Analysis of Marketing Campaign: Vodafone New Zealand PXT Service - Research Paper Example

 Report of Marketing Campaign Review - Vodafone New Zealand PXT Service - Table of Contents I. Executive Summary ……………………………………………….. 3 II. Introduction ………………………………………………………… 4 III. Aim …………………………………………………………………. 5 IV. Findings …………………………………………………………….. 5 a. Mobile Industry Analysis ………………………………….. 5 b. Vodafone PXT ™ / Telecom New Zealand ……………….. 7 b.1 Launching the PXT Technology ……………………. 7 b.2 Corporate and Social Responsibility Initiatives ……. 7 V. Discussion …………………………………………………………... 8 a. Vodafone Launching PXT Marketing Strategy …………… 8 b. Corporate Responsibility Initiatives of Vodafone and Telecom NZ ……………………………………………. 10 b.1 Text Bullying ………………………………………. 10 b.2 Health and Safety ………………………………….. 11 b.3 Charity ……………………………………………… 11 b.4 Code of Ethical Purchasing and Environment Responsibility ………………………………………. 12 VI. Implication / Recommendation …………………………………….. 12 VII. Conclusion ………………………………………………………….. 13 References ………………………………………………………………… 14 - 15 Executive Summary The Mobile industry scenario provides a clear picture on how a marketing analyst should provide an effective marketing campaign for a new product. Recently, Vodafone has launched its marketing campaign for the new PXT system. The success of its marketing campaign has created a new business opportunity for Vodafone New Zealand PXT ™ services. Aside from the success of the GO-Race (Loo-Racer) strategy, investing and implementing a good Corporate and Social Responsibility Initiatives such as: environmental concerns, charity works, disaster programmes, educational assistance among others contributes a lot to the success of a mobile company. Introduction Vodafone Group was established in the United Kingdom back in 1983. The company acquired its New Zealand business – previously known as BellSouth New Zealand in November 1998. At the time Vodafone Group made the purchase, BellSouth had a total of 138,000 customers. As of June 2006, Vodafone New Zealand had a customer base of 2.1 million customers that is composed of 55% share of the New Zealand mobile market.1 The competition in the New Zealand mobile market is very tight. For this reason, the company needs to constantly upgrade its system such as PXT messaging. In 2001, Vodafone New Zealand signed up a commercial agreement with Telecom New Zealand today in order to enable their customers to send sound enables photo and video messages between the two mobile networks.2, 3 Vodafone New Zealand introduces its free weekend use of PXT messaging as a marketing campaign between the periods of December 2003 until September 2004.4, 5 Vodafone PXT ™ uses this strategy with the attempt to boost the demand for multimedia messaging. Since January 2004, the PXT messaging across the Vodafone network has increased at a rate between 35 – 50% month-on-month despite the price of 75 cents per message.5 In line with the increase in the use of PXT messaging, the sales of more featured phones were also increasing. Vodafone used the GO-Race (Loo-Racer) as a unique way of launching the new PXT capable phones. This event was featured on 30 second TV commercial throughout New Zealand and Australia together with some print ads campaign. This campaign was successful in reaching for Vodafone’s target market. AIM: To determine the goal of Vodafone PXT ™ marketing campaign and to be able to identify the best marketing campaign method for telecommunication industry. Findings Mobile Industry Analysis There is only one competitor in the New Zealand mobile industry – The Telecom NZ because of the high cost of infrastructure requirements. This also becomes a barrier to exit. Due to globalisation, it is still possible for International Telecommunications Company to penetrate the industry and offer a more competitive similar services and mobile phones to the consumers. Since Vodafone and Telecom NZ is offering the same products and services, both companies practice advertising and price wars. The threat for substitution is high because of the presence of internet access to Yahoo and Skype communications. The continuous improvement in the information technology and similar services also contributes to a higher chance for alternative sources of communication. Buyers’ bargaining power is moderate because they could easily shift to alternative sources due to moderate switching costs. Also, the product differentiation is low. On the other hand, the bargaining power of supplier is low due to globalisation. (See Table I – Mobile Industry Analysis on page 6) Table I – Mobile Industry Analysis Vodafone PXT ™ / Telecom New Zealand Launching the PXT Technology Vodafone PXT ™ uses a unique marketing strategy that successfully captures their target market in New Zealand. The GO-Race (Loo-Racer) is a good strategy to launching the new PXT capable phones since the event invites people from New Zealand and Australia who seek for a different kind of adventure and excitement in the same way that the new technology phones are offering.6 The use of a 30 second TV commercial throughout New Zealand and Australia together with some print ads campaign directly attracts these potential target markets. The events were scheduled to take place in Auckland, Wellington, and Christchurch. During the promotional period, each one of the participants and attendees were given the chance to experience photo taking with the use of the new PXT capable phones that allows these people to e-mail to photos to their friends and relatives worldwide. The company also gave away a lot of Vodafone stuffs and a brand new Ericsson T68i phone as the major price in each of the events. Since Telecom New