Marketing Planning at Vodafone Corporation - Essay Example

? of the of the Number Marketing Planning: Vodafone Background Marketing Planning is dubbed as the process used by the marketers to analyse the market situation and develop strategies that fits with the environment. Eminent scholars such as Hatton (13) defined marketing planning as the method of assessing the existing marketplaces as well as new market places to determine how a business can optimally compete and strengthen their market position. The marketing planning process usually results into marketing strategies which are then used to increase the overall sales of the business. A marketing plan encompasses market specific, product specific and company-wide plans and highlights objectives of these respective areas and simultaneously mentions the plan about how to fulfil and achieve these objectives within a given time frame. In the recent past, the notion of marketing planning has changed from various perspectives (Hatton 12). Companies nowadays put in strong efforts to identify the problems of market and formulate a strategy only on that basis. In the similar way, the technique of promotion has undergone drastic changes. There have been evident changes in the strategies of selling as well. Considering the scenario of the market, aggressive and push selling are being are being actively pursued by the companies. P&G created an artificial demand in the market for their product Surf Excel, which clearly exemplifies an innovative marketing technique. Another evident change is the increased stress on the consumer needs and ‘go to market’ approach. In the meantime, future planning has been also considered important by the marketers. However, the ability of an organization to predict its future marketing activity depends upon the level of competence. In addition, their ability to adapt to a particular situation also acts as a decisive factor. This is because the future is uncertain and it is impossible to predict the situation of market 2-3 years down the line. The marketing planning of an organization helps in identifying the most appropriate direction a company should move, while operating in the market. Furthermore, a well defined marketing plan allows a firm to accurately define the tasks and responsibilities and also provide better insights to the market and economy. Hence, it is apparent that with a better marketing plan, a company will be able to save resources as well as time. Therefore it can be affirmed that marketing planning is essential in the strategic planning process of a firm (McDonald 1-10). This study aims to create a marketing plan for a product/company by analysing the market situation of the chosen firm. The company chosen in this aspect is Vodafone UK and the product for which the marketing plan will be developed is their telecommunication services. Therefore, a brief overview of the chosen company is presented below. Vodafone: A Brief Overview Vodafone Group plc, commonly known as Vodafone is a telecommunication company based in UK. The company offers telecommunication services and other related services to both end customers and business customers. The company initiated its business venture in the year 1991 in the city of Newbury, Berkshire, United Kingdom. However, at present the company is headquartered in London, UK. In terms of the overall revenue as well as the number of subscribers, the company is presently ranked in the second position. The company is only behind China Mobile, which is the largest telecommunication company of the world. The company presently operates in 30 countries of the world. In addition, it also carries out operation in 40 other countries with partner networks. The company employs around 86,400 people across the globe. One of the positive aspects of the company is that despite being a telecommunication firm, the company has a diversified product line. For example, Vodafone offers telecommunication services, internet services, DTH services and also sells different enterprise system solutions. Additionally, the company has entered into a treaty with a number of mobile manufacturing companies for the purpose of selling mobile phones under the brand name of Vodafone. Exclusive retail distribution and exclusive store selling are the two most fundamental operation modes of the company. Recently the company has also started online selling business where the company sells the recharge cards and post paid bill payment via internet. The major competitors of the company are France Telecom, Telefonica Europe plc, Xon Mobile and Dutch Telecom among others. In the financial year ended 2012, the net revenue of the company was ?46.417 billion and the overall profitability was ?6.957 billion. The total asset of the company was estimated at ?139.57 billion (“About us”). The financial figures clearly display the strong market position of the company. Sustainability programs and CSR initiatives also needs special mention because of their pro-activeness. The section below will now formulate the marketing plan for Vodafone’s telecommunication business in the context of UK market. The Marketing Plan Current Situation In order to understand the current situation of telecommunication business environment in UK, an assessment of the market needs to be carried out. The assessment of a market is carried out through various processes. Among the numbers of techniques, this study will concentrate on PEST analysis. Hence, political, economical, social and technological issues will be evaluated. Although, the progress of a firm largely depends upon the internal environment and factors of a firm such as internal operational culture of a business firm, associations between the top