Report about Vodafone - Essay Example

?Business Table of Contents Table of Contents 2 Introduction 3 VODAFONE: A Brief Overview 4 Mission ment 5 SWOT Analysis 6 Marketing Mix 9 Existing Strategies 11 14 14 Recommendation 15 Conclusion 16 References 17 Bibliography 19 Introduction A network service provider is an organisation which is involved in the selling of bandwidth or gives access to its network to facilitate communication. Telecom network in UK plays a vital role in the growth of its economy. It accounts for nearly 75% of the total service revenue in the UK’s communication sector. The revenue from voice service was on the higher side prior to 2009, but started declining thereafter. During the same time the industry witnessed a massive growth in the internet segment. The widened accessibility of rapidly fast broadband network and the changing demand of consumers in the UK market made it possible. There was a huge increase in the number of mobile internet user (Ofcom, 2010, p.279). The players of the industry includes orange and T-mobile, Vodafone, O2, 3 mobile service and others. The report will highlight the present marketing strategy of the Vodafone and also it will try to put an analysis of the internal strengths and weakness and also the external threats and opportunities of the company. SWOT analysis will be used as the tool to conduct the evaluation process. VODAFONE: A Brief Overview The name Vodafone appeared from the words voice data-phone and collectively got its name, Vodafone. Vodafone group Plc. is an organisation indulged in the business of providing telecommunication services. The company was headquarters at Berkshire, but recently it has changed its base to London, United Kingdom (BBC, 2009). It has its presence in Europe, Africa, Asia pacific, Middle East and the United States of America. It employs around 70,000 employees around the world. Vodafone has its presence in 30 countries around the world and also holds a mammoth base of 371 million subscribers around the world (Vodafone, n.d.). In this changing environment and rapid technological development has made the customers to demand at the extremes levels. Therefore in order to satisfy its customers the network of Vodafone gets periodically updated with the launch of any technicalities. To cite an example the company has incorporated the 3G technology in its network. It has made possible for the company to provide the subscribers with the access of voice communication as well as data transfer at a rapid rate. The competitors of the company includes 3 mobiles, telenor, airtel, t-mobile, AT & T, orange mobile, pennon, TMN etc. and also other local player belonging to different countries. Mission Statement The company has put forward its mission statement as ‘We will be the communications leader in an increasingly connected world’. The mission symbolizes that the company is optimistic in nature. The company is currently the third largest telecom provider of the world after china mobile and singtel according to the number of customer. Therefore the company clearly portrays that they would like to achieve the elite position in the years to come. The company is also highly focused on developing the products which goes according to the technology as well as which satisfies the need of the customers. SWOT Analysis SWOT analysis is a tool which is used to do strategic planning and is also used to evaluate the internal strengths & weakness as well as the external opportunities and threats. Therefore it is considered as essential element which matches the company’s capabilities and resources to the environment where it operates along with its competitors (Richter & Pahl, 2009, p.1). The SWOT analysis of Vodafone has been illustrated below:- Internal Strengths International presence Huge Brand value Technically up to date products `Weakness Poor connectivity in some rural areas. Depends on European market External Opportunity Larger geographical access Sound diversification strategy Threats Tremendously competitive and saturated market. Emergence of low priced brands. Strengths- The primary strength of Vodafone in the telecommunication industry lies in its huge brand value and brand image. The company has successfully established its global presence. The existence of Vodafone in several countries within the European continent as well as in the other parts of the world enhances the image. The company also has a strong financial backbone which allows them to invest in different marketing and social activities. The global presence also allows its customers to travel with the services provider of their native country. In some countries where Vodafone do not have existence (e.g. Norway) has well established tactical association with the operator of the host country. Weakness- The weakness of the company is mainly their poor connectivity in some of the rural markets. Apart from the technical issues the company also suffers from the huge dependence of European market. The maximum revenue of the company gets generated from the European segment. Therefore sometimes this market has to act as the subsidy to other markets. The company also suffers through higher churn rates. In UK the churn rate of Vodafone has increased to 32.8% where as the churn rate of its competitor 02 is around 24%. Opportunities- Though the communication market is highly saturated some of the regions offer huge opportunities with the availability of diverse population and sophistication of the consumers. The opportunities need to be grabbed by the use of proper market segmentation and properly exploiting the profitable segments. The global presence of the company will give added opportunities in the form of entering the market more forcefully with other differentiation product. The company also has huge opportunities in the development of new mobile technologies. Apart from the mentioned opportunities the company can cut down the cost and try