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MARKETING STRATEGIES OF VODAFONE                                           SERVICE MARKETING   

                                                 SUBMITTED TO: PROF A SRIKANTH   

 

 

 

Submitted by:                      Aditi Maheshwari   09BSHYD0033 

                                            Anshuman  Goel       09BSHYD0139 

                                                Mudit Mathur          09BSHYD1025 

                                           Mansi                       09BSHYD0433 

                                           Neha Gupta              09BSHYD0498                                                        

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Table of Contents 1.  OBJECTIVES ........................................................................................................................................... 3 

2.  INTRODUCTION ..................................................................................................................................... 4 

3.  SITUATIONAL ANALYSIS ........................................................................................................................ 5 

4.  MARKET OPPORTUNITY ........................................................................................................................ 6 

5.  BRAND ELEMENTS ................................................................................................................................. 7 

6.  CRM ....................................................................................................................................................... 8 

7.  POSITIONING ......................................................................................................................................... 9 

8.  SEGMENTATION .................................................................................................................................. 10 

8.1 BCG MATRIX .......................................................................................................................................... 10 

8.2 ANSOFF’s PRODUCT‐MARKET EXPANSION GRID .................................................................................. 11 

9.  MARKETING MIX ‐ 7Ps FOR VODAFONE ............................................................................................. 12 

9.1 PRODUCT ............................................................................................................................................... 12 

9.2 PRICE ..................................................................................................................................................... 13 

9.3 PLACE .................................................................................................................................................... 13 

9.4 PROMOTIONS ........................................................................................................................................ 14 

9.5 PEOPLE .................................................................................................................................................. 14 

9.6 PROCESSES ............................................................................................................................................ 15 

9.7  PHYSICAL EVIDENCE ........................................................................................................................ 15 

10.  CONCLUSION ................................................................................................................................... 16 

11.  REFERENCES .................................................................................................................................... 17 

 

    

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1. OBJECTIVES  

• To analyze the marketing strategies of the service provider – Vodafone • To see the positioning and segmentation done by Vodafone. • To determine the marketing mix of Vodafone.

   

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2. INTRODUCTION     

Vodafone is the world’s largest mobile telecommunications community, employing over 65,000 staff and with over 130 million customers. The business operates in 26 countries worldwide. Vodafone is a public limited company with listings on the London and New York stock exchanges. Global recognition of the Vodafone brand is growing as the company rolls out its identity into new markets. However, it retains local names and imagery in markets where this is essential to maintaining the trust of customers. To help promote its image worldwide, Vodafone uses leading sports AND stars from high profile global sports, including David Beckham and Michael Schumacher.

Vodafone Essar, usually referred to as Vodafone is the Indian subsidiary of Vodafone Group with 67% stakes held by UK based Vodafone Group Plc. and 33% stakes owned by Essar Group. It was formerly known as Hutchison Essar. In May 2007, Vodafone acquired the 67% stake held by Li Ka Shing in Hutchison-Essar, thereby making it Vodafone Essar. The company won 3G licenses in 9 of the 22 telecom zones for Rs. 11617.86 crore and plans to launch its 3G services in Jan-March 2011. The company now has operations across the country with over 118.04 million customers.

FROM HUTCH TO VODAFONE

Vodafone essar was formed out of an acquisition deal of Vodafone and hutch essar, and hence Hutch was successfully rebranded as Vodafone. This was an easy way to enter into India as hutch essar already had a strong brand image in Indian telecom market. As the rebranding campaign begun they started by changing the taglines communicating the change from hutch to Vodafone. The taglines were ‘change is

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good’, “hutch is now Vodafone”. They changed from ‘where u go our network follows’ to ‘Make The most of Now’ They also carried out a massive advertising campaign to rebrand themselves, and the main feature of their campaign was the Zoo Zoo characters that were used to promote the value added services by Vodafone and became famous as soon as they were launched.

3. SITUATIONAL ANALYSIS  Customers

Vodafone operates in 23 telecom circles in India in 2G segment and it is about to enter 9 telecom circles in 3G segments. As per the report of Cellular Operators Association of India, in the month of October it has 118.04 million subscribers all over India

Competitors

Vodafone’s market share is 23.20%and it faces stiff competition from several players in the market like Airtel, Reliance, BSNL, Idea, Tata Indicom, Virgin Mobile and new entrants like DOCOMO. Therefore, the level of competition that Vodafone has to face is high.

