Essay: Vodafone

With the fast pace of technology growth, the telecommunications market is at its peak. India is the second largest telecommunications market. The mobile phone industry in India is expected to contribute 400 billion gross domestic product (GDP) and could generate about 4.1 million jobs by 2020, according to Anne Bouverot, CEO of the Mobile Association Speciale (GSMA) . “Vodafone is investing about $ 3 billion over the next two years in India to expand its network infrastructure and distribution channel in the country,” Vodafone said. “The data history of India is very promising.
This expected growth is of high profitability for the services sector in the coming years. The intense competition in this field requires Vodafone to strive to increase its market share and the current position of the market demands a revision of its current position in relation to the growth trends of the multiple uses of mobile phones.
The main goal of any organization is to strengthen brand awareness. In the short term, the target would be to target medium and low-cost customers (as the rates offered by Vodafone for these segments are the most competitive). Targeting minority markets will result in a compromise between revenue (lost by high volume users) and volumes (subscribers) in terms of market share. Our long-term goals could attract the best range of mobile users. The report provides detailed internal and external analysis, marketing objectives and strategy review, including how the company can move towards sustainable marketing.
INTRODUCTION
1.0 Introduction
In today’s fierce competition, companies sell goods and services through a variety of direct and indirect channels. In mass marketing, marketers are exploring new forms of communication, such as experimentation, entertainment and viral marketing. (Roy and Das, 2016) Such an idea is Vodafone’s innovative campaign “ZooZoo”. Never in the history of marketing in India has witnessed a campaign that has generated much interest and curiosity among all sectors of society, young and old. Vodafone is known for its unique advertising campaign like pug, happy to help service and the latest advertising campaign “ZooZoo”. (Roy and Das, 2016) as Vodafone was a new brand in India, it had a difficult task developing its own entity and made it wonderful. Vodafone has benefited greatly from their aggressive marketing campaigns and has proven to be a great marketing story. This research aims to analyze the marketing and marketing strategies used by Vodafone and the impact it had on the minds of customers. It caught the attention and imagination of consumers, has aroused curiosity, told stories and made people tell the story.
1.1 Background to the study
Marketing has been considered as a method of mass promotion in which a single message can reach many people. (Chintala, 2016). But this approach to promoting mass poses problems because many of them are exposed to a marketing message are perhaps not in the marketing field of marketing. However, this is changing as the marketing of new technologies and the emergence of new media offer more options for targeted marketing. (Joshi, 2015) Marketing also has a history of being considered a unidirectional means of marketing communication in which the recipient of the message is not able to respond immediately to the message. (Sharma, 2016) In fact, it is expected that in the next 10 to 20 years of marketing will move away from a unidirectional communication model and become one that is highly interactive. (Sharma, 2016) Another feature that can change as marketing is changing the view that marketing does not stimulate immediate demand for the advertised product. In other words, customers can not quickly buy a product they see advertised. But as more mass media allow customers to interact with messages the ability to provide sellers to quickly stimulate demand will improve. (Joshi, 2007)
1.3 Vodafone’s Profile and its Marketing Strategy
Vodafone Group Plc is the world’s leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company’s subsidiary undertakings, joint ventures, associated undertakings and investments. (www.vodafone.com)
The Group’s mobile subsidiaries operate under the brand name ‘Vodafone’. In the United States the Group’s associated undertaking operates as Verizon Wireless. During the last two financial years, the Group has also entered into arrangements with network operators in countries where the Group does not hold an equity stake. Under the terms of these Partner Network Agreements, the Group and its partner networks co-operate in the development and marketing of global services under dual brand logos. (www.vodafone.com)
Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. Vodafone Essar now has operations in 16 circles covering 86% of India’s mobile customer base, with over 44.1 million customers. (www.vodafone.com)
The year 2017 also witnessed the merger of all mergers, the merger between Idea Cellular and Vodafone India. The merger deal values Idea at Rs 72,200 crore. While the implied swap ratio of 1:1, increased market share and spectrum capacity and cost synergies are positives, intensifying competitive scenario, possible regulatory hitches and a still large debt pile on the books of the combined entity limit the upside for Idea shareholders in the near term.
As per this merger, both Idea Cellular and Vodafone India will have equal rights in the combined entity. Vodafone will transfer 4.9 per cent stake in the combined company (around 35 crore shares) to Aditya Birla Group for RS. 3,900 crore.
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1.3.1 Marketing Goals and Objectives of Vodafone
Marketing Goal of Vodafone
To be a converged communications leader, investing to provide the customers with differentiated network access and excellent customer service.
