Safaricoms Marketing Audit - Case Study Example

Marketing Audit Introduction Market assessment is an important activity in realizing business opportunities. There are several untapped opportunities in the market that can be of great positive impact on relevant business organization. Besides, there are also various factors that limit organizations from realizing these opportunities. Market audit is a structured review of the business marketing activities (Ross 1991). Through a market audit, the organization keeps track of its activities to realize if the set goals are being met. This further shows how the business is affected by internal as well as external factors. As such, the marketing department is put on alert, thus helping the company in risk preparedness. Below is a market review of Safaricom Company. Organizational Objective Safaricom is a company in Kenya. It is a company that exists to offer mobile services to its customers (Ross 1991). Among the services offered include communication services, money transfer services and availing internet services to its customers. As a mobile provider in the Kenya, Safaricom is actually the most successful company. It has one of the best marketing programs that have seen it maintain it position in the value chain. Another factor that has advantaged the company is its centralized position. It is positioned in the country’s capital that is fairly centralized. It is easier to operate from the centralized position as compared to other places. The company has a marketing program that has performed so well in expanding its business. The program emphasizes more on advertising the company. This is seen in its involvement in various activities in the society. It also runs a number of commercial advertisements on local media houses (Stern & El-Ansary 1992). Its extensive involvement in activities in the society has won the company a good reputation that has transferred into a wide customer base. Current environment and operation It is very important to consider the working environment when determining the position of a business. This is one area that was put in consideration when determining the position of the Safaricom Company (Dan 2009). As stated earlier, the company is contrary positioned in the country’s capital. This position assured the company an easy access to vital business aspects. Organization’s marketing environment is made up of various aspects of business. These include; internal and external environment, the micro-environment and the macro-environment. Internal environment Internal environment comprises of various aspects such as employees, office technology, wages and finance SWOT. An analysis of the company’s internal environment shows various marketing processes of the company. The company has a net staff of about 3,000 employees with a higher concentration in the company’s headquarters in the country’s capital. Its employees are professional qualified personnel from the local learning institutions (Hamel 2000). This hiring of professional expertise has won the company a wide customer base due to the high quality of their out put (Dash & Andrew 2008). Customers have gained trust with the mobile network provider as their services are to standards due the influence of its high ranking staffs. The company is also under the leadership of a high ranking C.E.O. who is of American origin with experience in managing and directing a firm. With the experience and adequate education, he has instilled a positive influence in the company. Similarly, he has guided the company through innovative programs that have further improved the position of the value chain. Another aspect of internal environment is the employee wages. Wages are a factor that affects most business organizations. This is because of the modern living stands that have gone so high. Employee are sensitive on the wages they are given (Gioia & Sims 1983). Poor wages have seen most companies experience staff strikes. However, organizations cannot pay large sums of money to impress their employees. As such, the issue of wages becomes a sensitive part of any corporate. At Safaricom Company there are a few issues related with the staff wages. It has a human resource department that looks into the issue. The company pays its staffs according to qualification and their rating at the company (Gioia & Sims 1983). The company has office equipment. Compared to other similar organizations in the country, the company has the most modern equipments. Most of its office activities are computerized. The customer care department is the biggest beneficiary of this computer program. This has reflected in the good customer care services offered to its clients. The services are fast and efficient. The company also runs a money transfer program that uses the computer technology (Jack 2009). In other words, the company enjoys good reception due to its efficiency that is made possible through the use of modern technology such as use of computers. The micro-environment External customers, agents, distributors and suppliers make up the micro-environment of an organization. Competitors are also part of this environment. This is the environment that comprises of external factors. As stated earlier the company enjoys a wide customer base and because of this, external customers of the company have positive influence on the company. Most of new customers subscribing to the company services are influenced by the testimonies of the already existing customers (Dan 2009). Most of these old customers have testified for the quality services offered in the market. The good customer reception is also attributed to the diverse advertisement done through various local media houses (Gordijn 2002). The company gets involved in various activities in the society such as sponsoring recreational activities. It also sponsors students in various learning institutions and absorb them upon completion. These involvements in the society have won the company a good reputation which has resulted into increased customer trust (Bent, Mette & Søren 2002). Safaricom