Marketing Mix Strategy in Developing Country - Essay Example

Marketing Mix Strategy in Developing Country Table of Contents Page No 1.0 Introduction 3 2.0 Determinants of Marketing Mix Strategy 3 2.1. Differing Customer Needs 3 2.2 Competitive Objectives and Strategies 4 2.3 Logistics Management 4 2.4 Promotional Object 4 2.5 Labor Cost 5 3.0 Comparison of Selected Mix Strategy with the UK 6 3.1 Differing Customer Needs 6 3.2 Competitive Objectives and Strategies 6 3.3 Logistics Management 7 3.4 Promotional Object 7 3.5. Labor Cost 8 3.6 Likelihood of Automation 8 3.7 Aesthetics 8 4.0 Factors for Future Marketing Strategy 9 4.1 Channels 9 4.2 Communication 9 4.3 Consumption 9 4.4 Choices 10 4.5 Commitment 10 5.0. Conclusion 10 References 12 1.0 Introduction As discussed in assignment 1, the company can penetrate the market of Afghanistan, applying either of the four entry-strategies, i.e. licensing, joint venture, acquisition and franchising. Besides, in assignment 1, justification of the entry mode has also been discussed, which has a clear implication on the marketing mix strategies (explained in terms of price, product, place and promotion) to be applied by the company in Afghanistan as compared to its home country operations in the UK. Correspondingly, this paper intends to discuss about the comparison of the marketing mix strategies been undertaken in Afghanistan with Vodafone UK, focusing on the element of promotion. 2.0 Determinants of Marketing Mix Strategy Marketing mix strategy determinants can be identified in relation to the four dimensions of price, place, promotion and product. In this section, emphasis will be laid on factors or determinants that impose considerable influences on the success potentials of Vodafone’s marketing strategies when penetrating Afghanistan. While these strategies need to be linked with the market trends and the consumer buying behaviour, there are many factors those might impose considerable effects on organisational efficiency to persuade target customers and successfully accomplish their marketing goals. It is to be noted in this regard that marketing mix strategies developed by organisation (Smith & Taylor, 2004). 2.1. Differing Customer Needs When deciding upon strategies related to product in Afghanistan, customer needs shall play a major role as a key determinant to its success. As the effectiveness of products offered depend on its efficiency to suffice consumer needs, which again influences on the factors associated with consumer behaviour and correspondingly, to customer satisfaction and organisational success, it becomes crucial for any company to pay due attention to the same when penetrating a foreign country. It is worth mentioning in this context that each target market deciphers a considerable difference from other market segments in terms of their product needs, which makes it more crucial for Vodafone to understand the customer demands in Afghanistan irrespective of its experiences in the home country (Avlonitis & Gounaris, 1997). Notably, as Afghanistan is currently in a developing state, major development and change have been witnessed within the consumer needs in effect of globalisation. Subsequently, the younger generation and the industrial sectors within the country have been observed as getting highly influenced by the western culture, owing to which, Vodafone can channelize its services in engaging the industrial sector and the younger generation in a productive manner keeping parity with the prevailing consumer behaviour trend there (CIA World Fact book, 2013). Notably, the target consumers’ need to be socially active in online sites and through telecommunication networks has also increased in the past few years in Afghanistan (Forbes, 2013). 2.2 Competitive Objectives and Strategies Price of goods in an economy is often subjected to various types of governmental interventions, in order to preserve a healthy competitive environment in the industry context, wherein it is important to have an apparent competitive objective for Vodafone when entering Afghanistan. As price is deemed directly proportional to organisational profitability and effectiveness, it has a crucial role to play when confirming sustainable return on investment made by Vodafone in Afghanistan and likewise, ensure better competitive foothold in the host country (Lovelock & Wirtz, 2010). It is in this context that competitive objectives of the company, in alignment with governmental regulations, become crucial for Vodafone when deciding its pricing strategy for the telecom services. In the post-Taliban era, the country politicians have engaged in various activities to bring about development in various sectors of the country, wherein pricing activities performed by the foreign investors have been a major point of debate, perhaps owing to the conservative approach of the society when considering competitive developments (Katzman, 2014). 