Telecommunications Provider in the United Kingdom - Essay Example

Marketing of Services (Research on O2, a Telecommunications Provider in United Kingdom) Table of Contents Introduction 3 Discussion 4 Suggestions Regarding Improvisation of the Service Process of O2 based on the 3Ps 4 Processes 4 People 5 Physical Environment / Evidence 6 Customer Identifiable Potential Risks For O2 7 Faulty Network 7 Poor Quality of Customer Complaint Handling Procedure 8 Issues Faced by O2 Regarding Effective Customer Satisfaction Management and Recommendations 9 Financial Issues 9 Deterioration in the Service Quality 10 Ineffective Customer Complaint Management 10 Required Pricing Strategy for O2 11 Competitor Based Pricing 11 Cost-Based Pricing 11 Citation of Research in Relation to Bundling of Services and Recommendation for the Future Development 13 Conclusion 14 Journal References 15 Website References 17 Introduction Over the past few years, multiple small and large telecommunication companies have been established within the markets of UK. One of such major player of the UK telecommunication sector is the O2. This company has been a commercial brand of the Telefonica UK Limited which itself is one of the world’s leading telecommunication integrated operators involved in the provision of digital entertainment, communication and information services all across Latin America and Europe. However, the discussion in this report will mostly be concentrated on its commercial sub-brand O2 (Telefonica UK Limited, 2014). This commercial sub-brand of the Telefonica UK Limited till date has attained a total customer size of about 23 million. Adding to that, as per the ranking of Ofcom, which is an UK based industry, involved in the regulation and competitiveness measuring of various telecommunication industries, O2 has attained the highest ranking in context to customer satisfaction levels. This commercial sub-brand provides 2G, 3G and 4G network services all across UK. Apart from these, O2 also provides Wi-Fi services. It also owns nearly half of the shares of the Tesco Mobile Limited which is another network operator operating within the UK markets (Telefonica UK Limited, 2014). The main focus objective of this discussion is to effectively evaluate this commercial sub-brand (O2) and provides answers to the following provided questions which have been described in the discussion part of the report. Subsequently, conclusion and recommendation will also be provided accordingly in the later parts of this essay. Discussion This section will comprise of the detailed evaluation of all the provided questions. Suggestions Regarding Improvisation of the Service Process of O2 based on the 3Ps Processes As can be predicted, the main process for a telecommunication company is all about providing high quality communication and online data services to its customers. However apart from just the service provision activities, other services such as effective customer complaint handling, identification of the needs of the customers and fulfilling them accordingly and effective handling of all the organizational processes also falls under the process part of the extended marketing mix (O2online, 2009). The same goes for this UK based Telecommunication Company (Continuum Learning Pte Ltd, 2010). Moreover, as can be understood from this company’s insights that it provides utmost importance towards delivering high quality of communication service to its customers. Adding to that, the company also believes in context to establishing long term relationships with its customers through bringing about improvisation within their customer handling skills and minimizing their customer response time (O2online, 2009). Adding to the basic commitments of this telecommunication company, it can be stated that it takes customer complaints seriously. The company operates a highly qualified group of customer complaint handling staffs which provide quick and requirement specific solutions to the each and every quarry of the customers. Notably, in case of faulty services, the company undertakes investigation procedures for identifying the faults and simultaneously provides pro-active feedback to the customers to retain their trust and loyalty on the brand (O2online, 2009). In comparison to that of the other competitors within the UK markets, this telecom brand provides a wide variety of options through which its customers can clarify their service related doubts from the customer care executive 24 hours for all 365 days within a year (O2online, 2009). As a recommending part, since the company has already been into service, it should take initiative regarding provision of specific data and tariff plan not based on the company’s standards but based on customer’s request. Through this way, this company will be capable of bringing about diversification within its service types along with attaining significant level of customer’s preference (Continuum Learning Pte Ltd, 2010). People This can be considered as one of the crucial factors of the extended marketing mix. The people or the workforce comprises of a major operational part within a service industry. They can also be termed as the organizational stake holders who show their efforts in terms of carrying out each and every operation inside or outside the organization in an effective manner. For O2, an effective customer handling team is required for supporting all its customer related services. Adding to that, for the current scenario, the company has already set up effective guidelines regarding the employee hiring process. Some of these set guidelines have been described as under (Telefonica S.A, 2014). Currently, the brand has been tending towards bringing about development within its sales network and expanding its business structure. Other future perspectives of this company in the current scenario include successful launching