S.W.O.T. Team Team 6

Whitney Norris James Kelleher Cristina Dans Susan Harper

Emily Fitzgerald Ahmed Zainal

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I. SWOT Team Preview Among all of the wireless telecommunications services, AT&T has remained one of the

top companies nationwide. Since 1875, the company has been serving its customers with communication devices, products, and carrier services (AT&T, 2016). In order to successfully communicate about the AT&T brand, our agency is building a knowledge base; this will keep the company at the top and maintain customer satisfaction. We plan to reinforce AT&T brand awareness while providing new opportunities for our telecommunications service.

In order to better understand our client, we are performing in-depth research to identify current issues and potential opportunities within the AT&T brand and services. Our goals include further exploration into the AT&T company background, its current products and services, audience and consumers, competitors and the overall market environment. By performing this extensive market research, we will better understand opportunities to improve AT&T’s image, while increasing brand awareness for our client. II. Company Background & Evaluation

Delivering mobile services to more than 120 million subscribers worldwide, AT&T is the number one wireline voice communications service in the U.S. and an industry-leading provider around the world (Statista, 2016). In 2014, AT&T was responsible for 56 percent of total wireless service sales and 89 percent of total communication service sales in the nation (Statista, 2016). With coverage in all 50 U.S. states and more than 225 countries worldwide, AT&T continues to connect customers with telephone, high-speed Internet, VoIP and digital TV services in a fast and affordable way (AT&T, 2016). As AT&T ranked first among U.S. telecommunications services in 2015, with annual sales of $132.45 billion, it can be assumed that its current marketing strategy is clear and effective (Marketline, 2016). Despite this fact, AT&T came second to Verizon Wireless concerning total net profit margin and total profitability. Verizon Wireless has also beat AT&T in specific areas of customer reach: Verizon leads by 7 percent in reach to the 45-54 age demographic, 1 percent for those 55-64 and 6 percent for those 65 and over (Mintel Academic, 2016). Likewise, Verizon ranks above AT&T in social media reach with over 7 million likes on Facebook and 1.6 million followers on Twitter (REDBOOKS, 2016). AT&T’s social media standing includes a lesser 5.9 million likes on Facebook and merely 736.7 thousand followers on Twitter (REDBOOKS, 2016). Both carriers are leading with the most subscribers among U.S. telecommunications services, but AT&T’s reach is evenly distributed across age demographics, while Verizon’s reach is more prevalent for older age demographics (Mintel Academic, 2016). Both AT&T and Verizon are currently the leading service providers, distinguished largely by their extensive audience reach (Mintel Academic, 2016). In order to overcome Verizon’s strengths and become the top service provider in all areas of customer reach, AT&T needs to gain consumers from the older age demographics and users of social media such as

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Twitter and Facebook. To do this, we must increase our Facebook and Twitter activity, and increase our social spend as well. III. Product Evaluation

AT&T offers an array of products across multiple platforms. This variety of products are placed in categories including wireless, TV, bundles, internet, home phone, digital life and accessories.

Wireless:

Smart Phones

AT&T carries 31 smart phones from nine different companies. Apple (31), HTC (4), LG (6), Samsung (7), Blackberry (3), Kyocera (2), Microsoft (2), NEC (1) and Sonim (1). These smartphones range from $49.99 - $949.99. Tablets

AT&T offers 19 tables from six different companies. Apple (9), LG (3), Samsung (4), Microsoft (1), ASUS (1), AT&T (1). These tablets range from $150 - $979.99. Plans

AT&T bundles together their plans known in packages known as Mobile Share Data Plans. Rollover data, unlimited talk and text, shareable 15 gb data, and international calling are the main features of the bundle. In addition to the original Mobile Share Data plans, AT&T offers an online planner tool that allows users to add and subtract phone lines, increase data and have complete control over their plan at all hours of the week. Prospective customers can use the tool for estimates as well (AT&T, 2016). TV: AT&T recently partnered with DirectTV in order to bring a uniform approach to consumers. There are six different package options ranging from $19.99 - $89.99 per month; the difference between these option is the number of channels included per option. These prices are only locked in for the first 12 months (AT&T, 2016).

