Explaining the Growth of Mobile Phone Industry in the World - Research Paper Example

Running Header: Marketing Report for Vertu Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Marketing Report for Vertu Content 1.0 Situational Analysis 3 2.0 Objectives and Strategy Development 6 2.6.1 Product strategy 10 2.6.2 Price Strategy 11 2.6.3 Promotion Strategy 11 2.6.4 Place Strategy 12 References 14 Introduction Vertu is a British based company that specializes in manufacturing and retailing of mobile phones (Vertu 2010). Vertu was founded in 1998 and specializes with manufacturing of luxury mobile phones. The parent company of Vertu was Nokia but it used to runs an independent division of manufacturing mobile phones. Since the company specializes in manufacturing of luxury phones, most of the components used are very expensive and therefore its products are very expensive. The company uses its own distribution system to market for its products is throughout the world. Among the most common models of the company are smartphones Constellation Touch and Constellation Quest, Aysta, Constellation Classic and Ascent. The company aims to capture more market through manufacturing of more innovative phone brands and improving its distribution system. 1.0 Situational Analysis 1.1 Competitor Analysis The main competitor for Vertu in the IT industry is Apple, Blackberry, Sony, IBM, Motollora, Nokia, Samsung and INQ (Locak & Abimbola 2009). Almost all the competing companies have the same financial strength of producing phones similar to those of Vertu. However none of these companies can matches the level of specialization in luxury phones that Vertu engages in. Most of the companies produce both cheap and less expensive phones which makes it easier for their brand to be popular (Ozman 2010). At the moment, Vertu manages about 9 % of the world market. Vertu products are produced using very expensive materials but serves similar or equal purposes as those of other companies. In the past 2 years, the sales of the products have risen by 0.2 % while Sony gained share of 20 % in the similar period (World Technological Report 2012). This shows that Sony have a capacity to design and manufacture a similar products to those of Vertu and become a threating competitor. 1.2 Marketing Analysis There is a very large market for mobile phones all over the world. In a span of less than 10 years ago, mobile phone communication has been introduced in almost every part of the world. According to Alfric Ahmad & Gurrib (2010), mobile phones have become a personal item and therefore people buy them for personal use. Expensive and stylish phones are associated with the youth, middle income earners and high income earners (Locak & Abimbol 2009). Youths ranging between 18 and 35 years make the majority of the world population. Most of the features of Vertu products are suited to run in the urban areas. Features such as Wifi, internet, music videos are mostly applicable in urban areas. The population in the rural areas who may not be interested with features that are not available in those areas would also find the products useful. Rich people on the other hand are about 20% of the total world population. Almost all the products of Vertu Company are purchased by youth and high income earners. 1.3 Environmental Analysis In the recent years, mobile phones have become a personal component. In this case, every individual is buying the phone which has the features that are unique to him or herself (Roland, & Jessica 2011). There are also additional features that support mobile phone operations. Mobile communication companies, internet companies, Wifi, television stations among others are all looking for ways of reaching more and more people in order to promote their businesses. Through producing a mobile phone that is able to support most of the features those are associated with other companies, Vertu gains support from support companies. Its mobile phones integrate well with any mobile product in the market. 1.4 Customer Analysis The trend of any industry that has the objective of succeeding is that which aims to satisfy the needs of the customer. In the mobile phone industry, customers are looking for a product that have as many features as possible, easy to use and portrays a stylish look. Luxury and customer satisfaction is prioritized in the design of Vertu products. In this case, all the needs of the customer are appropriately implemented in this phone. However, the costs of the products are very high compared to those of the competitors. Though most ordinary people would want to have the Vertu products, the cost is very high which therefore limits the number of customers. Rich people who would want to create an image of them and the youths who are fun of the technological products are the main customers of Vertu products. 