Marketing Strategy of UKs Leading Provider of Mobile Phones and Broadband - Research Paper Example

O2 Marketing [The of the will appear here] [The of the will appear here] [The of the Table of Contents Title … Pg 2 Introduction … Pg 2 Background … Pg 2 Statement of Problem … Pg 2 Importance of Research … Pg 2 Research Question(s)/ Aims and Objectives … Pg 3 Research Questions … Pg 3 Aims and Objectives … Pg 3 Literature Reviews … Pg 4 Methodology … Pg 6 Project Planning and Resources … Pg 8 Time Frame … Pg 8 Limitations of the Research … Pg 9 Ensuring an Ethical Research … Pg 10 Bibliography … Pg 11 Title: Marketing Strategy of UK’s Leading Provider of Mobile Phones and Broadband Introduction Background The research report focuses on the marketing strategy adopted by O2, which is UK’s leading provider of mobile phones and broadband. The telecommunication market is a widely evolving and expanding market. New products and service enter into the industry and in order to serve the customers better, O2 and other such companies have to keep abreast of the change and evolve their own strategies to cater to the customers. The proposal for this research paper sets the method and pace for conducting the research question being raised in the proposal. The proposal will serve as a guide to construct a good research paper and to understand the limitations that one may face when conducting the research. Statement of the Problems Even though O2 enjoys a leading positions are cell phone and broadband provider, it still needs to update its policies in order to remain ahead of the competition. Due to favourable policies towards the telecommunication sector in UK, competition has grown strong and diverse in the country. This research attempts to explore the current marketing strategy of O2 and find issues with these strategies in order to develop improved strategies for the company. Importance of the Research This research is particularly helpful in creating an understanding for the marketing strategies of O2 and how it managed to develop such a strong customer base and reach. This research will help students of marketing in understanding the practical implications of the theories and concepts that they learned in the course as applied to a real case example. This research would also be helpful for not just students but also business leaders. It would particularly help O2 as it would not just summarize their current marketing direction but also provide solutions for future directions based on the feedback and information provided by current and potential users of the company. This research would also be helpful for the competitors of O2 in order to analyze the competitor landscape and to understand why O2 is progressing as one of the largest telecommunication companies in UK. Research Question(s)/ Aim(s) and Objectives Research Question(s) 1. What is the USP of O2 and how does O2 communicate this to the customers through its marketing? 2. How does O2 integrate the USP to develop a competitive edge over the business? 3. What marketing plans does O2 employ? 4. How O2 can improve its marketing to create an edge over competition? Aim(s) and Objectives The aim of the paper is to understand how O2, the leading UK provider of mobile phones and broadband has achieved its position through its marketing strategy. The idea is to identify the Unique Selling Proposition of O2 and to define the marketing plan of O2 with respect to its communication of the USP through the different marketing channels. The marketing plan of O2 will later be compared and contrasted with other providers of mobile phones and broadband that is perceived as the direct competition for O2. Through this, the research paper aims to analyze and evaluate the effectiveness of the marketing strategy and plan developed by O2. Once the analysis is reviewed, the next and final part would be to develop an improved marketing plan for O2. The research paper will introduce marketing strategies that O2 can implement with respect to the changing competitive landscape and the changing demographics and needs of their target market. Literature Review ‘O2 is a major international brand serving almost 24 million customers and offering roaming services in160 markets’ (Irish Time, 2006). O2 began its operations in 1997 from Ireland and later spread out in UK, Germany and other European countries but its presence in UK is the strongest, given the huge population base of UK and the extra need of telecommunication in the country, because of its corporate and trade background. O2 has a diverse product portfolio that can be loosely categorized in three parts: Voice Services: voice calls, voicemail, conference call etc Data Services: Multimedia messaging, SMS, email etc Internet Services: online shopping, O2 account, broadband etc At this point, the target market for O2 is divided in two categories: personal users and business users. These users are categorized differently since they use the service provided by the company in different manners, differing in amount and timing of usage basically. The main target market for personal users is the young target market that falls between the ages of 15-24. Among this target market, O2 has been able to gain penetration of almost 93%. Other than this group age of target market, O2 has also focused on the mass market through its advertising that does not focus on just one group of market but rather all the people interested in buying cell phones and internet services (Anon., 2011). Since the telecommunication industry in UK is a mature and saturated industry, developing a differentiation strategy is very difficult (Birke and Swann, 2004). Despite this O2 has been able to differentiate from the rest of the industry through its focus on music and music lovers. It