Is Your Cell Phone Worth Your Money?

Attaching an emotional value to an electronic device is an example of how marketing is used by manufacturers to open up new avenues for profit.

By Zack Larmond, Online Staff Writer

Cell phones are used daily by millions of Canadians. They connect us to our jobs, families, friends, and the internet.  Phones and plans cost a lot of money often requiring long term contracts.  Canada’s telecommunications industry has mastered the art of emotional marketing.  They have us convinced us that their products and services are an important part of our happiness.  They have a distinct corporate advantage that allows them to market and release new technology at their convenience resulting in large profits.

Save For a New Car, Buy a New Phone!

A $7.5 Billion dollar profit for Canada’s telecommunications industry in 2010 can be compared to the $330 Million to be expected from Canada’s automotive industry in 2011.   While Canadians are saving up for a new car, they are buying new phones in record numbers.

Emotional Marketing and the Corporate Advantage

For a lot of people, life without a mobile phone would be a disaster.  Business and recreational users rely heavily on their service plans to maintain relationships.  The telecom industry is very good at using that human element of emotion to sell products.  A new ad for LG’s “dlite” phone features Canadian synth-pop sensation Lights, and sells the emotional aspect of relationships.

LG has focused on a distinct target audience.  In so doing they are able to market a distinct emotion.  Attaching an emotional value to an electronic device is an example of how marketing is used by manufacturers to open up new avenues for profit.

Mobile phones are in high demand.  This advantage is used by manufacturers as they strategically leak new technology.  A mobile phone has a base value that is decided by the market.  With new phones and plans, new value levels are introduced.  A general phone with a plan can be quite affordable, but it is variety of choice that is in demand.

Using variety along with innovative technology, manufacturers and retailers of phones and plans create added value to cell phone purchases.  Variety adds to the personal element of ownership.  Choosing is valuable to consumers and very profitable for distributors.

Overspending?

According to the Pure Mobile Insider Blog, the Canadian telecom industry profits of 7.5 billion dollars represent an 11.7% rise.  A 32 GB iphone ships from the apple store for $779 without a plan.  At that price, Apple is able to take in a large profit, do they deserve it?  Do phone plan distributors deserve all the money they make off of their monthly plans, as well as overuse fees?

A lot of the telecom industry profit comes from businesses and citizens paying reasonable fees for their phones and plans.  However, a lot of it comes from people who have plenty of disposable income.  These people are willing to pay any amount for recent technology and deluxe plans.  Is the desire for newer and better phones endless? Does the telecommunications industry deserve such a huge payout for their marketing efforts and technological advancements?

“There are two ways to get enough: one is to continue to accumulate more and more.  The other is to desire less.”  G.K. Chesterton (1874-1936)

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