Marketing Planning for Vodafone Group Plc in B2B Sales - Case Study Example

Report on Marketing planning for Vodafone Group Plc (B2B) Terms of reference: Managing Director, Vodafone XXX, Researcher, PQR Management Consultants Abstract: The report contains the marketing planning for Vodafone, a telecommunication market leader in UK. As Vodafone is a perfect example of B2B and currently is not pursuing any strategy, marketing plan for its sales has been prepared. For evaluating the marketing plan of Vodafone, a series of points have been extracted. The marketing audit has been accomplished with PEST analysis. For each of these segments, depending on marketing mix product, place, promotion, place, a detailed course of action has been elucidated with 7P analysis. The entire process has structured in these points, market segmentation, targeting, positioning and choosing competitive advantages.1 The importance of customer relationship management and evaluation has been shown. Vodafone has diversified dynamic state of art customer relationship center. Table of Content Report on 1 Terms of reference: 1 Abstract: 1 Table of Content 2 Introduction: 3 Theoretical aspects: 3 Part-1: Market Audit 3 Part-2: Market Segmentation and positioning strategies 7 Part-3: Segmentation, targeting and positioning of Vodafone 9 Part-4: Ways for implementing B2B and STP: 16 Part-5: Theories STP and B2B: 18 Part-6: Evaluation of CRM in Vodafone: 21 Part-7: CRM programme supported by a marketing communications mix: 22 Bibliography: 25 Appendix: 26 Brief profile of Vodafone: 26 Introduction: To launch and promote any business activities within a shape of organisation, a marketing plan is needed to integrate with ecommerce. Without marketing plan it is difficult to penetrate in the market. This paper has taken Vodafone as a significant and it needs a detailed marketing plan for the expansion of its business activities. Theoretical aspects: According to Kotler, P, and Armstrong, G. (1999), segmentation is a process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mix and the process of evaluating each marketing segments attractive and selecting one or more segments to enter. Market positioning is the process of formulating competitive positioning for a product and a detailed marketing mix. Marketing mix are product, price, place, promotion. Depending on these elements the entire marketing plan is established. Marketing audit is a study to analysis the external and internal factors. According to Taylor .S (2007) CRM stands for customer relationship management and helps the management and customer service staffs cope with customer concerns and issues. B2B refers to business to business with fully ecommerce supported.2 Part-1: Market Audit Many variables can affect Vodafone's current strategy or future strategy. These have direct and indirect impact. These are: External forces (Organisation has no control over these factors) Internal forces (Organisation has direct control over these factors) PEST analysis is the investigation of the external macro-environment that has an effect on all firms. P.E.S.T. is a contraction stand for the Political, Economic, Social, and Technological factors of that external macro-environment. It is a useful strategic tool to considerate business position, market growth or turn down, potential and course of operations. A lot of macro-environmental factors are area explicit and a PEST analysis may need to be carrying out for all countries of concern. Political: The external factors can be analysed with PEST analysis. PEST means Political, Economical, Social and technological environment. Political factors have a direct impact over the business. 3Any political condition changes the business environment, increase or decreases the risk. Suppose if Government wants to hike up the oil price for political turmoil, it has adverse impact on the business. Recently UK has signed up the in the single European currency. This must have direct impact on the business.4 Like Vodafone and other telecom operators will face the changes of exchange rate. Economical: Economical policy can affect the overall investment strategy of the business. The central bank can use the monetary and fiscal policy. Changing in the interest rate can direct influence over the business. Recently the central bank of England cut its interest rate to 5%. This will change the money supply in the UK market. Like Vodafone and telecom operators will take more loans from financial institutions and can invest in their specific concern. So, changes in the economical situation, affects the investment strategy of the firms. When uses the policy to increase money supply especially in the recession, this will create high employment, living standard though it has some adverse effect. An interest rate changes in the USA will have an effect on UK share market, competitive strategies. The figure below is showing the relationship between economic activity and time. The business cycle is depicting the various positioning of booming recession. Figure-1: Business cycle of Vodafone Social: Society, people, friends etc changes the economic conditions. Peoples behave and attitude has a direct impact on business. In UK people are changing their attitude for dieting, health and online shopping. So, this situation can change the business structure in two ways. The firms which are producing fat item will force to decline their production and the firms which are producing diet controlling item, will increase their production. So, money is moving form one market to market. The lifestyle changing is modifying the existing market. Changes in population are one of the major elements of external factors. When people are tending to control the birth rate the population will change in near future and the cost of labor would be higher5. Like Vodafone and other telecom operators will have to compete in their existing customer base. New subscriber base will be declining. On the other hand increase in the birth rate in other country may have advantages for UK for cheap labor supply. Technological: Changes in the technological sector will impose a direct impact in the organisation and overall business process.6 The transaction and information