Company

Vodafone Essar, formerly known as Hutchison Essar is a cellular operator in India that covers 23 telecom circles in India based in Mumbai. Vodafone Essar is the Indian subsidiary of Vodafone Group 67% and Essar Group 33%. It is the second largest mobile phone operator in terms of revenue behind Bharti Airtel, and third largest in terms of customers. Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital GSM technology, offering voice and data services in 23 of the country's 23 license areas. It is second largest telecom service provider as per the market share.

Context

Tele-density in India has reached nearly 51% and the industry is growing at a CAGR with 22%. The intense competition has led the players to target lower segments and entry into rural areas. The rural mobile penetration is just 19% compared to 103 percent in urban India (around 20% is estimated to have dual Sim cards).

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4. MARKET OPPORTUNITY  

The Indian telecom market is the fastest growing market in the world and is expected to soon takeover US as the second largest market, much of this growth is to be driven by the lower middle income group and the rural population.

With the penetration of telecom in the urban markets, the urban middle class markets have more or less saturated. The next phase of growth is thereby likely to be driven by the lower income group which form the Bottom of the Pyramid. The service providers will have to revamp their business models by which they could make good profits even at low ARPUs. For e.g.: One paisa per second billing. Vodafone has already taken a step forward towards targeting these consumers who are at the bottom of the pyramid with their bonus cards and advertisements. The key success factor in the telecom sector would be to concentrate on providing the most competitive tariff rates, good quality of service and constant innovations.

 

 

Vodafone logo, tagline, stores and schemes.

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5. BRAND ELEMENTS  

NAME BRAND ELEMENT- VODAFONE

DESCRIPTION

BRAND NAME

Vodafone Fanciful

URL www.vodafone.in Easy to remember, Simple country extensions

LOGO/SYMBOL

Recognizable, Red and white color combination. Bright red color giving a lively image

CHARACTER

Zoo Zoo. Create imagery for value added services, Animated and Humanized, Recognizable and loved. creative

PACKAGING

Imprinting the same logo, colorful logos on packaging of sim cards, handsets, top up recharge coupons, Recognizable,

TAGLINES Make the most of now Consistent and uniform across the world.

 

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6. CRM  

Total Customer Benefit is the perceived monetary value of the bundle of economic, functional and psychological benefits customers expect from a given market offering because of the products, services, personnel and image involved. In the case of Vodafone, we can analyze the Total Customer Benefits as follows:

Product Benefits

A variety of products is offered including several variations in the prepaid and post-paid divisions. In addition to the existing products, Vodafone provides a number of top-up plans each of which can be selected on the basis of what is the customer’s requirement. Apart from all of this, Vodafone now has the iPhone 3G and the Magic Box Handset as product offerings.

Services Benefits

Vodafone World which is the GPRS Service, Vodafone Live which guarantees non-stop streaming action, ‘Chhota Recharge’ which is a small value recharge card beginning at Rs.10, are some of the value added services that Vodafone provides. Vodafone provides a series of other services like Tunes & Downloads, News & Updates, Call Management, Astrology, Entertainment, Sports, Finance, Travel, Devotional, Mail, Messaging, and Detailed information on Billing.

Personnel Benefits

The staff of Vodafone is trained with the mindset of “Happy to help you” which is the motto of Vodafone. Vodafone has call centers with trained personnel who take a customer’s request, process it, service the request and then follow up to find out if eventually the customer’s needs have been met satisfactorily.

Image Benefits

Vodafone has always been positioned as a brand that provides a wide range of services and caters to all sections of the society. However, Vodafone seems to have hit it off well with primarily the youth and the younger age groups.

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If we were to analyze the Total Customer Costs in a similar manner, we would find

Monetary Costs

Vodafone has several plans to suit everyone’s pockets and so the cost associated with a Vodafone connection is only what the client feels is feasible for him or her.

Time Costs

Customer’s do not have to spend too much of time trying to pay their bills or get their requests serviced because of the many stores and online payment facility

Energy Costs

Because clients do not have to travel to meet their needs too often, the energy costs associated with Vodafone are also considerably low.