managers and employees at different hierarchical levels, still these functions are greatly influenced by the scenario of the external environment. The external environment audit is presented below: - Political Factor: - Political factors always have a major impact on the telecom industry. The network license and spectrum is tightly controlled by the regulatory authorities. A company also need consent letter from the government regarding the development of infrastructure. Moreover, a company also needs to abide by the rules and regulation of the country pertaining to the health issues. In UK, similar kinds of rules and regulations have been established and it changes with time. Thus the company needs to remain careful about it. Due to strong market reputation, the government of UK is supportive towards Vodafone and the government is also stable enough to provide continued assistance for a long period of time. Hence, the political factor is favourable for the company. Economical Factor: - The economic factors encompass the economical situation of the country and the extent to which it impacts the industry. UK is considered to have one of the largest economies of the world. Presently, the total GDP of the country is US$2.43 Trillion and the per capita income is US$ 39,038 (“Europe: United Kingdom.”). The figures above clearly reveal a strong financial position of the country. This gives Vodafone an opportunity to target each group of customers and maintain premium pricing. However, in order to pursue premium pricing strategy, the company needs to have strong justifications for the same. Social Factor: - The country has a population of 63,395,574 as of July 2013. Around 82% of the population falls between the age group of above 14 years. Therefore, it is obvious that the target market for the country will be huge. Another positive fact is that around 80% of the population are urbanized reflecting colossal growth and development of the country (“Europe: United Kingdom.”). Hence, from the above factors it is evident that the society offers favourable business situation to the company. Technological Factor: - A good technological infrastructure is one of the key requirements of the telecommunication industry. Regarding this context, UK offers strong technological support to the companies and the government also encourage companies to conduct research and development activities. The technological development of the country has allowed the firm to offer additional services and faster data access. As of 2011, the country had 33.23 recorded telephone users and a whooping 81.612 million mobile subscribers. Moreover, the country is 7th largest internet user of the world. Being a telecommunication service company, transportation infrastructure is also vital as a number of tasks such as product distribution, face to face client interaction etc. Presently the country encompasses 460 airports, 16,454 km railways and 394,428 km, which clearly signify that the country has all required infrastructure for a business operation (“Europe: United Kingdom.”). Therefore, in the context of technology, it can be said that Vodafone is benefitting from the technological infrastructure of the country. Competition Analysis Competition always has a major role to play in shaping the industry. Some of the major threats to the company are T-mobile, Orange, Virgin Mobile, O2, and 3-Mobile among others. (Source: Westaway, “Vodafone 4G vs EE 4G vs O2 4G vs Three 4G: Price and data compared”) According to the Vittorio Colao, Chief Executive of Vodafone, “The operators with bigger shoulders will follow us, while the smaller ones or the ones who are more financially constrained may not be able to” (Yahoo Finance. “Vodafone sees large competitor’s also increasing capex”). Thus from the statement it is obvious that Vodafone, despite being the market leader is falling a match up to the customer expectations. Recently, wireless internet service providing companies such as Vodafone and T-mobile has launched 4G services, but still wired internet service providers are offering equivalent speed of 5G at a low cost. Although, the analysis of the external environmental factors makes it evident that most of the factors are favourable for Vodafone in UK, but strict competition is a cause of concern. The analysis has identified several loopholes which might endanger the operation of the firm in UK (Strauss 2-11). One of the key issues identified in this respect is the internet services of the firm. It has been observed that a majority of the consumers is shifting to equivalent 4G services, which the company is yet to launch in the market. This is also a reason for which the company is losing market share and revenue. The strategy to overcome the same is described in the following sections. Where do we want to be? The objective of the company is to increase its market share in the UK market. In addition, the company also aims at increasing the number of service offerings. In order to fulfil this objective, the company needs to develop a new service i.e. an advance version of the 4G services. Majority of the wired connection service providers are offering equal speed of 4G and that too at a low price. In order to compete with them effective and gain an edge over the competitors it is necessary to launch a new product or service. Scholars have stated that in today’s intensely competitive market developing new processes, products or services is one of the most effectual ways to achieve competitive excellence in the market place. Moreover, echoing the same another set of authors have argued that competing on quality and price is no longer a smart idea for business ventures to offer value to the consumers. Hence, the development