exchanging cost can be reduced for dedicated call center and internet facilities. The technological changes speed up the organisation, production process and create employment. The quality of goods and services are increasing as more corrective steps are taken through technological development and it is reshaping the overall production process. The great technological changes are revamping the export and import processing. Part-2: Market Segmentation and positioning strategies Every buyer has unique needs and wants; each buyer is potentially a separate market. Ideally, then, Vodafone has design a separate marketing program for each buyer. The product is duffers with the changes of buyer. Vodafone's current market segmentation is given below: Market segmentation Products offered Technology Business Small Business Plan B2B Data service Broadband and wireless Conventional Advertisement Soccer Conventional From the above table it has demonstrated that Vodafone has designed different market segmentation with a view to establish their offer with different marketing promotion. For each of these segments Vodafone operates different types of strategies. Target market: As UK's telecommunication market is saturated and new subscriber growth rate is slow it is not possible to increase the base in terms of new customer. So, Vodafone is trying to grab the customer of other players and keep the existing customers.7 The following are the existing target market of Vodafone: Advertisement through sports and music Business Fixed telephone service, Home user Current positioning: Vodafone followed strategies are given below Generic strategy. Low cost provider Specific strategy..Target market segmentation As stated earlier Vodafone followed the low cost provider strategy. It tries to keep its call price low in comparison with other players. As giant telecom sector T. Mobile is following the quality services with higher prices Vodafone is in reverse. The qualities of goods are moderate and prices are low. So, like this country Vodafone is following the correct strategy. Part-3: Segmentation, targeting and positioning of Vodafone Market segmentation: Vodafone has some market segmentation. But new ideas of segmentation can be introduced to attract more potential customer. To establish effective market segmentation Vodafone should follow following terms: Measurable: The size, purchasing power and profits of the segments can be measured. 8 Accessible: The market segment can be effectively reached and served Substantial: The market segments are large or profitable enough to serve Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs Actionable: Effective programs can be designed for attractive and serving segments There are some suggested segmentations according to Kotler, P and Armstrong. G (1999) this paper would discuss available marketing segmentation as: Geographic segmentation: According to the density and quality of living standard of population geographically segmentation can be done. These are: Urban Suburban Rural In the urban and suburban area following market segmentation can be pursued: 1) Targeting the corporate segment: Most of industry has been developed in urban and suburban area. Currently Vodafone has less corporate segmentation. To grab the entrepreneurs, Vodafone should provide special call rate, extra facilities like various kind of value added services and loan facilities. Huge revenue can be earned in this way. 2) Public telephone operator: Within a low cost Vodafone can established public call center. As a result people will tend to make more calls through this and a large economy of scale can be obtained.9 Rural: In rural sector Vodafone has a wider scope to capture the market. Vodafone can establish community center for providing internet services. As result farmers, entrepreneurs, businessmen can exchange information. Demographic segmentation: According to the age, gender, income, occupation, education, religion, family size some demographic segmentation can be suggested: 1) Gender segmentation: Currently Vodafone has no offer for women entrepreneur. Vodafone can arrange finance and special facilities through Vodafone in an attractive way. 2) Age segmentation: For different types of ages Vodafone can arrange various kinds of program for entrepreneur. The best idea is when students are about to graduate Vodafone can promote them by special offers. Market targeting: In order to evaluate market segments Vodafone should concentrate on three factors: segment size and growth, segment structural attractiveness and company objectives and resources. Vodafone has three alternative strategies. These are undifferentiated marketing, Differential marketing, and concentrated marketing. In accordance with market segmentation market targeting should be based on Differentiated marketing. This is depicted below: Vodafone decides to target several market segments or niches and design separate offer for each. Though it creates lots of cash but different types of marketing research, planning, implementation will result in higher cost. The marketing mix is given below: Developing Marketing Mix: Product: Product: Packages for financial institutions client's to promote entrepreneurship. There will be customized packages for the different sectors for investing. These financial institutions will have contract with Vodafone to motivate their clients to have their packages. This can be depicted below: Corporate segmentation: So, from the above picture, it is seen that Vodafone and the financial institutions has a b2b relationship. Women entrepreneur: For facilitating the women entrepreneurship Vodafone can customize their existing products and it can be brought under Vodafone. Customised products for different sector investments can be designed. Students are about to graduate: When the students are about to graduate a massive campaign in universities can be conducted. Vodafone enterprise will assist them by providing valuable and related information. On behalf of students Vodafone can arrange financing as it has relationship with financial statement stated earlier. Public phone operator: Vodafone can motivate less educated people to operate public call center. In this segment call rate will