1.5 Internal Analysis Vertu has the capacity to derive any form of mobile product to any customer. The internal structure has high level of specialist in all fields. The 600 staffs are highly trained right from the designers of the products to the marketers. The company structure is such that it is able to gather information on product requirements from the customers and design a product that meets those specifications from scratch. Alfric, Ahmad & Gurrib (2010) observes that full availability of resources is a key factor in full implementation of any organization strategy. The company has enough resources to expand its market and improve its operations. Since 1998, the company has been growing at a rate of 10 % and has over 10 billion dolla assets. 1.6 SWOT Analysis The company strength is that it is the major luxury producing company based in UK. It stylish products are well known to the high income earners and no company brand matches their product. The main weakness of Vertu is that all the products are very expensive and therefore most customers opt to buy similar products from other companies that are of lower cost. The company has the opportunity of using its expertise in the industry to produce cheaper less expensive phones that shall be able to penetrate the market. If this strategy is implemented, the company shall shift from relying on rich to middle class earners. Consequently, the company is likely to double its growth every year. The main threat to this strategy however is the level of competition in the market. The market is flooded with many phone companies which may make their new product less popular. 2.0 Objectives and Strategy Development 2.1 Marketing Objectives The marketing objectives of Vertu are as follows:- Establishing market leadership through creation of high quality mobile phones To enable Vertu in satisfying, fulfilling and equipping the needs of the customer through offering mobile phones that suits their lifestyles To be the market leader in mobile phone industry by increasing the market share To enable Vertu to monopoly the stylish mobile devices by 80% by the year 2015 To enable Vertu to increase its revenue from mobile devices by 30% by year 2017. 2.2 Target Market 2.2.1 Segment Identification All Vertu mobile phones have very appealing look and have multiple functionalities that are compatible to other devices. Producing a cheaper Vertu phone shall definitely attract a large market from the youths. In majority of the parts of the world, many people are educated and are looking for means through which they can communicate and access different types of information without any complications. Use of mobile phones offers the best way to do this. Therefore, production of our phones which have widest applications supported in a single device then it shall offer the needs of the majority of world population. 2.2.2 Segment Needs Today, mobile phones are not just used as communication tools. They are also being used to accommodate both social and personal need. Most customers are now interested with phones that not only serve as a means of communication but also offer sense of belonging with others, are cool and fun to use and offers digital and cultural lifestyle. Phones that are used contributes to luxurious activities such as surfing, music, radio and photography are what the market is looking for. 2.2.3 Segment Trends Initially, phones were manufactured for the sake of just making and receiving calls (Rowold, 2011). However, over time additional functionalities have been incorporated in mobile phones. Today, the trend shows that customers are interested in mobile phones that have multi-functions, compact in size, easy to use, light (World Technological Report 2011). Customers are further very conscious of the brand and are looking for phones that offer a digital lifestyle. Therefore, due to the current trend transformation, introduction of cheaper phones that offers the stylish and luxurious functionalities would definitely be welcomed in the market. 2.2.4 Segment Population According to Locak & Abimbola (2009), the highest populations of mobile phone users are people of the age between 18 and 34 years. They use phones for doing business, entertainment, luxurious activities and communication. According to statistical CIA statistical report, the population of the world is increasing at a high. The majority of the population is of age between 15 and 64 years (Roland & Jessica 2011). About 40 percent of the people in this age bracket own phone and those who are not are in need of acquiring one. Vertu mobile phone offers the ideal functionalities that satisfy this population and therefore if the company shall be in capacity to popularize its products, it shall definitely be welcomed. High interest on our products is especially from the youth. The youths have a way of finding unique thing in technological devices and therefore availability of mobile phones that can accommodate that will be welcomed 2.3 Positioning Strategy Vertu has been able to revolutionize the mobile phone industry by adapting innovation, manufacturing creativity and visceral design. Over the entire period that the company has been in operation, it has been able to improve on the functionality features of its products and therefore gaining popularity in the industry. All that is required at this stage is to popularize its product and enter into more market. For the Vertu mobile products it products are based on the