2.3 Logistics Management Successful promotion of any product is greatly impacted by the logistics management strategies adopted by the targeted market, which tends to determine the convenience factors for consumers, further influencing their likeness towards the offered product and/or service (Karakaya & et. al., 2011). Certainly, society in Afghanistan is much different from any other society of the world, which is conservative in nature and pursues its unique set of social principles, which promotes customers’ bargaining power on the basis of their conveniences (CIA World Fact book, 2013; Solomon & et. al., 2006). It is in this context that Vodafone might have to adapt to the persisting logistic strategies practiced by the existing telecom companies in Afghanistan and develop those strategies further to maximise customer convenience and add better value to their demands. Thus, logistics used by the company also plays a major role as a determinant for its successful placing strategies. 2.4 Promotional Object Each society has its preferences for selected types of promotional channels or promotional objects, which is also unignorable in the Afghan market. Effectiveness of promotional strategies therefore can be largely dependent on the elements blended to generate awareness and gain the loyalty of customers in the selected market, by Vodafone (Wilson & Wong, 2003). For instance, being a conservative society, gaining trust of the customer might become challenging for Vodafone as a foreign brand in the market. Contextually, the company will have to understand the influence and significance of each type of promotional mix elements in the Afghan society prior to invest in promotional strategies to ensure it utmost effectiveness. 2.5 Labor Cost Afghanistan, being on a developing trend with growing prospects for successful international trade relations, it requires advance techniques to maintain parity with other developed countries and hence, has been grooming its national labour market, further giving rise to its labour costs (Tanner & Raymond, 2013). It is worth mentioning in this context that labour costs in the host country overall play a significant role as determinant of successful people oriented strategies having a direct implication on the return prospects of the investments made by Vodafone in Afghanistan along with its pricing strategies for the service offered. This particular factor may also influence the company’ sustainability stance in the Afghan market, labour being one of its prominent stakeholders there, making it more crucial for the company to decide upon an all-inclusive people oriented strategy direction (Lovelock & Wirtz, 2010). 2.6 Likelihood of Automation Undoubtedly, technology based differentiation will be a key determinant in the efficiency of Vodafone to process its services as per the needs and demands of the target consumer segments. It is worth mentioning in this section that with the rising awareness amid telecom customers in the host country, their demand for a continually developing automation system has also increased that is expected to facilitate innovation and a consistent upgradation of the telecom service being offered (Islamic Republic of Afghanistan, 2011). This particular factor can certainly prove to be a major determinant of processing strategies to be used by Vodafone when penetrating Afghanistan. 2.7 Aesthetics Consumers’ tastes and preferences, commonly attributed as aesthetics, signify their purchase behaviour. Thus, it can be treated as a determinant of Vodafone’s effectiveness, when focusing on the physical evidences of its services. As mentioned in Lovelock & Wirtz (2010), better or adequate emphasis to aesthetics can assist a foreign company to serve its target consumer groups in the host nation, as it will facilitate better linkage between the consumers’ purchase behaviour traits and the service features offered by Vodafone to maintain a degree of sustainability in its foreign country operations in Afghanistan. From a critical point of view, the key to sustenance in Afghanistan for Vodafone will be its product/service features, which will further influence the other determinants of the marketing mix strategies applied by the company in its host country. Correspondingly, product strategies and its key determinants will affect Vodafone’s operations in Afghanistan essentializing its appropriate standardisation and adaptation therein. 3.0 Comparison of Selected Mix Strategy with the UK As a matter of fact, no two country dimensions are alike when it comes to the key determinants of a company’s product strategies. Correspondingly, to resent its product strategies in the target host country, companies need to standardise its mechanism and adapt new techniques in consolidating its marketing mix initiatives (Goi, 2009). In this section, similarities and dissimilarities between the product strategy determinant (i.e. consumer needs for telecom product/service), as applicable in the context of Vodafone, will be studied. In precise, customer needs in the UK telecom industry and Afghan telecom industry will be compared in this section. 3.1 Differing Customer Needs In the UK, consumers enjoy advance lifestyle, upgraded with respect to the technology and services, wherein the telecommunication companies are required to pay utmost attention towards transparency and sustainability issue when promoting their products/services to the British customers, which signify the needs of consumers in the UK telecom industry (OECD, n.d.). While in the Afghan telecommunication market, consumers possess limited but rapidly intensifying knowledge of telecommunication products and thus, changes in consumer needs are more apparent as compared to a much stable market of the UK (Palau, 2011). In this context, focus must be delivered by Vodafone to analyse the industry lifecycle phase currently observable in the Afghan market to gain a better understanding to the near future consumer need changes and likewise, determine its innovative product strategies. 