Integrated Marketing Communications Mix Strategy for Mobile Services Providers: Vodafone vs Virgin - Essay Example

? Comparative Analysis of Integrated Marketing Communications Mix Strategy for Mobile Services Providers: Vodafone vs. Virgin Executive Summary The paper evaluates the integrated marketing communication strategies followed by Vodafone and Virgin Mobile. Marketers are exploring new advertising and communication forms such as, viral, entertainment and experimental marketing. Integrated marketing communications (IMC) has also emerged as an increasingly implemented strategy across organizations and agencies. The study will describe the mobile market statistics, competition and current as well as future trends, pertaining to UK market. Two major players, Vodafone and Virgin mobile have been selected for competitive strategy analysis. The major marketing strategy followed by Virgin mobile is cross-selling of mobile services to the existing base of customers. Vodafone, on the other hand, is engaged in luring new customers through various innovative campaigns, strategies and initiatives, apart from maintaining its current base of customers. With the help of the above analysis, marketing communication mix strategies will be developed for the competitor brand with the objective of increasing their competitiveness. The various branding and promotion strategies of the two organizations will be discussed in detail. The paper will also analyze the loopholes in the current marketing communication strategies and the ways to overcome them. With the help of a well build research, the paper will evaluate and recommend few strategies for Virgin mobile in order to build a sustainable and continuous growth and achieve competitive advantage. Table of Contents Introduction 4 Market Review 4 Literature Review 6 Critical Analysis and Discussion 8 Vodafone 8 Virgin Mobile 10 Recommended Marketing Strategies 13 Conclusion 15 Recommendation 15 Reference List 17 Introduction In the present competitive world, organisations are selling services and goods through a variety of indirect and direct media channels. Marketing comprises of anticipating the needs of customers and evaluating the apt services or products which can satisfy those needs, thereby achieving high levels in sales. In mass advertising world, marketers explore new communication forms such as, entertainment, viral marketing and experimental marketing. In this phase, integrated marketing communication has evolved as one of the most popular and increasingly recommended strategy for gaining sustainable competitive advantage. This paper analyzes the marketing and communication strategies followed by Vodafone and Virgin Mobile. The report will evaluate the various advertisement and promotional campaigns used by both the competitors, specific to UK market. The report will also evaluate the various marketing and media strategies used by the companies and the extent to which these activities could excite customers. With the help of the above analysis, marketing communication mix strategies will be developed for the competitor brand with the objective of increasing their competitiveness. Market Review Market for mobile services includes those organizations which in collaboration provide services such as, information and telecommunication as well as entertainment services like, internet, voice, text, SMS and data services (Jarkko, 2005). It is composed of thousands of organizations which offer mobile services across the globe. Few of the big players include Vodafone, AT&T and China Mobile. Vodafone is undoubtedly one of the strongest and well-known brands in the mobile industry. Mobile networks are now accessible to more than 90 percent of the world population and almost 80 percent of rural population. As mobiles are becoming cheaper and more affordable, various emerging markets are becoming growth engines within the mobile industry (Goulding, 1999). In the case of this booming sector, emerging countries in the African and Asian regions are showing highest growth rates in terms of new subscribers and usage (Chen, 1996). The mobile market of United Kingdom can be termed as advanced and latest. Mobile service competition also had the earliest beginning in this nation along with number portability which was introduced during early 1999 (Whalley and Curwen, 2004). Telephony services were also adopted widely in the region. However, according to more recent statistics, penetration of mobile phones has reached 100 percent. Extreme and intense competition exists between five major mobile operators namely, Vodafone, T-mobile, mmO2, Orange and Hutchison (Budde, 2013). These competitors are both trying to take away customers from their present operators as well as attract new competitors. United Kingdom is one of the largest European mobile markets, both in terms of revenue and volume of subscribers. The market of UK is characterized by various new developments. Apart from upgraded networks, advanced services in data are also provided to the customers. Mobile bundling has become a new phenomenon and the regulatory bodies are controlling the fees and charges. The overall mobile penetration is above EU industry average. However, subscriber growth is strong as customers keep adopting additional SIM cards and other business oriented applications on a number of platforms. Competition is fierce in the industry. Mobile operators mainly focus on packaging of the service bundles and their promotions. They are also exploring other applications