STRATEGIC MANAGEMENT ASSIGNMENT ON MARKETING FUNCTION AND ENVIRONMENTAL SCANNING OF VODAFONE

ASMA SULTANA III BBM 09BM012A

VODAFONE GROUPVodafone Group Plc. is the worlds leading mobile telecommunications company, with a significant presence in Europe, Middle East, Africa, Asia Pacific and the United States through the companys subsidiary undertakings, joint ventures, associated undertaking and investment. The headquarter is situated in London, United Kingdom. It is the worlds largest mobile telecommunications company measured by revenue and the worlds second largest measured by subscribers, with around 332 million proportionate subscribers as of 30th September, 2010. It operates networks in over 30 countries and has partner networks in over 40 additional countries. Vodafone Group was founded in the year 1984. The name Vodafone comes from voice data fone, chosen by the company to reflect the provision of voice and data services over mobile phones.

VODAFONE ESSARVodafone Essar is the Indian subsidiary of Vodafone Group and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license or Mumbai. It is the second largest mobile operator in terms of revenue behind Bharti Airtel, and the third largest in terms of customers. The company now has operations across the country with over 113.77 million customers. Over the years, Vodafone Essar, under the Hutch brand. Has been named Most Respected Telecom Company, The Best Mobile Service in the Country and the Most Creative and the Most Effective Advertiser of the Year. Initially, around 1995, the company services were branded Ma Touch, renamed to Orange in 2000. In December 2006, Hutchison Essar relaunched the Hutch brand nationwide. On September 21, 2007, Vodafone acquired Hutchisons stake in Hutch Essar and henceforth it is known as Vodafone Essar in India. Vodafone is a public limited company with listings on the London and New York stock exchanges. Vodafone Essar is owned by Vodafone 52%, Essar group 33% and other Indian nationals 15%.

VISIONThe vision is to be the worlds mobile communications leader through corporate responsibility by reducing business risk and supporting our reputation with customers, employees, government and other important stakeholders.

MISSIONTo be the worlds mobile communications leader by enriching customers lives, helping individuals, businesses and communities through the unique power of mobile communications.

MISSION STATEMENTWe will be the communications leader in an increasingly connected world.

VODAFONE SLOGANMake the most of now.

MARKETING FUNCTIONMarketing is a comparative term which includes all resources and a set of activities necessary to direct and facilitate the flow of goods from produced to customer. And the process of distribution is called sales. It is to satisfy customers demands. It is the creation and delivering the standard of living to society. The company first determines customers wants and figure how to make the delivery of the product to satisfy those wants. Human efforts, financial management are tools for marketing. Team work and market penetration are tools for sales.

OBJECTIVESy To analyse marketing opportunities. y Increase of sales and revenue. y To satisfy the customers wants as the business exists only due to existence of customer demands. y To distribute the product in time. y To maximize product variety and customer choice. y Overcoming customer complaints.

y To improve the quality of life consisting of the quality, quantity, range & accessibility of the goods. Vodafone has targeted the bottom of the pyramid. Under market segmentation, Vodafone has adopted a multi-segment approach. y GEOGRAPHICAL SEGMENTATION: Metropolitan and cities of India. Vodafone wants to expand into the Asian markets. India has the 2nd largest market for mobiles. It is growing at the rate of 6 million subscribers per month. y DEMOGRAPHIC SEGMENTATION: Low and middle income group. y TARGET MARKET: Market from urban areas from middle and upper middle class families, youngsters in big cities and businessmen.

MARKETING STRATEGYy The strategic objective is to innovate and deliver on customers total communication needs. y To educate consumers about cellular telephony. y Vodafone also communicates regularly with its customers to keep them well informed of the benefits of all Vodafone products.

STRATEGY ADOPTED BY VODAFONEFOCUS ON FREE CASH FLOW GENERATION AND EXECUTION Drive operational Value enhancement. performance. Cost reduction. Pursue growth Mobile data opportunities in total Enterprise communications Broadband Execute in emerging Delivery in existing markets. markets. Selective expansion/ Cautious approach. Strengthen capital Shareholder returns. discipline. Clear priorities for surplus capital.

BRAND AMBASSADORSy Hutch, as a brand, always tried to connect with consumers in a simple, honest and real manner. y The Hutch Pug and the actor Irfan Khan were retained for the brand promotions. This ad campaign was started in 2003 featuring a pug named Cheeka following a boy around in unlikely place, with a tagline, Wherever you go, our network follows.

y To help promote its image worldwide, Vodafone uses leading sports stars from high profile global sports, including David Beckham and Michael Schumacher. y The latest by Vodafone is advertisements featuring Zoozoos which have hit the Indian market like a storm. They have caught attention, became popular and will now probably go into history as one of the most brilliant advertising idea for the industry.

