Telecommunications Industry-Marketing of Vodafone - Essay Example

 1. Introduction Telecommunications has been one of the rapidly growing sectors in countries all over the world. This sector provides significant contribution to the Gross Domestic Product of many nations (Li and Xu, 2002).Moreover, the sector contributes to other businesses by reducing their transaction costs and thus creating positive externalities. Thus telecommunication sector is considered to be of much economic and technological importance (Li and Xu, 2004). There had been significant changes in this sector transforming from a state owned, state operated and monopolistically behaved sector to a private owned and liberalized one since the 1980s with the privatization of British Telecom and the introduction of competition in the US long distance services (Wallsten, 2001). Based on the theoretical perspective son privatization, it has been argued that the privatization of telecommunication sector will result in increasing the sector’s efficiency and overall performance. The empirical studies show the results varying in different countries. According to Encyclopaedia Britannica (2009), marketing audit is “a comprehensive, systematic, independent, and periodic analysis that a company uses to examine its strengths in relation to its current and potential market”. This includes both the external and internal environment analysis of a company. In this essay, the marketing activities in the telecommunication industry are examined with the case study of Vodafone. The main products of the company as well as its main marketing activities, their evolution over time and the major hurdles in this regard are evaluated. Moreover, how they are successful in their decision making are also evaluated. The organization of the essay is as follows. Section 2 discusses the company in detail including its products and services and its mission and vision. Section 3 discusses the orientation of the company towards marketing including the attitude towards marketing, its evolution over time and the major barriers for the company to be faced. Section 4 discusses the marketing research activities of Vodafone for the decision making purpose and its evaluation. Section 5 concludes the essay. 2. The company Vodafone is one of the most famous mobile companies in the telecommunication industry with its headquarters at United Kingdom. The company has branches all over the world mainly focused in Europe (Vodafone, 2011a).It has been growing very fast in the last two decades with its financial performance increasing significantly (Vodafone, 2011b). The main products of the company include web box and two varieties of Vodafone. Moreover, the products include handsets, smart phones, voice and messaging services, and branded handsets. The main services of the company include business solutions, personal solutions, marketing solutions, personal ideas and mobile solutions (Vodafone, 2011).The main markets of this company include Europe, Middle East, Asia Pacific, Africa and the United States. The mission of the company is to become the world leader in telecommunications industry .The vision includes leading the telecommunications industry in response to public concerns like mobile phones, masts and health. The primary goals of the company include driving operational performance, pursuing growth opportunities in total communications, execution in emerging markets and strengthening market discipline. All these are aimed at the main objective generation of free cash flow. Accelerated customer growth and immediate geographic expansion had been the two guiding factors behind the company’s success. Based on these, the next section discusses the attitude of the company towards marketing and its evolution over time. The main barriers and challenges for the company are also shown below. 3. Orientation towards Marketing The company tries to retain its image in markets already existing as well as uses celebrities like David Beckham, the famous sportsman to promote its image in new markets (Vodafone, 2011b). Based on the principle of a “brand to buy”, the company uses effective marketing as its strategy. As a part of its strategy, the company shows its features as well as products using communication which is effective. The improvement in revenue and profit margins in the company is done by making use of its marketing strategy for more earning from each product. The live service in Vodafone is one of its main strategies to improve its attractiveness that helps customers to download ringtones, games etc (Vodafone, 2011c). The other value added service includes mobile connect card through which customers access the normal business applications in case of the absence in office (Vodafone, 2011c).The marketing mix for the company which includes four p’s like product, place, promotion and price are discussed below. These four factors are very essential parts of an effective marketing strategy for any organization. The products include the chatting, game playing, messaging and downloading opportunities, information availability etc for the company. The live services are another main and attractive product. Regarding place, the company has branches all over the world that has independent retailers as the sellers. Moreover, the products of the company are easy to be visible and managed by the customers (Vodafone, 2011c).Moreover, the customer care centres which are readily available are the main attractive features of the company through which people can easily register their complaints, queries etc. The customer care executives are available for 24 hours to communicate with the customers in this regard. Regarding price, the price structure for different products is quite attractive for the company. The price structure suits the needs of the varying groups of customers like young, old, disabled, business persons, layman, etc. The pricing facilities include prepaid and post paid options as well as options for online recharging. The other attractive