It's hard to imagine Rita Li as a battle-hardened warrior of Hong Kong's long running and increasingly aggressive telecommunications wars.
But the director of consumer marketing of PCCW's consumer business has been battling challengers for as long as she's been in the business, as the industry moved from partial to full deregulation during her 11 years marketing telecom services. And while she may not look the part, it's safe to say Li speaks softly but carries a big stick. As in a war chest that amounted to more than HK$53 million(US$7 million) in 2004 to defend the telco's fixed line business which has come under constant attack in the last three years.
But the director of consumer marketing of PCCW's consumer business has been battling challengers for as long as she's been in the business, as the industry moved from partial to full deregulation during her 11 years marketing telecom services. And while she may not look the part, it's safe to say Li speaks softly but carries a big stick. As in a war chest that amounted to more than HK$53 million(US$7 million) in 2004 to defend the telco's fixed line business which has come under constant attack in the last three years.
Where rivals have used steep discounts and new online technology to offer cheap internet-based phone calls as a lure, Li is bound by Government rules to refrain from predatory pricing practices given PCCW's dominant carrier status. Dominant it may still be, butPCCW's market share has nevertheless tumbled from 82 per cent in 2002 to about 68 per cent last year.
Instead, Li turned to branding lessons learned during her agency days in the early '90s, first at Leo Burnett for five years followed by a short McCann Erickson stint to stem customer defections.
Having seen commoditisation sharply reduce margins in the once lucrative IDD sector, Li is keen to avoid a replay in the fixed line business with what she hopes is a deft combination of product innovation, positioning as a quality operator and pricing to secure customer loyalty. "We have been reducing above-the-line advertising for IDD because the product is quite commoditised. When the price is so low differentiation diminishes," notes Li, who also oversees marketing of the long-distance call operation. "Eventhough there is some brand value, price is now the hero because with IDD it's very functional. The only requirement of the customer is that you can connect me overseas."
Fortunately that isn't the case for the fixed line business -- at least not yet though as the Organisation for Economid Cooperation and Development warns, that internet-based calls will eventually force all telcos to overhaul their business.
In the meantime, Li is banking on innovations like PCCW's new-generation fixed line phone and on-going campaigns to position the phone as a communications tool for the family to help create the vital point of difference to justify tariffs that are about 30 per cent more than the competition. PCCW's new-generation fixed line phone offers a range of features created with different target segments in mind. There is the SMS service for kids and teens, football, horse racing and stock tips for the men's segment and cooking tips targeted at housewives. "The SMS phones have given us an innovative image in the market," she says. Accompanying the hardware has been a series of TV-led campaigns in which PCCW and its newly reappointed agency JWT Hong Kong have attempted to move the fixed line battle from pricing to service quality. The latest collaboration, the 'Cruel Ting' campaign, borrows from a successful local talent show of the same name to address the issue of inferior competing services.
"Our latest tracking on brand preference indicators has reached its highest point for the past two to three years," Li says. "Our market share has dropped to below 70 per cent, but our brand preference stands above our market share at more than 80 per cent." For Li, who routinely puts in 12-hour days with her team, it's reason enough to smile as soaring brand preference scores have started to filter to the bottomline. PCCW's first half net profit climbed 25 per cent, helped no doubt by the rebound of its real estate portfolio but also by its success in stemming three years of fixed line market share erosion.
