| U06A1- Integrated Global Marketing Case Study | Sprint Nextel Corporation | Capella University- MBA6012 | LaJeania P. Kitchens | 2/15/2013 |

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Sprint Nextel Corporation “S” is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The organization is “organized to meet the needs of our targeted subscriber groups through focused communications solutions that incorporate the capabilities of our wireless and wireline services” (Sprint, 2012). Sprint is the third largest wireless provider behind Verizon Wireless and AT&T Mobility. Sprint targets those consumers that use wireless communications daily.
Marketing Mix
Sprint Nextel Corporation’s marketing mix creates a somewhat successful mix of products, price, timing and promotion in order to spread awareness of their services. They have repositioned some products and services for consumer acceptance as part of a long term goal to continue to be a leader in the telecommunications sector in the global marketplace. The price of Sprint’s products is comparable to those of Verizon and AT&T. Since price is determined by the value perception of the consumer, pricing would indicate the value the consumer would want to pay. Sprint pride themselves on offering bundled services at a cheaper rate to entice the consumers’ interest and hopefully their business. The place portion of the marketing mix varies widely from services and products. Sprint delivers services by providing mobile and wireless communications through devices available for purchase. There are many retailers and wholesalers that provide a variety of methods to distribute Sprint’s brand. Promoting Sprint’s brand through different advertising methods will help the brand’s awareness and strategically increase sales. The price, place and promotion increase the product vulnerability in the marketplace.
Sprint is one of the largest global carriers of Internet traffic which operates one of the largest wireless broadband networks. They are also one of the largest providers of wireline long distance services. Sprint services are provided through their own “extensive wireless networks, an all-digital global long distance network and a Tier 1 Internet backbone. We utilize several networks to offer our wireless and wireline subscribers differentiated products and services whether through the use of a single network or a combination of these networks” (Sprint, 2012). The revenue therein is broken down into segments separated by the services, products and expenditures each provides.
Sprint has two reportable segments: Wireless and Wireline. Because the market is so unstable, prices and services will direct telecommunications revenue either as a decrease or increase. Sprint offers services in the United States and Internationally. Each segment has services, products and competition that show the most promise as a target investment. “Most markets in which we operate have high rates of penetration for wireless services, thereby limiting the growth of subscribers of wireless services” (Sprint, 2012).
Wireless Segment
Sprint offers wireless services on a postpaid and prepaid payment basis to consumers, wholesalers and affiliates. These service options are utilized on the Sprint network but sold under the retailer/wholesaler brand.
“We support the open development of applications, content, and devices on our network platforms through products and services which allows for functionality such as one phone number for all devices (home, wireless, office), routing calls between devices, and in-call options to switch between devices during a call which provides the ability to store payment options while you shop using your wireless device” (Sprint, 2012).

This allows the flexibility to mix and match plan options that include voice, messaging, data or any combination to meet the individual and business needs in this segment. The Prepaid option allows consumers to purchase service on a “pay as you go” economic convenience. These subscribers of this segment are specific service consumers that only want to pay for service that they use frequently. This subscriber group wants tech-savvy devices, only messaging or data services that are not expensive. “Boost Mobile serves subscribers who are voice and text messaging-centric, Virgin Mobile serves subscribers who are device and data-oriented, Broadband2Go offer subscribers control, flexibility and connectivity through various communication vehicles and Assurance Wireless provides eligible subscribers who meet income requirements with a free wireless phone and 250 free minutes of local and long distance monthly service” (Sprint, 2012). The approach Sprint offers to the different type of subscriber segments listed above are flexible service options combined in different ways but under the same portfolio of services. According to Marshall and Johnston (2010), demographic segmentation is one of the most popular segmentation approaches because of the customer needs and wants tend to vary with some degree of regularity based on demographic differences and because of the relative ease of measurement of the variables.
The products that Sprint offers are provided using a wide variety of multi-functional devices including smartphones, mobile broadband hotspots, and embedded tablets and laptops manufactured by various suppliers. “We generally sell these devices at prices below our cost in response to competition to attract new subscribers and as retention inducements for existing subscribers” (Sprint, 2012). The availability of switching to a new provider via services, devices and plans offered elsewhere cheaper as a startup, usually have consumers switching from provider to provider. Telecommunication companies use the deep discounts to appeal and retain current subscribers. “We believe that the market for wireless services has been and will continue to be characterized by intense competition on the basis of price, the types of services and devices offered and the quality level of service” (Sprint, 2012). Sprint’s competition offers similar services packaged together competitively. The prepaid services segment competes with a number of carriers that focus on total sales that are paid through commissions.
