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Assignment 1 - Reaserch Brief
Assignment 1 - Reaserch Brief
Assignment 1 - Reaserch Brief
Executive Summary
The aim of this report is to investigate the underlying problems behind one of KDDI’s
mobile services povo, look into why it has not been successful in new acquisitions, and
then propose research objectives and questions in order to solve the problems. In
2020, in response to the Japanese government's request to lower mobile plan rates, all
telecommunication companies released new, competing budget friendly plans that
complied with the government’s requirements simultaneously; with povo being KDDI’s
response.
KDDI has been struggling to reach and progress its targets with povo, with it only
making it to 1.8% of the total market share by February 2022, against the goal of
growing its share of accounts to 5% by that time. 1 It has also not been able to gain
ground against the overall market share acquired by ahamo; the equivalent plan
offered by competitor NTT. The possible cause of it could be that they are not
converting users from other companies and a poor user experience given the difficulty
faced when attempting to change mobile service providers in Japan.
Background
KDDI Inc. is one of the biggest telecommunication companies in Japan; it was
established through the merger of several telecommunications companies in the 2000s
– KDD, DDI, and IDO.
The vision and mission of KDDI is connecting and powering an inclusive digital society
that benefits everyone by providing the internet and safe, simple and smart solutions,
also contributing to the development of a rich communication focused society that
exceeds customer expectations.
The core business for KDDI is the mobile department, and have invested a lot in new
mobile plan initiatives like povo; a budget service that targets young adults. KDDI is
however involved in a multitude of services, which are listed below.
There are four mobile service providers in Japan, and KDDI has the second largest
share of the market at 27.4%, following NTT at 37.4%.
1
ISP Business
Solution Business
Data Centre / Network Business
2
ahamo at 76.6 % .2 Which means ahamo has been successful in acquiring new users
from other companies.
This symptom cannot come from high price or low value, as the price of the plan is less
than ahamo for the same value. Ahamo is offering 20GB of data with free calls up to 5
minutes for 2,980 yen ($31AUD) a month, povo offers the same plan at the same price,
with the option to not include the free calls and reduce the monthly cost by 500 yen –
an alternative that may be popular with the younger target audience who do not make
as many cellular calls. NTT and KDDI have the same coverage and network quality,
meaning that this would not be a cause to choose one over the other. In all, povo offers
the same plan at the same price, as well as a cheaper option that fits with the target
market’s needs. This means it cannot be the plan itself or the quality of the offering that
has led to the low conversion rates and customer acquisition.
<The Symptom>
The povo share of users is at only 1.8% of the total mobile market, which is lower
than the ahamo and the KPI
User experience (UX) is integral to customer acquisition and retention at all stages of
the customer journey. From the first interaction a company has with a potential client,
3
the UX of their website is affecting the likelihood of conversion, as well-designed sites
contributing to a 400% higher visit-to-lead rate as well as a 200% higher visit-to-order
conversion when compared to companies with poor UX on their sites. 4 This seems only
natural as customers would not want to have to work hard or navigate confusing layout
to access products or services. The benefits of a greater quality of UX continues even
beyond the initial sign-up phase with higher customer retention as seen through a
14.4% increase in repeat customers and a 15.8% decrease in seeking out a competitor
for the same or similar services. 4 It also helps with building a good reputation among
clients as companies with good UX are 16.6% more likely to get recommended than
those with poor UX.4
Research objectives
<Lack of Awareness>
Invest more money on promotion, analyse and optimise the current brand strategy.
< Poor User Experience (Hassle to Convert)>
Analyse consumer actions on the web page and improve it.
Research Question
<Lack of awareness>
What is different between the marketing strategies of KDDI and NTT?
How many people are aware of POVO?
What image do peaople have of POVO?
< Poor user experience (hassle to convert)>
How can potential clients be incentivised to convert?
How to show ease of conversion?
Can users achieve their goals?
4
These data have been used by a lot of companies to provide a better user experience
for their customers. In addition, it gives valuable insights for marketers to grasp what
their customers want and need from their websites.5
Moreover, external data such as social media presence and engagement, online
search queries related to povo and ahamo, brand reviews on external platforms and
competitor activities would also be useful. This information gives you an opportunity to
understand your customers and know about the potential ones.
Competitors' promotions, price reductions and campaign have a significant impact on
their own sales and revenues as well as yours. By quickly detecting and responding to
such competitive actions through using external data, a company can prevent sales
and profits from declining.6
Summary
KDDI has failed to find success in their new mobile brand povo; not reaching their KPI
and struggling to catch up to their main competitor ahamo from NTT. This issue likely
stems from two key marketing issues, a lack of awareness or a poor user experience.
In order to get to the heart of these two potential problems, research must be
conducted and data collected that investigates what ahamo is doing differently in their
marketing strategy to build more brand awareness to attract more customers from
other companies, and find any pitfalls in the UX. Through this investigation KDDI could
find exactly where the problems lie in their current marketing strategy and UX, then
adjust accordingly and hopefully see a turnaround in their performance.
References
1. Labo, M. M. D. (n.d.). 激化する通信業界の動向と今後の展望. MMD 研究所.
Retrieved August 17, 2022, from https://mmdlabo.jp/column/detail_2028.html
2. Labo, M. M. D. (n.d.). 2022 年 3 月通信サービスの利用動向調査. MMD 研究所.
Retrieved August 17, 2022, from https://mmdlabo.jp/investigation/detail_2042.html
3. Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market
outcome, brand equity, and the marketing mix. In Fashion branding and consumer
behaviors (pp. 113-132). Springer, New York, NY.
4. Gualtieri, M. (2009). Best practices in user experience (UX) design. Design
Compelling User Experiences to Wow your Customers, 1-17.
5
5. 9 Internal Data Sources to Inspire Fresh Content Marketing Ideas. (2020, October
27). Column Five. https://www.columnfivemedia.com/9-data-sources-inspire-next-
piece-content/
6. The importance of external data for marketing. (2022, February 3). Accurate
Reviews. https://www.accuratereviews.com/the-importance-of-external-data-for-
marketing/