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Bundles: Bundles offer consumers the option to bundle their phone, internet and TV together into a one bill. Although the availability of these bundles are dictated by geography and DirectTV, AT&T offers $19.99 for the first 12 months when users switch to AT&T from another carrier. The three main bundles are internet and phone for $35, U-Verse internet and phone for $45 and phone, internet and TV for $54.99. All prices listed are in the first year of signing (AT&T, 2016). Internet: AT&T offers its own internet service known as U-Verse; U-Verse is a high-speed internet service that provides an unlimited mail storage, national AT&T hotspots, wireless routing and added security all included. U-Verse starts at $15 a month when users bundle with an AT&T phone or TV service (AT&T, 2016). Home Phone: AT&T offers home-phone services known as U-Verse Voice; this allows for unlimited national calling for $20 a month within the first year. If users bundle with another service, this price will vary based on location (AT&T, 2016).

Digital Life: Digital Life is an AT&T home security and automation system that allows users to stay connected from any device. Users can secure their homes, check on kids and check on pets from any AT&T device. Pricing for this system varies based on the geography and the extent of equipment installed (AT&T, 2016). Accessories:

AT&T offers 785 accessories ranging from cellphone cases, chargers, audio and wearables. These accessories come from 35 different companies including Apple, Beats and GoPro; prices range from $25-$100 (AT&T, 2016).

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IV. Audience Makeup & Evaluation (add more in-text citations) With a wide range of consumers in the telecommunication service industry, AT&T strives to meet all consumer needs and desires based on demographic and psychographic information. In examination of this large audience, MRI MediaMark Reporter found a total of 237,011 consumers using cellular, mobile devices or smartphones. Within this consumer pool, 122,870 are female and 114,141 are male; the majority of these users identify as caucasian. Taking a closer look at consumer demographics and psychographics, statistics provided us with education levels, specific age groups, popular occupations, income disparities, census regions, marital statuses, races, family size statistics, values, popular television series and popular websites used by these consumers. To better understand our client’s audience, we must define all aspects of their lives to help us meet their telecommunication service needs.

Out of 237,011 total telecommunication users, 150,344 users have purchased a smartphone at some point in their life. Of those users, only 85,237 have purchased a smartphone in the past 12 months. Furthermore, only 12,194 of these users spent less than $50 within the past month for their services. Considering that only a small number of users are saving money on their services, it is key for AT&T to continue reaching out to users spending over $50 per month. In this way, AT&T will save prospective consumers money. The majority of users are ages 18-49 with no college education. Concerning user occupation: sales/office position and professional occupations are common among these consumers, reflecting an income of $75,000-$149,999. These individuals are now married and/or have children between the ages of 6-17 (Spring 2014 Product Electronics).This statistic is crucial to our services as it recognizes parents whose children are at ages where they may be purchasing/using a smartphone. These children are raised using AT&T, and therefore are customers of the service.

As these consumers are of a higher socioeconomic status, the majority also either own homes or live in valued homes at $200,000-$499,999 (Spring 2014 Product Electronics). This fact is essential to telecommunication services due to consumers willing to spend more or less money on their mobile services.

Concerning favorable platforms to reach these audiences, MRI MediaMark Reporter provided various TV shows, websites and prime TV times with regard to consumer psychographic information. For instance, the majority of telecommunication users watch TV between 4 p.m. and 7:30 p.m. With this in mind, advertising within this timeframe via TV could be a successful way to reach our target audience. An even more effective way to reach our audience during this timeframe would be to advertise on their favorite TV networks; this is essential for to make the most from TV advertising. For example, according to MRI MediaMark Reporter, TBS, TNT, Fox News, ESPN, The Discovery Channel, CNN, A&E and ABC Family are the most popular cable networks for our consumers. In addition to advertising via TV, posting AT&T ads on popular consumer websites such as Gmail.com, Yahoo! Mail, Ebay.com, Pandora.com, Weather.com and Amazon.com could be effective to reach these target audiences (Spring 2014 Product Electronics).