Wireline Segment
This segment is broken down into services that are provided to its customers (Sprint) and to other targeted communication companies and businesses. These services consist of voice, data, IP communication services and cable Multiple System Operators (MSOs). Cable MSOs resells local and long distance telephone services provided over cable facilities primarily to residential customers. “We continue to assess the portfolio of services provided by our Wireline business and are focusing our efforts on IP-based services and de-emphasizing standalone voice services and non-IP-based data services” (Sprint, 2012). At this time Sprint does not have a substantial segment developed to see an increase in revenue. This segment banks on outside cable providers to use their wireline in order to provide telephone services like Vontage. Sprint has seen a huge decrease in wireline services due to other providers lower cost offerings and the decrease in users outside of cable MSOs. “Our ability to compete successfully will depend on our ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, demographic trends, economic conditions and pricing strategies”(Sprint, 2012).
Looking at this segment, Sprint has not fully developed this market. This segment has seen increasingly large deficits that will continue to decline with more companies positioning themselves in this market. It is safe to say that this segment strategy was not analyzed fully to understand the under developed market. “Target marketing is the process of evaluating market segments and deciding which among them shows the most promise for development” (Marshall & Johnston, 2010). By this principle, Wireline should not have been a potential market segment. The future return on investment is invaluable to Sprint’s bottom line.
Promotional Mix
Sprint’s target subscribers groups are individual consumers, businesses and government. These three groups make up the marketing focus to attract new customers. This marketing style does not focus on the customer mindset. It merely discusses the target and the amount of sales they see as their main revenue source. It does not discuss the individual customer wants or needs. In order to be successful, Sprint will need to survey its customers’ and determine what will keep them as consumers. In order to accomplish new customers, I’ve determine that Sprint “requires a clear focus on the product and service attributes that represent value to the customer and that create customer satisfaction and loyalty” (Marshall & Johnston, 2010). Acquiring new customers is the easy part, retaining them is the obstacle. There are a number of wireless providers like Verizon and AT&T who focus on their customers and maybe one of the reasons why they are #1 and #2. They have customers who are loyal and satisfied with the level of service from their providers.
Sprint has also revised their marketing styles, service options and products offered to consumers. Recognizing that the economy was at a high time low, customers were either requesting a lower service plan or leaving altogether due to cheaper service options elsewhere. Sprint saw the reduction in customers as a result of loss revenue, they begun to advertise their new initiatives of bundled services. Today Sprint commercials advertise their new service options compared to their competitors. The Simply Everything, Everything Data and the Any Mobile Anytime service plans feature the most requested services in wireless service bundled into one fixed monthly rate with a two year contract. “Consumers respond to these plans by migrating to those they deem greater discounts than our competitors; our ability to effectively compete in the wireless business is dependent upon our ability to retain existing and attract new subscribers in an increasingly competitive marketplace” (Sprint, 2012).
Sprint also discounted most of their wireless devices by giving them away for free or minimal cost with a new two year contract. The new devices were the latest in the advance technology of mobile communications. Other providers were offering the same devices for similar discounts. These devices would save the customer time and money by accessing the internet via mobile software just like you would with a computer. Offering huge discounts far below cost would decrease revenue but would gain another customer for at least two years. “We may offer higher cost devices at greater discounts than our competitors, with the expectation that the loss incurred on the cost of the device will be offset by future service revenue. As a result, we recognize point-of-sale losses that are not expected to be recovered until future periods when services are provided” (Sprint, 2012).
Promotional Strategy
Sprint’s Integrated Marketing Communications (IMC) is focused on the customer needs. The concept that Sprint’s operations “target subscriber groups through focused communications solutions that incorporate the capabilities of our wireless and wireline services” (Sprint, 2012), would inform or persuade customers into purchasing their products and services. As one of the telecommunication leaders, Sprint leverages wireless and wireline networks with its partnerships with other companies to develop joint solutions focused on the customer satisfaction. “The successful execution of marketing and sales strategies include the acceptance of our value proposition, service delivery and customer care activities” (Sprint, 2012). The costs associated to this concept will depend on the consumers and their economic stability. The idea of selling devices below cost to attract new subscribers or retain subscribers “could make it more difficult and expensive to implement national sales and marketing programs and could increase the costs of our wireless operations” (Sprint, 2012).