ESSENTIALS OF MARKETINGThe world is a global market with few barriers, so Vodafone has to be highly visible as the brand to buy. Effective marketing is the key to this high visibility. Marketing involves anticipating customers needs and finding the right product or service to meet those needs, thereby encouraging high sales levels. Vodafone goes further by looking to impress on its customers not merely what its products are i.e. features, but also what they can increasingly do i.e., benefits. This involves effective communication. There is a slowdown in sales of mobile handsets, in some markets like the UK, as the mature part of the product lifecycle is reached. Customers are exposed to a barrage of different images and messages by mobile phone companies, as the competition gets tougher. Vodafone appeals to new customers and aims to keep its existing ones by emphasising the uniqueness of the brand. Vodafones aim is to grow its revenue and improve its profit margin by adding value to its products and services i.e. earning more from each product sold. The Vodafone live! service enables customers to use picture messaging and to download polyphonic ring tones, colour games, images and information, through an icon-driven menu. This service will soon be further enhanced by picture messaging libraries, video clips and video telephony and improving download speeds. Another service is the Vodafone Mobile Connect Card, which enables customers to access their normal business applications on a laptop when out of the office. Such services add value to the product, and high profile effective promotion will help sell these services to existing and new customers.

SERVICESy y y y y Tunes and Downloads Entertainment Devotional Sports News and Updates

y y y y y y

Call Management Services Finance Travel Mail, messaging and more. Dial in Services Bill Information.

PRODUCTSy y y y y y y y y y y y y y y y Prepaid Postpaid 3G Magic box handset World Calling Cards Gulf Calling Cards Vodafone PCO Vodafone services Vodafone office Vodafone Live! Vodafone Mobile connect card Mobile Advertising Vodafone handsets Vodafone handy phone Vodafone Business Handsets Magic Box Handsets

MARKETING MIXA longer term marketing strategy is underpinned by careful planning and a successful marketing mix. The marketing mix is a combination of many features that can be represented by the 7 Ps.

PRODUCT

Product decisions are executed in 3 ways:y BRANDING- It is done by targeting people living in cities and towns, poor and middle income groups, youngsters in big cities, businessmen. y QUALITY- Ensure compliance with all the requirements of the quality management system.

y FEATURES- 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. Vodafone live! provides on-the-move information services.

PRICEPricing is the only mix which generates a turnover for the organisation. y Vodafone wants to make its services accessible to as many people as possible: from the young, through apprentices and high powered business executives, to the more mature users. y It offers various pricing structures to suit different customer groups. y Monthly price plans are available as well as prepay options. Phone users can top up their phone on line. y Vodafone UK gives NECTAR reward points for every 1 spent on calls, text messages, picture messages and ring tones. y The pricing strategies are:1. Product Line 2. Competition 3. Skimming 4. Penetration

PLACEy y y y Vodafone covers almost 75% of its operational area. It also sells through independent retailers. Customers are able to see and handle products they consider to buy. It has both post-paid outlets and prepaid outlets. The Vodafone outlets are being situated in various places in India which include- Andhra Pradesh, Punjab, West Bengal, Karnataka, Maharashtra, Goa, Tamil Nadu, Rajasthan, UP, Haryana, Kerala, Delhi, Gujarat, Orissa, J&K, Himachal Pradesh and Madhya Pradesh. y People are on hand to ensure customers needs are matched with the right product and to explain the different options available.

PROMOTIONVodafone always works with icons such as David Beckham, Michael Schumacher and Michael Clarke.

y 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. y Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy. y Vodafones stores, its products and its staff all project the brand image. y Vodafones activities develop good public relations by sending press releases to national newspapers and magazine to explain new products and ideas. This is known as below the line promotion. y In 2009 zoozoo came as the brand ambassador and created maximum brand presence. y Vodafone chose the Indian Premier League2 as a platform to launch their advertisement, which proved to be a great marketing strategy.

PEOPLEy Vodafone rely on their people for their enthusiasm, talent, commitment to maintain and build on the success of their business. y They depend on their people to deliver excellent service to customers. y Vodafone Group employs approximately 71,000 people around the world. y They want to enhance their reputation as an employer that provides excellent development opportunities.

VODAFONES PEOPLE STRATEGYPEOPLE STRATEGY Connecting ISSUES Communication Consultation and Surveys. Trade Union Representation. Training and Development Diversity and equal opportunities. Attracting talent. Pension plans. Benefits Recognition Changes management restructuring Occupational health and safety. Flexible working. Well-being programmes.

Developing Resourcing Rewarding

Changing Caring

PHYSICAL EVIDENCEy VODAFONE SHOPS Shops are located at every convenient location around the country. Customers can subscribe to any of their value added services or get more information on them. Customers can pay the bills, get their queries answered, etc. y MOBILE VODAFONE SHOPS Vodafone shops are going on the move, to bring their services closer to customers and to provide faster online services.

PROCESSIn Vodafone the process is done in 3 ways:y NEW CONNECTION Includes information, attraction of customers, promotion. y SUBSCRIPTON Application, documentation, verification and start service. y SATISFACTION Customer care, relationship, VAS, correct bill.