of new products and services in all the nations in which the brand has been operating (Telefonica S.A, n.d.). Thus, for attaining these perceived objectives, the brand requires its workforce to be capable of anticipating change. Adding to that, the workforce of this brand is highly result oriented and is quite adaptable to the surrounding environmental change. Moreover, the employees within this brand also project high signs of commitment towards the organizations and in return, the brand project high level significance towards their career development options (Telefonica S.A, 2014). The brand also requires its workforce of have significant amount of knowledge about the business process along with strong determination to serve customers effectively. As a conclusive part, the employees within this organization are of high energetic nature along with effective team players as well. The human resource department of this organization also make significant efforts with respect to effective management of the employee forces and keeping them motivated for maintaining their work performance. All this is about the current workforce scenario within this brand (Telefonica S.A, 2014). Thus, as for the recommendation part, an opinion can be made regarding involvement of the workforce’s ideas into organizational decision making process. This will gradually help in attaining new strategic ideas along with improvising the organizational attachment factor with its employees (Continuum Learning Pte Ltd, 2010). Physical Environment / Evidence Since this brand has only been into service, most of its physical evidence factors can be explained in term of in-tangible factors. This brand has already been projecting high profitability rates over the past few years, thus for now it has come up with the plan of redesigning its store outlets for attracting more customers in the days to come. This recent renovation plan of this brand has been projected by multiple news channels where the brand has expressed its ideas of investing £19 million for digitizing its outlets. The brand seems to believe that this will be like a significant adds up to their physical evidence factor (Tomaszczyk, 2013). The brand also plans of establishing showroom areas within each of its outlets for displaying its cellular products to its customers. Through the implementation of these technological advancements, the brand aims towards providing its customers with value added services such as online cash payment, listing to online music track within the store, VoIP services, and Wi-Fi services among others so that the customers can get a showroom glimpse of the various products and services that the brand is willing to provide to them and test them accordingly (Tomaszczyk, 2013). As for the recommendation part, it can be stated that this brand should plan in context to promoting its product and services online. Presently, the customers are more interested towards checking the products online before purchasing them so this could help the brand in attaining an additive advantage (Continuum Learning Pte Ltd, 2010). Customer Identifiable Potential Risks For O2 Faulty Network One major risk factor which customers will keep in mind before choosing O2 as their service provider is regarding the quality of network service. To the customers, the main requirement for choosing a telecom brand is that it provides superior connectivity over other telecom service providers. Adding to that, O2 is the second largest telecom brand operational within UK and thus the expectations of the customers regarding the service offered by this brand are also high (Roberts, 2012). On the other hand, this brand has faces multiple loopholes within its service which has created emergence of more problems for the brand’s customers. For instance, the failure of the entire O2 telephone network during 2012 has projected a major loophole within its service quality. Adding to that, for the first time, the brand’s response to the customers in context to this network issue was their unawareness regarding the amount of time which will be needed for fixing the issue. As a result, the numerous customers remained interrupted from making any type of call or texts. Moreover, the brand also failed in estimating the number of customers who got affected due to this service problem (Roberts, 2012). As a recommendation to the brand, it can be stated that it needs to simplify its communication services so that any further faults within its system can be easily identified and rectified accordingly. This would also help the brand to provide better quality service to its customers and thus attain their confidence and trust. Poor Quality of Customer Complaint Handling Procedure As being a well reputed brand within the UK markets, O2 is also expected to give prior importance to the complaints made by its customers regarding the quality of service. Adding to that, handling the customer complaints effectively has also been one of the core commitments of this brand (O2 Community, 2014; Khan and Afsheen, 2012, p. 12833-12840). Moreover, the customers will also tend towards preferring those brands which shows effectiveness and speed in context to handling customer complaints. Despite its increased commitments, the brand has failed multiple times in terms of managing customer complaints. Multiple instances can be brought forward as an evidence of ineffective customer complaint handling which has been projected by this brand (O2 Community, 2014; Khan and Afsheen, 2012, p. 12833-12840). For instance, multiple examples of this brand’s customers stating negative comments regarding the ineffective customer complaint handling procedure can be seen in the brand’s community website. As a recommendation, the company will have to make serious efforts regarding improvising its customer management mechanisms otherwise there will a high risk of