such as, advertising facilities and mobile servicing. Other issues which are affecting the mobile industry in UK are roaming tariffs and interconnection. The two companies under discussion are Vodafone and Virgin Mobile. Vodafone is a British telecommunications organisation with their headquarters situated in London (Vodafone, 2013b). It is the second largest telecommunications organisation across the globe, measured in terms of both subscribers and revenue. The company has its networks in more than 30 countries and partner networks in 40 additional nations. It was founded in the year 1991 in Newbury, United Kingdom. Gerard Kleisterlee is the current chairman while Vittorio Colao is the present CEO of Vodafone (Vodafone, 2013a). Virgin Mobile is a subsidiary of Virgin group, a multinational conglomerate founded by Richard Branson (Virgin Mobile, 2013a). It is a wireless communication subsidiary used in eight different global licences. The communication services of Virgin Mobile are currently available in Canada, Australia, Colombia, Chile, India, France, South Africa, Poland, United States and United Kingdom (Virgin Mobile, 2013b). Since each entity of Virgin mobile subsidiary acts as an independent entity, the network interfaces, handsets and service plans which are offered, varies from nation to nation. The typical partnership strategy followed by Virgin Mobile is between Virgin Group and the existing network operator. Literature Review According to Fitzerpatrick (2005), “marketing communication is a step towards an integrated approach in achieving efficiency by synergy. It involves the merging of distinct communication functions in a way that allows an organization to speak with one voice, one look.” Caywood (1997) has suggested that the emergence of IMC can be traced back to three areas. Firstly, the increasing intensity of competition and high market risks due to mergers and acquisitions and their consequences on marketing strategies. Secondly, the constant weakening of the traditional advertising and marketing trends owing to information technology which is constantly in search for cost effective communication methods among marketers. Thirdly, due to the changing consumer lifestyle, the marketers are forced to create more descriptive and faster response formats (Besanko, Dranove and Shanley, 1996). Integrated marketing communication helps consumers to learn about product makers, benefit and purpose of the product and how brands are linked to people, events, feelings, places and experience (Cornelissen, 2001). It also enhances the ability of the company to reach the right consumers at right time with the right message and in the right place. The IMC concept has been built over four fundamental foundations. These are mainly, coordinating promotional elements, redefining marketing communication scope, application of communication technology and IT and strategic and financial integration (Panda, 2003; Lavidge, 1999). IMC has been helpful in recognizing the trends through which customers can be aligned, related and coordinated, thereby increasing the efficiency of advertising, direct marketing and sales promotion programs (Schultz, 2003). Critics have recommended that marketers in this century should implement those IMC programs apart from the usual concepts of marketing (Johnson and Schultz, 2004). Disregarding IMC and inability to spread communication messages in unison can lead to serious brand damage and negative influence on the consumer behaviour (McGrath, 2005). Competitive analysis can be defined as the process through which an organization tries to understand and define its sector, locate its competitors, evaluate their weaknesses and strengths as well anticipate their future moves (Kliatchko, 2008). Competitive analysis involves both the collection of data through competitive intelligence and interpretation and analysis for decision making in the management. Competitive analysis also helps in selecting viable strategies for strengthening the market position of the organization (Porter, 2004). Therefore, it also serves as the key foundation for strategy formulation in any organization. The ultimate aim of competitor analysis is to understand the competitor in order to follow their every strategy and implement even better strategies. It is always said that marketers and strategies should always be able to live in the strategic shoes of the competitor. Competitor analysis helps in evaluating the likely responses of the competitors to the organization’s strategic moves. Critical Analysis and Discussion In this section both the competitors, Vodafone and Virgin mobile, will be evaluated on the basis of their marketing and advertising strategies to attract customers. The various slogans, messages and tactics used will also be discussed. Vodafone The marketing aim of Vodafone in UK is to maintain market leadership. The company has followed customer focussed and product led strategy, where it is involved in continuous development of new services and products by utilising the latest technology. However, as the customers are becoming increasingly volatile and sophisticated in their use of technology, their demands have reached greater heights and they seek value addition and product improvements (Brennan, 2008). Previous Vodafone campaigns were described as too conventional as it was very mismanaged and complicated. The major challenge which the marketers had faced during their early days was to ensure that the launched campaign was strong enough to hide or