Marketing Analysis NTT DoCoMo

1. NTT DoCoMo

2. Background information – 5C
 Company
 Established in 1992 when spun off by NTT
 Introduced i-mode in 1999.
 "Always on" wireless technology
 Pursued other markets
 unavailability of 3G
 low response from market to Internet access via mobile
phone vs. via PCs
 First carrier in the world to launch 3G services
 Customers
 In Japan, trendy and young customers
 Business users were still considered a target, because
of reduced price sensitivity and typical use of premium
information and transaction services

3. Background information – 5C
 Collaborators
 FeliCa - Contactless IC technology
 Third party content providers
 Handset manufacturers. Carriers commissioned the
designs and bore the inventory costs.
 Competition
 KDDI - introduced a lesser-speed product, but much more
compact with GPS and less cost.
 Vodaphone
 Context
 A constantly changing technological environment.
DoCoMo wanted to be first to market with FeliCa
applications, but security concerns leave room for less
confidence. Opportunity to change image and reputation
(because they alienated their 2 G customers).

4. SWOT
Strengths Weaknesses
- Expansion overseas (due to
consumer preferences on how to
- i-mode in Japan access Internet (via PC vs phone) and
- First to market 3G technology the investment required for 3G
- State-of-the-art technology licenses
- Must build new network facilities
for FOMA (vs. KDDI who could use
current network.)
Opportunities Threats
- Market maturation of Japanese
- 3G technology markets.
- "Lifestyle Infrastructure" - - Regulatory challenegs
Marketing opportunity to leverage - Flat-rate pricing led by KDDI
- Security issues/fraud on FeliCa.

5. Main Objectives
 Improve mobile phone churn and
subscription acquisition rates
 Increase profit from FeliCa Networks
 Increase Revenue by providing mobile
FeliCa services

6. Major issues
 Issue 1 – Provide Financing Services
and Phone Credit Card
Options to consider:
1. Nonexclusive partnership
- Collect fees. Points program
2. Exclusive partnership
- DoCoMo strong brand could make a difference
3. Phone-based credit without partner
- Lack of experience is a risk

7. Recommendations
 Issue 1:How to introduce credit card functionality?
Option 3: Phone-based is the best choice
- Acquire credit company to get the know how and
mitigate the risks
- Use the DoCoMo brand name
- Don’t have to share revenues with credit card
company
- Position in the market as a provider of complete
solutions

8. Recommendations
Credit Card Phone - STP Analysis
S – Segment
· The current cluster of credit card users who also rely on
their smart phones to conduct many activities besides the
traditional voice, image and data transactions
T - Target
· Businesses - Access to buildings (readers would identify
the employee, and would be able to download messages,
news, scheduled activities to the employee’s phone when
he/she access the company’s facility
· Trendy Young people (urban, technology oriented,
“gadgets” fans)

9. Recommendations
· College Students
• (parents charge the student’s phone)
• phone’s screen shows current balance, class
schedules, latest sports and gossip news)
· Commuters in big cities who use massive public
transportation (passes)
P – Position
· Music TV channels
· Business Magazines ( adds offering the services to
retailers, office buildings, restaurants, etc.)
· Top ten web sites visited for the target cluster

10. Recommendations
Four P’s Analysis
Product – Offer
• Payments in stores, restaurant and businesses in
general
• Access to high security buildings
• Scan of codes in advertising published in magazines –
this would allow the purchaser to download general
information, review the product, submit the order or
request more information.
The credit is provided by the DoCoMo Financial
Services organization and the validation of credit
limits, and authentication is conducted by the same
DoCoMo.