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Lastly, in order to successfully get our audience to buy and remain loyal to AT&T’s service, we must understand its means of purchasing the product. According to the MRI MediaMark Reporter, 51,720 out of 237,011 users purchase their devices in carrier-owned stores.The other majority, 16,151 out of 237,011 users, purchase their smartphones and/or services online. Additionally, 16,547 out of 237,011 users purchase their phones or services in the electronic store. Other means of purchasing include department stores, discount stores and wholesale/club stores (Spring 2014 Product Electronics). As in-store purchases are most common, AT&T should take advantage of this opportunity and provide in-store discounts to compete with other telecommunication services, as addressed in our SWOT Analysis. V. Competitive Frame

There are many carriers in the U.S. wireless telecommunications industry, but the primary players today are AT&T, Verizon, Sprint, T-Mobile and US Cellular—with AT&T and Verizon battling for the top position. In the third quarter of 2015, AT&T topped with 34 percent of the market share. Verizon followed with 33 percent, Sprint and T-Mobile tied at 16 percent, and US Cellular held 1 percent (Chetan Sharma Consulting).

As proven by market share data, AT&T’s biggest competitor is Verizon. In the past four years, the two have been alternating between the top market share spot, constantly remaining within 1 to 3 percent of one another (Chetan Sharma Consulting). Verizon’s main strength is that it has the largest 3G and 4G networks in the country; it was also the first company to have an LTE network. According to page five of a 2015 SWOT Analysis by MarketLine: “At the end of FY2013, the company’s 4G LTE network was available to 97 percent of the US population in more than 500 markets covering approximately 305 million people, including those in areas served by LTE in Rural America partners.” The company has multiple services including video and broadband; its FiOS service has brought increasing revenue into the company as well. As mentioned in the Company Background & Evaluation

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section, Verizon is also ahead of AT&T in social media reach, specifically on Facebook and Twitter. However, a major weakness of Verizon is its substantial debt; at the end of 2014, the total debt was estimated to be around $125 billion. This weakness gives other companies the advantage by having better access to capital resources (MarketLine, 2015).

T-Mobile and Sprint are tied as the third-largest wireless services in the nation. T-Mobile remains heavily-focused its low-cost business model, which draws in many customers; its “Un-carrier” initiatives bring more perks and low-cost benefits to consumers. Regardless of T-Mobile’s obvious weakness, having a smaller market share compared to AT&T and Verizon, its promotional strategies help it remain a well-known brand. To add to this weakness, T-Mobile focuses solely on wireless communication, unlike AT&T and Verizon, which branch into many other telecommunication services. This puts T-Mobile at a disadvantage; the bigger players with more services are better suited to capture market share (MarketLine, 2015).

Like T-Mobile, Sprint is smaller than Verizon and AT&T but still “has a large addressable market” (MarketLine, 2015). Sprint works to enhance its reach among US markets; it operates its own networks and offers roaming on other providers’ networks. Sprint has several weaknesses. It lags in the competition for the most up-to-date service; Sprint introduced its 4G LTE service long after other carriers. Additionally, it had a debt of $32.7 billion by 2015. Each month following 2013, Sprint has had significant decreases in average revenue per user (MarketLine, 2015).

U.S. Cellular holds just 1 percent of the market share in regards to US telecommunications services; it’s exceedingly small in comparison to its competitors. U.S. Cellular has several bundle plans in addition to having prepaid plans for certain phones. From 2010 to 2012, the number of smartphone users on the network accelerated from 17 percent to 42 percent. The company also sells many wireless accessories to diversify its product range and decrease business risk. One of the its weaknesses is that, unlike the others with a global presence, U.S. Cellular stays true to its company name and is concentrated solely in the United States. In fact, it only has operations in 26 states; this small-scale operation makes it difficult to compete with other service companies. In addition to this weakness, its customer retention rate is questionable; while U.S. Cellular suffered user decreases from 2010 to 2012, Verizon and AT&T users dramatically increased (MarketLine, 2013).