losing customers as well as brand reputation (O2 Community, 2014; Khan and Afsheen, 2012, p. 12833-12840). Issues Faced by O2 Regarding Effective Customer Satisfaction Management and Recommendations Customer satisfaction is the key aspect of all telecom industries to sustain within the market. However, despite the numerous attempts done by the telecom industries to hold on to their customers, still multiple unsatisfactory aspects are common to evolve within them regarding the service quality or type. Some of the issues which might arise within the company in carrying out its effective customer satisfaction management procedures have been provided as under. Financial Issues It is a common that no matter how much effort O2 puts for ensuring satisfaction within its customers, still the chances of discontent customers will subsist. Basically, carrying out these types of customer satisfaction programs are often time consuming and costly as well. A simple understanding can be made that customers generally attain satisfaction if their requirements gets fulfilled and moreover, the requirement type may vary from customer to customer. Thus, it is not possible for the brand to monitor the requirement types of each and every customer in an individual manner (Nimako et al., 2010, p. 35-49). However, the financial factor cannot be related with the issues faced by O2 in the current scenario. Adding to that, bringing about diversification within the products and services will be a necessary factor which O2 will have undertake for carrying out the customer satisfaction initiative effectively. Regarding the recovery strategy for preventing such issues, O2 will have to implement certain risk management techniques which will be capable enough of understanding the customer requirement and expectation factors. The data obtained from this risk assessment and management tools with help in guiding the production and service provision in an effective manner (Nimako et al., 2010, p. 35-49). Deterioration in the Service Quality The same concept goes for the service quality type. In a similar context, it should be understood since the brand is already serving a huge population within the UK market; it will not be easy for the brand to maintain the quality factor in a constant manner. Adding to that, since the entire service type provided by this brand is mostly based on technology so it is likely to witness malfunction within its system at one point of time (Roberts, 2012; Nimako et al., 2010, p. 35-49). The meaning being that, maintaining the communication supportive hardware systems might require huge amount of investment and might be difficult as well. Thus, as a strategic recommendation, the brand should establish an efficient management team or tool which will be effective enough in detecting the faults within the system and otherwise if found could also rectify them within a limited duration of time. Through this initiative, the brand will have the capability of providing uninterrupted and quality communication service to its customers and increase the satisfaction level of the customers (Roberts, 2012; Nimako et al., 2010, p. 35-49). Ineffective Customer Complaint Management This can be considered as another issue that might hamper the customer satisfaction management process undertaken by this commercial brand. The current news forecast projected that this brand has made huge investments regarding digitization of its outlets with the prime intention of attracting more and more customers. Through these efforts, the brand wants to bring about diversification within its operationality and service and product mix which would further lead to improvisation of the customer satisfaction levels (O2 Community, 2014; Nimako et al., 2010, p. 35-49). Despite these improvisation attempts, the brand has been receiving multiple negative comments regarding the deficient performance of its customer service management teams. This could result in loss of interest and brand loyalty of the customers and they might jump to other brands. As a result, all the efforts made by O2 will finally end up being a complete failure. As a strategic recommendation, the brand should take such issues seriously and improvise them accordingly to retain their customers (O2 Community, 2014; Nimako et al., 2010, p. 35-49). Required Pricing Strategy for O2 Competitor Based Pricing Competitor based pricing strategy is the process in which a business organization sets up its products and service prices by taking into consideration of the prices of similar products and services which are provided to the customers by the competitors. In the case of telecom companies, it can be said that multiple other small and large players are already present within the markets of UK (Heidhues and Koszeg, 2008, p. 1245–1268). Moreover, they also provide almost the similar kinds of products and services as well. The difference might be in terms of the quality of service. It can be stated that customers commonly prefer quality service at reasonable rates. So in general terms it can be stated that O2 should set up its tariff plans by taking into consideration of other competitive players such as Virgin mobile and Vodafone. Formulating a competitor based pricing strategy will gradually be like a competitive edge for this brand (Heidhues and Koszeg, 2008, p. 1245–1268). Cost-Based Pricing Cost-based pricing can be an advantage for this brand, if the market situation is of monopolistic type. For attaining the advantage part, O2 will have to minimize its actual production and services cost and then add up the profit margin which they want to attain. However, in case of a saturated market, this type of pricing strategy will not be of much effect. This is mainly due to the reason that multiple other players will be also competing in terms of price leadership (Christopher and Gattorna, 2005, p. 115-121). Value