11. Recommendations
Price – Cost
• Service is charged to the mobile phone-credit
card (financing charges plus additional fee)
• Fee charged (lower than current fees charged by
banks)
• Store offers bonus or credit points toward future
purchases and the customer can check his/her
credit points at any time in his/her phone
• It can be charged per transaction or a
percentage of the purchase or both.
Surveys and Focus Groups should tell what
every specific group of the target market is
willing to pay for this service

12. Recommendations
Place – Distribution
• Upgrade of existing phones (in Japan the
provider dictates the features the new phone
should have)
• New models with more functionalities including
the possibility of offering a debit/credit card
embedded in the same camera phone

13. Recommendations
Promotion
• Integrated marketing communication
- High end stores and restaurants
- Marketing Campaigns in:
• Top radio stations and TV segments
• Top magazines most read by the target market
• Top web sites most visited by Business Managers and investors
• Alliances with stores and business to sell from simple ads in
newspapers and magazines (QR codes scanning)
• request information
• submit order
• provide feedback (valuable information for manufacturers and retailers
about the impact of their marketing materials in the public)
• Massive transportation sytems
• Colleges

14. Major issues
 Issue 2: Security concerns
 Phone lost, what happens?
 Barrier to adoption
 Reputation may be at stake if money is
lost
 Competing type “B” technology is more
secure

15. Recommendations
 Issue 2: Security concerns
- Look into a version 2 of FeliCa with Sony using its
latest chip
- Propose a “protection plan” to NTT customers that
would protect phone and money
- Use innovative functions such as voice recognition
or biometric system to identify the owner of the
phone

16. Major issues
 Issue 3: eMoney promotion
 Options to consider
 One provider – One reader. Readers
interoperability
 Promote Edy
 Merge efforts with JR East and/or JCB

17. Recommendations
 Issue 3: eMoney promotion
- Continue to promote Edy, the network of vendors
and businesses
- Push for reader interoperability by partnering with
readers providers
- Integration of Visa and eMoney in one terminal
- Get compatible with Suica / JR East system
- Promote reader purchase with incentive programs,
lease options, fee based usage
- Partner with retail stores chain
- Bundle phone and services access

18. Major issues
 Issue 4: Competitive advantage
 NTT competitors like KDDI are perceived as
more “aggressive” and NTT needs to react to
change its image
 Setbacks with 3G introduction
 KDDI and Vodafon open new services and 2.5G
cheap competing offers

19. Recommendations
 Issue 4: Competitive advantage
- Launch a targeted advertising campaign
- Innovation, dynamism theme
- Customer focused company
- License technology to other countries which have
i-mode already
- Strengthen its position as ISP provider
- Internationally position DoCoMo phones

20. Timeline
Acquire credit Launch promotion
card company campaign
Secure phone
License technology
Launch Protection plan
Develop Edy network
Partner with Suica and JR East
3m 9m 18m 24m

21. Case update
NTT DoCoMo to Launch "iD" Credit Card Brand for Mobile Payments TOKYO,
JAPAN,November 8, 2005 --- NTT DoCoMo, Inc. announced today its new
iD™ credit card brand for card issuers, which will enable DoCoMo
customers to make credit card payments with the "Osaifu-Keitai" mobile
phone equipped with wallet functions. The brand will be launched on
December 1, 2005. iD will enhance existing credit card services by giving
credit card owners the option of making payments via a DoCoMo wallet
phone linked to the card, in addition to conventional payments with their
plastic credit card. The payment procedure will be as simple as waving the
phones in front of dedicated reader/writers at stores.
No signature will be required for purchases under a certain amount, while
purchases exceeding this amount will require the user to simply enter a
password via a device linked to the reader/writer. In addition to enjoying
secure payments with iD, DoCoMo users will also benefit from security
features built into their DoCoMo wallet phones.
A user can, for example, call a designated phone number to immediately lock
a misplaced or stolen phone. Also, a user can choose to make all payments
require a password. Applications for iD will be accepted through credit card
issuers. Once the application is accepted, the user will download an i-
appli™ application into their handset and choose various settings for using
the service. The DoCoMo handsets initially compatible with iD will be all
902i series (coming soon) and 901iS series models, and the F901iC,
N901iC, SH901iC, F900iC, SH506iC, SO506iC and P506iC models.
Compatibility will differ, however, depending on the card issuer, so users
are asked to contact their card issuer for details. DoCoMo will continue to
enhance the convenience of its "Osaifu-Keitai" wallet service for cashless
payments to further integrate handsets into everyday life.
In addition, DoCoMo plans to offer services as a credit card issuer using the iD
brand in the first half of fiscal 2006