Sprint handles public relations and personal selling through sponsorships and customer service representatives. Customer service representatives are given incentives and bonus to retain current subscribers when they are dissatisfied with the level of service and threaten to discontinue their subscription. “Customer service call centers, some of which are operated by us and some of which are operated by unrelated parties subject to Sprint standards of operation, receive and resolve inquiries from subscribers and proactively address subscriber needs” (Sprint, 2012). They offer free add-on services and a percentage discount for several months for their inconvenience. Sprint also provides sponsorships to nationally televised sport programs that are very expensive but very lucrative if it brings in more subscribers. “Although we market our services using traditional print and television advertising, we also provide exposure to our brand names and wireless services through various sponsorships, including the National Association for Stock Car Auto Racing (NASCAR®) and the National Basketball Association (NBA). The goal of these marketing initiatives is to increase brand awareness and sales” (Sprint, 2012).
For the future of Sprint’s success, the marketing manager will need to focus more on the customer experience and new innovative devices offered other than for renewed subscriptions. Since the majority of revenue comes from the wireless segment, more attention and budget costs should be allotted to this line of business. “Our Wireless segment generates revenues from the sale of wireless services, the sale of wireless devices and accessories and the sale of wholesale and other services” (Sprint, 2012). The wireless segment currently includes multiple brands designed to appeal to specific subscriber segments therein. This will allow Sprint a variety of targeted audiences in which to solicit new subscribers. “We market our prepaid services under the Sprint®, Nextel®, Boost Mobile®, Virgin Mobile®, and Assurance Wireless brands as a means to provide value-driven prepaid service plans to particular markets” (Sprint, 2012). The promotional goal to inform, persuade and remind will significantly raise awareness to the different product services offered through the Sprint brand. “Having a great product but, being a best-kept secret is not a favorable position” (Marshall & Johnston, 2010). The marketing manager must seek out the advantages of having multiple brands where each has been designed to appeal to a specific customer segment within the total wireless segment. “The promotional mix strategy is a crucial element in positioning a firm’s offerings effectively” (Marshall & Johnston, 2010). Sprint’s promotional strategy will either descend or elevate them in the global marketplace.
Business leaders need to realize the need to foster and develop relationships with emerging organizations as partnerships that offer complementary strengths to the existing company. These alliances are designed to deliver integrated solutions that will address business challenges, increase revenue and discover new market opportunities/segments. A strategic fit means “there is good match of a target market to the firm’s internal structure, goals and resource capabilities” (Marshall & Johnston, 2010). Sprint has only acquired 50% of its growth with the new acquisitions through technology and infrastructure. The wireless segment has seen increases in their service options and the retaining of customers. The wireline division has seen a huge increase in cable operators as well as a host of smaller competitors in the provision of wireline services. This increase in providers has made the wireline segment unprofitable and need to be revitalized quickly. Repositioning the wireline segment to reflect a change in business characteristics, attributes and offerings will help engage future and present customers to an improved, quality service product. “Consolidation and competition in the wholesale market for wireline services, as well as consolidation of our roaming partners and access providers used for wireless services, could adversely affect our revenues and profitability; the blurring of the traditional dividing lines among long distance, local, wireless, video and Internet services contributes to increased competition”(Sprint, 2012).
Final Analysis
Although Sprint has offered new data plans and advertise the competitors’ comparable prices, Sprint has not focused on the customer to fully achieve greater success. Yes, Sprint seized the opportunity on behalf of the customer when they developed new service options but, the customer service aspect is still lower than their competitors. These consumer complaints of terrible service will add to the decrease of revenue. “Competition and technological changes in the market for wireless services could negatively affect our average revenue per subscriber, subscriber churn, operating costs and our ability to attract new subscribers, resulting in adverse effects on our revenues, future cash flows, growth and profitability”(Sprint, 2012). Improving the customer service segment of their wireless services will continue to present a customer centric approach. “Our future growth plans and strategy revolve around achieving the following three key priorities: Improve the customer experience, strengthen our brands, and generate operating cash flow” (Sprint, 2012). I think Sprint has finally gotten the idea….Priceless!

Reference
Marshall, G. W., & Johnston, M. W. (2010). Marketing Management. New York, NY: McGraw-Hill Companies.
Sprint.com. (2012). Sprint Nextel Corporation-10-K. Retrieved January 12, 2012 from http://investors.sprint.com/Cache/12818751/10K.pdf