3.2 Competitive Objectives and Strategies In the UK, political impact upon the competitive objectives of the business can be observed as limited to a certain extent owing to a well-structured and defined competitive forces currently functioning within the nation. Industry life cycle phase of the maturity period can be related with the UK telecom industry facets when considering its regulatory policies emphasising competitive objectives of any particular organisation. On the other hand, the telecom industry in Afghanistan is experiencing a growth stage, which increases fluctuation and regulatory risks for Vodafone as compared to its home country. In addition, the UK market is observed to have a defined set of regulations to control competitive pricing strategies practiced by different telecommunication companies (Government of Canada, 2010). Nevertheless, in the Afghan society, as the competitive structure of the industry remains undefined and prone to frequent regulatory changes, Vodafone might have to face difficulties if it attempts to practice the same strategies as similar to its home country (Zita, 2004). 3.3 Logistics Management In the UK economy, logistics have witnessed an accelerated growth and development in comparison to the Afghan society, which has further increased potentials for almost a uniform distribution of service quality to the customers in the British markets. Considering the income opportunities and bargaining power of the customers in the UK society, logistics system prevailing within the home country of Vodafone can be observed to offer limited bargaining power to the customers when making their purchase decisions (OECD, n.d.). On the contrary, logistics system in the Afghan society is yet observed as developing lacking a defined en-route and offering greater bargaining power to customers, having strong influences on competitive forces. In addition, spending intentions of the average consumers in Afghanistan is also observed to be low in comparison with the UK market, which intensifies the conditions to a substantial extent (Hamdard, 2012). 3.4 Promotional Object According to Hofstede’s cultural dimensions, UK society can be observed as highly individualistic in nature, with low degree of uncertainty avoidance and high degree of indulgence (The Hofstede Centre, n.d.). These features support a more independent form of purchase decision making amid the consumers in the telecommunication industry imposing significant influence on the selection of promotional objectives by Vodafone in its home country. Correspondingly, Vodafone and other telecommunication companies focus on utilising the common tactics such as aggressive advertising, sales promotion and direct selling (Vodafone Group Plc, 2012). On the contrary, the Afghan society is observed to be much inclined towards a collectivism approach to decision making with high degree of uncertainty avoidance (Rarick & et. al., 2013). It is in this context that Vodafone will have to emphasise building direct interaction with the customers, wherein promotional tactics of word-of-mouth, personal selling and greater significance to maintaining public relation shall be highly beneficial. 3.5. Labor Cost Although labour cost in Afghanistan has been augmenting recently, it is yet persisting at a comparatively lower degree in the country as compared with the UK. To be noted in this context, labour costs in the UK are quite flexible, especially in the case of unskilled or semi-skilled labour forces. While in the Afghan society, a comparatively rigid and high labour cost might be borne by Vodafone being a foreign investor in the market. In other words, labour costs in the UK and the Afghan society differ owing to flexibility ratios. This might further increase standardisation need for Vodafone when penetrating the telecom industry in Afghanistan (Pessoa & Reenen, 2013; Opel, 2005). 3.6 Likelihood of Automation UK is determined as a technologically advanced country, with consumers having substantial knowledge about the technology features demanding for continuous enhancement in technology automation. In the similar context, the country is also observed to be rich in its infrastructure to support better automation of information from the company to the consumers in the UK telecommunication industry, which has undoubtedly assisted Vodafone to gain success in its home country through effective maintenance of its process (Vodafone Group Plc, 2012). Whereas, in Afghanistan, Vodafone will have to apply a more aggressive approach to technology automation development owing to the infrastructural limitations of the nation as compared to the UK market and the limited but rapidly intensifying know-how of the customers regarding the services being offered (Solomon & et. al., 2006). 3.7 Aesthetics Aesthetics vary largely in the UK and the Afghan markets, for any service organisation such as Vodafone. The differences become more prominent in the case of a British company penetrating Afghanistan for venture. Aesthetics in the Afghanistan society has been much influenced by the regulatory frameworks, governmental initiatives and the recent war damages witnessed by the nationals; while in the UK, the development in aesthetics of the market has been smoother and more dependable (Telecom Asia, 2002). This also increases changes of volatility in the services demand likely to be faced by Vodafone when penetrating the Afghan market, essentializing its effective standardisation. 