Vodafone Youth Market Segmentation

Barcelona, 21 October 2004

The Youth Segment


Raffaella LeprouxVodafone Italy


AgendaAgenda

1 - The importance of Customer Base management and segmentation in the Italian market

2 - The Youth segment: profiling, needs and subsegmentation

3 - The Vodafone Italy Youth proposition


The Mobile Italian Market/1The Mobile Italian Market/1

39%

56%

77%

90%94%

PenetrationAs % of Pop. BLU WIND

TIM

3101%

VO

103%

-

10.000

20.000

30.000

40.000

50.000

60.000

70.000

1998 1999 2000 2001 2002 2003 2004

EO

P (

.000

)

BLU WIND

TIM

3

VO

VF Italy Mkt share: 36%VF Italy EOP Customers: 21.4M (at 30.06.04)

VF Italy Avg ARPU: 30.1 euro/month (at 30.06.04)


New services revenues

New customers revenues

Lost customers revenues

1999 2000 2001 2002 2003 2004

RE

VE

NU

ES

The Italian Market Penetration is >100%

Very compelling market with Mobile Number Portability and the launch of the first UMTS operator, “3”, in 2002.

Importance of Importance of Customer Base Customer Base ManagementManagement

The Mobile Italian Market/2The Mobile Italian Market/2


RETENTION

UPSELLING

CARING

Maintain the customer base and defend it from competitors attacks

Increase the value of the customer base through the usage stimulation

Offer to the customers the best service and reward

SEGMENTATION

Vodafone Italy Customer Base Vodafone Italy Customer Base ManagementManagement

UPSELLING

CARING


What’s Segmentation What’s Segmentation

To divide the Customer base in cluster groups

with different needs and behaviours in order to

create

different and appropriate marketing

proposition


Segmentation changes with market Segmentation changes with market evolutionevolution

Voice centric segmentation

Segmentation based on value of customers:

Top Value Customers

High Value Customers

Low Value Customers

CRM-based segmentation

Segmentation based on:

lifestyle / attitudes

value

360 degrees segmentation

1996 / 19971996 / 1997 1998 / 20001998 / 2000 2001 / 20042001 / 2004

Mature Market

Start Up

Growth

Segmentation based on volume and kind of calls:

Emergency only

Personal use (off peak)

Professional use (peak/off p)


The SegmentationThe Segmentation MethodologyMethodology

Seg 1Seg 2

Seg NSeg4

Seg 3

application of the rule to the entire CB (including new adds)

Customer Data Base

Seg 1

Seg 2

Seg 3

Seg N

Seg 4 Classification rule onsample

Segments estimate

Seg 1

Seg 2

Seg 3

Seg N

Seg 4

variables tim

eC

usto

mers

Market research* Customer Data Base

Segmentation Data Mart Customer Insight Development

Modelling

YOUTH


The Youth segment – Key The Youth segment – Key characteristicscharacteristics

Age between 12-24

Still at home

Budget constraint

Need to belong

Emotional need driven

Highly social – very image conscious

Interest:- Movies- Music- Sport


The Youth segment The Youth segment - KPI- KPI

YOUTH ADULT

Voice

SMS

MMS

HS Vodafone

Live!