redeem the earlier negative images of the Vodafone campaigns (Roy and Das, 2012). In order to shed the negative image, Vodafone had started using the voice of pop stars and integrating various media channels like, television, billboards, radio as well as website marketing, public relations and social media. The promotional campaigns consists of print ads, online promotions and advertising, mailers, television, outdoor promotions, social media marketing and website management. A promotion mechanism involving 360 degree approach has been used by the organisation for improving its consumer base. Slogans and messages Vodafone has been known for its unique and catchy advertisements. The company had initiated a campaign with a pug and kid, spreading the message of trust, friendship and bond. In the advertisement, the pug follows the child wherever he goes, even in the remotest of places. Through this, the company sent the message of 24 hour connectivity with the customer. The campaign was launched in a 360 degree format. All media channels were engaged in this media awareness. The tag line during this campaign launch was, “Where ever you go, our network follows” (Business Case Studies, 2013). During this campaign, different modifications were made to the advertisements to fit the individual messages to be sent, such as, instant connection, happy to help and quality connections. After the success of the campaign with the pug, Vodafone had again successfully launched another campaign. It was known as the “ZooZoo” advertisement strategy. These ZooZoo advertisements consisted of egg-headed white creatures. The initial advertisements gained quick popularity and had become a major hit. The campaign was also launched in a 360 degree approach. It had gained popularity in social media through various sites such as, Twitter, Facebook and other video-oriented websites. With the help of ZooZoo, Vodafone had attempted to present the image of a common urban man who is gradually transforming into the main driving force behind increased telecom usage. Brand image Through exclusive and unique selling proposals, Vodafone provides value added services to its customers. The company has been associating with popular personalities such as, David Beckham, in order to give Vodafone a specific brand image. Thus, the brand upholds the image of being trendy and latest, yet reliable and qualitative. Few of the latest services offered by Vodafone were email plus, PC backup, music download and 360 stores. Virgin Mobile Since it does not own any network infrastructure, Virgin mobile acts as a virtual operator in United Kingdom and provides mobile services to the existing network of Everything Everywhere. The broadband of Virgin is ranked third largest with more than 4 million customers in UK market. Virgin mobile has been playing a critical role in the overall corporate and media strategy of the parent company (Ofcom, 2011). The major marketing strategy followed by Virgin mobile is the cross-selling of mobile services to the existing base of customers. The company is also involved with another Virgin subsidiary, Virgin Mobile, in order to reach out to a new base of customers. The overall quality of data, voice and other value-added services of Virgin Mobile is hugely influenced by the performance of its mobile and network partner, Everything Everywhere. Few of the current marketing campaigns which the brand operates include an integrated brand campaign where participants are rewarded for playing different games through online mobile applications. Social media channels such as, Youtube, have also been covered in order to increase the overall brand reach. Other media supports include display, digital, outdoor, high mobile executions, premium advertising in Facebook, commuter press and digital marketing (Ferdous, 2008). The brand has also partnered with various website and networking firms for services such as, game play updates, utilisation of national street teams, talent integration as well as promotion across social, radio and other digital platforms. With the help of its marketing and media campaigns, the mobile service brand hopes to strengthen its customer centric strategy and engage customers in the most unique manner. Slogans and Brand message The initial positioning strategy of Virgin Mobile had revolved around the message “A fair go for all”, with the focus on customer satisfaction. After the success of this campaign, the brand had again started campaigning on a new message “We look after our won.” This new campaign uses media channels encompassing online, outdoor advertising and partnerships with various Virgin subsidiaries such as, promotion on boarding passes of Virgin airlines. The brand has an exclusive customer magazine which is distributed in Virgin stores. Brand Image Virgin mobile has categorised itself as a brand which is youth oriented. In order to communicate this brand image, the mobile service company has launched many media campaigns targeting the youth. Also, the website of the company is dominated by a vibrant red colour and uses a vocabulary which is easy to connect for the youth. The mobile plans are especially tailor-made for this segment, offering services such as, small talk time recharges and special student discounts. Services such as, mobile shopping facilities, internet, latest caller tunes and ringtones are opportunities tapped by the brand. The current brand identity of Virgin mobile has been simplified and more similar to other Virgin member groups. The brand