Aside from U.S. Cellular, TracFone is another competitor of AT&T; TracFone is an indirect competitor that specializes in prepaid services using cards to receive service in the form of “minutes.” TracFone is among the aforementioned companies when it comes to advertising spend; in 2014 TracFone spent $166 million on advertising, significantly less than AT&T ($1,200 million), Verizon ($1,040 million), Sprint ($908 million) and T-Mobile ($845 million), but more than U.S. Cellular ($34 million) (Advertising Age, n.d.). Although TracFone lacks smartphones and data systems, it is popular among older demographics who are less technologically knowledgeable; this is important information to remember, as AT&T wants to gain leverage amongst older ages.

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Other indirect competitors include, but are not limited to, any technology or wireless service that would deter an individual from purchasing a cell phone or wireless plan. Examples of these are satellite systems, tablet manufacturers, and internet providers.

In order to gain a competitive edge, it is critical for AT&T to ensure all of its services are on par with its main competitor: Verizon. It is vital that AT&T’s 4G LTE service is expanded to 100 percent of customers. AT&T should also increase social spend to increase social media presence and bridge the gap between Verizon’s high social media numbers. The company must be aware that the advertising for its direct competitors will highlight any potential flaws in the company or its plans and should focus its own advertising efforts on boosting the benefits of AT&T. VI. Marketing Environment Evaluation

There are a few current marketing trends that AT&T must take into consideration within the telecommunications industry. One trend in particular is the merging of telecommunication companies; this indicates that two or more companies will join forces in order to strengthen each other's businesses (Mishkin, 2015). For instance, Time Warner Cable and Comcast will collaborate for creative bundling services. Another market trend to take into account are price wars; these are a result of back-and-forth competitive responses that rival companies make in response to another company's actions. This trend is represented through the launching of AT&T’s “Rollover Data,” which meant that unused data could be carried over into the following month; this service developed after T-Mobile came out with “Data Stash” three weeks before. The rise of social media is another trend that AT&T should take into consideration; with social networking platforms on the rise, AT&T could use this opportunity to connect with the target audience (Mishkin, 2015).

When looking at the trends associated internally with AT&T’s company, it is plain to see

that its yearly revenue has increased substantially. Seen in the table above, AT&T’s revenue is

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expected to increase to $83.6 billion at a rate of 5.7 percent. Over time, and with the aid of the Apple iPhone’s popularity, customer data usage has increased substantially. Not only has AT&T’s wireless revenue increased, but the profitability of AT&T’s wireless operations have been positively impacted for more than five years. The average revenue per user (ARPU) has also increased, causing data revenue to grow and improve the operating margin of AT&T’s services. AT&T has changed its contract for new customers to a tiered data-usage pricing scheme, with a growing percentage of postpaid smartphone subscribers on usage-based data plans (Mishkin, 2015).

Due to the prediction that GDP growth will continue to increase to 3 percent over time, telecommunication companies like AT&T will show a positive impact due to a increase request for networking and data applications (Mishkin, 2015).

The Telecommunications Act of 1996 is a law that restricts AT&T’s product sales. This act promotes competition and reduces regulation in order to guarantee low prices and higher quality services for consumers (Mishkin, 2015). This will lead to the creation of new technologies and, in turn, will provide more rigorous work for our company due to its outside competitors.

Based on the information gathered from in-depth research addressed in the SWOT analysis, there are potential opportunities and problems that are present. An opportunity for AT&T’s business to consider is the merging of brands; when two or more brands merge together, they collaborate in order to thrive off of one another’s success. Although the merging of telecommunication companies can be an opportunity for AT&T, it also has the potential to serve as a threat or problem for the company. When two or more companies join forces to form a large conglomerate, there is always the possibility of one or both companies’ brand images being diluted or ignored by the consumer audience. If this is apparent for AT&T’s business, the strategy of merging companies may be an area to reconsider. Another opportunity seen within our research is the constant increase of social media usage; with this trend on the rise, AT&T has the opportunity to reach a broader audience and better understand its consumers inside and out.

