Product Overview: Mobile Money Transfer
The product that will be introduced in the market is mobile money transfer. This is an intangible product, which involves the process of sending and receiving money via the mobile phone. There will be partnerships with the top eight wireless telecommunication service providers in the United States such as Verizon wireless, AT&T mobility, Sprint Nextel, T-mobile USA, TracFone Wireless, MetroPCS, U.S. cellular and Cricket wireless.
The wireless telecommunication service providers will charge for the product offered both when sending or receiving money. The range of cash that will be allowed will be between US$ 50 and a maximum of US$ 1500. This is to avoid possible conflicts with the financial institutions and the laws that govern their operation.
Mobile money transfer will target low-income earners who would wish to send and receive money from their next of kin. This group of customers should be earning between US$ 80 to US$ 2,000. Majorly, the market segment will comprise of youth aged between 18 years of age to adults aged 45 years of age.
This is the active age for employees both self-employed and those employed by other institutions. Besides, this market segment comprises of students in colleges and high schools who would like to receive some cash from their parents to sustain them in school life. The simplicity of this product vests in its convenience and ability to increase employment in the State.
As mentioned earlier, the target market or customers are majorly the low-income earners who earn between US $80 and US $2,000. They might be parents who earn very low income but have students in colleges hence, would like to send cash to their children for sustainability.
This can be done by visiting numerous agents deployed around the State by their respective wireless telecommunication service providers. The money is deposited in the mobile phone and the customer can send at any convenient time. On the other hand, those receiving will be able to withdraw the cash from any agent located within vicinity and in town centers at a fee. The customers will not require going to the banks or any other financial institutions to withdraw their cash.
Moreover, small business people will be able to transact payments and settle small debts conveniently with this kind of product. Mobile money transfer will be also benefit the customers who are connected to wireless telecommunication but do not have bank accounts or credit cards to transact money transfers.
The product has great potential benefits to the clients as far as convenience is concerned. First, it can be used to settle small debts when one does not have the liquid cash at any given time. Second, one can buy goods or products even without cash at any given time especially where there is remoteness.
For example, where the ATMs are not available or the financial institutions are not anywhere within vicinity. The agents for money transfers will be distributed everywhere in the suburbs and towns to promote faster delivery of services. Customers will also be able to transfer money to other users and non-users, settle different bills, and buy airtime for their respective networks. Lastly, the customers can deposit and withdraw money from banks using their service providers.
Pricing Strategy
The product will be priced according to the amount being transacted. The table below shows the scale that will be used in pricing the money send or received.
Source: Personal preference
Withdraw and depositing of money in and out of the banks or any other financial institution will cost the client US$ 5 on top of the service provider charges. According to Kotler and Armstrong (2010), the pricing strategy that will be used for the new product will be premium pricing and value based pricing.
With premium pricing strategy the customers will be made to believe that the cost of sending or receiving will be charged according to the volume of money being sent or received. On the other hand value based pricing the product is being priced based on the value it gives to the customers. Despite there being no close competitor, the product will not monopolize the profits to gain customer loyalty and confidence.
In using the mentioned pricing strategy, several objectives will be achieved. First, is to create a long-term relationship with customer based on value. In so doing customer loyalty to the product will be guaranteed (Cierpicki, Wright & Sharp, 2000).
Second, the pricing strategy used is meant to a locate cost to the product in a manner that is perceived by the customer to be fair at the same time obtain profit from the product offered. The third and the final objective is to create the perception in the minds of the customers the more money one transacts the more one is to pay for it. Hence, the lower level earners will not feel exploited at the expense of the middle and high-income earners.
The product is worth the price because a percentage of the charges will be retained by the wireless telecommunication providers while the other percentage will be taken by the product inventor. In fact, the service providers will obtain 45% of the revenue from the product while the inventor will obtain 55%. This is the best offer that corresponds to the costs involved in coming up with the product.
At the introduction stage
Source: Personal preference
At the growth stage
Source: Personal preference
At the maturity stage
Source: Personal preference
At the decline stage
Source: Personal preference
The tables above show the different charges that will be charged in the different stages of product life cycle. The reason for the low cost in the decline stage is that assumptions have been made that in case the product experiences a decline in market or usage, the cost will be lowered to retain the customers. The sending charges do not have a significant change because of the technicality involved. It is the wish of the product inventor that this product can beat all the odds in the market to excel.
References
Cierpicki, S., Wright, M., & Sharp, B. (2000). Manager’s Knowledge of Marketing Principles: The Case of New Product Development. Journal of Empirical generalizations in Marketing Science, Vol. 5, 771-790
Kotler, P & Armstrong, G. (2010). Principles of Marketing. Prentice-Hall Publishing. New Jersey