Marketing objective of Vodafone
Along with capturing the scale and efficiency benefits of the global presence of Vodafone, the company aims to generate attractive returns, enabling them to sustain their investment levels, further increase their network differentiation and meet their customers’ high expectations.
1.3.2 Ansoff’s Matrix-Vodafone
The Ansoff’s matrix enables us to examine the strategies adopted by the companies at present and in the future. For Vodafone they are currently following the ‘Product Development’ and ‘Market Penetration’.
In terms of future proposed strategies Vodafone is suggested to pursue ‘Market Development’.
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PRODUCTS
MARKET
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LITERATURE REVIEW
Literature Review
Many early attempts were made to formulate a marketing definition. Such an attempt has given rise to the following definition of marketing: “The dissemination of information about an idea, product or service to force action according to the intention of the advertiser” (Mohan, 2016)
It is easy to interpret the above definition can include personal selling with persuasive sales call. It was felt that this definition of marketing is not as accurate as it should be. For several years (1963), the American Marketing Association (AMA) has proposed the following definition of marketing: “Marketing is a form in the form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor”
(Wright et al., 1983) opined about the definition of AMA marketing “purist might point out that the definition of AMA actually describes advertising rather than marketing, these words deserve careful consideration:
These authors recommended a different definition of marketing. According to them “Marketing is controlled, identification information and persuasion through the media.”
Modern marketing is largely a product of the twentieth century; However, communication was part of the sales process for the exchange of goods between people began. The development of technology and research has led to an increase in the sophistication of marketing in recent decades: in ancient and medieval times, marketing was as gross as measured by today’s standards; However, the fundamental reason for using marketing was the same as it is now. (Bearden et al, 1989)
Institutions will become reality when a need arises. Support various external forces and nurture the growth and development of the institution. To survive, the institution must be dynamic, flexible and adaptable to meet needs in changing environmental conditions. (Bearden and Etzel, 2011)
The recorded history of marketing dates back to about 5,000 years, including the age of the modern satellite and the Internet, our marketing knowledge in antiquity is quite fragmented. However, it seems that the desire to advertise has been part of human nature since antiquity. (Bearden et al., 2000) Excavations by archaeologists in countries bordering the Mediterranean Sea, have unearthed a day of Babylon table dating to around 3000 BC. DC marked an ointment merchant, a clerk and a shoemaker. Romans and his predecessors knew that “it’s worth advertising.” The papyrus found in the ruins of Thebes (Egypt) shows advertisements that offer rewards for the return of fugitive slaves (circa 3000 BC).
Before the invention of movable type printing (circa 1438 AD) by Johann Gutenberg, there were three forms of marketing: (Lessig and Park, 1998)
1. Brand: Artisans, at first, wanted to be recognized for their skills and put their individual brands of the products they manufacture. This led to the reputation of the house built by word of mouth. Buyers have learned to look for distinctive signs as they now look for brands and trademarks of products.
2. Signs: Phoenicians and other merchants painted commercial messages on the prominent rocks along the trade routes they frequented. These messages were the products that were for sale highly valued. This is an example of external marketing. Archaeologists revealed by excavations at Pompeii, that small shops had inscriptions on the walls near the entrance to inform passers-by that the store sells pottery, wine, bread or any other product.
3. Preachers: This cries system could be present in all advanced civilizations of the ancient world. In Greece, during the golden age, city criers were paid to travel around the city by broadcasting news and making announcements on the streets of Athens. Epics and history books about ancient India reveal that leaders have used India’s crier system to educate the public on various issues of public interest. In rural India, towns of town criers were used until the 1950s.
Marketing is largely based on group pressure and often uses calls to a consumer’s needs to identify the group, membership in social and community standards. Whether the advertisers’ goal is awareness, knowledge, persuasion or buying, social needs and group influence are powerful motivators that can often be invoked to achieve the goal. For example, television ads that use the so-called “slice of life” of ten people are presented to a person who demonstrates the benefits of the product to another. This is an example of television simulation of a process of personal influence. (Guillermo and Etzel, 2002) Marketing slice life has been very effective and is still widely used by large packaged consumer companies such as Procter and Gamble. Dental hygiene products such as toothpaste and mouthwashes, deodorants, perfumes, cosmetics, clothing and dozens of other products rely heavily on the influence of the group and social calls. In addition to the pressure to adjust to social standards (bad breath and body odor are generally frowned upon in the United States), wear clothing that is socially acceptable and consistent with what is currently in fashion, buy care that will impress Parents and neighbors, and engage in a wide variety of behaviors designed to impress or attract other people. (Robertson, 2011)
Impact of marketing on Sales
It is interesting to explore how advertisements affect sales. Mostly it is thought that four basic mechanisms are involved: (Ryan, 1982)
1. Brand Switching: The objective of some sales promotions is to induce brand switching, which means encouraging consumers to purchase the promoted brand instead of the regular brand that would have been purchased had there been no sales promotion. (Hamel & Prahalad, 1990)
2. Repeat Buying: Sales promotions influence the consumers in a manner that increases the chances of purchasing the same brand again in future.
