Practice Prize Report - Planning New Tariffs at tele.ring: The Application and Impact of an Integrated Segmentation, Targeting, and Positioning Tool

tele.ring is a mobile phone organization selling contracts and cell phones in the Austrian market. The market situation in 2005 was highly competitive and dynamic resulting in relatively short tariff life cycles. Excessively long lead times made tele.ring’s management feel dissatisfied with their new tariff development process. Furthermore, a new competitor had entered the market posing a major threat and it was unclear how to effectively safeguard tele.ring’s position in the market. In cooperation with the management, we implemented and tested a new segmentation, targeting and positioning tool, which provides managers with information on their target markets, customer preferences, competitors’ strengths, and customer segments. It allows for the simultaneous visualization of this data on a single map and facilitates timely and accurate decision making. In particular, we report on the design and the implementation of a new pricing scheme, “Formel 10”, which became the most successful new tariff introduction in this competitive market. tele.ring’s managers were very much impressed with our tool’s ability to represent the market on a single map and with its capacity to allow for intuitive interpretation. In addition, the tool enhanced internal communication between its users and different stakeholders during the new tariff development process.