Voice Over Internet Protocol (VoIP) – “Crossing the Chasm” (Research Paper Sample)

Voice Over Internet Protocol (VoIP) – “Crossing the Chasm”
MKTG 6525
E-Commerce and High-Technology Marketing: Strategic and Cultural Considerations
Prepared for Professor Detlev Zwick

Dante Cardenas Jaspal Dhillon

Joseph George Aashish Jain
Table of Contents
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Executive Summary  PAGEREF _Toc117070590 \h
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Introduction  PAGEREF _Toc117070591 \h
3
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Technology Overview  PAGEREF _Toc117070592 \h
4
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Advantages  PAGEREF _Toc117070593 \h
4
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Disadvantages  PAGEREF _Toc117070594 \h
5
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Cultural and Social Impact  PAGEREF _Toc117070595 \h
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Regulation  PAGEREF _Toc117070596 \h
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Major Players  PAGEREF _Toc117070597 \h
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Skype  PAGEREF _Toc117070598 \h
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Vonage Canada  PAGEREF _Toc117070599 \h
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Rogers  PAGEREF _Toc117070600 \h
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Yak  PAGEREF _Toc117070601 \h
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Lessons From Other Technologies  PAGEREF _Toc117070602 \h
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Research In Motion and the Blackberry  PAGEREF _Toc117070603 \h
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Implications  PAGEREF _Toc117070604 \h
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Fuel Cell Technology  PAGEREF _Toc117070605 \h
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Implications  PAGEREF _Toc117070606 \h
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Ericsson and 3G  PAGEREF _Toc117070607 \h
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Implications  PAGEREF _Toc117070608 \h
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Conclusion  PAGEREF _Toc117070609 \h
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Appendix  PAGEREF _Toc117070610 \h
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Appendix 1 – Customer mentality and requirements  PAGEREF _Toc117070611 \h
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Appendix 2 – Skype Product Proposition  PAGEREF _Toc117070612 \h
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Appendix 3 – Vonage Product Proposition  PAGEREF _Toc117070613 \h
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Appendix 4 – Rogers Product Proposition  PAGEREF _Toc117070614 \h
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Appendix 5 – Yak Product Proposition  PAGEREF _Toc117070615 \h
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Bibliography  PAGEREF _Toc117070616 \h
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Executive Summary
Voice Over Internet Protocol (VoIP) is a telephony technology used to transmit ordinary telephone calls over the Internet. VoIP takes analogue audio signals and turns them into digital signals (packets) that are transmitted using Internet Protocol (IP) networks. VoIP’s advantages include low cost, flexibility, and mobility. Conversely, VoIP’s disadvantages include sound quality such as latency (delay), jitter, and packet loss. VoIP has a number of cultural, social, and regulatory impacts that solution providers must consider when marketing their services.
The major players in the VoIP market in Canada are Skype, Vonage Canada, Rogers, and Yak. Each player has its own separate marketing mix; however the majority are mainly targeting the technically savvy and small business niche segments. Even though the mass market is the ultimate goal for these players, much of their current business is found within these segments. Therefore, in order for the technology to cross the chasm from the niche to the mass market, the industry would do well to learn from other technologies that were in a similar position. For example, RIM’s Blackberry gives suggestions on how to properly market to your target segment. At the basic level, it is to fulfill user needs and wants. However, it also includes fulfilling needs and wants that are sustainable for the solution provider (i.e. not just a low cost solution). In addition, the Blackberry also teaches VoIP providers the importance of using the purchaser vs. influencer model and the development of key partnerships to increase adoption. Fuel Cell (FC) technology has important lessons for VoIP providers in terms of the marketing message. FC technology shows that in order to reduce the appearance of risk in adopting a new technology, communication, education, and customer involvement are critical. Ericsson and 3G highlight the need for a complementary set of goods for the core technology. Overall, the implementation of these factors is vital for VoIP to “cross the chasm”.
Introduction
VoIP is a revolutionary new technology that could bring dramatic changes to the telecommunication landscape. However in terms of consumer adoption, the technology is at a crossroads and it is unknown whether it will be able to cross it. Author Geoffrey A. Moore has defined this crossroad as a “chasm” which has been successfully adopted by early adopters, but the late adopters are still left to be converted. The chasm can be described as follows:
Figure 1 – The chasm
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The set of individuals involved in each stage have their own set of requirements and mentality towards the technology. To get a greater understanding of these customers mentality and requirements please refer to Appendix 1. The purpose of this paper is to give insights and recommendations into how VoIP providers can go about successfully crossing the chasm.
The paper starts with a technical overview of VoIP which includes the advantages and disadvantages of the technology. The second part highlights the cultural and social impacts and the regulatory issues that VoIP providers have to consider when marketing the solution. The third section gives a brief introduction into the major players in the Canadian marketplace and their individual marketing mix. The next part discusses other “chasm” technologies and the lessons VoIP can learn. Finally, the conclusion gives final recommendations for VoIP providers to take in order to cross the chasm.
Technology Overview
VoIP is a new form of communication that takes analogue audio signals and turns them into digital signals, or packets. This is an innovative alternate to the traditional circuit-switched method of telecommunication, where a dedicated circuit between two parties is maintained. In order to set up a traditional phone call between two telephones, the switched and the intervening network establish a dedicated route from one end of the call to the other. Conversely, VoIP uses a packet-switched method where audio signals are converted into digital data at the originating end, which is then transmitted over the Internet and converted back to analog signal at the receiving end. In other words, VoIP digitizes voice, inserts the digitized data into discrete packets, and sends them over the IP network. The packets have a destination address, but no fixed path through the network. The packets arrive at the address, where they are put back together and converted back to analog audio signals. VoIP integrates voice and data communications and turns any Internet connection into a phone call. VoIP is a revolutionary technology that has the potential to drastically change the way people communicate and talk on the phone around the world.
Advantages
VoIP has a number of advantages. First, the major advantage is related to cost. VoIP has tremendous savings potential for anyone who communicates over long distance. For instance in a corporate environment, the cost for leased lines no longer exist if phone calls are transmitted over the Internet. In addition, if an employee moved to a different location within the same office using a regular phone system like the Public Switched Telephone Network (PSTN), fees would be incurred in that move. To make such a move with a VoIP system, however, employees would only need to plug their IP phones into their office’s Ethernet jack, with no extra cost. A digital private branch exchange (PBX) system already provides for the integration of traditional telephone services and thereby eliminates the aforementioned costs of moving. Secondly, flexibility and mobility are also utilized with the adoption of VoIP. Individuals can simply plug in their laptops, access the Internet, and talk on the phone, potentially improving organizational communication and customer service. In terms of customer service, VoIP has some advantages. Using VoIP’s capabilities with different enterprise software, when a customer calls they can be routed easily to whom they want to talk, and the service representative will have easy access to pertinent information that will improve customer service.
Disadvantages
VoIP also has its share of disadvantages when compared to the functionality of PSTN. A major disadvantage of VoIP is that it is a new technology. As a result, the long-term benefits and risks are not yet known. These risks include unknown service life of hardware and infrastructure, and details surrounding reliability and quality. The factors that affect the sound quality during transmission include latency (or delay), jitter, and packet loss. In terms of latency, human ears can withstand a delay of 150-250 ms and not be able to notice the delay. The PSTN meets this standard with a nominal delay of 150; however, VoIP cannot meet this standard of delay for a consistent period of time. Jitter is defined as the variability in packet arrival at the destination. Voice packets are transmitted over the same IP network as normal data packets a...