following: Benefit Positioning: Unlike most mobile phones that have specialized the gadget for making and receiving of calls, Vertu’s products have wide usage which include facilities for listening to music, surfing, taking picture and videos and connectivity to other devices through, Bluetooth, WiFi and cables. Products Positioning: The design shape of the products is such that they portray good look, easy to use and very convenient. User positioning: The product comes at a time when there is progressive growth trend in digital devices. To the customers that are oriented to its use, the phones offer a digital lifestyle. Although the main functions of mobile phones is communication through calls, Vertu phones can be marketed as music devices, cameras or modems (Locak & Abimbola 2009). Vertu has a very brand personality to the customers who have interacted with their devices since it offers the unique features in a friendly way. Successful development of the previous products has been accepted by the people. 2.4 Growth Strategy Based on the previously observed growth, the company has the potential to continuously grow in the market. According to the statistical reports, the world population is expected to increase by 18.3 % (World Technological Report 2011). It is further anticipated that the youths in this age will have increased by the same proportion and the number of mobile users will rise. The market for the company will grow demanding for more products that suits this population. Another factor that will accelerate the growth of the market shall be introduction of cheaper phones. The price of a product determines the popularity of a product in the market. In most countries, Vertu products are only known by the rich people due to the high price associated with them. Introduction of cheaper phones will make the products more affordable and therefore gain more popularity. The luxurious shape and applications shall be maintained while the manufacturing materials shall be changed to suit those which are more affordable to most of the people. As the market grows, the company will need to improve the distribution system. The number of people that are able to access the products of the company mainly depends on the availability of that product. To ensure that the product reaches as many parts of the countries as possible, the company will have to contract part of the distribution system. However, the distribution system needs to be organized in a manner that it brings value to the company. This way, it shall be able to accelerate the rate of distribution of its products. 2.5 Competitive Advantage Competitive advantage is the advantage in the strategy which a business has over its rivals. The main competitive advantage of Vertu is its mobile phone design which cannot be matched by those from any other company. Most of the mobile phone developers specialize in application and some features are more emphasized than others. Luxurious phone are the unique brand that is associated with Vertu (Times Magazine 2002). Furthermore, the company has among the best experts in the IT industry. This makes it easy for the company to identify and adapt to the needs of the users without using a lot of effort. Some customers view the products as very expensive; however, the quality of these phones cannot be compared in any way with those of the cheaper phones. Detailed attention is paid by the staff to ensure that from the look to the different functionalities, each of the elements works and integrates with the rest of the device. This is what makes Vertu products more lasting than those of our competitors. 2.6 Marketing Strategy The success of development of new product and fully establishing them in the market depends on how well the marketing strategy is implemented (Patrick 2007). In marketing of Vertu mobile phones, four main strategies shall be used; Product strategy, price strategy, promotion strategy and the place strategy. 2.6.1 Product strategy In order to ensure that the products developed are always up to date, the design team shall focus on periodically coming up with new products. The area of innovation shall be to ensure that our product fulfills the requirements of as many customers as possible. All of our previously developed phones can last for over 100 years without damaging; however, they may be outdated by new technology or new phones in the market (World Technological Report 2011). In this case the IT department shall focus on designing models that can be updated. The software components of the products shall be such that it can be updated when technology advances. The uniqueness of Vertu products lies on the ease of use, stylish design and simplicity of use. Therefore, in our future designs, the company should focus on developing these unique features. To prevent the possibility of imitation in future, the brand shall come up with a comprehensive marketing plan that shall not only promote the products but shall make it expensive to produce similar goods. 