works with different distributors and suppliers that are hired locally and internationally as well. However, the company is selective when deciding whom to get into partnership with. As stated earlier, it enjoys a good reputation in the society and therefore it struggles to maintain the good image (Bent, Mette & Søren 2002). The company once entered into partnership with a controversial card printing firm that largely tarnished its image. This did great harm than good to the corporate, a condition that the management do not wish to repeat the same mess. SWOT Analysis Safaricom’s SWOT analysis shows various internal and external factors affecting the company either positively or negatively. There are various strengths, weaknesses, opportunities, and threats experienced at the company. A comprehensive analysis presents these factors in two groups; internal and external factors (Chowdhury 2006). Internal factors of the SWOT analysis include the strengths and weaknesses factors that are internal to the organization. The strengths of the company include factors such as good customer reception (Bent, Mette & Søren 2002). As stated earlier, the company enjoys a wide customer base. Some of the factors that have contributed to the good reception in the market include their good services and good customer care program. Customers feel recognized and appreciated as they are listened to whenever they have a problem. Similarly, the company is so innovative and always first with new attractive services (Gioia & Sims 1983). A good example of these innovative services that have had a great impact in the society is the money transfer services called M-Pesa (Neal 2008). This is apparently the most successful program offered by the company. With the service, people can register and send money to friends and family world wide at affordable prices upon a click of a button. Customers can also run accounts in which they store money and can access it through various agents all over the country. This service has impacted many lives especially the low earning categories. Due to this impact, the company has won the trust the local people who want to be associated with the service making the company put more emphasis on the program to ensure that it is running through out (Stern & El-Ansary 1992). Lack of adequate knowledge in use of some modern office equipment is some of the weaknesses the company experiences. Being a mobile operator, most of its activities are computerized. However, there have cases of temporary suspension of some of its services. This is because of lack of adequate computer technician at the company (Neal 2008). There have been frequent job advertisements for computer technicians at the company indicating that the company is in a shortage of these experts. Despite the success of the money transfer services, the program is the most hit with this problem of expert shortage. The program experiences frequent suspensions or delays. However, the problem can be controlled through organized workshops that will see employees acquire the technology know-how of operating the equipments (Treanor 2008). The external factors of SWOT analysis include opportunities and threats presented by the external environment (Shankleman 2009). There are various untapped opportunities in the market. For example, the company can get into partnership with local banks and come up with a program that enables customers to access their bank accounts through their phones. Similarly, this service, mobile banking, allows their clients to do bank transactions such as withdrawing money via their phones. The company has a number of threats. The most outstanding one is competition from similar companies in the country (Chowdhury 1992). Despite the good reception, the company rates are very high. This has scared away potential customers from subscribing to the company. Another factor affecting the company is that other similar companies in the country have come up with similar money transfer programs that have fairer rates as compared those of Safaricom. This poses the challenge of competition from these copy-cat companies. PEST Analysis A PEST analysis is another important part of the market audit. A PEST analysis of Safaricom Company shows how the company is affected by the political, environmental, social and technological (Ross 1991). There are a number of factors affecting the company. However, the country enjoys a good political stability with a few cases of instability rarely reported. The main political influence to the company is the government involvement through tax regulation. The company has high rates for its services. However, some of the rates are regulated through the country’s bureau of standards. In addition, the government maintains various positions on market ethics (Treanor 2008). However, the company seems to be less affected by this as it is among the most influential companies in the country. There are a number of economic factors. Considering the state of a trading economy in the short and long-terms, the company enjoys good interest rates due to the good economy (Ross 1991). The company faces a few social-cultural factors. However, the dominant religion is Christian, a factor that advantages the company (Sullivan & Steven 2003). Stakeholder Analysis (Stakeholder Matrix) This is the backbone of the conflict resolution, business administration and project management analysis that is necessary for company under consideration and is a detailing of the process that consists of identifying groups and individuals that may be affected by or may affect a suggested action (Bent, Mette & Søren 2002). This information becomes vital in assessing stakeholders’ interests in project planning, policy and program implementation and what is generally called stakeholder management (Chowdhury 1992). Objectives To establish the role of stakeholders in the running of Safaricom in reference to customer benefit To establish stakeholders’ interests that should be addressed by company management and policies To establish the corporate obligation that