Boost Mobile Qualitative Positioning Development Research

1. Boost MobileQualitative Positioning Development Research DRAFT - Advance preview copy

2. Contents • Background • Research Objectives • Approach & Methodology • Overview/Executive Summary • Cellular Phone Category • Overview of Key Themes • Competitive Landscape and Perceptual Map • Category Fundamentals & Expectations • A Model for the Ideal Cellular Phone • Boost Mobile Brand • Associations based on the Boost Mobile name/logo • Reactions to presentation of Boost Mobile brand • Reactions to Products and Core Features • Boost Mobile Brand Position and Personality • Summary and Next Steps

3. Research Objectives • In preparation for the launch of Boost Mobile in the U.S. market, qualitative research was conducted to guide the positioning of the Boost Mobile brand. • Specific objectives included: • Understand the competitive landscape • General beliefs and attitudes about cellular phones • Competitive perceptions [strengths & weaknesses of key brands] • Explore the primary motivators within the category • Aspirational imagery associated with the category • Unique and appealing benefits of the Boost Mobile offering • Uncover relevant positioning opportunities for Boost Mobile • Based on presentation of the brand using packaging, posters, and product samples • Includes feedback on the actual style and features of the product

4. Approach & Methodology • Given the nature of the objectives, a qualitative research approach was utilized at this stage of development. This approach allowed for a in-depth exploration of the thoughts, feelings and attitudes of respondents as they relate to the category and to the Boost Mobile brand. • Methodology included a combination of: • In-Home friendship groups – High School Teens • Conducted with high school teens age 15-18, engaging them on their turf and among their friends. This methodology provides a comfortable, open environment that allows them to freely share their thoughts and feelings. • On-Campus friendship groups – College Students • Conducted with college students age 18-22, engaging them on their turf and among their friends. This methodology provides a comfortable, open environment that allows them to freely share their thoughts and feelings. • In-Facility discussion groups – Young Adults • Conducted with young adults age 21-24] in an environment that encourages collaboration and an open exchange of ideas.

5. Approach & Methodology • A series of 10 qualitative discussion groups were held between April 10th and April 19 in two California markets: • Southern California: LA/Venice/Santa Monica • 2 Teen In-home sessions [1 male and 1 female] • 2 College On-campus sessions [mix of male and female] • 1 Young Adult Focus Group [mix of male and female] • Northern California: Berkeley/SF • 2 Teen In-home sessions [1 male and 1 female] • 2 College On-campus sessions [mix of male and female] • 1 Young Adult Focus Group [mix of male and female] • Respondents were pre-screened to match the following profile: • Demographically fit within one of the three core youth segments • Currently have a cell phone, or be interested in acquiring one • Interested in action sports [surf, skateboard, snowboard, bmx, etc.] • Culturally plugged-in: technology, fashion, music, entertainment

6. Executive Summary

7. Exec Summary • Fill in exec summary here…

8. Cellular Phone Category

9. Cellular Phone Category • Cellular phones are an accepted and desirable part of their lives • Friends, classmates, parents -- phones are everywhere • Respondents had a great deal of knowledge of the category – even among those who have never owned a cell phone • Familiar with the terminology • Sim cards, SMS, GSM, etc. • Aware of all the major players • Service providers: AT&T, Verizon, Cingular, Sprint, Nextel • Phone makers: Nokia, Motorola, Ericsson, Audiovox, Panasonic, Samsung • Note: VoiceStream, Virgin Mobile were not mentioned in any session • Familiar with most of the advertising, especially for Cingular, Sprint, Verizon, and m-Life • No brands were currently making a connection with their lives • Opportunity for a relevant youth-oriented brand in this category

10. Youth Opportunity Cellular Category: Perceptual Map New/ Emerging Old/ Established For Business For Everyone For Youth

11. Key Competitors • Nokia • Vast street presence makes Nokia appear to be the most common (and popular) phone • Easy to customize accessories (with changeable faceplates) made Nokia a favorite with many females • Perceived as “trendy” and the “youngest” brand • Driven by their small “cute” phones, colors, games • Nokia was too young and too small for some, “kiddie” phones • Cingular • Known for offering inexpensive plans and free phones • Made Cingular a popular choice among respondent • Brand persona was more “friendly” and “fun” • Often criticized for having poor service quality

12. Boost Mobile Partners • Motorola • A reputation for making high quality, expensive phones that are primarily for business professionals • Recognized as the “original” – but no longer the “cutting edge” leader • Many remembered the Star-Tac phones, flip phones • Heritage with Walkie-Talkies (sporty, rugged) and pagers was viewed as a positive, especially among teens • Emerging youth appeal and street credibility from Hip-Hop associations [Jay Z, “I just wanna love you (Give it to me)”] • Nextel • Viewed as being exclusively for businesses, corporations, including blue collar jobs • Nextel was perceived as having quality service, state-of-the art • Strong association with 2-way radio feature [Direct Connect] • Many associated Nextel with Motorola

