You are a consultant for an international management strategy consulting firm. Your firm has been approached by Herr (Mr.) Hans Wursching, CEO of TransSprech, A.G., a newly formed cellular phone service and phone provider based in Stuttgart, Germany. TransSprech has a satellite GSM network with complete coverage in Europe and the United States, as well as throughout most countries in the world. The company has established some semblance of a marketing and management strategy, and you have been asked to review the current strategy and help the company go to the next level by growing its sales.

You recently conducted the initial information-gathering meeting with Herr Wursching, and received the following mass of information: 

• TransSprech maintains corporate offices in numerous cities around the world. However, its customer service outlets and retail sales are conducted through the company website, as well as through licensed electronics retailers. It does not maintain its own customer service or retail locations.

• Its target markets are both companies and individuals wanting cellular phone service with worldwide coverage and who are willing to pay a premium to get it. It already has about 3,000 customers worldwide and is hoping to grow to 10,000 by year-end.

• Corporate customers are more valuable customers because they are buying in larger volumes. Establishing a customer base is very important as this company attempts to establish itself.

• No sales force has been established. So far the company has received many customers in response to its advertising.

• It offers individual customers four different cost plans with respect to the cellular service, as well as five different phone options. However, corporate customers can negotiate variations within the established options.

• The phones themselves are similar to those used by TransSprech’s competitors, but the satellite network providing the coverage is far more advanced.

• The company has retained a Berlin-based advertising and public relations agency to develop a worldwide advertising campaign. Print and television ads have recently saturated the European market and will soon be shown in the U.S. market. The company is currently running several promotions to get its product and name known; however, its long-term goal is to offer a premium, nondiscounted product that is desired because of its value and quality, not low price.

• Because the company and its product are in the early stages of development, there have been technical problems, and the company has had to provide a great deal of service to its customers.

• Herr Wursching understands that it costs more to acquire new customers than to retain existing ones, so he would like to establish a CRM plan at some point to improve customer loyalty and retention. He has a well-trained customer service operator staff in place. However, he does not want to invest in a complicated software system right away. His current technology is giving him enough problems, he says.

Questions

1. What is the company’s strategy with respect to each of the four elements of the marketing mix (product, distribution, price, and promotion)?

2. Based on the current marketing strategy, should the company’s promotion mix focus be on personal selling or on advertising?

3. What further questions might you ask Herr Wursching to help his company move toward a more relationship-based business and establish CRM initiatives? What other recommendations might you make for him with respect to CRM?