holds the O2 Wireless Festival in UK every year (Davis, 2009). O2 has also been able to differentiate on account of their fast service and being the first to introduce many services in the market and thus becoming a pioneer of innovative services. It is due to O2’s focus on the customers that they have partnered with other brands and services at various points in order to improve and facilitate the customer experience (O2, 2011) However due to the rules and regulations regarding telecommunication industry in UK, the telecommunications industry has grown at a very rapid rate. This has resulted in an increased competition for O2 on its broadband and cell phones services and as a result, prices have decreased rapidly. However, the policies introduced have increased the penetration of the telecommunication sector in the market and most consumers and families benefit from both services of O2, which resulted in a rapid rise in the number of subscribers. O2 falls under the five leading network providers in UK after Orange, Vodafone and T-Mobile but before 3 (Plunkett, 2006). O2 has a customer base of 17.8 million customers (Wray, 2007a) and in order to compete with the competition they have to take in account one of the most pressing problems for network providers which is the switching of the network providers. It is on account of switching costs that O2 has been falling behind in the recent years. ‘In the UK, O2 actually lost a net 42,000 pre-pay customers, adding 76,000 higher-paying contract users, giving it a total of 17.785 million British users. Average monthly revenue per user rose to £23.40 from £22.30’ (Wray, 2007b) Literature review for this topic was difficult to compile on account of the changing marketing strategies that O2 had to adopt given the changes in the industry and customer preference. O2, being customer oriented, thus made changes in its marketing strategy occasionally. The research will also focus on how O2 developed its marketing over time to suit the changing demands and how this allowed O2 to maintain its position as the leading provider of cell phones and broadband. For the purpose of the literature review, the data available on Sally Cowdry was the most important as she is the marketing director of O2 and has discussed the marketing strategy of O2 at various points of time. Also O2’s own strategy was important to discuss in the literature review and this was available on O2’s website which is www.o2.co.uk. Methodology For the purpose of conducting this research, the methodology would be based on two parts. The first part is the review of literature and the second part would be developing and conducting a survey that focuses on understanding the impact of the marketing strategy adopted by O2. In every research, literature provides the background for the research while the interviews and actual surveys help in proving and disproving the research questions framed in the beginning of the research proposal. In this case, the literature review would develop the background of the marketing strategy employed by O2 and based on this knowledge, the target market of O2 would be contacted who would answer questions regarding the effectiveness of the marketing strategy and how the marketing department at O2 could improve their strategies based on the feedback of the customers. The literature review for this research would focus on the marketing philosophy of O2. In order to understand the marketing strategy, we need to focus on different aspects of the marketing strategy of O2. The first part would focus on understanding the competition for O2 which includes other service and cell phone providers such as Orange and Vodafone. Next the market segmentation and target market of the company would be discussed in detail. Based on this knowledge, the next part would be to understand the differentiation policy of O2 and the positioning of the brand in the minds of the customers. Literature studied for this section would be taken from a diverse range of books and journals so as to improve our understanding of the issue. The literature available from the company website would also be discussed. Once the review of the literature is complete, the next step would be to analyze the literature. This would be done by compiling the data first and then finding a complete marketing strategy of O2 and how O2 manages to serves its large customer base. Since research is never perfect, one can minimize or even remove the biasness by gathering a diverse amount of literature. For this reason a variety of literature and studied and through our understanding and actual research, we can move towards a valid conclusion (Juliet, 2002). The third part would be to conduct the survey. This is one of the most difficult tasks for a variety of reason. Firstly, it is difficult to obtain the right sample population for the survey. The right sample population in this case would be mainly the primary target market of the brand. This includes not just young teenagers but O2 recently expanded their target market to include even families. Secondly, it would be difficult to obtain unbiased data from the sample population used for the survey. Since the population would be selected randomly, there would be chances that certain people would be too biased towards the company, either positively or negatively. Also it is important to understand at this point that it is necessary to inform the sample population of the use of the information. This is important when conducting an ethical research paper. The sample population may not be made aware of the exact nature of the survey in order to prevent increased biasness but they should be aware that their answers would be used for the purpose of developing a research report on the marketing strategy of O2. The