Vodafone in India - Research Paper Example

Vodafone in India Introduction The telecom landscape in India is one of the sectors that are growing at the fastest rate. The country has one of the largest population demographics in the world and thus provides a huge market for the telecom companies. The competitors in this sector compete fiercely with each other to capture the largest market share. The Vodafone as a company is one of the largest players in this market and is second in terms of subscriber base. The fact that Vodafone has the second largest customer base in the country is a proof in itself of the success story of the marketing of the company. Other factors that tells about the success story of the marketing is the wide brand recognition that the company enjoys and the wide recognition of the advertisements of the company which enjoys almost cult status (TRAI 2013). The following table shows the customer base of Vodafone in two consecutive years as compared to other companies. Figure 1subsccriber base of telecom majors in 2012 and 20131 Figure 2 revenue of Vodafone as compared to Airtel and Idea and EBITDA of the company over the years Figure 3 Change in Business of Vodafone and Business snapshot of the company in 2014 Key factors leading to marketing success Environment analysis The political situation in India is democratic and stable which means that the companies can work in India and perform their day to day business activities with ease (Bowhill 2008). Recently a single party has own majority in the elections considered in the country which is a boon for Vodafone as company as policy decisions are likely to be taken with ease which will help the company. For companies like Vodafone this presents a huge opportunity and a wide market that it can explore in order to proliferate mobile subscriber base for its business. People in India are family loving and family oriented (Neild and Carol 2008). To take advantage of the situation Vodafone has introduced lower call rates to help stay connected with family members at low cost. Vodafone has been part of these technological changes and introduced advanced technologies in their operation processes. Considering Environmental factors Vodafone markets itself as one which takes care of the environment as this plays as a good sentimental advantage and helps the company in long run. There has been recent turmoil that has been witnessed in the telecom sector in India (International Business Publications 2013). The turmoil has been witnessed in the spectrum allocation and 2G license. Vodafone as a major telecom company abides by the rules and regulations set by the Supreme Court avoiding any disputes that may affect the brand image. Buying behavior Type of purchase decision Vodafone has researched on the Indian market and came up with plans to cater the needs of the Indian consumers. They had also announced different plans for different regions to consider the geographical aspects of the country as well. The company launched marketing campaigns in the villages where it is affectionately called ‘lal dukan’ by the villagers. The company introduced special internet packs for the villages and it has led to wide brand recognition for the company in the villages. The company has been trying to convert the pay per use customers into data pack users. Steps in buying process Need recognition The need to purchase a new connection arises when people feel the need to communicate (Reynolds and Jerry 2001). Information search Once the need to purchase a new connection is recognized the customers search the alternatives. Search mostly involves asking the opinion of family members or friends. Evaluation of alternatives The potential customers evaluate the various alternatives that exist in the market based on the facilities that they give in order to decide about the connection that they think of purchasing. The decisions of different family members play an important role in deciding on the particular alternative. Purchase decision After performing a careful evaluation of the alternatives a purchase decision is made to purchase one connection (Govindarajan 2007). Post purchase behavior Based on feedback of previous purchase, the customer will think of again making the purchase for second time if it is required or won’t go on purchase (Talloo 2007). Cues customers respond to The cues are providing the customers with a connection that offers goods connectivity, provides value added services at low cost, and specially allows group calling at low cost (Wright 2006). Criteria used to evaluate options The criteria on which options are evaluated are the ones that are mentioned in the cues that customers respond to (Kengthon 2005). Social aspect of buying The opinions expressed by the close friend circle or group of advisors play a major role in making the purchase decisions. Competitor analysis The telecom market in India is experiencing growth at a healthy rate (Levi 2007). The number of telecom subscribers in India reached 96.42 Crores in November 2014 (Magretta, 2013). As per the TRAI the monthly growth rate is 0.16%. During this period, Vodafone added 23.2 lakh new customers in the period (Desai 2006 ). SWOT Strengths 1. 2nd largest subscriber base 2. Wide brand recognition through ad and flexible market pricing model (Fine 2009) 3. Wide recognition in the villages and gaining rural customers. Weakness 1. Relatively high price 2. Perceived as costly service provider 3. weak presence in the enterprise space Opportunity 1. Entering enterprise sector with cloud based computing. 2. Introducing 4g data services. 3. Introducing mobile money treansfer facility. 