Zealand has signed up a commercial agreement with Vodafone PXT ™, Telecom NZ is also benefiting from the marketing campaign and strategies that Vodafone has implemented. Corporate and Social Responsibility Initiatives ‘PXT’ as a new technology sell on its own. For this reason, mobile companies are competing in terms of other strategies such as the use of corporate and social responsibility initiatives in order to attract more customers. Vodafone, as a responsible company, takes initiatives in responsible marketing, continuous improvements the products and services offered, health related issues concerning the use of the mobile phone technology, mobile recycling, waste minimization, energy efficiency and climate change, as well as ethical purchasing within the supply chain.7 Just like Vodafone, Telecom New Zealand is also practicing social responsibility such as: community connection sponsorship, education support, environmental responsibility, sustainable development and shapeNZ, disaster relief, mobile safety information among others.8 Discussion Vodafone Launching PXT Marketing Strategy Prior to the official launching of Vodafone PXT ™, the company was giving out free use of the PXT services during weekends for a few months. This enables some of the prospective target market to get used to the use of this new feature. The strategy that Vodafone PXT ™ uses is during the actual launching of the new service is considered as a good marketing campaign because it is capable of developing an excellent relationship between the target markets and the company. The wonderful experience this event has contributed to the lives of these people creates a strong sense of company and product acceptance for most of the participants. According to McEwen (2001), “satisfied customers do not guarantee customer and market retention. The only way to achieve a successful brand loyalty is to create an emotional attachment to its customers.”9 Since the GO-Race (Loo-Racer) strategy is an interactive promotional activity, the company is able to open the communication line between each of the target customers and the company. It is not like the typical marketing campaign wherein the target consumers are gathered into one place just to listen to the campaign speech or read some traditional marketing materials. People in general are too tied up with their own regular work to even think of spending their leisure time to read on marketing advertisements. One reason for the Vodafone PXT ™ marketing strategy to be considered as outstanding is because the whole process of the event indirectly involves selling. Instead, it allows the participants to unleash their guards and aloofness from the typical marketing campaign that gives the company the opportunity to get the attention of these people to look at their product right after the target consumers are emotionally overjoyed. This event contributes to increasing the positive emotional attachment between themselves and the company making the strategy more effective than the use of the traditional marketing campaign methods. Another good point in the strategy is that Vodafone PXT ™ decided to schedule the event in three different places: Auckland, Wellington, and Christchurch. This important decision was made in order to remove the geographical boundaries that could lessen or hinder the potential of the company to reach out for more potential customers. This enables Vodafone to extend the opportunity to spread the news regarding the benefits of using the PXT services to far-reaching places all over the New Zealand. It was a part of the strategy to give each of the participants and attendees to experience photo taking with the use of the new PXT capable phones during the promotional period. This alone brings excitement to the participants about the amazing promises that the new technology could bring into their own personal lives. Since these photos are capable of transmitting through e-mails worldwide, the company is successful in directly reaching more people through the presence of the attendees. Through a positive word-of-mouth, these people are already considered as volunteered advertisers on the part of Vodafone PXT ™. The company also gave away Vodafone stuffs and a brand new Ericsson T68i phone in each of the events in order to capture the attention and excitement of the participants during the entire marketing campaign period. Corporate Responsibility Initiatives of Vodafone and Telecom NZ Text Bullying Mobile companies are responsible in protecting the safety of their customers. Therefore it is necessary for them to combat TXT bullying. Vodafone joined force with the internet safety group NetSafe to protect the students from being a victim. They handed brochures and posters to schools to inform the students on the proper way of handling TXT bullies. This campaign was also featured on national television and radio. This campaign has been effective since TXT bullying incidence dropped by 30% between the periods of 3 months (September to November 2004).7 In the case of Telecom NZ, the company joined the New Zealand Telecommunications Carriers Forum in which the Code of Practice for the Provision of Content via Mobile Phones is adapted. Just like Vodafone, Telecom NZ is also supported by the Internet Safety Group – ‘Netsafe’ and ‘New Zealand Police Youth Education Service’ to help protect the minors from receiving inappropriate contents in text message. Pamphlets have been distributed to parents to teach their children the proper safety procedures when using the mobile. Telecom NZ is directly selling their added mobile features to capture more customers. Specifically the mobile feature wherein the mobile user