More Changes Are In Store For Wireless Marketing, Says Samsung - Twice

More Changes Are In Store For Wireless Marketing, Says Samsung

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Wireless sales and marketing strategies continue to change, Samsung executives told TWICE.

For one thing, carriers "are investing in Q4 to make the year," yet they don't want to overbuy because of last year's Q4 inventory bloat," said Pete Skarzynski, senior sales and marketing VP. "So if they buy a phone, they're buying GPS models to meet the FCC's E911 mandate."

The transition to GPRS and 1x technologies is also prompting carriers to buy carefully, he added.

As a result, carriers and retailers alike are concentrating on fewer SKUs, said Randy Smith, senior director of marketing and business development, "so if they get caught with inventory, they'll be caught with the highest moving products." In contrast, carriers were caught in the fourth quarter of 2000 with a lot of slow-moving SKUs in inventory, he said.

As for distribution practices, Samsung executives said carriers will continue next year to increase their reliance of direct channels.

Next year, said Skarzynski, "we'll see changes in how the carrier message gets across." Carriers will do more direct marketing to target segments, he explained.

On top of that, "every carrier has expansion plans" for their owned and operated stores, Smith said, in large part because of the rollout of 2.5G and 3G services that "need a captive sales force to explain."

When subsidies and churn are taken into account, carriers have concluded that their own stores "are less expensive," he noted.

As with any new phone or service, carriers will limit sales of GPRS and 1x phones to their stores for 30-60 days before distributing the phones to retailers.

Carrier stores represent 30 percent of Samsung sales, but the percentage is growing, executives said.

Retailers are also changing the way they promote wireless, Samsung said. "Our retailers are coming to us to promote handsets in their ads because it's difficult to differentiate among so many rate plans," added Smith. "Products and features are being advertised more heavily in ads."

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