Vodafone Mobile Network in India - Essay Example

Vodafone in India AFFILIATION: Table of Contents Table of Contents 2 Introduction of Vodafone 4 Vodafone in India 5 Current Marketing Mix and Marketing Strategy 6 Product 7 Price 8 Place 8 Promotion 9 International Marketing Plan 9 Conclusion 11 References 12 Appendix I – PEST Analysis 13 Political 13 Social 13 Economic 13 Technological 14 Appendix II – SWOT Analysis 15 Strengths 15 Weaknesses 15 Opportunities 15 Threats 16 Vodafone is among the leading international brands of Britain in the telecommunication industry. It is the pioneer company which has revolutionised the ways in which communication takes place on the mobile phones. Recently, the number of mobile phone users has increased globally due to diverse range of applications available for them. Moreover, the cell phones are being used as a necessity due to easy access to the Internet. However, this concept is relatively new for the developing countries as there is dearth of effective communication channels. Additionally, the growing population coupled with poor communication network especially in rural areas has necessitated the demands of cost effective communication tools in these regions. In order to strengthen its presence on international level, Vodafone makes sure that it offers the offerings in accordance to the market needs. Presently, it has implemented a slightly different marketing strategy in developed and developing markets so that it can incorporate the demands of the respective markets. Even in India, it is targeting the rural population which does not has access to the mobile phones due to their high prices. Vodafone is utilising the marketing activities in compliance with Indian market so that the customers can understand its features. However, there is immense need of modifying the strategy so that it can include the business specific services for the thriving corporate world. Introduction of Vodafone Vodafone also known as Vodafone Group PLC is a multinational firm operating across the globe with having basis in UK. It is recognised as the Britain’s third prevalent mobile network operative company and the world’s largest mobile telecommunication network corporation which has revenues of about ₤20 million (Vodafone, 2013). The company was established in 1984 and its name is an acronym of Voice Data Fone. Currently, it has presence in all of the continents which comprises of direct operations in more than 21 countries and partnering networks in about 49 countries (Vodafone Institute for Society and Communications, 2013). Overall, the company is delivering services in more than 150 countries along with 23 different languages and has a customer (individuals and enterprises) base of more than 404 million (Vodafone Global Enterprise, 2014). The vision of Vodafone is “to attain the position of being a global leader in the mobile industry by adding value to the customer’s life and increase the profitability rate along with making the networks of mobile the ‘nervous system’ of a network connected economy” (Vodafone, 2013). In order to cater successfully to the demands of the consumers, the company has designed distinguished business and marketing strategies for developed and developing/emerging economies. There is vast difference between the two categories in terms of customers, economic conditions, social attitudes and macro environmental factors (Vodafone Group PLC, 2013). When a company decides to implement the international marketing plan, it has to assess the strategy which has to be incorporated in its global operations. The foremost decision which has to be taken is regarding the operational measures i.e. business culture, HR policies, working environment, ethical code of conduct, marketing, finances, production and others (Cateora, Graham & Gilly, 2012). Hence, the key strategies which are followed by the leading Multinational companies are classified as global, standardised, international/adaptive and localised (Czinkota & Ronkainen, 2012). Considering the scenario of Vodafone, it has designed the strategy by combining the elements of standardised and localised strategies. In few business aspects like values, ethical code of conduct, business processes and services, it is following the standardised strategy. On the other hand, in marketing, sales, distribution and others, it has incorporated the localised technique. It allows it to make sure that it offers consistent quality of offerings worldwide which are in alignment with the respective markets (Vodafone Group PLC, 2013). Vodafone in India Vodafone existed in India for many years in the form of having stake of about 5.6% in Bharti Airtel. Moreover, it strengthened its presence in the region by entering into a joint venture with Essar Group and it had stake of about 67%. Essar Group formerly known as Hutchison Essar was owned by Hong Kong’s Hutchison Telecommunication. The company had an attractive competitive bid as Reliance Communications and Hinduja Group also wanted to purchase it but Vodafone took its control by agreeing to pay $18.8 million (Vodafone India, 2013). Vodafone is named as Vodafone India Limited in the region and the company along with its subsidiaries i.e. VI Group (Vodafone India Group) has its headquarters in Mumbai. Vodafone is well-known as the