could send the word ‘SAFE’ on their handset to ‘7233’ for their safety and traceability of their whereabouts is a marketing strategy for the company.8 This added service could capture the market on each family that practice a close relationship among the members or between couples. Health and Safety Aiming to protect the health of the general public, Vodafone has developed a single global policy to manage health and safety. The company follows specific criteria upon approving the use of mobile devices on their network. They also provide trainings to employees working directly on sites. The company also sells old phones to poorer countries as refurbished phones in order to reduce electronic wastes.7 Telecom NZ is also taking care of its people – customers and employees by being a member of the New Zealand Business Council for Sustainable Development and improving the quality of life of the New Zealanders. The company offers a range of products and services specially designed for people with disability. In terms of helping more people on a large scale, Telecom NZ helps people in general by providing them with disaster relief in times of need.8 Charity Telecom NZ is directly connected to the community via sponsorship programme. Each year, the company is donating up to $5 million to support charitable organizations like Barnardos, CCS, Cancer Society, Citizens Advice Bureau, Heart Foundation, Red Cross, etc. The company is also investing on New Zealand education through a School Connection Programme. Instead of paying a large sum of money through advertisements, the company chose to donate a portion of its revenue to charity work. These activities acts as a good advertisement itself in terms of the good publicity the company is getting. Code of Ethical Purchasing and Environmental Responsibility As part of the Vodafone Code of Ethical Purchasing, the company is encouraging its suppliers to follow their ethical purchasing criteria in relation to social and environmental performance such as ‘Greenfleet’ programme and sign up to their code.7 On the other hand, Telecom NZ is also investing on environmental responsibility such as recycling, waste minimization, power saving and fuel reduction initiatives which is directly supported by its volunteered employees called ‘EcoRangers.’ These activities are also incorporated to their internal practices with the supply chain and procurement systems.8 Implication / Recommendation Because of the tight competition within the New Zealand Mobile industry, it is necessary for each mobile company to develop a new strategy that could directly capture the attention of the consumers. The Corporate Responsibility Initiative is one area that could positively affect and influence the consumers to patronize the company’s products and services. For this reason, the mobile company should spend more money investing for the improvements of their Corporate Responsibility Initiatives more than spending a large amount of investments on other means of advertisement and marketing strategies. Conclusion There are ways in which a mobile company could lessen the advertisement costs. Among the effective strategies are those that could directly build and create a direct emotional impact and attachment on the prospective and current consumers. Investing on the improvements of a company’s corporate responsibility initiatives is considered to be more effective than the traditional way of conducting a marketing strategy. The domestic and global markets we have today are already saturated. This makes people less interested on the traditional methods and marketing approaches. With the launching of the new PXT system to the public, Vodafone was able to successfully create and implement a unique concept of gathering and entertaining the people. This strategy is more effective than the usual way of advertisement campaigns and strategies because it could create a positive impact on the participants. The most important achievement of this marketing method is the fact that it could mobilize the participants and attendees to actively spread a positive word-of-mouth experience. Being able to capture the attention of the people and enable them to spread positive statements about the company is enough evidence of the campaigns’ success. *** End *** References: 1 Vodafone (2007) ‘Company Information’ Retrieved: May 24, 2007 < https://www.vodafone.co.nz/ > 2 CDG (2005) ‘Messaging Becomes Even More Fun!’ September 27, 2005 Retrieved: May 24, 2007 < http://www.cdg.org/ > path: news 3 M2 Communications (2005) ‘Vodafone and Telecom Unveil MMS Interoperatibility’ M2 Communications Journal. October 3, 2005 Retrieved: May 24, 2007 < http://www.m2.com/ > 4 Auckland, P.B. (2004) ‘Textual Intercourse Surges Over Holiday Period: Both Vodafone and Telecom Experienced Christmas Cheer this Season with Massive Upsurges in the Use of Text and Photo Messaging’ Retrieved: May 24, 2007 < http://computerworld.co.nz/ > 5 Fifth Finger (2004) ‘Mobile Marketing and Content Industry News: Vodafone Offers Free PXT’ July 4, 2004 Retrieved: May 24, 2007 < http://www.5thfinger.com/ > 6 Vodafone (n.d.) ‘Vodafone Loo-Racing’ Retrieved: May 24, 2007 < http://www.funworks.co.nz/ > 7 Vodafone (2005) ‘What in the World We have We Done?’ Vodafone New Zealand Corporate Responsibility Report 2004 – 2005 Retrieved: May 24, 2007 < http://www.vodafone.com/ > 8 Telecom New Zealand (2007) ‘Social Responsibility’ Retrieved: May 24, 2007 < http://www.telecom.co.nz/ > 9 McEwen, W.J. (2001) ‘Beyond Customer Loyalty: ‘Engaged’ Customers are more Valuable than Just Satisfied Ones’ Gallup Management Journal. April 30, 2001. Retrieved: May 24, 2007 < http://www.gmj.gallup.com/ > Read More