increasing the profit. Threats The primary threat of the company is in the form of higher level of competition. Major market players such as 02, T-mobile, Orange mobile and AT & T gives a stiff competition. Apart from the established brands the company is also facing tight competition from the local players. The local players tremendously affect the price sensitivity of the company. Threats are also present in indirect format. They may not be the direct competitors of the company but they act as the substitute to the products offered by Vodafone, such as availability of Skype, g-talk and other related internet based communication services hugely affects the company. The company is also expecting a threat in the form of European Legislative Measures which will be limiting the tariffs for the providers of network and may harm the profitability of the company. Marketing Mix The initial stage of any marketing activity is related to the proper definition of the marketing mix. The principles of marketing mix are generally used by the organisation to help them in reaching their desired objectives. The elements of marketing mix can be controlled and needs to be managed properly to meet the requirements of the desired target group. It is an essential part of a company’s planning process (Kumar, 2010, p.45). Generally marketing mix is also known as the 4p’s of marketing. The elements include product strategy, price strategy, place strategy, promotion strategy (Foodexport, n.d.). The marketing mix of Vodafone illustrated below:- Product strategy In the product category the company has voice calling services, messaging services and also the data transfer services. The unique product of the company includes Vodafone live, and special interactive services. Apart from the concept selling the company also has products which are available in the physical form such as data cards, mobile handsets etc. The company has a wide range of cell phones to satisfy the diversified needs of the customers. It also provides a lot of features along with its phones such as wallpapers, games, themes, ring tones, music, different information services, bill payment options, video playing and also it allows surfing the internet through the cell phones. Vodafone is also planning to launch more handsets in the years to come. Pricing Strategy Since the company has a diversified group of customers the pricing strategy is also somewhat different from. The company has different types of schemes available for its customers to suite their respective needs. In order to have a large base of loyal customers the company offers a broadened structure of prices. There is also availability of plans where the customer can pre pay for the services on a monthly basis and can top-up through online recharges. Place Strategy The company has its presence in around 30 countries of the world. To be more specific in the context of United Kingdom the company operates through more than 300 stores which are owned by the company itself. The company also sells its range of products through individual retailers. The company spends heavily for the placement of its product. The placement is generally done through the retailer shelves. Promotion Strategy Vodafone focuses heavily on the promotional segment of the company. In order to promote their product the company uses advertising on TV, magazines, billboards. This helps to spread the communication to a large number of audiences. They also make use of different celebrities to make endorsements. They work with different celebrities like David Beckham and Michael Clarke to communicate its brand value. Apart from the commercials the stores of the company gives special offers and uses POP displays to attract customers. The staffs of the company are also given proper training in order to portray the brand image of the company. The company also aggressively tries to keep a healthier relation with the public. Therefore to maintain the public relation the company periodically sends the press releases to renowned newspapers and magazines to describe about the new ideas and products. The company immensely uses Guerrilla Marketing techniques as well for the promotional purposes. An example can be cited where it will justify how Vodafone uses it to promote the products. Recently the company launched Guerrilla Marketing campaign. A Desk Car has been used to promote its 3G service. The car travelled throughout the city of London for showing Londoners the 3G experience in this amazing format. Another example can also be referred where in a rugby match between the New Zealand team and Australian team, there were 2 persons who went on to the field without any clothes on them and there were the corporate logos of Vodafone coloured in their back. Sponsorships also play a major role in the marketing mix of the company. It is an integral part of the marketing strategy (International Chamber of Commerce, n.d.). Vodafone sponsors the Formula 1 giant McLaren Mercedes. They work as the title sponsor and also the official mobile partner of the team. They also uses diversified advertise campaign for different events as well. As for example the commercials with Zoo-Zoo in India during the Indian Premier League (IPL) were highly successful and even considered as one of the best innovative advertisements of all time. Existing Strategies Apart from the marketing mix strategy, the company also focuses on market penetration, development and diversification strategy. Market Penetration Strategy The market permeation strategy of Vodafone is illustrated below:- To progress through geographic development. To gain new customers from the market place by using extensive promotions and consumer offers. Customer churn is one of the major challenges for mobile network service providers. In Western Europe due to extreme competition, mobile number portability and more than 100% market infiltration have led to a churn rate of 24% per