3. Purchasing more, or accelerating timing: Consumers purchase more quantity than their ‘immediate requirements, or the purchase timings are changed. (Hamel & Prahalad, 1990)
4. Increasing category expansion and consumption: The consumers increase consumption of total product category as a result of sales promotion.
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CRITICAL ANALYSIS OF CURRENT MARKETING STRATEGIES OF VODAFONE
Currently the strategies used by Vodafone. Since Vodafone operates in a very dynamic industry in which technology becomes obsolete in the space of six months or less, Vodafone has made quarterly forecasts and revised its strategies accordingly.
The markets in which they focus for penetration are low mobile subscription markets as compared to population size, geographic areas where it is more cost effective to build wireless infrastructure than fixed and networks of densely populated areas. One way to implement it is to use vernacular communication communication in your campaigns to draw closer to potential consumers. So if you are in Maharashtra, you will hear ads and other promotional campaigns in Marathi, and if you hear it in Tamil Nadu.
Vodafone does not believe that it is limited to just the bases. They plan to introduce new niche products and services that they believe will appear as and how technologies from various industries will begin to converge, especially in the field of consumer multimedia.
Its strategy is to explore, identify and extract revenue from the most profitable and fastest growing in the business of the means of consumption and its value chain by anticipating the needs of consumers in this area and the development of the sectors of Innovative value-added services. In the short term, they intend to focus on imaging and games, where a number of products have already been introduced. Their strategies to stimulate multimedia consumption also consolidate their position in the consumer voice market.
First Motor Strategy’ One of the strategies of success of the strategy of the first engine of Vodafone. Vodafone identify the opportunity well ahead of its competitors and charge the benefit. Vodafone was the first to launch the mobile Internet. Vodafones strategy is customer-focused and potential products, the company is constantly developing new products and services so consumers can enjoy the latest technologies.
Life Cycle of the marketing strategy produits’ positioning strategy Vodafone evolves as the product, market and competitors evolve over time. At present, they are in the growth phase as Vodafone new products and services very often to attract more and more customers. They also plan 4G in the near future.
Vodafone believes that there are many opportunities for mobile market growth and intend to focus on the market with a low rate of mobile subscriptions compared to the population size, geographic areas where it is more cost-effective to build wireless infrastructure if Fixed telephone networks and densely populated areas, where factors such as poor housing fracture tilt the balance in favor of wireless solutions.
Mobile Multimedia Consumer Unit ‘ Vodafone enters the new product and serves niches, Vodafone expects technologies from various industries begin to cover. Particularly in the areas of public media, the main objective was to explore, identify and extract income from the most profitable and dynamic segments.
MARKETING MIX OF VODAFONE
MARKETING:-
Marketing is a total system of business activities designed to plan, price, promote and distribute want ‘ satisfying goods and services to present and potential customers. (Myers, 1966)
MARKETING MIX:-
The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. These tools can be classified into 4 broad groups called the 4Ps of marketing: product, price, place and promotion. (Douglas, 2008) Vodafone’s marketing mix is describe
FOUR P’S OF VODAFONE
‘ PRODUCT
‘ PRICE
‘ PLACE
‘ PROMOTION
PRODUCT
‘ Product mix concept holds that consumer will favor those products that offer the most quality, performance or innovative features. (Masaki and Helsen, 2004) Vodafone taking care of this concept introduced its product into the market like India where people prefer quality and performance. Product mix is the proper combination of product variety, quality, design feature, brand name packaging, sizes, services, warranties.
‘ Vodafone made a proper combination of each and every component of product mix by offering innovative services in prepaid and post paid segments and introducing amazing value added services to its customers.
PROMOTION
‘ Promotion is also an important part of the marketing mix. (Ryan, 2002) It provides a platform to product for its initial launch thus this is an important aspect for any company launching its product. Vodafone in order to promote itself, went through various channel like
(1) Sale promoting
(2) Marketing
‘ Vodafone in order to advertise its product is mainly relied upon print media, internet, hoarding in print media. Vodafone came up with ads in magazine, newspaper etc, also made an effective marketing through internet. The Zoozoo Ads produced by Vodafone have rocked like anything and are a huge hit in India. All these methods of marketing chosen by Vodafone are taken into consideration keeping in view the target markets. Thus Vodafone adopted marketing and sales promotion technique in such a way that it appealed to its target market.