13. Two primary factors dominated perceptions and satisfaction with service providers: Service quality Poor service, weak signal strength caused issues Expensive pricing – often due to confusing and misleading plans: Hidden extra charges Not enough usable minutes Gouging for going over the minutes included in the plan Anytime vs. night/weekend minutes When does “night” begin Billing for full minutes Problems with plans The perfect plan would include: Free incoming calls Free first minute Free Mobile-to-Mobile Unlimited nights/weekends Flat fee pricing for unlimited use Accurate status of minutes used Less concerned with Free Long Distance / No roaming Especially teens, who have a smaller zone of life More simple & more honest plans Dynamics of Service Plans

14. Pre-Paid Opportunity • Idea of Pre-Paid – the simplicity of “pay-as-you-go” – was intriguing • The concept of “buying minutes” was a refreshing alternative to conventional plans • Teens found Pre-Paid especially appealing – as a way to get a phone without credit – but more importantly, without permission • However, Pre-Paid was far from a perfect solution… • Pre-paid minutes are perceived as overly expensive [like calling cards] • What is the actual cost per minute? What is in the fine print? • Connection to disposable phones [cheap, crappy phones] • Many expressed concern over running out of minutes • Expected to find additional minutes at any store, 7-11, gas stations, etc. • In the end, Pre-Paid was NOT truly a viable solution • Utilizing Pre-Paid to avoid financial pain meant using the phone less -- which actually defeats the purpose of having a phone

15. Cell Phone Imagery & Associations • Respondents clearly recognized the pragmatic benefits associated with having a cell phone Staying in Contact Emergencies Going Places

16. Cell Phone Imagery & Associations • Several negative aspects were immediately associated with cell phones Too Expensive! Doesn’t Work Everywhere Frustrations

17. Cell Phone Imagery & Associations • The strongest associations showed why cell phones are a desirable and important part of their social life Not Missing Out on the Action Hooking Up with Parties Chillin’ with Friends

18. Cell Phone Imagery & Associations A Safety Net [Do More, Take Chances, Get Crazy] A Security Blanket [Confident, Free, Relaxed]

19. Cell Phone Imagery & Associations Fashion Statement More Than A Phone Getting Noticed

20. FUNCTION FEATURES FORM / FASHION FUN FUTURE The Ideal Cell Phone • The ideal cell phone for this target includes the optimal combination of: • Function: Works flawlessly as a phone • Features: Expected basic features • Form / Fashion: The style, look and feel • Fun: Bonus extras • Future: Ideal features to come

21. The Ideal Cell Phone • FUNCTION • The top priority was having a phone that always worked • This meant getting good service no matter where you are – indoors or outdoors • Perceptions of Nextel having superior service will provide a strong benefit for Boost Mobile • FEATURES • Phone was expected to have a core set of standard features • Voicemail Text Messaging • Customizable Ring Tones Clock / Alarm • Calendar / Datebook Phone Book • Vibrate mode Caller ID

22. The Ideal Cell Phone • FORM / FASHION • Size, Style, Accessories (especially for girls) • Sleek, modern looking • Especially for young adults, who did not want a phone that looked like a toy • Metallic – silver, chrome, platinum – or black • Clear, see-thru (like the popular iMac designs) • Colored lights • Compact Flip-style - small (pocket size), but so small that it is fragile • Preferred styles also had an internal antennae • Customizable faceplates: colors, patterns, images • Especially appealing with females, who were more interested in “accessorizing” their phones

23. The Ideal Cell Phone • FUN • Bonus extras features used primarily for killing time • Games! • Captured everyone’s imagination (even if they claimed to not play) • Snake is a universal favorite, Tetris would be great • Color screens… enhanced the game playing experience • Web services, information • Voice commands [a novelty feature] • Horoscopes, Bio-rhythms, “Magic 8 Ball” • FUTURE • Ideal features to come [can be evidence of the brand attitude] • Music via the phone was clearly the leading idea [MP3 & radio] • Real music for ring tones • Cameras, video – sending pictures • GPS – built-in navigation system

24. Boost Mobile Brand

25. Youthful Young Active Sporty Energy Amplifier Speed New Refreshing Hip Boost Mobile: Brand Associations • Based only on the presentation of the name and logo, Boost Mobile was very well received and elicited many positive associations • An appealing company, unlike other phone companies • Unaided associations with surf, skate, and shoe brands

26. Associations with Action Sports • Presenting Boost Mobile in the context of these sports confirmed that the brand is for a younger crowd • Further distanced Boost Mobile from others in the category • Association with established brands [Billabong, Quicksilver] provided an element of credibility and belonging in this environment • Respondents could see potential in co-branded accessories from these brands, and others • Volcom, Oakley, Baby Phat • Though disconnected from sports in that people don’t use cell phones while doing those activities, these associations created expectations of the product • Rugged, durable phones • Water-proof (or water-resistant) • Relevant features and content (such as surfline.com)