4. Attracting customers through value added services (Griffin 2006) Threat 1. Losing customers in the form of MNP. 2. Loss of customers to a competitor. Market segmentation The markets are segmented on the basis of demographic segmentation especially in the matter of age (Dunbar 2012). An example of this is to create special data packs for the college students. Vodafone also segments the market based on the rural and urban market place. Previously the company’s market presence was dominated by its presence in the urban market. In the villages the company is known as laal Dukaan. In order to increase familiarity with the villagers the shops are run by local residents and the program is known as Son of Soil and the company offers special data pack for the villages. The segments are very attractive as it presents huge area for the company in which it can market its product (Wedel and Kamakura 2000). After successful ad campaigns Vodafone now has about 23.5 % market share in the rural market. Rural customers are about 53% of the total 160 million customer base of the company. The Zoo Zoos were introduced in the advertisement space in ad campaign that was launched during IPL and became hugely popular to attract the youth. The company through the ad persuaded the users to use more data. Advertisements including pug and a kid are used to promote the brand. Marketing mix Product Vodafone introduced unlimited data plans and coordinated with Samsung smart phones. The CEO designed campus plans ranging from 25 INR for students having the validity of weekly or fortnightly. The customer executives influence the consumers to upgrade their 2G usage to 3G usages and it achieved huge success (Richter 2012). Price Vodafone products and services are slightly priced on the higher side and the company provides superior network and range of VAS to justify the price that the customers pay (Jain 2009). Place Vodafone’s products are available all throughout India. The company’s products are available through company authorized service centers and through independent retailers as well. Promotion The promotional campaigns include promotional campaigns by leading celebrities across the world. Recommendation for future Going into the future the road map for the company is quite clear. It has to go on increasing the subscriber base of the company, stay relevant to the customer base (Werbach 2013). The company can do this by taking the help of technology. The company is already committed to improve the network by making good investments in the network. The company is also slated to increase the market share of the company by introducing 4g network in the country. In future the increase of market share by the company will depend on the connectivity and the value added services that the company can provide (Achill, Frederikson and Davies 2013). The increase in the subscriber base will also depend on the pricing strategy that the company may follow in future in order make the products of the company competitively priced with respect to the competitors and their pricing strategy. The challenges that lie ahead for the company is the rapidly changing market landscape and the increasing competition and the best strategy will be used to conquer the competition. There are several areas in which the company can increase its market share and profitability in a country like India. India has huge demographics and the fact that it is a developing countries provides ample opportunity for growth to the companies. Going into the future there are several strategies that the company can use to fuel its growth in the country. Few of the possible areas are data packs, mobile money transfer, and inter-vehicle connectivity through wireless infrastructure. Other services that can be provided by the company are related to cloud based computing and infrastructure for the enterprises, internet lease lines, provisions of smart metering etc. The smart metering services can be provided by the company to energy and utility companies to minimize human intervention. The future business expansion strategy for the company would focus on increasing presence in the enterprise based business in the form of cloud based computing, providing 4G services in data. Another good move would be to haul up the money transfer services of the company. The enterprise based services can use cloud computing services to provide easy affordable solutions to the rising communication cost by replacing physical network with cloud based computing. Although revenue for the company is much high from India but its profitability in the country is not as high as the company’s operation in other countries. In comparison to India South Africa operations gives the country 4 times the profit at similar revenue. This is because the call rates are much higher in South Africa and the competition is not too high. In order to increase the profitability of the company’s operation in the country the company has to increase its foot print in the 3G and 4G market place as data gives higher profit than voice networks. References Achill, N J., Frederikson M. and Davies, J. (2003). Strategic marketing planning: a grounded investigation. European Journal of Marketing, 37 (3/4), pp. 430-460. Bowhill, B. (2008). Business Planning and Control: Integrating Accounting, Strategy, and People. West Sussex: John Wiley & Sons. p. 41. Desai, A. (2006). India's Telecommunications Industry: History, Analysis, Diagnosis. SAGE Publications. Dunbar, I. and McDonald, M. (2012). Market Segmentation. NY: John Wiley & Sons. p. 51. Fine, G. (2009). The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome Threats. NY: CreateSpace Independent Publishing Platform. p. 126. Govindarajan, M. (2007). Marketing Management. New Delhi: PHI Learning India. p. 79. Griffin, R. (2006). Management. NY: Cengage Learning. p. 27. International Business Publications. (2013). India Telecom Laws and Regulations Handbook. New Delhi: International Business Publication. p. 241. Jain, A. (2009). Principles of Marketing. New Delhi: FK Publications. p. 48. Kengthon, W. (2005). Consumer Buying Behaviour. Berlin: GRIN Verlag. p. 92. Levi, Kiruba J. B. (2007). Market Entry Strategies of Foreign Telecom Companies in India. Berlin: Springer Science & Business Media. p. 156. Magretta, J. (2013). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Boston: Harvard Business Press. p. 90. Neild, C, and Carysforth, C. (2004). BTEC First Business. Oxford: Hienman. p. 136. Reynolds, T. and Olson, J. (2001). Understanding Consumer Decision Making: The Means-end Approach To Marketing and Advertising Strategy. NY: Psychology Press. p. 63. Richter, T. (2012). International Marketing Mix Management: Theoretical Framework, Contingency Factors and Empirical Findings from World-Markets. Berlin: Logos Verlag Berlin GmbH. p. 18. Talloo, T. (2007). Business Organisation And Management. New Delhi: Tata McGraw-Hill Education. p. 41. TRAI. (2013). The Indian Telecom Services Performance Indicators. New Delhi: TRAI. Wedel, M. and Kamakura, W. (2000). Market Segmentation: Conceptual and Methodological Foundations. OXON: Springer Science & Business Media. p. 161. Werbach, A. (2013). Strategy for Sustainability: A Business Manifesto. Havard: Harvard Business Press. p. 84. Wright, R. (2006). Consumer Behaviour. London: Cengage Learning EMEA. p. 27. Read More