be lower. As a result the sales volume will be higher and unemployment will be reduced. For different locations different packages can be tailored. Developing Marketing Mix: Price: For all of these segments price can be fixed on usage basis. Special discount can be arranged for the long time conversation. Credit limit can be enhanced with the collateral of entrepreneurs. The payment method can process in online. For corporate segment financial institutions will be liable for call making and Vodafone will only support the logistics supports. Developing Marketing Mix: Promotion: For corporation the internal method of promotion can be used. Vodafone enterprise will have a direct relationship with financial institutions and will pay these institutions for their advertisement assistance. For graduates, campaign should be conducted in the university premises. Seminar, conferences, establishment of outlet can be conducted. Every university will have an intranet connection for the availability of information and operations. For Public call operator and for women entrepreneurship personal selling procedure is required to measure. By the following ways this can be achieved: As personal selling is a procedure to communicate between buyer and seller, diversified dynamic issues should be considered. By personal selling, information and market findings will be provided to customers. The following depicted picture can clarify these: The personal sales agent will contact customer to promote him for entrepreneurship. The customer database will be maintained for future records10. After evaluating the future prospects of the customers, the personal sales agent will be prepared for final presentation. The entire profile will be maintained through relational database. The internet will be used for queries and spreading information. Developing Marketing Mix: Place: The final component is place. It consist channels, coverage, assortments, locations, inventory, transportation, and logistics. For corporation the places will the corporate house and for graduates place will be the related campus. Part-4: Ways for implementing B2B and STP: By considering above points Vodafone should follow the process below: Identify bases for segmenting the market Develop profiles of resulting segments Develop measures of segment attractiveness Select the target segments Developing positioning for each target segment Develop marketing mix for each target Positioning for competitive advantages: A product's position is the complex set of perceptions, impression, and feelings that consumers hold for the product compared with competing products.11 Vodafone should follow the test below for implementing its strategy: Is this resource strength hard to copy YES Is the resource strength durable YES Is the resource really competitively superior YES Can the resource strength be trumped by the different resource strengths and the competitive rivals NO So, the company will get competitive advantages. Vodafone can position their on different product attributes means different type of convenient call rate for different users. Products can be positioned according the usage occasion. The product can also be placed on the needs they fill and the benefits they offer. Choosing and implementing a positioning strategy: Implementation is the procedure to convert the theoretical study into working state. Successful implementation includes involving all of the decision makers, segmentation innovation, proper guideline for execution, boosting the power of existing products and repositioning. When it is about to implement the strategies it should be brought down under consideration that whether the product should be differentiated or low cost oriented. According to the market segmentation and availability of resources the right measurement should conducted12 So Vodafone should utilize above procedures with product differentiation, service differentiation, people differentiation. Part-5: Theories STP and B2B: Vodafone (B2B): Before proceeding on the main discussion it is necessary to understand the "Vodafone" as a b2b. Vodafone is a perfect example of B2B. It has following characteristics: Interactive & interface design for customer, owner, and suppliers. Dynamic, static and negotiation relationship. To execute business process per to peer and sophisticated business tools are used Value of transaction is comparatively high By depicting a diagram the above features are elucidated: Figure 5: Vodafone small business: Data exchanging From the diagram, it is seen that, Vodafone maintains two system customer and provider. The backend database is maintaining for storing the information sending and receiving. When a business unit wants to take a connection he/she has to submit a form via online and later 13Vodafone check it out and fulfill the request. The whole transaction or modification is done via online. Inside the corporation intranet is used and outside the corporation internet is used. Vodafone's positioning opportunity can be depicted below: Figure-6: Vodafone's Position Parties to exchange: Several parties are engaged in Vodafone as: The person who uses the product: The entrepreneurs are the user of the product. Gatekeepers: Vodafone maintains third party software that is integrated into the whole system whose work is to control the information used by others. Influencers: When entrepreneurs take the decision to take any services like loan, Vodafone helps to evaluate the alternatives. Deciders: The entrepreneurs take the decision to purchase the services. Buyers: The person who has the actual authority to take the decision. Maintainers: The large stuff of Vodafone and entrepreneurs are the maintainer. Part-6: Evaluation of CRM in Vodafone: CRM stands for customer relationship management. Vodafone has state of art call centers which are used to keep communication with current consumers. It is important to Vodafone because existing customer always queries about the market condition of upcoming events. CRM helps the management body to think about the future prospect. Vodafone uses a large relational database for keeping the current information of the customer. Anytime by querying specifics customer's information can easily be