. They think that if they save money on the infrastructure, they will make more money on the paging service. Inadequate coverage gives a very bad impression to the paging subscriber. Missed and garbled messages will turn them to the competition. Your market area should be supersaturated with the paging signal. It should penetrate buildings, go into underground parking areas, and extend all the way out to where the cows live. A planned expansion of the coverage area should be a continuous event - up to the limits of the license or concession - and should be included in each year's budget.


VIII. The Future of Paging?
Pagers continue to get smaller, cost less, and have more features. Battery life is improving. Most important of all is that public awareness of the benefits of paging is increasing all over the world. In Taiwan, a country of 22 million people, paging subscribers grew from 10,000 in 1986 to over 2,000,000 today. Similar growths are taking place in México, Brazil, and Puerto Rico. Paging is starting to include more than personal messaging. In Brazil, because of hyperinflation, financial services have become an important part of market growth. In Chile, stock-market quotation services over paging are becoming popular. In China the ADVISOR is very popular because it displays Chinese characters and supplements a limited telephone infrastructure. It is interesting to note that in the Chinese language the term for pager is: bi bi call . In Colombia, if your car is stolen, you can turn off the motor by activating a pager hidden in your car's electrical system. In Korea, there are over 600 dealers selling Motorola pagers. The future of paging will include many innovative uses of one-way radio signaling. The Wheel of Fortune describes some of those that we can do today.

A. The Wheel of Fortune
The Wheel of Fortune presentation (given separately) attempts to promote the concept that the infrastructure of a radio paging system can be used to support several other business activities besides traditional paging. Several examples are given:

wheel of fortune graphic
1. People Paging People
2. People Paging Things
3. Things Paging People
4. Things Paging Things

The other important concept presented is that the capacity of a paging system is usually dependent on the amount of personal messaging traffic that presents itself during the busiest hour of the day. If the system operates with a satisfactory grade of service during this time then everything is OK. If there is too much traffic during the busy hour, this will result in unacceptable delays in processing and transmitting the messages to subscribers. When this happens, the system is said to be overloaded. This may mean that the system cannot handle any more new subscribers - not a good situation for an RCC to be in.

There are several things that can be done to alleviate this problem if it occurs. Balancing the paging load according to the pager capcodes, upgrading to a faster paging protocol using POCSAG or migrating to a new, faster and more robust code such as FLEX, are two options. Sometimes it may be necessary to add more incoming telephone trunks or more telephone operators. Often a more efficient paging terminal is required such as the Unipage with its new High Capacity Channel Controller Card Set.

The concept presented in the Wheel of Fortune is to offer other services outside the hours when personal messaging is predominant. For example during the night when most of our traditional paging customers are asleep, large amounts of data can be transmitted to computers, over the paging system, without having any negative impact on the daytime grade of service.

Another service that allows many more subscribers on a system without much increase in system congestion or increased air time, is one-to-many transmission. A virtually unlimited number of subscribers can receive information on their pagers if they all have the same pager code. Since the information only has to be transmitted once and modern pagers allow for several different codes, large groups of people can receive information services at the same time. One code for individual messages, and other codes for information services such as news, weather, sports scores, and financial information.

B. New Paging Protocols
As mentioned above the speed of the information sent out to the pagers is a critical factor in figuring out the capacity (number of subscribers that can be served) of the radio channel. A difficult question, often asked is: "How many pagers can you have on one radio channel?" An accurate answer must take several factors into account such as: Busy Hour Call Attempts, average message length, paging code type, signaling speed, Grade of Service, speed of message entry, and batching efficiency. The following estimates are based on a theoretical analysis which makes "standard" assumptions. The practical limits in a real operating paging system are considerably less than the theoretical, as can be seen from the Practical Limit column under Number of Subscribers On One Radio Channel. Remember the following are only rough estimates:

Theoretical and Practical maximum numbers of paging subscribers per radio channel:

Code
Speed Mode Digits Characters
Theoretical
Practical
POCSAG 512 b.p.s. Numeric 10 62,784 34,000
POCSAG 1200 b.p.s. Numeric 10 147,456 80,000
POCSAG 2400 b.p.s. Numeric 10 294,336 160,000
FLEX 6400 b.p.s. Numeric 10 668,200 426,000
POCSAG 512 b.p.s. Alpha 40 10,464 8,500
POCSAG 1200 b.p.s. Alpha 40 24,576 20,000
POCSAG 2400 b.p.s. Alpha 40 49,056 40,000
FLEX 6400 b.p.s. Alpha 40 131,000 106,000
POCSAG 512 b.p.s. Alpha 80 5,412 4,300
POCSAG 1200 b.p.s. Alpha 80 12,712 10,000
POCSAG 2400 b.p.s. Alpha 80 25,374 20,000
FLEX 6400 b.p.s. Alpha 80 65,500 53,000