features include reward pints for the calls made by customers, picture messages, ringtone downloading etc. The promotion options include associations with celebrities to promote their activities. The above the line promotion activities like television advertisements, advertisements in magazines, billboards etc are very actively used by the company for promotion activities. The other promotion activities include special offers, reward points, posters etc to attract clients. Moreover, the image of the company is actively promoted by its products, services and the employees of the company. The press releases sent by the company to newspapers serve the purpose of promoting its new product offers to the customers. Thus the four p’s like price, place, product and promotion are explained for the company. The evolution of marketing activities in the company over time is evaluated below. The marketing strategy of the company all over the world has been to retain its leadership in the market. The product led strategy of the company makes it necessary to produce new products using the technological advances which are very sophisticated. In the present era, the consumers are found to be more technologically advanced and hence more sophisticated technology led products are demanded by the changing consumers as shown by reports (Vodafone 2011c).Hence it is shown that the new demands must be accommodated into the marketing strategies of the products by Vodafone. In many nations especially UK, the customers make use of the most technologically advanced mobile technology particularly the youth. Their changing demands are continuously accommodated in the products of Vodafone as shown by the reports. Reports show existing customers more in number than new customers. Hence, the needs of existing customers are more accommodated in the marketing strategies of customers as shown by the reports (Vodafone, 2011c).Since there is enough competition for mobile companies in the market and there are many alternative options available in the market, the youth is reported to have a thorough thinking before buying mobile phones. Moreover, the latest advances in the information technology and the internet surfing made it very convenient for the customers to make thorough research on different options available in the market. Hence the Vodafone marketing strategies are now based on all these considerations. The main marketing objectives put forward by the company for achieving its goal are to retain the customers already existing, find new customers, make use of technological advances and developing new products and services. Based on these, the new products and services are updated by the company. Moreover, effective communication is established with the customers to consistently update their services. The information availability about new products is also made available through the customer care services. Many commercial alliances are made with other companies like alliance with Manchester United in UK on January 2000 for improving its brand image. These alliances shave helped improving the global image of Vodafone in the recent years. Reports show these alliances helped the company in obtaining its marketing objectives explained above. These alliances have also helped in creating new customer base for the company through developing new products. Three main advantages are reported for these alliances .One is to improve its brand image, other is to develop new products and services and the last is to add value to services. The effectiveness of these strategies are evaluated by the company in different ways like consumer research, evaluation of sales performance, evaluation of the number of registered users and service users as well as media evaluation. Based on all these, it has been shown that the company was successful in establishing an alliance with Manchester United. The main barriers and challenges for the marketing activities of Vodafone to achieve its success are discussed below. The main challenge is the significant rise in the number of mobile subscribers and the need for global connectivity in the coming years. Next challenge includes tradeoffs between variety and cost made by the consumers and the success of cost in this regard (Vodafone, 2011c). The other major development is the Asian Currency Unit as the third major currency reserve and hence the opportunity for economic influence and trade balance in a more suitable manner (Vodafone 2011c). The possibility for the disappearance in the difference between physical identity and virtual identity is another major development. Rise in the urban migration and the consequent rise in the living conditions in urban areas than in other areas can create another major challenge for the success of the company (Vodafone 2011c). The rise in access to information and the consequent improvement in public awareness is another major development which can be a challenge in the success of the company. Another challenge is the reduction in the usage of energy all over the world as a result of the growing environmental concerns. The rise in technology for improving hunger and malnutrition as well as the change in food markets all over the world are other possible challenges. The other challenges include rise in global pandemics and the slow luxury (Vodafone 2011c). The possibility for digital money transfer through mobile phones can be considered as a major technological development in the coming years. The other challenges include zero waste, water wars, flattening world, knowledge commoditization, global tele health and urban poverty (Vodafone 2011c). All these are reported to have created barriers in the overall success of the company in the coming years. Hence these need to be addressed according to the reports of the company. The next section discusses the market research activities of the company and their evaluation, given this marketing background for the company. 