2.6.2 Price Strategy Currently, the reason why most of Vertu products are not popular is due to the high price. Initially, there had been plan to manufacture go to specialize on the quality and features of the product at the expense of the price. According to Whitelock (2002) in the pricing strategy, several factors shall be considered such as potential substitutes, product lifecycle and the consumer demand. Since the company has portrayed itself as promoting style in its products, the initial plan shall be coming up with a cheaper mobile phone that has most of the features demanded by the consumers. It shall be designed to suit the average price of the competitor phones already in the industry. The company has had a successful pricing strategy in the sale of Constellation classic in the market. Through introduction of a cheaper phone, the company shall employ the same marketing program to popularize all its products. 2.6.3 Promotion Strategy The main objective of promotion strategy of Vertu products shall be to create awareness of the company’s products by majorly targeting the youths. Further the strategy shall be to increase its share in the market. In general the company shall use television, radio, magazine, internet, personal selling, public relations and publicity. More emphasis shall be put on the Media and internet where the target population is easily reached. Media is one of the best modes of promoting products since it is able to reach many people (Roland & Jessica 2011). Therefore, the company shall select the media that targets youths as target groups. To the youth, internet is the most powerful mode of communication. In this case creative online advertisements shall be created through the marketing department with the objectives of reaching more customers. 2.6.4 Place Strategy The aim of place strategy is to ensure that the product is available to the customers with as many distribution channels as possible (Hary, Tage & Per 2004). Other than the already established distribution channel, the company shall contract distributers in the countries the countries that it is unable to efficiently reach out to the customers. The main distribution channels however shall be through online stores, retail stores, and direct sales. Currently, the company is using retail stores which have been proved to be very successful. Direct sales shall be affected through use of Vertu shops established at different countries of the world. Through these shops, the local distributers shall be selling the phones on commission shall be contracted. Through the use of user friendly website, the company shall be able to make direct sales to the customers. Conclusion Vertu Mobile Phone Company deals with manufacturing and selling of mobile phones. The company specializes in design of luxurious and stylish mobile phones that are easy to use, fun and offers comprehensive features to the customer. The situation analysis developed in the report shows that the internal and external operations of the organization are highly developed. The situation analysis enables the company to come up with constructive and dynamic strategies that will help the company meet its strategic mission. The outlined marketing plan is aimed to helping the company to have a larger share of the market, better distribution system and enable the overall growth of Vertu by double rate by 2017. The marketing plan majorly target the youth who are the major consumers of the company’s products. Through contracting the distribution system and using cheaper material in the manufacturing of phones, the company shall be able to reduce the overall cost of its phones and achieve a higher growth. Implementation of this plan shall definitely lead to growth in popularity of the company, higher growth rate and overall expansion of the company. References Alfric,M, Ahmad, S & Gurrib, M 2010, ‘Explaining the Growth of Mobile Phone industry in the world’, International Journal of Technology, Vol. 1, no.1, pp. 68-73. Hary, K, Tage, M & Per, S 2004, ‘World Telecommunication Industry,’ International Marketing Review, Vol. 21, no. 6, pp. 645-665. Locak, A & Abimbola, T 2009, ‘Phone Industry, International Marketing Review, Vol. 26, no. 4/5, pp. 439-452. Ozman, M 2010, The knowledge base of Products: Implications for organizational structures, Organization Studies, Vol. 3, no. 8, pp. 61-111. Patrick, K 2007, Phone Marketing’, People Management Strategy, Vol. 1, no. 3, pp.14 -58. Roland, K & Jessica, L 2011, Working out the quality of work life, International Marketing Review, Vol. 19, no. 3, pp. 65-78 Rowold, J 2011, Relationship between leadership behaviors and performance, Leadership and Organization Development Journal, Vol. 31, no. 9, pp. 415-465 Times Magazine 2002, Vertu Is Its Own Reward 2012, viewed 20 April 2012, < http://www.time.com/time/magazine/article/0,9171,901021125-391498,00.html>. Whitelock, J 2002, ‘Theories of internationalization and their impact on market entry’, International Marketing Review, Vol. 19, no. 4, pp. 342-347. World Technological Report, 2012, Trend in phone and Technological Industry, pp. 23-38. Vertu 2010, Vertu Media Centre 2012, viewed 20 April 2012, < Times Magazine 2002, Vertu Is Its Own Reward 2012, viewed 20 April 2012, < http: //vertu.com/en/vertu-corporate/media-centre.>. Read More