second largest operator of mobile networks which is serving above 150 million customers in the country and it has presence in every telecommunication circle of India which are about 23 in number (Vodafone Group PLC, 2013). In India, the firm defines its business as “bringing together the data and voice, wireline and wireless services for assisting the businesses and individuals in harnessing the potency of a holistic solution for communications” (Vodafone, 2013). The entity focuses on presenting the customers with unique, innovative, superior quality and brilliant solutions so that communication becomes effective. Due to enhanced level of commitment evident in its business operations, the brand is ranked as The Most Trusted Service Brand in the country. Moreover, in the last year, Vodafone has been able to increase the base of subscribers by 11.8% and volume of voice usage by 20% in India (Vodafone, 2013). Current Marketing Mix and Marketing Strategy From international perspective, the key objective of Vodafone is to attain the market leadership level on the basis of revenue generated from each customer, increased customer satisfaction and first-class quality of network (Vodafone Global Enterprise, 2014). Besides this core business purpose, the company’s marketing strategy is customer-focused and product-led which means that the employees have to continuously develop innovative and unique products and services while utilising the advanced technologies (Vodafone Institute for Society and Communications, 2013). As the consumers are becoming sophisticated regarding using the latest mobile phones, they are looking for value added options through employing the product improvement features. For instance, in UK, USA, Europe and other developed countries, the mobile phones and related technologies are mandatory parts of life and they are demanding a range of benefits from the mobile network companies. Vodafone has to make sure that it takes account of the customer demands by carrying out surveys and studying their needs so that they are presented with compatible applications and tools (Vodafone, 2013). On the other hand, the developing countries such as India, China, Malaysia, UAE, Kenya and others are still in the growth stage. These markets are attractive options for Vodafone as there is a wide range of unmet needs of the customers and the company is offering them such solutions which can serve their purposes. Moreover, these countries have weaker communication systems when compared with developed economies, so Vodafone has a diverse set of unexploited opportunities (Vodafone Group PLC, 2013). A detailed analysis of Vodafone in India is presented in Appendix I and Appendix II which sheds light on the micro and macro factors which are considered by the firm when operating in India. However, the crucial marketing objectives of Vodafone are as follows: 1. Attract and retain new customers 2. Retain the existing customer base 3. Introduce the latest and technologically sophisticated services 4. Enhance the image of Vodafone brand (Vodafone Institute for Society and Communications, 2013) In order to make sure that Vodafone is able to cater to the Indian market needs, the marketing mix of the brand in the region is as follows: Product One of the important driving forces of a brand is the basic product or service as it is the fundamental basis on which a firm is able to stand out from its competitors. For Vodafone, the offerings had to be modified to align with the consumer’s communication needs. In the developed countries, it offers highly innovative and technologically advanced business and customer solutions as the customers have desires of availing the choices of value added and productive communication techniques. However, in India, the brand introduced a range of products to penetrate in the telecom industry. Especially for the customers who fell in the low income category, pre-paid facilities were provided to them as majority of Indian population lives below the poverty line. Also, for customers having high incomes, the brand offered post-paid services. Moreover, it even launched the easy to use and cost effective ‘Vodafone Handyset’ service for addressing the requirements of people residing in rural areas so that such individuals can have mobile phones at affordable prices (Vodafone India, 2013). Price For all companies, the price is an important determinant of their marketing strategy as it allows them to develop their tactics accordingly (Czinkota & Ronkainen, 2012). Overall, in developed countries, Vodafone has implemented the penetration pricing as it is targeting youngsters in all the markets. With the help of this pricing, a large number of students and young adults are utilising the services of the firm. Whereas, in India, it is following a low pricing approach so that it can attain a high market share in rural sector of India. More than 70% of Indian population is living in rural areas so this policy allows it to enhance the customer base. Additionally, the customers are given value for their money as the quality standards of Vodafone in India are in compliance with the international benchmarks. Place In all of its global business operations, it is following the same distribution strategy which is offering services on outlets, dealing with customers