materials, which include merchandisers as well as store materials, have also been reinvented with colours such as, silver, purple, black and white in order to provide a vivacious image. The uniforms of the retail staffs have also been transformed to bear a more vibrant and attractive outlook (Forbes, 2012). The major weakness of Virgin Mobile is that even though it has been able to establish successful campaign in the market, it lags far behind big giants such as, Vodafone, in terms of market share and brand identity. Even though marketing campaigns are able to generate sales and revenue, the overall brand loyalty is low and people tend to shift to a more secure and known brand (Amit and Schoemaker, 1993). Another major issue which the company has to face is the long term dependency on Everything Everywhere. In case of any emergency or misunderstanding with the operator, Virgin mobile will not be able to continue its service on a commercial and timely basis. Recommended Marketing Strategies Value added services The company has been successful in providing unique value added services. This can be one of the standards of differentiation against top competitors. The current strength of Virgin mobile is that, unlike other big brands such as, Vodafone, Virgin is catering to a niche market comprising of young, energetic and techno savvy customers. By engaging these customers through unique and cost effective offers as well as quality services, the brand will be able to establish a strong and dedicated customer base. Constant innovation Another important strategy for Virgin mobile will be to constantly improve in terms of innovation and creative ideas for engaging customers. The bigger brands such as, Vodafone and AT&T, have a strong brand image along with brand loyalty, which compensates for any lack in the creative area. Since, Virgin mobile is a comparatively new brand, it needs to constantly innovate before it establishes a firm brand image in the market. Less diversification Currently, diversification is not on the cards for Virgin Mobile. As a result of the various subsidiaries and unrelated brands, the brand name has become diluted into more of an endorsement brand. Apart from that, it also increases the risk of negative brand publicity. For example, if any one sister company of Virgin group enter the wrong books, the entire company will be affected (Gimeno and Woo, 1999). Integrated marketing campaign for niche segment Integrated marketing activities should include those strategies which would not only bring those on a single platform, but also make them loyal to the brand. For this, every innovative idea should be backed by creative media communication (Holm, 2006). For example, creating buzz about an incoming stage show through mobile vans, creating online communities for debates and discussion as well as luring customers through various awards and freebies. Thus, an attractive communication plan with long term objective planning will be very helpful in establishing the overall brand identity and brand image of Virgin mobile (Barney, 1991). Conclusion Mobile communication has penetrated almost every market across the globe. In case of developed nations such as, United Kingdom, the penetration level has reached over 100 percent. Thus, mobile operators are now engaged in providing new and better services to the existing customers as well as capturing new customers. The competition is intense and profit margins are very low. In the current report, marketing communication strategies of Vodafone and Virgin mobile has been discussed. Though Vodafone has established itself as one of the major mobile service provider across the globe, Virgin Mobile has been constantly raising its status through creative marketing ideas and innovative communication channels. However, in order to survive in the market, Virgin mobile will have to change its approach and work towards a more integrated marketing approach. Recommendation Business does not necessarily mean changing the external surroundings, but it also indicates the change in the internal environment as well as organizational reaction to certain changes in the environment. Thus, IMC approach should not be taken as a final goal. Rather, it should be viewed as a continuous approach with modifications and changes specific to the industry as well as the competitors. These communication programs should also be closely associated with various changes such as, technical advancement, consumer patterns and competition. IMC not only helps in providing practice based insights, but also provides concrete suggestions regarding various communication campaigns. The advantage of employing IMC is that, apart from current and prospective customers, it also helps in communicating with other stakeholders like, vendors, employees, external environment and related industries. In future, IMC is going to become a necessity and not a choice for agencies and clients worldwide. Moreover, marketing communication will be a waste, in case the consumers are not aware of the changes in the services and products offered or they are not provided the right message through right channel. Thus, without integrated marketing communication mix, successful promotion of a product, brand or general business is not possible in a competitive and global market. Reference List Amit, R., and Schoemaker, P.J., 1993. Strategic assets and organizational rent. Strategic Management Journal, 14, pp. 33–46. Barney, J.B., 1991. 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