PLACE:
‘ Place is an important component of marketing mix. (Settle, 2009) The major purpose of marketing is to satisfy human need by delivering product of various types to buyer’s when and where they want them at a reasonable cost.
‘ Distribution plays an important role in place mix. (Belk, 1988) Increasing levels of competition, cost-consciousness, brought on by world and national economic development and consumer concern with efficiency in marketing are amongst the main reasons why distribution has become increasingly important to organization in recent year
‘ Place mix is a combination of channels of distribution, coverage, assortment, location, inventory, transportation. Channel of distribution is one of the main components of place mix. (Siddhartha, 2012) A channel of distribution, then, consists of producer, consumer, and any intermediary organization that are aligned to provide a vehicle that makes possible the passage of title or possession of the product from the producer to the ultimate consumer
SEGMENTATION, TARGETING, & POSITIONING OF VODAFONE
STP stands for ‘Segmentation, Targeting and Positioning’, on which all marketing strategies are built upon. (Robertson, 1971) Vodafone follows mass-marketing.
SEGMENTATION
Segmenting is the first step in segregating consumers into different types or categories. (Mahajan et al, 2010) Vodafone segments it’s consumers on the basis of psychographics, which means that the segmentation is on the basis of lifestyles and personality.
Vodafone’s corporate objectives include getting into every domain that makes life mobile, which is why they are investing heavily into the multi media business. This makes perfect sense with respect to Vodafone’s segmenting on the basis of psychographics. Vodafone attempts to target all customer groups with all the products they might need. They cover the whole market through differentiated marketing, designing different products for each segment.
In terms of geographic markets, currently Vodafone has reached about 2000 towns in the country with mobility coverage being about the same extent. (www.vodafone.com) Coverage is likely to reach 3500 towns in the next 6 months, so Vodafone’s geographic target clearly is to reach those 3500 towns with their handsets through controlled distribution.
Vodafone has achieved a strong market presence in India through mass marketing. By putting their cellular services ‘out there’ in the market, consumer awareness about the product is heightened. (www.vodafone.com)
It has adopted a full market coverage strategy in which it attempts to serve all consumer groups with all the products they might need through differentiated marketing. It operates in several market segments and designs different models for each segment. Vodafone targets Smart classic, enterprise consumer and Fashion Segments. All of Vodafone’s advertisements are targeted at a specific segment.
The researcher has done this analysis on the basis of average. Vodafone, on one hand, has a highly-developed product line, ranging from basic services at a low price to services with many value added features like 2G, 3G etc. for a premium price. So at an average, Vodafone stands at a point where in terms of quality and features it is high whereas as far as price is concerned it is comparably low. On the other hand, Airtel has a concentrated market targeting a clientele which is as good as Vodafone. Therefore, even though their product features are different, so is their price, at an average. Therefore, it stands at a point at where both quality and price are high.
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POSITIONING
Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. The end result of positioning is the successful creation of a customer-focused ‘value proposition’, a cogent reason why the target market should buy the product. Below is the positioning of Vodafone.
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NEED GAP ANALYSIS
The gap between the customer’s perceptions and expectations was calculated to find out whether they are satisfied. At the end of the study an analysis is done to achieve the main objective of the research to rank Network quality, Price, Promotion and Physical Evidence of Vodafone.
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OBJECTIVES
1.3 Objective of the Study
Therefore under the above research perspectives the objectives of the study are:
‘ To study the effectiveness and responses of telecom customers towards Vodafone Marketing Strategies
‘ To know the role of marketing on the buying behavior of the customer
‘ To find out whether the Indian customers associate with the new Vodafone
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HYPOTHESIS FORMULATION
H1: The services provided by Vodafone are at par with the customer’s expectation
H2: Vodafone’s Marketing strategies have succeeded in attracting customers as compared to its competitors
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RESEARCH METHODOLOGY
INTRODUCTION
The present study is an attempt to investigate how Vodafone used its Marketing strategies for better communication in India. This section also explains the methodology employed in the study and provides a description of the research instrument, sampling design, and data collection procedure and data analysis technique. The data were gathered through questionnaire and interview.