Based Pricing In terms of value based pricing strategy for O2, it can be stated that this pricing strategy will be only effective for this commercial brand if it is coming up customized tariff plan which is completely unique from its competitors and provides the customers with high value. Generally this type of pricing strategy is followed by brands which manufacture products of high value (Hinterhuber, 2008, p. 41-50). Drawn Facts By taking into consideration of all the above facts along with evaluating the current marketing scenario within UK, a suitable conclusion can be drawn for this brand, competitor-based pricing strategy will be best strategy since the UK market has already got stagnated with multiple other telecom service players. So the other two pricing strategy might not prove to be that much effective in the present market scenario for this brand. Citation of Research in Relation to Bundling of Services and Recommendation for the Future Development From a summarised perspective, it can be stated that there still exists multiple opportunities for this telecommunication service provider to attain a better market share in the days to come. Adding to that, the store digitization strategy undertaken by this brand is ought to give it a better competitive edge against its competitors. For the recommendation part, few points can be mentioned which includes improvisation of the service quality, better management of the customer complaint and speeding up their customer response time (Uusitalo et al., 2008, p. 1-13; Seth et al., 2004, p. 913-949). The brand might also implement their product display features within their websites so that customers can easily go through the product categories and inquire about which product they need to purchase. The brand might also come up with new tariff and discount rates for attaining much more customers. Further recommendation regarding provision of bundled services can also be provided for this brand. Through bundled services, the brand will be capable of conveying the message regarding its new communication products and service types to its customers (Jarrar and Smith, 2011, p. 43-60). Conclusion By taking into consideration of all the above discussed facts, it can be sated that, O2 needs to bring about systematization within its operational structure. The brand seems to be well committed but in some way or the other lacks the practise. By bringing about improvisation within its service process and types, brand might be able to attain greater preference in the market. Apart from these, the brand must also need to formulate new strategies depending on its sore digitization process. O2 should also put on significant amount of efforts regarding promotional activities which will gradually help the brand in better positioning of its products and services in comparison to that of other telecom products and service providers within the UK markets. Journal References Christopher, M. and Gattorna, J. (2005). Supply chain cost management and value-based pricing. England: Industrial Marketing Management. 34(2). p. 115-121. Hinterhuber, A. (2008). Customer value-based pricing strategies: why companies resist. Austria: Journal of Business Strategy. 29(4). p. 41-50. Heidhues, P. and Koszeg, B. (2008). Competition and price variation when consumers are loss averse. USA: American Economic Review. p. 1245–1268. Jarrar, N. S. and Smith, M. (2011). Product diversification: the need for innovation and the role of a balanced scorecard. Australia: Journal of Applied Management Accounting Research. 9(2). p. 43-60. Khan, S. and Afsheen, S. (2012). Determinants of customer satisfaction in telecom industry a study of telecom industry Peshawar KPK Pakistan. Pakistan: TextRoad Publication. p. 12833-12840. Nimako, S. G. et al. (2010). Overall customer satisfaction in Ghana’s mobile telecommunication networks: implications for management and policy. Ghana: ATFD Journal. 7(3). p. 35-49. Seth, N. et al. (2004). Service quality models: a review. India: International Journal of Quality & Reliability Management. 22(9). p. 913-949. Uusitalo, K. et al. (2008). Customer complaints as a source of customer-focused process improvement: A constructive case study. Finland: Int. Journal of Business Science and Applied Management. 3(1). p.1-13. Website References Continuum Learning Pte Ltd. (2010). 3ps of services marketing mix. [Online] Available from: http://www.continuumlearning.com/Customer%20Services_3Ps%20of%20Services%20Marketing.pdf [Accessed: 13th May 2014]. O2 Community. (2014). Poor customer service and shamble complaint handling. [Online] Available from: http://community.o2.co.uk/t5/Pay-Monthly-and-Pay-Go/Poor-customer-service-and-shambel-complaint-handling/td-p/241111 [Accessed: 13th May 2014]. O2online. (2009). O2 code of practice for handling customer queries and complaints. [Online] Available from: http://www.o2online.ie/o2/uploads/pdfs/terms/consumer/O2-COP-for%20complaint-handling-Jun12.pdf [Accessed: 13th May 2014]. Roberts, H. (2012). O2 hit by nationwide network failure that has left millions of users unable to make calls or text. [Online] Available from: http://www.dailymail.co.uk/news/article-2172211/O2-signal-problems-Nationwide-network-failure-left-users-unable-make-calls-text.html#ixzz20ORJv5HN [Accessed: 13th May 2014]. Tomaszczyk, S. (2013). O2 in £19m store refit programme to deploy ‘digital services’ strategy. [Online] Available from: http://www.mobilenewscwp.co.uk/2013/09/10/o2-in-19m-store-refit-programme-to-deploy-digital-services-strategy/ [Accessed: 13th May 2014]. Telefonica UK Limited. (2014). About us. [Online] Available from: http://www.o2.co.uk/abouto2/company-history [Accessed: 13th May 2014]. Telefonica S.A. (2014). Career opportunities. [Online] Available from: http://www.telefonica.com/en/about_telefonica/html/profesionales/oportunidades.shtml [Accessed: 13th May 2014]. Read More