sample population for this research paper will amount to more than 500 people, including the primary and secondary target market of the company. It is not necessary that the sample population should be using O2 but it is important that the sample population understand what O2 is and who its competitors are. Due to time and financial constraints, the sample population would be limited to London. Even though O2 operates in many countries including UK, Germany and Ireland, it would not be possible to study these countries for this research due to limitations of reach in these countries. The survey would be conducted in popular public places such as mall, shopping centres, theatres and other such areas where it would easy to reach a large amount of sample population in one area so as to reduce the time and money spent on taking the survey. Since the primary target market of the company are young teenagers and the youth, it would be more practical to conduct in survey in such areas since this target market are usually found in such places and these places do not prohibit approaching people in order to take surveys. When taking the survey, it would be important to inform the sample population of the need of the survey to ensure that the final research is ethical. Also before taking the survey, the moderator would explain the background of the survey to a limited extent and try to understand the knowledge of the sample population in order to realize whether the particular person would be providing important information or not. Project Planning and Resources Time Frame and to do List Research Proposal 26 November, 2011 Literature Review 5 December, 2011 Compile and Analyze Information 8 December, 2011 Develop Survey 10 December, 2011 Conduct Survey 15 January, 2012 Compile and analyze information 20 January, 2012 Final Report 25 January, 2012 Limitations of the Research One limitation for the research report is to gather information of the topic from credible resources. At this point, research available on this subject is limited since this is a current topic and marketing strategies are updated from time to time in order to better serve the customers and to gain an edge over the competition. However, in case of O2, literature is available since it is leading Telecommunications Company; and the marketing director Sally Cowdry is socially active in terms of providing interviews and participating in discussions. Another limitation is the issue of selecting the right sample population. Most people are not willing to readily provide surveys without adequate compensation and given the financial constraints on this research, it would be difficult to easily gain access to the right population. Also since the population will be selected randomly from malls and other public areas, it would be difficult to understand their knowledge of the telecommunication sector. Adequate knowledge in this area is important so that the results of the survey are valid and strong. The sample population may also be biased towards certain companies and this may impact the accuracy of the results. However, these limitations can be minimized by the help of two actions. The first is to conduct a mini-interview with the sample population to provide a brief outline of the need for the survey and also to gain knowledge of the sample population regarding the telecommunication industry. Another method is by taking a large sample population which would help in removing bias to a great extent and would also help in gaining conclusive results of the survey. Ensuring an Ethical Research When conducting any research report, it is essential to ensure that the report is ethical so that the research report does not lose its validity over the period of time. For the purpose of this research, two steps have to taken to ensure that the report is ethical. Firstly, it is important that the sources used in formulating the research report are properly cited. It is unethical and also illegal to copy information from another writer and claim is as one’s one. This is also known as plagiarism. Another factor in ensuring the report as ethical is to inform the sample population about the purpose of the interview. The sample population should be aware that survey will be used to formulate a research paper, even if the actual questions that the survey is trying exploring are not explained to the sample population. Also it is important that accurate survey information is related in the research paper without adding or deleting any pertinent information. Bibliography Anon. (2011) Keeping ahead of the Joneses, Marketing Magazine, pp. 20-21 Beall, A. E. (2010) Strategic Market Research: A Guide to Conducting Research that drives businesses, Indiana: iUniverse Birke, D. and Swann, G.M.P. (2004): ”Network effects in mobile telecommunications: An empirical analysis”, unpublished. Davis, M. (2009) The Fundamentals of Branding, London: AVA Publishing Juliet, C. (2002) Conducting Research, New York: Goodwill Trading Co. Inc Irish Times (2006) O2: Marketing iMode, 9 ed., Business 2000, Retrieved from www.business2000.ie NewsCentre O2, (2011) O2 Takes on the Deals Market with Priority Moments, Retrieved from http://news.o2.co.uk/Home-Page-Body-Announcement/O2-takes-on-the-deals-market-with-Priority-Moments-31d.aspx Plunkett, J. W. (2006) Plunketts Telecommunications Industry Almanac 2007: Telecommunications Industry Market Research, Statistics, Trends and Leading Companies, Texas: Plunkett Research, Ltd. Wray, R. (2007a) O2 in a mobile internet push, The Guardian, Retrieved from http://www.guardian.co.uk/business/2007/oct/04/11?INTCMP=SRCH Wray, R. (2007b) O2 suffers in a crowded field, The Guardian, Retrieved from http://www.guardian.co.uk/business/2007/jul/31/news.technology?INTCMP=SRCH Read More