on its E-commerce website and distributing through well-known retailers. Currently, Vodafone is present in more than 23 states of India and the customers can avail the brand services either from the brand’s direct distributors, indirectly from the retail outlets or through its website. In almost every part of the country, there are various Vodafone’s service centres so that the customers can have easy access for resolving the issues. By dealing the customers on one-to-one basis has helped the brand in expanding its customer base significantly (Vodafone Group PLC, 2013). Promotion An important constituent and the backbone of marketing mix is the promotion. The promotion of a brand comprises of a range of activities undertaken by a company for informing the customers about the offering (Cateora, Graham & Gilly, 2012). The main promotional tools utilised by the firms are advertising, direct selling, sales promotion, sponsorship and Public Relations. The advertisement and promotion campaigns of Vodafone in India have been successful due to their resonance with the Indian market. When it launched the ad of Zoo Zoos and pug, it was an instant hit and it even got attention on the social networking sites. The celebrity endorsement technique is also implemented in India; the advertisement comprised of Irfan Khan as the influencer and it was well received by the target audience. Moreover, the brand even sponsors various events of sports such as IPL (Indian Premier League) which induced many customers to try out the brand’s services. It even entered into sponsorship with Splits Villa (a reality show) on MTV to gain popularity among young people who watched this program. Some other promotional schemes of Vodafone are Bonus Cards, Talk Time offers, Low cost offers, Validity offers, Tariffs Offers, Cost-effective Handsets for the pre-paid customers and attractive offers for post-paid customers (Vodafone, 2013). International Marketing Plan Although Vodafone has strong presence in Indian market but there are a range of avenues which are untapped by the brand. First of all, it needs to reinforce its brand image in the market by offering distinctive services for the urban and rural population. In addition to targeting the customers on the basis of income groups, it is recommended that the brand takes account of literacy rate. As majority of Indian population comprises of young adults who are acquiring higher level education, they are looking for efficient mobile networks and have desires of embedding technologically advanced learning alternatives. In order to enhance the market share and penetrate deeply in Indian market, the marketing plan for India should incorporate the following features: 1. Create advertisements especially for the educated class and run these ads on News channels and during prime times so that these customers can be informed about the brand. 2. Enhance the enterprise solution services to the corporate sector of India as many multinational firms are shifting their operations in this region. By developing the services for such global companies, Vodafone will be able to expand its international business and augment the global reach vision. 3. As majority of the Indian market admire Amir Khan (Film actor of Bollywood) and believe that he is a patriotic and trustworthy person, endorsing the brand by having him in the advertisements will give a positive message about the brand. 4. Social networking sites should be effectively used for penetrating in Indian market as people like to discuss about brands on these platforms. Vodafone can exploit this avenue for enhancing its presence in India. 5. During the festivals such as Holi, Diwali and others, Vodafone should consider offering attractive promotional schemes so that the customers feel valued. For instance, it can start talk time offer for those people who are living in abroad countries so that people can share their happiness at low cost during such happy events. Conclusion Vodafone is definitely an international and well-known mobile network communication brand which has enhanced the communication experience of its customers. It has undertaken a strategic approach by categorising the markets into developed and developing countries so that it can utilise the technology with full potential and present the customers with offerings in compliance to their understandings and requirements. For India, the brand has even made sure that it offers a completely distinctive range of offerings especally designed for the Indian market so that the technologically savvy people living in rural areas can avail its services. However, there are few areas which need to be considered so that it can enhance its brand image in the region. References Cateora, P., Graham, J. and Gilly, M., 2012. International Marketing. 16th ed. USA: McGraw-Hill/Irwin. Czinkota, M.R. and Ronkainen, I.A, 2012. International Marketing. 