Psychological Costs

The customers of Vodafone do not need to spend any large amount on acquisition, maintenance, usage and disposal of the connection. Therefore, the elements of the psychological costs do not play too much of a factor while evaluating the total costs that a customer incurs in availing of Vodafone’s services.

7. POSITIONING 

After the great success in the ZooZoo ads, which were used to communicate to audiences with high levels of literacy, Vodafone is now popularising the brand by an animated parrot. This advertisement is to commercialize their Rs 4 Bonus card offered to pre-paid consumers. The positioning of this as is as such as to as address a different target group i.e. lower income groups/masses. Vodafone is trying to reach the mass consumers by releasing shorter and Tiny Packs and Using Animated Characters like Parrot Setji. The proposition is very strong and interesting. There seems to be an attempt to connect with the price-conscious audience - therefore the 'common man' kind of talk. A similar ad was released by the company ‘Vodafone Blackberry Ads’ to target the urban growing youth who are price conscious but at the same time want Value added services.

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8. SEGMENTATION 

8.1 BCG MATRIX 

HIGH

Business

Growth

Rate

LOW

HIGH LOW

RELATIVE POSITION (MARKET SHARE)

Stars

Prepaid Services of Vodafone would be a star performer as the lower income segment and rural areas prefers pre-paid connections. With the Customer subscriber base growing steadily, Vodafone is keeping itself abreast with the Industry growth rate by clocking a steady growth around the same margin

Cash cows

While the Wireless Telecom Sector may show an industry trend of 15% revenue share in the Post-paid segment, Vodafone Postpaid Services is a Cashcow by contributing a large proportion to the company’s revenues

Question Marks

The Magic Handboxes offered by Vodafone would fall under this particular category as the mobile Handset market in India is growing at a pace of about 9% per annum and due to intense rivalry and many specialised players Vodafone is not able to perform well in this particular area of interest.

STARS

PREPAID SERVICES 

QUESTION MARKS

MAGIC HANDBOXES  

CASH COWS

POSTPAID SERVICES

DOGS

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8.2 ANSOFF’s PRODUCT­MARKET EXPANSION GRID  

• Market Development

With the booming rural market in India, Vodafone should adopt a very proactive approach in reaching out to the new markets with its current flagship products viz. the prepaid and post-paid plans. With Urban markets literally getting saturated and also with increased competition Vodafone should concentrate on the rural segment and the lower income group. Hence this would be a case of market development in this particular regard.

• Product Development

With respect to the Magic Hand boxes and Solar Powered Mobile phone offerings of Vodafone, it would be a case of Product development strategy as it constantly comes out with innovative new designs to satisfy the changing needs of its customers. As of now Vodafone is concentrating its efforts only on the urban areas with respect to Magic Hand boxes and although it has introduced its solar powered phones particularly for the rural segment there have been lagging behind in promotions for the same.

 

                                                          Current Products New Products

 

 

Current Markets

New markets

 

 

Market Penetration S

Market Development

Product Development Strategy

Diversification

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9. MARKETING MIX ­ 7Ps FOR VODAFONE 

9.1 PRODUCT A product with many different features provides customers with opportunities to chat, play games, send and receive pictures, change ring tones, receive information about travel and sporting events, obtain billing information – and soon view video clips and send video messages

• Magic Hand boxes: Vodafone provides a range of magic boxes (mobile handsets) at the lowest possible rates as a part of its offering to the markets. It should embark on the low cost so as to attract the lower income segment.

• Solar Powered Phones: Vodafone has already launched its solar powered phones earlier this year. These new handsets are to benefit users in areas with adequate sunlight and unstable electricity supply.

• Bonus cards: These are essentially prepaid cards that enable a larger section of the society to stay connected. These can be easily purchased from its stores and mini stores.

• VAS: Vodafone offers a range of Value added services apart from its core offerings. These include Tunes and Downloads, entertainment quotients like music and movie related activities, devotional and sports quotients, regular news and updates and call management services. Apart from these, special offers and services are also offered on important festive occasions like Diwali in order to provide maximum value to its customers. This would be a very important component of differentiation considering the fact that almost all players in the market are on an even playing field with respect to providing the core products.

Vodafone products, top up coupons, a satisfied Zoo Zoo

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 9.2 PRICE    

• Vodafone wants to make its services accessible to as many people as possible: from the young, high powered business executives, to the more mature users.