RESEARCH METHODOLOGY
RESEARCH APPROACH
The research approaches selected for the study were both exploratory and descriptive survey as per the nature of the study. According to (Gupta, 2003) descriptive survey is concerned with the condition of relationships that exists, practices that prevail, beliefs, point of view or attitudes that are held, processes that are going on, effects that are being felt or trends that are developing. The present study is concerned with aspects like marketing strategy, consumer behavior and customers. For this purpose a descriptive survey approach was considered to be most appropriate as suggested by (Goldstein & Healy, 1995).
RESEARCH DESIGN
According to Saunders et al (2005) research design is the overall plan for collecting and analyzing data, including specifications for enhancing the internal and external validity of the study. Gupta (2003) highlighted that the selection of research design depends upon the purpose of experiment, variables to be manipulated and the conditions under which the experiment is to be conducted. The objectives of the descriptive research according to Saunders et al (2005) is to answer the ‘who, what, when, where and how’ of the subject under study. In descriptive studies, the researcher has to give adequate thought to framing research questions and deciding the data to be collected and the procedure to be used for this purpose. Data collected may prove to be inadequate if the researcher is not careful in the initial stages of the data collection. It designs are used for some definite purpose. It cannot identify the initial stages of data collection.
NATURE OF DATA:
The research has made use of both, the primary sources and the secondary sources of data in eliciting information.
PRIMARY DATA: The primary source of data involves oral interviews and questionnaires. These sources are inadvertently expected to yield more qualitative data and results.
SAMPLE POPULATION
According to Saunders et al (2005), population is any group of individuals that have one or more characteristics in common and are of interest to the researcher. According to Polit & Hungler (1999) population is the entire aggregate of cases/elements that need the designated set of criteria. The need for defining a population for research project arises from the requirement to specify the group to which results of the study is applied. It was not possible for the investigator to survey all the customers and officials of Vodafone so a total of 120 questionnaires were distributed to the customers and officials of Vodafone in National Capital Area region, out of which 116 were returned, filled to the researcher. Of the 116 returned questionnaires 16 were incomplete and 100 were usable for analysis purpose.
THE SAMPLE & SAMPLING TECHNIQUE
According to (Polit & Hungler, 1999), a sample is a small proportion of population selected for observation and analysis. Sampling refers to the process of selecting a portion of the population to represent the entire population. Sampling is necessary because it is more economical and efficient to work with a small group of elements. (Goldstein, 2000) Keeping in view the nature of the problem, the objectives of the study and the research design, a sample size of 100 was considered to be adequate.
DATA COLLECTION
The task of data collection begins after a research problem has been defined and research design/ plan chalked out. While deciding about the method of data collection to be used for the study, the researcher should keep in mind two types of data viz., primary and secondary. (Nag, 2013) The primary data are those which are collected fresh and for the first time and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. (Nag, 2013) The researcher would have to decide which sort of data would be using (thus collecting) for the study and accordingly will have to select one or the other or both method(s) of data collection. The methods of collecting primary and secondary data differ since primary data are to be originally collected, while in case of secondary data the nature of data collection work is merely that of compilation. (Nag, 2013)
PRIMARY DATA COLLECTION METHODS
INTERVIEWS: The author has conducted oral interviews, questionnaire survey among the customers, retailers and officials of Vodafone. In considering an oral interview of such a nature, a follow up and step by step approach was adopted in getting through the interviewees. The oral interview involved a set of well thought out questions that were asked and the responses thereon noted as a basis for analysis. Subsequently a graphical analysis has been made based on the responses received from the persons questioned and interviewed. Sufficient notice was given to those to be interviewed (customers, retailers and officials of Vodafone) so as to enable the arrangement to be successful. An advanced notice of four weeks was considered. Once the interview was over, the responses received were grouped together, and a graphical presentation and analysis has been made for every set of questions.
SECONDARY DATA COLLECTION METHOD
For the study, the literature survey was undertaken according to year wise. In the First stage, an effort was made to understand the problem clearly and to find out which aspects must be covered in the study. For this purpose a preliminary survey of literature was conducted under various subject headings. A thorough search was made through secondary sources to find the literature related with Vodafone and its Marketing strategies published in different journals, books, reports, seminar/conference proceedings, etc. and bibliography was prepared accordingly. In the second stage, the most relevant articles and documents were selected for detailed and in-depth study. Therefore, a thorough search and review of literature related to various aspects of the topic was conducted.
METHOD OF DATA ANALYSIS
Author has conducted a graphical analysis based on the responses received from the persons questioned and interviewed. Once the questionnaire survey was over, the responses received were grouped together, and a graphical presentation and analysis made for every set of questions.