Voice Mail

Ring Tones

Directory

services

+ 30%

+100%

+ 10%

+ 5%

+ 60%

+ 40%

+ 90%


What is Youth?What is Youth?/1/1

EarlyTeens12 – 15 years

Late Teen

s16 – 19 years

Young Adult20-24 years

Young Professionals25 -30 years

Child0 – 11 years


What is Youth?What is Youth?/2/2

16 – 19 years16 – 19 years PeersPeersLate Teens

Peer group

renforcement

Peer group

renforcement

12 – 15 years12 – 15 years Emancipation

from Parents

Emancipation

from ParentsFamily /PeersFamily /PeersEarlyTeens

20 – 24 years20 – 24 years Peers/SocietyPeers/SocietyPeer group

Renforcement/

Status Displays

Peer group

Renforcement/

Status Displays

YoungAdult

GROUP AGESPHERE OF INFLUENCE

SYMBOL BEHAVIOUR

Chance for product diversification

Challenge for universal proposition


Needs overview Needs overview S

ha

re o

f T

ime

**

Stimulation

Self expression

Communication

Fun &

Entertainment

Information

Organisation

Share of Mind*

YOUTH

Self expression

Stimulation

Communication

Fun &

Entertainment

Information

Organisation

Share of Mind*S

hare

of

Tim

e**

ADULTS

*Share of Mind is the rank order of need when it occurs ** Share of Time is the frequency of mentions of need across all occasions, with occasions weighted by importance (% penetration of occasion & average duration of occasion)

The self expression need is the difference


COMMUNICATION

To share

To check-up

To show affection

To chat

YOUTH - Needs overview YOUTH - Needs overview

MOBILE

COMMUNICATION

Call & Videocall

SMS & MMS

Sending a song


FUN &

ENTERTAINMENT

To have fun

To Escape

To pick up my mood


MOBILE

FUN & ENTERTAINMENT

Playing a game

Listening music track

Taking/Sending pictures

Watching TV



ORGANISATION & INFORMATION

To keep up to date

To organise myself

To learn

MOBILEORGANISATION &

INFORMATION

Reading news

Finding/Sending information

Receiving alerts


Vodafone Italy YOUTH Proposition Vodafone Italy YOUTH Proposition

Ringtones

M-play

3 euro Top Up

111 for me

SMS promotions

EarlyTeens

My Music

Load a Game

Vodafone Infinity

SMS promotions

M-Village

Multiparty

My gallery

Late Teens

Supertones live!

MMS postcards

MMS contest

Java Games

Vodafone Infinity

Superpromo mms

S. Valentine Card

Freetime MMs

Goal live!

Content SMS

YoungAdult

COMMUNICATION

SELF EXPRESSIONSELF EXPRESSION

FUN & ENTERTAINMENT

ORGANISATION &INFORMATION


Fun &Fun & Entertainment: My MusicEntertainment: My Music

PROPOSITION

Replace ring back tones of your mobile with a real song. The activation it’s easy. Call 45555 and choose your song! Until 15th of November the music track of Vodafone TV summer campaign is free for one month.

OBJECTIVES

• Increase the range of personalization products.

• Be innovative

• Use music to reinforce the brand through the youth segment.


Fun &Fun & Entertainment: MMS contestEntertainment: MMS contest

PROPOSITION

Express yourself catching every week something different and send it with MMS. Every week receive an MMS with the topic of the week.

OBJECTIVES

• Stimulating DATA penetration services

• Suggest different occasions to send MMS

• Create Community.


Communication: Communication: Vodafone Vodafone InfinityInfinityPROPOSITION

Pay only the first minute of each call, the remaining airtime is free. The activation cost is 7 euro.

OBJECTIVES

• Be competitive in the new arena.

• Stimulating Voice penetration services

• Growth VF market share on the segment


PROPOSITION

With 3 Euro Top Up you can recharge your mobile also with coins. A small credit that allows you to stay in touch with your friends through calls and SMS.

OBJECTIVES

• Top up approachable even for budget restricted customers.

• Increase top up margin/frequency.

Communication: 3 Euro Top up Communication: 3 Euro Top up


Messaging Promotions – Price/Volume Messaging Promotions – Price/Volume ElasticityElasticity

SMS Card2002

SMS+MMS Card2003

Christmas Card2003

SMS+MMS Card2004

Youth Segment shows a strong increase in SMS and MMS per day usage during Summer and Xmas Promotion

Summer 03 Xmas 03 Summer 04


ConclusionsConclusions

Segmentation is fundamental

There is no a “Youth segment”

The key need is the “self expression”

Proposition should suit each subsegment


Thank you!

Vodafone Youth Market Segmentation

Technology

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