Cingular lays out $300M to lock in No. 1 spot

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With spending estimated as high as $300 million for the fourth quarter alone-most of it concentrated in the eight weeks after the Oct. 26 merger-Cingular Wireless is raising the marketing bar.

Following its merger with AT&T Wireless that created the nation's largest cellular phone carrier with 46 million subscribers, Cingular is determined to widen that lead. Chief Marketing Officer Marc Lefar said the strategy for retaining AT&T Wireless customers and growing Cingular's customer base is "all encompassing." Its singular purpose for the next six months is to convince "prospective and existing customers that the combination has resulted in a dramatic change in wireless and it is good."

By positioning Cingular Wireless as a quality player with "unsurpassed network quality and commitment to best-in-class customer service," as Mr. Lefar put it, Cingular goes head on against Verizon Wireless, previously the nation's No. 1 cellphone carrier, and its long-standing quality positioning.

In addition to the quality message and competitive packages during the important holiday selling season, Cingular has added about half a dozen exclusive new handsets to draw customers, including the sexy Motorola Razr V3. It's also initiated a 30-day return policy, touted as groundbreaking in the business.

At the same time, Cingular isn't forsaking its standby marketing approaches, underscoring that its free mobile-to-mobile program now includes all AT&T Wireless customers. Nor has its abandoned its trademark rollover plans, which allow consumers to move unused minutes from one month to the next, though AT&T Wireless customers must sign up for new Cingular rate plans to be eligible.

Cingular's new look, which incorporates AT&T's blue into its yellow jack logo and dropped its "fits you best" tag line in favor of "Raising the bar," is accompanied by a bar icon developed by WPP Group's Ogilvy & Mather for the waning days of AT&T Wireless. The bar reference has a double meaning, suggesting higher company standards, as well as better cellphone reception.

It's hard to miss the Cingular barrage. In addition to a TV blitz with seven spots airing to date, print ads in 100 newspapers and a dozen magazines, Cingular is running online advertising using tactics such as covering a home page with snow, only to have it dissolve into the Cingular "bars." Cingular also sent out and distributed in stores a custom publishing piece explaining the merger to 30 million plus customers.

direct-mail effort

Perhaps the most clever of all the executions is a direct-mail piece, made to look like a wedding invitation, sent to 25 million customers. "Cingular Wireless and AT&T Wireless invite you and everyone in our family to share in the joy of our coming together," the invitation read, ending with the line: "Reception to follow immediately."

Charlie Miesmer, vice chairman, BBDO, and lead creative on Cingular, which is handled out of both the New York and Atlanta offices, said the wedding invite trick was used because "We wanted something people would actually open."

Verizon Wireless, meanwhile, has not stood still. It ran an ad in select markets headlined: "Attention AT&T Wireless customers: As long as your wireless carrier is changing, why not change to the best?" Cingular quickly retaliated with an ad touting its leadership in the category and its programs.

Verizon's attack ads were "false and misleading and we will not be bashful in clearing up any messages spread by the competition," said Mr. Lefar. A Verizon Wireless spokeswoman declined to comment.

Preparations for rolling up the merged companies began with extensive sales and service training, including a one-day conversion on Nov. 14 of 11,000 AT&T Wireless stores into Cingular stores. Overall, the launch is going well enough that President-CEO Stan Sigman told analysts Dec. 1 that the new Cingular will be "earnings positive in 2005, a year sooner than we projected in February."

Some wireless experts were skeptical. Said Roger Entner, director-wireless mobile services, the Yankee Group, "It just makes you wonder about the schedule."

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