10th ed. USA: Cengage Learning. Vodafone, 2013. Half year results and strategy update. [Online] Available at: [Accessed 7 April 2014] Vodafone Global Enterprise, 2014. Who we are? [Online] Available at: [Accessed 7 April 2014] Vodafone Group PLC, 2013. Strategy. [Online] Available at: [Accessed 7 April 2014] Vodafone India, 2013. Footprints – Vodafone India Sustainability Report 2011-12. [Online] Available at: [Accessed 7 April 2014] Vodafone Institute for Society and Communications, 2013. Mobile Technologies – The digital fabric for our lives. [Online] Available at: [Accessed 7 April 2014] Appendix I – PEST Analysis Political The political environment comprises of the government authorities, country rules and regulations and legal requirements of operating in the region. Considering India’s political aspect, there is instability as the country’s situation remains adverse most of the time. Moreover, there is too much politics in India and corruption is found everywhere in the government corporations. However, the situation is favourable for the foreign firms as they are offered a huge range of benefits such as low corporate taxes, leniency in business operations as there are many cost effective alternatives, diverse and competently skilled labour force and easy access to a range of suppliers and distributors. Vodafone will have to comply with the Indian Telecom Industry policies so that it performs its business activities in legal way. Social India has a growing population of more than 1.2 billion. Majority of the people are in between the age of 25-34 which is an indication of demanding and technologically driven customers. Moreover, there is surge in rural communities who are migrating to urban areas mainly for employment purposes which shows that there will be an increase in the demand of effective communication networks. As agriculture is the major driver of the economy, more than 50% population is living in rural areas. Due to IT advancements in India, there are huge changes that there will be a new market for competent set of mobile network communications. Economic India is recognised globally for having the fastest economic growth in the last five to ten years. As of 2013-18, it is predicted that it will have GDP CAGR of 6.6%. Almost all the top ranked multinational firms are relocating their manufacturing facilities along with operational businesses in India so that they can take advantage of the highly skilled workforce. Moreover, the service and IT sector of India is booming at an accelerating pace which indicates that in near future it will be the leading service provided worldwide. Technological The technological advancements are taking place at a fast pace on global level and due to such modifications communication throughout the world has become an easy task. India is among those nations which is known as IT destinations as it has abundance of IT professionals who are outsourcing their services globally. Additionally, innovations are taking place at a robust speed in the region as there are many people who are involved in a diverse range of R&D activities of different industries. Appendix II – SWOT Analysis Strengths Dominance in the cellular market on global level – It is ranked as the number one mobile network service provider for consumers and number two for the enterprises Wide presence on geographical level – Vodafone is able to integrate international exposure effectively in its strategy Successful market expansion strategy – Till now, the company has not encountered any failure in any of its international operations Economies of Scale – Having presence in more than 23 states of India allows the company to have an access to wide resources for managing the operations cost effectively. Integrated network infrastructure – It eases its expansion technique as the technology is the source of its competitive edge Weaknesses Low investment in R&D – There is low rate of product development initiatives which causes it to lag behind the competitors ROA is negative – The ineffective utilisation of assets is affecting it as it falls behind the rivals like BT group Less network coverage in rural areas – Inability of developing effective communication networks in rural areas of India Legal notice for ITA – Despite having presence in India, it received the legal notice from ITA (Indian Tax Authority) in 2009 Inability to charge premium rates – It cannot charge high rates from the customers as the population has very low spending power Opportunities Target educated class – As youngsters in India are acquiring education, Vodafone can offer distinctive services for this target group Enhance presence on social networking sites – Since the latest trend is of social media, the brand can exploit this avenue for reaching a wide target market Develop communication networks – As there is dearth of appropriate communication networks, the company can try to create efficient systems for the rural markets by entering into partnerships with local authorities Offer specialised services for corporate world – India’s corporate world is undergoing drastic improvement changes which can make the country a developed nation in near future so Vodafone can offer tailored services for the leading businesses Threats Intense competition – There are few players in the market which is making the sector consolidated Price wars – As customers are price sensitive, the companies are competing on the basis of pricing strategy Lower cost imports – The customers can avail the low cost options which are entering the Indian market Natural disasters – Any natural disaster can impact the communication infrastructure which can hinder the operations of Vodafone to a great extent Read More