27. Associations with Action Sports • However, acceptance was not universal: • Action sports and Team Riders were especially appealing in southern California • Lifestyle is part of the overall culture • A greater sense of personal identification • Respondents in northern California were less captivated by this expression of the brand • Recognized the intention and associations, but less willing to embrace the imagery • More likely to see this approach as cliché, or worse, trying too hard to be appealing to young people • Action sports imagery for the brand was seen as being very narrow in appeal • Relevant to a small group or sub-culture • Also perceived to be lacking diversity

28. Boost Mobile Product: Features • The product features nailed it! Fully loaded phones had everything they expected and more. • Unbelievable games • Set the standard for games on phones • Immediately hooked people in • Open to downloading, buy paying was a question mark • Led to concerns about battery life and memory • 2-Way Radios • “Buck a day” concept for unlimited use made sense • Should be free (like walkie-talkies), why pay to use a feature • Speaker phone • Web services • Most compelling with relevant, credible content • Stigma of being slow caused skepticism • Text messaging was valued by students (who use it in class)

29. i55 • Overall reactions to the i55: • A perfectly acceptable basic phone • With all the features, most expected to pay around $100 • Some saw the i55 as being comparable to “free” phones • Style, while not exactly a good fit with their ideal, did fit well with the brand concept • Young, fun, durable looking phones • Silver was the standout favorite of the i55 models • Blue backlight was especially well liked • Other colors received a mix reaction • Pink: Dismissed as too “teeny girl” and two-tone shade • Green: To some, the green felt “dated” [like the 80’s neon. Body Glove]

30. Boost Mobile: Product Issues • Concerns and criticism of the i55 phone: • Size of i55: too thick and bulky, a bit too big as well • Antennae felt cheap and unnecessary • Button color: red button stood out, but not aesthetically pleasing • Navigation button on i55 - difficult to use • Layout of buttons caused some difficulty in navigating • Specifically the buttons for “select” and “exit” • Unclear terminology • Java apps • J2ME • iDEN • PPT • Buss Button

31. i60 • Overall reactions to the i60: • Flip phone style was well liked • More compact design was an improvement over the i55 • No caller ID info on outside • Available only in black, the lack of “flashy” style and extra features (compared to the i90) made the additional cost hard to justify • Note: Of all the demo phones, the i60 was the least developed in terms of feeling like an actual finished product.

32. i90 • Features feedback • Flip phone design, along with the silver and clear colors, made the i90 the clear style leader • Color screen was seen as an outstanding features -- especially for playing games -- putting the i90 in a class of its own • “LCD Color Display” text was unnecessary • Called ID screen on the outside was praised • Extra lights on clear version were a favorite of many younger males • Screen saver images, animation of numbers when dialing was very captivating • Overall, hard to justify additional cost -- Is it worth it? Can I afford it?

33. Boost Mobile: Brand Position • Extreme, Action Sports positioning creates challenges for the brand • Clearly a brand that is not for everyone • Not be like everyone else is positive • Not being universal by nature will exclude certain people, potentially limiting the appeal of the brand • Must be genuine, authentic -- or you risk losing even the hardcore • Using these sports in mass advertising is most susceptible to being sees as exploitation – action sports are known as being non-commercial • Tell the Boost story (supporting the sports) can help by revealing the depth of Boost Mobile’s involvement • Opportunity on packaging to tell more of the story

34. Boost Mobile: Brand Position • Position against the underlying spirit and attitude of the sports • The attitude is more compelling than the activity • Attitude is consistent with the action sports, letting the association live in on in promotions, sponsorships, niche marketing efforts • Freedom • No limits, no rules, no restrictions • No permission required • Individuality • Your way, Do your own thing, • Not mainstream • Australian • Different, Break the rules, hardcore, outdoors, free spirits

35. Boost Mobile: Personality/Attitude • Several distinct personality profiles emerged from the current presentation of the brand • Adopting the right tone and attitude can help provide a link being mainstream marketing efforts and niche (action sports) marketing • Laid back, casual • A relaxed, carefree attitude that captures the life attitude of the youth target, while also connecting with the easy going “beach” spirit • Aggressive, Defiant • The stereotype of most X-sports • Can reflect the spirit of not being like every other brand in the category • Energized, Spirited, Adrenaline • Reflects a universal life spirit common to many in this target group • An experiemental, take on the world attitude

36. Summary • Conclusions • Next Steps

37. For additional information, please contact: Mike Zarneke, PartnerAlternate Routes, Inc.mike@alt-routes.com310.938.5035 cell310.333.0800 main310.333.0880 fax Alternate Routes, Inc. • 531 Main Street #100 • El Segundo, CA 90245