retrieved. Every major call center and points are interrelated via intranet. It is ready to have for web based customer solution. . With just a few mouse clicks, a customer support representative for example can track the location of the customer's package or order. This is infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the customer service representative will also be able to see the previous concerns of the customer. This results in less time in resolving the issue, thus, higher productivity of the support staff. To the management, information of customers and suppliers are very important. Management can get the report easily with a click. To the advertisement sector it is too important. As on the basis of customer base and nature the advertisements are prepared. Part-7: CRM programme supported by a marketing communications mix: 7P analysis for Vodafone CRM (B2B): People: It is the major elements of competence. In the telecommunication sector skilled, dynamic, energetic, effective people are must. So, Vodafone CRM has built an enriched human resource base that is a major comparative advantage. With the changes of situation, culture, Vodafone is adopting the best strategy with varying the position of people. In every department of the organisation Vodafone is maintaining high profile people with local and foreign talents. Product: Product differentiation has made Vodafone effective from the very beginning. When Vodafone appeared in the market it tried to attract customer by offering various kind of products like personal price plan, SIM only piece plan, Business price plan and machine to machine. Pricing: Pricing is on of the important factor for market penetration. Vodafone CRM is following the cost differentiation strategy with various plans. A huge customer base has grown rapidly since 1985 as it has introduced pay as you talk and pay monthly with various options. Process: The most important in Vodafone CRM process is network coverage. Vodafone has covered almost entire area of England. In every time Vodafone is trying to expand its network coverage to fight with other competitions. As Vodafone comes first in the market it gets the first mover advantages. Quality and expanded network helps Vodafone to come up into this position. Promotion: Attractive marketing promotion helped Vodafone CRM to expand its market. Vodafone is in the top ten advertisers in England. The company has expanded its advertisement in connection with sports, music and etc. Vodafone operates its marketing advertisement through TV channel, radio, billboard, personal contact, road show, conferencing. Vodafone has targeted different ages of people and different markets and so marketing promotion has been conducted in accordance with this segmentations. Place: To sell out products and services Vodafone has established sales point in every state with huge selling points in subdivision of districts. Even any one can reach to its service from nearby shop. Physical evidence: Vodafone CRM has developed state of art technology and place in the central point of London. The place is accessible from anywhere of the country. Personal selling is an indispensable element for Vodafone. For promoting the customers and make their information available it required personal selling. Vodafone has expert human resources to train up them. Mainly these personal selling is occurred at the first time. The post purchase behavior is accomplished by internet. Vodafone sales promotion is very qualities and was nominated for GSMA award. Vodafone always organises trade fair to promote their services. Recently the ongoing tourist exhibition is sponsored by Vodafone. So, Vodafone has a dynamic CRM which is a competitive advantage. Vodafone is successfully using these mixes with the integration of online system. Besides, modern selling point and customer care has been established. Bibliography: Bannon, D. P. (2004), Marketing Segmentation and Political Marketing, Working Paper, University of Paisley, copyright Political Studies Association. Beamish, K. & Ashford, R. (2004), Marketing Planning, 1st ed, Oxford, England: Butterworth-Heinemann. Benatallah, B, (2002), B2B E-Commerce: Issues and Enabling Technologies, Working Paper, University of New South Wales Dibb, S. et al (2001), Marketing Concepts and Strategies, 4th ed, Boston, USA: Houghton Mifflin. Kotler, P. & Armstrong, G. (1999), Principal of Marketing, 10th ed, New Delhi: Prentice Hall of India, Porter, M.E. (1980), Competitive Strategy, working paper The Free Press Mercer, D. A.(1993) Two Decade Test of Product Life Cycle Theory, British Journal of Management, Vol. 4. Porter, M. E. (1979), How competitive forces shape strategy, Harvard business Review, March/April 1979. ASIN: B00005REKJ Peter F. Drucke, (2006), The Practice of Management, London: Collins Publisher, ISBN-10: 0060878975 Hofer, C. W. Schendel, D., (1978), Strategy Formulation: Analytical Concepts, West Publisher Group, ISBN-10: 0829902139 Robbins, S. P. and Judge, T. A. (2007), Organisational Behavior, 13th ed, New Delhi: Prentice Hall of India Pvt. Ltd. Stoner, J. A. F. Freeman, R. E. Gilbert, D. R. (2006), 6th ed, New Delhi: Prentice Hall of India Pvt. Ltd. Appendix: Brief profile of Vodafone: Vodafone group is a cell phone operator. Head office is in England. In terms of turnover and network it is the largest telecom operator in the world. The name Vodafone is evaluated from Voice data fone. In 1982 Vodafone got the license to operate the mobile network. Primarily the operator was known as Racel Vodafone owing 80% taken by Racel, the Hambros technology trust owing 5% and Millicom owning 15%. It has equity interest in25 countries and partner networks in a further 41 countries. The total customer base is 186.8 with 33 partners network. Vodafone's vision is "to be the world's mobile communications leader, enriching customers' lives and helping individuals, businesses and communities to be more connected in a mobile world." The renaming form is given below: 1985 Racal Telecommunications Group Limited 1988 Racal Telecom 1991 Vodafone group Acquisition and mergers: Year Company name Form 1996 Talkland Acquired (2/3) 1996 Peoples Phone Acquired (Full) 1999 Airtouch communication Acquired (Full) Read More