• It offers various pricing structures to suit different customer groups. • Monthly price plans are available as well as prepay options. Phone users can

top up their phone on line • A number of schemes are being introduced from time to time to match the

customer needs, like unlimited free msg card, 1paisa per second call rates. • The top ups are available from Rs. 10. • Its pricing strategies varies accordingly by offering features like Filmy

recharges and SMS value packs targeted at the youth segment to features like “Apne minutes”, bonus cards and longer validity schemes at a similar pricing but targeted at the lower income segment

• Magic hand boxes: Magic Hand boxes are products by which Vodafone can attract customers from a variety of income groups and other demographic characteristics. In order to make it available to a very wide section of the audience Magic hand boxes are made available from prices as low as Rs.999 to Rs.9999.

 9.3 PLACE • Vodafone promotes its offerings through a host of over 4000001 stores located

across all the 23 telecom circles in the country. Stores have special offers, and various point of sale posters in order to attract its customers.

Ads showing Zoo Zoo moods and accessibility of Vodafone services

                                                            1http://businesstoday.intoday.in/index.php?option=com_content&task=view&id=1892&Itemid=1&issueid=&limit=1&limitstart=1 

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9.4 PROMOTIONS  

• Unlike the other telecom majors which rely heavily on Film stars and cricketers to promote their brands, Vodafone has focused on advertising campaigns like the Pug and Zoo Zoos and now the Parrot to have connect with the people and also as a part of its strategy to be cost effective on the ad production front.

• ABOVE THE LINE: Advertising on TV, on billboards, in magazines and in other media outlets reaches large audiences and spreads the brand image and the message very effectively. This is known as above the line promotion.

• BELOW THE LINE: Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy. Vodafone’s stores, its products and its staff all project the brand image.

9.5 PEOPLE  

• Vodafone Essar India has an employee database of around 10,115 in the financial year 2010 which is considered as a dedicated and passionate workforce and one of the best customer service support teams. Fun is incorporated in the work life of employees of Vodafone. Empowerment and career development go simultaneously with all opportunities in Vodafone. It provides a dynamic environment and challenging opportunities to its employees. Vodafone Essar Limited has received many awards over the years such as the Best Mobile Service in India, Most Effective and Most Creative Advertiser of the Year, and Most Respected Telecom Company. Moreover it aims to reach the maximum number of people.

 

  

 

 

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9.6 PROCESSES  

Vodafone Essar India provides a wide variety of services in mobile communication and other value added services by adopting an easy-to-use customer friendly approach. All information about its basic and other valued services and various promotional offers can be availed through a unique customer care number 111 which can be dialed from anywhere in India.

Vodafone ads and stores

9.7 PHYSICAL EVIDENCE Physical Evidence is the element which allows the consumer again to make judgments on the organization.

• The most important physical evidence of for the Vodafone is its existing customer base. The Vodafone Essar subscriber bases in the cities of India are:

City No. of customers Kolkata 1,632,875

Mumbai 2989970 Delhi 3002442 Chennai 981996

(Source: http://business.mapsofindia.com/communications‐industry/companies/vodafone.html) 

• Existence of the customer care centers across the country, Vodafone mini stores that are small in size but big in service, Vodafone stores; Vodafone outlets are all a part of the physical evidence that facilitate the customer judge the service.

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10. CONCLUSION  

Vodafone as seen in the report has been a successful service provider and has been able to make its mark by a large consumer base despite a tough competition in the industry. The rebranding exercise was a huge success and the main credit goes to the Zoo Zoo ads which were mainly used to promote the value added services of Vodafone, these value added services now form a main part of the telecom industry. However, Vodafone has till now achieved a higher growth share in the urban areas as compared to the rural areas where it needs to focus on by implementing different strategies that would ease the usage of their services for the rural customers as well.

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11. REFERENCES  

• http://www.vodafone.in/ • http://www.kpmg.com/Global/en/WhatWeDo/Advisory/Performance-

Technology/Business-Performance-Services/Pages/Vodafone-case-study.aspx • http://www.bharatbook.com/Market-Research-Reports/Asia-Pacific-Mobile-

Handset-Market-Analysis.html • Cellular Operators Association of India, October, 2010 • http://www.thetimes100.co.uk/case-study--sponsorship-marketing-mix--41-

131-3.php • http://www.icmrindia.org/casestudies/catalogue/marketing/MKTG220.htm