4. Marketing Research Activities The marketing high profile campaigns are reported to have justified time, and money spent on it. Hence the marketing research group is reported to have examined the responses of people in different sectors .Based on their responses, the group is reported to decide on the modification of the campaigns. The main aim in this regard is to ask the people about how much they remember the campaigns called recall. In addition to these, several recall programmes on the most favourite posters of Vodafone are also being done frequently. Vodafone’s purchase of small local companies in the markets where the company is likely to enter is another main strategy of the company. The main example includes purchasing the J phone in Japan that is done in different stages. In the preliminary stage, the dual J phone logo and the Beckham image are shown together for its success. In the last stage the J phone logo was removed and entirely the Beckham logo of Vodafone was introduced showing the replacement of local brand by a global brand. 5. Conclusion In this report, overall marketing activities of Vodafone are examined. The main products of the company include web box and two varieties of Vodafone. Moreover, the products include handsets, smart phones, voice and messaging services, and branded handsets. The mission of the company is to become the world leader in telecommunications industry .The vision includes leading the telecommunications industry in response to public concerns like mobile phones, masts and health aimed at free cash flow generation. Based on the principle of a “brand to buy”, the company uses effective marketing as its strategy. As a part of its strategy, the company shows its features as well as products using communication which is effective. The improvement in revenue and profit margins in the company is done by making use of its marketing strategy for more earning from each product. The marketing mix for the company which includes four p’s like product, place, promotion and price are also discussed. The effectiveness of these strategies are evaluated by the company in different ways like consumer research, evaluation of sales performance, evaluation of the number of registered users and service users as well as media evaluation. Based on all these, it has been shown that the company was successful in establishing an alliance with Manchester United. It is shown that the new demands must be accommodated into the marketing strategies of the products by Vodafone. In many nations especially UK, the customers make use of the most technologically advanced mobile technology particularly the youth. Their changing demands are continuously accommodated in the products of Vodafone as shown by the reports. Reports show existing customers more in number than new customers. Hence, the needs of existing customers are more accommodated in the marketing strategies of customers as shown by the reports. The main marketing objectives put forward by the company for achieving its goal are to retain the customers already existing, find new customers, make use of technological advances and developing new products and services. Based on these, the new products and services are updated by the company. Moreover, effective communication is established with the customers to consistently update their services. The information availability about new products is also made available through the customer care services. Many commercial alliances are made with other companies like alliance with Manchester United in UK on January 2000 for improving its brand image. These alliances shave helped improving the global image of Vodafone in the recent years. The effectiveness of these strategies are evaluated by the company in different ways like consumer research, evaluation of sales performance, evaluation of the number of registered users and service users as well as media evaluation. Based on all these, it has been shown that the company was successful in establishing an alliance with Manchester United. The main challenge is the significant rise in the number of mobile subscribers and the need for global connectivity in the coming years. Next challenge includes tradeoffs between variety and cost made by the consumers and the success of cost in this regard. The other major development is the Asian Currency Unit as the third major currency reserve and hence the opportunity for economic influence and trade balance in a more suitable manner The possibility for the disappearance in the difference between physical identity and virtual identity is another major development. The marketing high profile campaigns are reported to have justified time, and money spent on it. Hence the marketing research group is reported to have examined the responses of people in different sectors .Based on their responses, the group is reported to decide on the modification of the campaigns. References Encyclopaedia Britannica (2009): “History and Society: Marketing Audit”(online) ,http://www.britannica.com/EBchecked/topic/365747/marketing-audit, Accessed April 2011. Li, W and LC Xu(2002): “The Impact of Privatization and Competition in the Telecommunications Sector around the World”, Darden Graduate School of Business Administration University of Virginia Working Paper No. 02-13. Li, W and LC Xu(2004): “The Impact of Privatization and Competition in the Telecommunications Sector around the World”, Journal of Law and Economics, vol. XLVII ,P1-39. Vodafone(2011a): “Where We Are”, http://www.vodafone.com/content/index/about/about_us/where.html, Accessed April 12 2011. Vodafone(2011b): “What We Do?”, http://www.vodafone.com/content/index/about/what.html, Accessed April 12 2011. Vodafone(2011c) : “Future Agenda, Sponsored by Vodafone, Publishes Initial Insights”, http://www.vodafone.com/content/index/press/group_press_releases/n2009/futureagenda_insights.html, Accessed April 12 2011. Wallsten S J(2001): “Telecommunications Privatization in Developing Countries: The Real Effects of Exclusivity Periods”, - Paper 99-031, Paper by United Nations World Employment Programme Read More