The obvious point here is that the faster protocols will allow for much larger subscriber bases. As you probably know, POCSAG is an acronym for the Post Office Code Standardisation Advisory Group. This was an inter-industry group that worked with British Telecom in London, England to define and recommend a nonproprietary high-capacity paging code in 1980. After this code was adopted by several international standards organizations, its official name became the "CCIR Radio paging Code No. 1." It is still mostly known by its nickname: POCSAG. As the requirements for faster signaling occurred because of the rapid growth of paging worldwide, the speed of the POCSAG code was increased from 512 bits per second to 1200 and then 2400. For technical reasons 2400 is about the maximum that this code can operate reliably. The new FLEX code developed by Motorola and licensed to other manufacturers, is not only faster but more reliable as well. In very large market areas where channel capacity will likely become a problem, it is important to plan for the eventual migration to the FLEX code. Both FLEX and POCSAG can coexist on the same channel, so there should be no problem in starting with POCSAG and then adding FLEX later. Do not worry about new protocols making current ones obsolete. It has been that way since paging started. There is always something new "on the drawing boards." The same holds true in the personal computer industry. If you wait for the latest and greatest microprocessor you may never buy a personal computer.

C. Infrastructure Adaptability
I have just given my opinions on the importance of faster protocols for serving more traditional paging customers on the same channel and for expanding into the exciting new world of information services. If I were buying infrastructure today, I would make sure that it would ALL be adaptable to the FLEX code. The faster codes will require a higher level of technical expertise, tighter control of the system, and complete integration of the system's components. The key elements are the Paging Terminal, the Simulcast Control Equipment, the distribution system (radio link, satellite, etc.), the Paging Transmitters, and the Pager. They all must work together. Please excuse the commercial here, but if all the equipment comes from the inventor of the FLEX code, I believe that the chances of the system working properly will be greatly improved. A mixed system is sometimes difficult to manage. Each manufacturer can say, "it's the other guy's problem."


IX. Summary
The initial thrust of marketing should, in my opinion, be directed toward identifiable Business Segments. Instead of a shotgun approach, I recommend a rifle approach. A shotgun fires many pellets and you would think that, if you just point it in the general direction of a flock of birds and fire, that you would get several birds. You don't get any. I have tried it. When you shoot a rifle you have to aim at one specific target if you want to hit something. A rifle only fires one bullet at a time. That is how a marketing plan should be. Aim at specific Business Segments. Contact the people most likely to need a pager in their work. Find out who they are by conducting a market survey, or just start-out by using the information in Figure 1. Train your sales people to understand the businesses their customers are in. Make them into specialists (like a rifle).

Show your potential customers that by using a pager they can buy time and increase their productivity. Buying time is an important concept. If your customer is basically motivated to make more money, then show how with a pager and the same number of hours of work, s/he can make more money. If, on the other hand, your customer's basic interest is in the family, then show how by using a pager s/he can work less hours, make the same amount of money, and spend more time with the family. This is buying time that would normally be lost. Life is short. If technology can give me a little more time in life to do the things that are important to me - I will take it.

I did not include any information about financial management. I know this is a very important part of a new RCC but it is beyond the scope of this paper. I ended up including many ideas about starting a new paging company that are outside the scope of a marketing plan. It seemed like the right thing to do.


X. Disclaimer
This is an informal marketing plan for starting a paging radio common carrier. The ideas expressed in this paper are those of its author and are based on his practical experience in the paging industry. Neither the author nor Motorola Inc. assumes any responsibility or liability for the accuracy of this information. These are only suggestions. The success or lack of success of a paging common carrier is dependent upon many factors. There is no guarantee that this marketing plan will produce the desired results. Please feel free to use or reject this information as you desire. Good luck.


XI. Appendix "A"(return to reference)

motorola logo

OUR FUNDAMENTAL OBJECTIVE
(Everyone's Overriding Responsibility)

Total Customer Satisfaction

KEY BELIEFS - how we will always act

KEY GOALS - what we must accomplish

KEY INITIATIVE - how we will do it
END OF SECTION
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