4.0 Factors for Future Marketing Strategy 4.1 Channels The distribution channels will be important factors to be considered by Vodafone in promoting the product in the Afghan market. As suggested above, Vodafone can apply for tie-ups with the advertising agencies operating locally in Afghanistan that would assist the company to gain better understanding of the socio-economic dynamics of the society, especially its logistics and consumer needs, and offer it with a certain degree of flexibility to overcome any kind of unexpected regulatory intervention. Besides, the company can involve the sub-political parties, college institutes and retail agents among others as intermediaries to campaign its services in Afghanistan to promote its products applying the word of mouth tactics (Rudelius, 2000). 4.2 Communication In fact, effective communication process ensures better promotion of the benefits associated with any products. Based on this notion, Vodafone can adapt the strategy of direct selling and public promotion through newspaper media and television as well as radio channels. This will assist the company in gaining cost effectiveness in case of communicating about its services and broaden its reach to the larger volume of targeted population in Afghanistan emphasising the aesthetics as prevailing in the host country. Notably, when promoting its product in Afghanistan, Vodafone should pay utmost significance to maintaining simplicity and stressing upon the usability of its offered features to avoid any misunderstanding with the targeted customers and ensure positive response from them, based on a two-way communication process (Ferrell & Hartline, 2012). 4.3 Consumption In Afghanistan, the economy is expected to continue developing in its international trade relations in the future, which shall make the society more open towards new services and benefits. While this can be a beneficial factor for Vodafone when operating in Afghanistan, the society is also quite likely to endure higher consumption power. In order to utilise their consumption power with augmenting openness towards adapting changes, Vodafone can opt for bringing latest techniques and services into the market, which will not only assist the company to differentiate itself from the existing rivals but also help persuading its product through the stated promotional strategies facing limited obstacles (Ferrell & Hartline, 2012). Nevertheless, the company should be focused on pricing its services with due emphasis to the labour cost to be borne when operating in the Afghan market. It is in this context that the company should focus on adding value to both its customers and labours, constituting its overall people dimension in its marketing mix strategies, when functioning in its host country. 4.4 Choices In the case of Afghanistan, the choices are limited with regards to the telecommunications services depending on the physical evidence of the services, i.e. aesthetics as a key determinant. Correspondingly, Vodafone can provide the market with added services and better opportunities to match the global pace. As currently, the market possess limited but tailored choices of telecommunication services, an international standard service offered by Vodafone in the near future shall aid the company with enhanced opportunity to persuade the customers targeted in the market. Notably, as majority of telecommunication industry consumers in Afghanistan tend to get attracted through the usability of the product being purchased, convenience features should be highlighted in its future promotion strategies to attract consumer choices in a favourable manner highlighting its prospects in the dimension of processes through technology automation (Rogers, 2001). 4.5 Commitment Commitment is very important in case of holding the interest of the consumers for any organisation, which should form the base for the promotional strategies suggested to Vodafone in Afghanistan, i.e. building tie-ups with the local advertising agencies. Vodafone must endure this promotion strategy to maintain its commitment for the customers giving the same considerable importance when determining its competitive objectives. As the local tie-ups are likely to possess a degree of influence on the socio-economic and psychological factors determining the purchase behaviour of customers in Afghanistan market, it shall be helpful for the company to gain the trust and expectations of the customers within a short-run period and likewise, ensure competitive advantages over others (Rogers, 2001). 5.0. Conclusion Undoubtedly, promotion will be a major concern for Vodafone when operating in Afghanistan concerning the vast cultural differences persisting between its home country and its intended host nation. As the element of promotion in marketing-mix strategies play a vital role in introducing a new product in the target market and further increasing awareness and demand for the same in the market, it will be crucial for Vodafone to emphasise effective promotional strategies with the objective to make the market penetration plan a success. 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