of a new service in the form of advanced 4G (4th generation of network) will be a great idea. The advanced 4G services will have the capability of transferring data at a speed of around 10 GBPs. The advanced version is aimed at lowering the resource consumption and enhancement of the transfer rate. To compete efficiently with the wired connections, Vodafone will need to have pertinent resources as well products. In addition, the pricing also needs to be considered before launching in the market. This is because telecom customers are highly price sensitive and depends upon their level of disposable income. How are we going to get there? This section will recommend the strategies of distribution, pricing and promotion about the new service or product to be launched by Vodafone. : Pricing Strategy: - The usual charge of 4G services is around ?30. Compactors are offering at a much low cost and with greater facilities. (Source: Westaway, “Vodafone 4G vs EE 4G vs O2 4G vs Three 4G: Price and data compared”) (Source: Westaway, “Vodafone 4G vs EE 4G vs O2 4G vs Three 4G: Price and data compared”) Hence, the company is strongly recommended to make modifications in the pricing. An ideal pricing strategy can be as follows: - Voice Text Data (4G Advanced) Pay Unlimited Unlimited 1.5 GB ?20 Unlimited Unlimited 6 GB ?25 Unlimited Unlimited 10 GB ?30 Place strategy: - The place strategy will remain unchanged except addition of few more techniques. Apart from intensive distribution, the company will also consider kiosk selling and business to business calling. This will increase the sales opportunities and is a way to remain in touch with the target audience. Promotion strategy: - The new offerings will be promoted in the same manner as the earlier promotion strategy. However, to make the target customers more aware the company may use celebrity endorsement and social media marketing. Apart from that, traditional modes such broadcasting media, print media will be a feasible option. Implementation There are various barriers to marketing planning. For example, the inter-organizational cultural difference, inability of the employees to execute the plan. Apart from that poor leadership, communication barriers and lack of creativity becomes visible (Harleigh, “Six Barriers to Effective Planning”). Although there are several barriers associated with marketing planning, these barriers can also be methodically removed. For example, the company must communicate the intended strategy properly to the employees and should also try to isolate marketing plans from the other tactics or operation. Now in order to implement the advanced 4G services, the company is recommended the following: - 1. Development of the Service through intensive research and development work. 2. Depending on the result of pilot study the company will plan the areas where the service will be launched. 3. Launching the services and keeping a close monitoring at the performance of the services. In addition, supporting the launch with promotional activities will help in boosting the sales and increase visibility. Appendices Ethical Issues The notion of ethics has received a substantial amount of information in the field of in the field of marketing and marketing planning. A number of scholars have argued that a company must embrace ethical marketing policies in the context of advertising, pricing, research and development work and also competitive strategies. Further, it is also obvious that ethical marketing efforts and decision should meet the need of business partners, suppliers and also the customers. Recent trends have pointed to the fact that consumers prefer companies that portrays ethical image and hence it can be concluded that ethics itself acts as a selling point for the companies. For example, a company should not exaggerate about the product quality or make false claims about the benefits of the product. Hence, Vodafone is strongly recommended to remain ethical in the marketplace as it will not do any harm to the company, but can help in achieving a set of loyal customers. Possible Problems There are several issues that marketers confront with while implementing marketing strategies. Some of the common one in the case of Vodafone relating to implementation of advanced 4G services is lack of resources and high cost. In addition, there is also a concern of the acceptance of the service in the market place. Hence, to get rid of these issues, Vodafone is recommended the following: - The company must plan and chalk out the requirement of resources. The company should then accumulate the required resources and funds and then only carryout the required operation. This would mitigate the risk to a great extent. The company must carry out a small pilot study before initiating large scale operation. This will also reduce chances of product failure. Works Cited “About Us.” Vodafone. Vodafone Group., 2013. Web. 15 Oct. 2013. “Europe: United Kingdom.” CIA. The World Factbook, 2013. Web. 15 Oct. 2013. Harleigh, Sharon. “Six Barriers to Effective Planning.” Hearst Communications, Inc., 2013. Web. 15 Oct. 2013. Hatton, Angela. The Definitive Guide to Marketing Planning. London: FT/Prentice Hall, 2000. Print. McDonald, Malcom. Marketing Plans: How to Prepare Them, How to Use Them. Oxford: Butterworth Heinemann, 2002. Print. Strauss, Ralf. Marketing Planning by Design: Systematic Planning for Successful Marketing Strategy. 2010. New Jersey: John Wiley & Sons. Print. Westaway, Luke. “Vodafone 4G vs EE 4G vs O2 4G vs Three 4G: Price and data compared.” CBS Interactive Limited, 2013. Web. 15 Oct. 2013. Yahoo Finance. “Vodafone sees large competitors also increasing capex.” Yahoo Finance, 2013. Web. 15 Oct. 2013. Read More