annum. But with the help of KXEN the next generation information mining tool, Vodafone has been able to decrease its churn rate. To retain the existing customers of the company they also use customer relationship management techniques. Development strategy In this section the company is focused on increasing the access to communication, to reduce the cost of the internet supporting devices and also to develop an application which will help the consumers in the developing markets as the company feels that the need of a developing market is quite different from a mature market (Vodafone, n.d.). Diversification Strategy In the past the company was primarily a telecom company, but with the course of time it has diversified to segments like internet, mobile broadband service and also provides financial services. These strategies helped the company to have a competitive advantage over their competitors. Not only has it given an upper hand but also this has made the company as one of the strongest brands of the world. The company is ranked as the seventh most valuable brand of the world. The company also features in the top 100 position of the Global 500 list by CNN money according to its revenues and profit (CNNMoney, n.d). These are the few achievements by Vodafone through the adoption of the aforementioned strategies. The practising of the strategies has also given the company a steady market share and high sales volume. Some of the important data has been graphically represented below: Service revenue growth in UK (Source: Annual report, 2011) Recommendation The recommendations are as follows:- 1) The company must move to the fixed line segment from where the company can generate a large profit and can also gain a new set of customers. 2) The company must give more efforts to the potential markets like India. It has a substantial presence but still if proper efforts are given it will act as one of the top revenue generating market. 3) The company must focus on tapping the rural market and try developing the connectivity of those places. 4) It is highly recommended that the company must focus on value added services. 5) Vodafone can diversify its business line into broadband service and DTH service. 6) They can also practise the marketing strategy followed by Volkswagen. The same strategy can even be practised in telecom industry. The company can intensely diversify its products with variety in the mobile handsets and dongles as for Volkswagen they have a long list of products. The promotional strategy can also be followed like Volkswagen where they offer gift items to the customers. Vodafone can also follow the same by providing some complementary item with a value purchase. For example the company can offer a free internet connection for a stipulated time frame when somebody purchases an internet dongle. Conclusion Vodafone is considered as one of the strongest brands of the world in the context of its brand value. With its primary telecom business the company has diversified into other wings as well from the data segment to the financial section. The company focuses heavily on the marketing mix as well as in the market development strategies. The research has been conducted to know about the current marketing strategies of the company and how the company is getting benefitted with the application of these strategies. The research is also about the ways by which Vodafone can generate more revenues as well as can get more market share. After conducting all the required researches on the given topic and based on the findings of the project through the graphical data it can be clearly concluded that Vodafone gets a competitive advantage in the market place. The innovative marketing practices through the use of Guerrilla Marketing techniques make it more visible in the market place. The company has a strong market in Europe and mostly revenues get generated from there, therefore it is highly recommended that the company must focus strongly on the development of the other geographical segments as well. References Annual Report. (2011). Key market review. [Online]. Available at: http://www.vodafone.com/content/annualreport/annual_report11/business-review/key-market-review.html. . [Accessed on 08 May 2012]. BBC. (2009). Vodafone moves world HQ to London. [Online]. Available at: http://news.bbc.co.uk/2/hi/uk_news/england/berkshire/8116198.stm. [Accessed on 08 May 2012]. CNNMoney. (No Date). Global 500. [Online]. Available at: http://money.cnn.com/magazines/fortune/global500/2011/full_list/. [Accessed on 08 May 2012]. Foodexport. (No Date). The export marketing mix. [Online]. Available at: http://www.foodexport.org/GettingStarted/Content.cfm?ItemNumber=1288. [Accessed on 08 May 2012]. International Chamber of Commerce. (No Date). ICC International Code on Sponsorship. [Online]. Available at: http://www.iccwbo.org/id899/index.html. [Accessed on 08 May 2012]. Kumar. (2010). Mktg of Hospitality & Tourism Serv. Noida: Tata McGraw-Hill Education. Ofcom. (2010). The Communications Market. [Online]. Available at: http://stakeholders.ofcom.org.uk/binaries/research/cmr/753567/UK-telecoms.pdf. [Accessed on 08 May 2012]. Richter, A., & Pahl, N. (2009). SWOT Analysis- Idea, Methodology And A Practical Approach. Munich: GRIN Verlag. Vodafone. (No Date). About us. [Online]. Available at: http://www.vodafone.com/content/index/about/about_us.html. [Accessed on 08 May 2012]. Vodafone. (No Date). Our development strategy. [Online]. Available at: http://www.vodafone.com/content/index/about/sustainability/sustainable_societies/our_contributiontodevelopment/our_development_strategy.html. [Accessed on 08 May 2012]. Bibliography Gruber, H. (2005). The Economics of Mobile Telecommunications. Cambridge: Cambridge University Press. Ibbott, C. J. (2007). Global Networks: The Vodafone-Ericsson Journey to Globalization and the Inception of a Requisite Organization. Basingstoke: Palgrave Macmillan. Read More