stakeholders have in the running of the organization Outcomes Telephone industry is one that is very robust in Sub-Saharan market since subscribers are highly enthused by the continuing technological advancement. This has two aspects to it both to the advantage of Safaricom and to its advantage. A discussion of these two perceptions of the robust market potential can be done by a short competitor and customer analysis. There is high competition in the area from a number of corporations that have opted to go full fledge in telephony industry and such corporations in Kenya include Zain, Telecom Wireless, Eco Net Ltd, Orange Network and Vodafone (Dash & Andrew 2008). Inasmuch as these companies still enjoy minimal market prominence, it is observable that with time they continue earning credible chunks of the market share thereby becoming a threat to Safaricom (Gioia & Sims 1983). It is in this regard therefore that it is important for Safaricom management to ensure that its stakeholders’ interests especially as regards market profitability so as their economic profitability still remains viable in the midst of its competitors. The market’s consumer analysis on the other hand is very promising since there are indications of continued zest in consumers’ enthusiasm that has translated to over five hundred thousand subscribers in the first quarter of 2010 (Stern & El-Ansary 1992). According to the survey conducted by (Gordijn 2002), it is indicated that Kenyan telephone market is very promising and that Kenya’s economy has been continually improving from 2007 thereby making telephone subscribers be at a vintage point in with their calling habits. This is further corroborated by the observation that there have been increased calling tendencies among the citizenry with Safaricom’s niche market (Stern & El-Ansary 1992). Strategy Assessment Vision The promoters' vision of Safaricom in 3-4 year's time is: The Corporation will be operating from a 500 sq. ft. unit in Nairobi Town. It will have annualized sales of $1000 and be profitable. It will employ around 550 people mainly engaged in promotional activities and management, marketing, support and administration. Safaricom will offer telephone services to a large customer base throughout the East African market segments and in over 30 countries overseas. The offers that are provided by Safaricom will be significantly improved and advanced in a way that surpasses their competitors’ offers. Further, the company will continually expand in different ways such as acquisition of market segment and technology that is related to its specialty and through organic growth. Mission Statement The central purpose and role of Safaricom Corporation is defined as: The company designs, develops and markets advanced systems for specialist data capture and transaction processing management. These systems that are web-based only work with special hardware that is supplied by renowned integrators. These systems are sold to all companies; small, medium and large size ones within the industry. These systems have sophisticated interfaces, are easy to modify and are easily scalable which are their specifications that give the company comparative advantage. Safaricom sells its services and goods through major OEMs/distributors both locally and internationally and some of the services. Such services that have received unrivaled preference in the market include M-PESA services (which is a money transaction and mobile banking service) and 3 G services providing faster internet services for its subscribers (Weaver 2007). Corporate Values Safaricom’s standards of relationships with its stakeholders and customers are of very high repute just as much as is its Corporate Social Responsibility pursuit for the environment and the community around. Corporate values governing its development include the following: Business Objectives To expand the business assertively and in the process offer returns to its shareholders that are above-average To be the leading company dealing in innovative systems in the Telephony market segments of East and Central Africa. Major Goals Key targets will be achieved by Safaricom Ltd over the next 3-4 years Achieve sales of $ 10 000 million by 2015 Report annualized profits of $ 1000 million in 2011 Secure 80% of the market segment by 2015 Become largest supplier of G.S.M and telecommunication systems in 120 countries within 10 years Employ 1500 people including 25 % technically qualified by 2012 Have sales offices or agents in 75 key markets before 2015 Conclusion and Recommendations A summary of the recommendations to the company’s operation and analysis is done by the help of the following Initial Market Audit Checklist. Initial Market Audit Checklist Yes No Do you have a traditional strategy and a marketing orientation in your firm  Do you understand your offline consumers and your online consumers  Have you clearly defined your product/service offering and business purpose?  Do you understand the customer pricing desires for your product service? Are you price minus?  Do you understand the emerging trends of your market place  What channel does your business currently use and do you think a web presence would work for you? The firm uses distributor channel for its service and product distribution  Has the success of the current promotion been measured? Do you know which promotion strategy your customer responds to?  In conclusion, Safaricom is one of the most influential companies in Kenya. It is a company with a good managing team that knows how to tap the slightest opportunity in the market. However, there are a number of minor factors both internal and external that have affected the company in one way or another. These factors can be controlled through various strategies. Bibliography Bent, F, Mette, K & Søren, L, 2002, Underestimating Costs in Public Works Projects: Error or Lie? New York: New York Times. Chowdhury, F. L., 1992, Evasion of Customs Duty in Bangladesh, MBA: Monash University, Australia. Chowdhury, F. 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