ENVIRONMENTAL SCANNINGBefore an organisation can begin strategic strategy formulation, it must scan the external environment to identify possible opportunities and threats and its internal environment for strengths and weaknesses. Environmental scanning is the monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the organisation. In order to survive and flourish in highly competitive and turbulent environment, every organisation must strike a balance between environment, values and resources. Environmental analysis helps organisation to identify both present and future threats and opportunities that may influence the organisations ability to reach its goals.

SWOT ANALYSISSWOT Analysis is a strategic planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.

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STRENGTHSThe Companys strengths can be the reputation of the business in the local market because of the product in long run. The companys strengths are the strong bond of the company towards the customer and valuing them most as they craft another product. Another strength that can be depicted is the technology that is their greatest asset above the competitors. Vodafone has excellent service quality. 24* 7 highly qualified team to help its customers.

y

WEAKNESSESThe result of the weaknesses can be shortage of materials needed or more expensive purchase of materials in the target country. Meeting the customers demand is sometimes hard to cope. Every company must admit that reaching the customers taste and preferences are really hard to achieve. But these weaknesses will serve as a challenge in the company and they must prepare actions in answering these needs.

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OPPORTUNITIESThe opportunities can be a well-established position when the business successfully landed in the foreign market. On growth opportunities, the three target areas are Mobile data, Enterprise and Broadband. Another opportunity is the growth through 3G. Maximum revenue can be generated through 3G services.

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THREATSThe threats can be large competitors that are waiting for the business that were undiscovered before conducting the study. This possibility is not that new. The Vodafone is not the only company that serving a kind of delicacy. Some companies might surpass their achievement, and therefore, they must maintain their company culture in dealing with their customers and being ahead in the products and services. The threats will not mean bankruptcy, but it can be a contributing factor in the bankruptcy of the company. Aggressive new entrants bringing in lots of schemes and products. The SWOT analysis is a tool that assesses the company in its position in the market, or commercial viability. The method of sales distribution with the accordance to brand or product, business idea, strategic option, such as entering a new market or launching a new product, opportunity to make an acquisition, potential partnership, changing a supplier, outsourcing a service, activity or resource, and investment opportunity, in short, SWOT measures a business unit, a proposition or idea.

PEST ANALYSISy

POLITICALThe political environment of a country is significantly relevant to business organisation. In practice, the political party in power makes profound impact on the economic atmosphere. Political factors involved the tax policy, labour law, environmental law, trade restrictions, tariff, and political stability. Due to the customer relationships that the company value most, Vodafone is willing to shift their approach away from unit pricing and unit based tariffs to propositions that deliver much more value to customers in return for greater commitment, incremental penetration of the account or more balanced commercial costs. This will require a more disciplined approach to commercial costs to ensure their investment is focused on those customers with higher lifetime value. In essence, Vodafone are confident that by targeting their offers, they can deliver more value to their customers and have a better financial outcome for Vodafone.

y

ECONOMICThe economic environment of a country has profound influence on a business organisation. The economic environment refers to the economic system of the country, the level of development, economic policies such as fiscal, industrial, agricultural and trade policies. Economic factors include the economic growth, interest rates, exchange rates and the inflation rate. The pricing factors the company usually do is giving the consumers a right and justly cost so that, everybody can avail or purchase their product in a broad sense.

y

SOCIALSocial environment may be understood as the environment of the society as a whole. Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. The need for an equipment that can be a good device for every age range is available, since everybody are fully oriented in the use of the mobile technologies.

y

TECHNOLOGICALTechnological factors include ecological and environmental aspects, like R&D (Research and Development) activity, automation, technology incentives and the rate of technological change. The technology is the thing that Vodafone is very proud of. The technological advancement enables the company to make a

customer relationship stronger because of their customers trust that built over the years. The PEST factors have major impacts on how businesses operate and make decisions. With the help of PEST analysis, the business can penetrate to the market with readiness. The determination of its four keys, the business will answer the common questions that revolve around the business society. These basic questions are what to produce, how to produce, when to produce and for whom to produce. No matter how many times a business answer these questions, the needs from the market will remain constant and unchanged. It is an advantage of the company to know the scope and limitation of their business. It is done so that the company is prepared enough to face a future and ready to give solutions as possible when the demand for the products are satiated or already diminished.

KEY TO SUCCESSThe foundation of every company to reach the success is how effective the research made and the continuous development in it. The further innovation is another great factor. The service of Vodafone towards its customers can generate a strong cash flow, based on the high-demand on their communication products. A greater range of data devices and portable computers, at increasingly lower costs, are enlarging the addressable market. On the cash cost side, only about a third of operating costs are fixed, and about a quarter depend on growth in voice minutes and data traffic. Vodafone has three key attributes which strongly differentiate from the competitors: y The scale in technology with which it continues to drive network and IT savings through consolidation and centralization of core activities. y The strong presence in the enterprise market, in large corporate as well as in small and medium sized businesses. y The brands, especially in consumer pull markets. The Vodafones strategy is focused on four key objectives: y Drive operational performance. y Pursue growth opportunities in total communications. y Execute in emerging markets and strengthen capital discipline.