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VI. SWOT Analysis

The chart below is an outline highlighting our SWOT Analysis; this is an analysis of the strengths, weaknesses, opportunities and threats we have associated within the AT&T brand. We have identified these through our secondary research, and will use these strategies to continue gathering more data for analysis within our primary research. These strategies are the core of our primary and secondary research, and will help our team find the best possible suggestions and outcomes in order to strengthen the AT&T company.

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VII. Research Questions Based on our secondary research, we plan to further investigate the habits, trends and

interests of our current target audience: all telecommunications service users and potential users. We have chosen to examine these consumers in order to strengthen our market and also to expand unreached publics. Within our primary research, we also plan to gather more of a knowledge-base for specific psychographic information concerning our target audience. To narrow our research, we have developed several in-depth research questions; these will aid us in further audience segmentation. The aforementioned investigative procedures will also serve to benefit us for primary research in Phase II:

RQ1: What makes telecommunications users ages 18-24 choose AT&T over

Other brands? Do Apple products influence buying decisions with AT&T? How important is price when making an AT&T purchase?

RQ2: How does age affect the decision to purchase AT&T services? What is the relationship between cell phone carriers and employment for ages 45-54?

At what age do individuals start choosing their own cell phone service? What is the relationship between income and cell phone carrier choice?

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IX. References Advertising Age. (n.d.). Advertising spending of selected wireless service providers in the United

States in 2014 (in million U.S. dollars). In Statista - The Statistics Portal . Retrieved February 22, 2016, from http://www.statista.com/statistics/261775/ad-spend-of-selected-wireless-service-providers-in-the-us/.

AT&T Company Information. (n.d.). Retrieved February 19, 2016, from http://www.att.com/gen/investor-relations?pid=5711.

Chetan Sharma Consulting. (n.d.). Market share of wireless subscriptions held by carriers in the

U.S. from 1st quarter 2011 to 3rd quarter 2015 . In Statista - The Statistics Portal . Retrieved February 22, 2016, from http://www.statista.com/statistics/199359/market-share-of-wireless-carriers-in-the-us-by-subscriptions/.

Kahn, Sarah. (2013). IBISWorld Industry Report 51711c Wired Telecommunications Carriers in

the US. Retrieved from http://trace.lib.utk.edu/assets/Kuney/Fairpoint%20Communications/Research/Other/IBIS_51711C_Wired_Telecommunications_Carriers_in_the_US_industry_report.pdf

MarketLine. (2015a). Sprint Corporation SWOT Analysis , 1-9. MarketLine. (2015b). T-Mobile US, Inc SWOT Analysis , 1-11. MarketLine. (2013). United States Cellular Corporation SWOT Analysis , 1-8. MarketLine. (2015c). Verizon Communications SWOT Analysis, 1-10. MarketLine Company. (2015). Company Profile AT&T Inc. Retrieved from

http://web.b.ebscohost.com.www.libproxy.wvu.edu/ehost/pdfviewer/pdfviewer?sid=e86e5716-614b-4481-a394-576de3fa16c0%40sessionmgr198&vid=9&hid=115 .

Mintel Academic. (2016). AT&T Inc. Retrieved from http://academic.mintel.com

Mishkin, Greg.(2015). Telecom Trends to Watch For in 2015. Retrieved from https://www.marketstrategies.com/blog/2015/01/telecom-trends-to-watch-for-in-2015/ -price wars, big mergers etc.

REDBOOKS Agency and Advertising Database. (2016). AT&T Inc. Retrieved from http://redbooks.com

Spring 2014 Product Electronics. (2014). [Spreadsheet used to display demographics and psychographics of telecommunication consumers, 2014]. MRI MediaMark Reporter. Retrieved from http://ureporter.mriplusonline.com/selectdemo.asp .

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Statista. (2016). AT&T Statistics & Facts. Retrieved from http://statista.com

S.W.O.T. Team . Digital image. Brandcrowd . N.p., n.d. Web .

Telecommunications Act of 1996. https://transition.fcc.gov/telecom.html