Download A STUDY ON THE MARKETING MIX MODELS OF VODAFONE INC

A STUDY ON THE MARKETING MIX MODELS OF VODAFONE INC
EXECUTIVE SUMMARY
Vodafone is the world’s largest mobile telecommunications group, employing
over 65,000 staff and with over 130 million customers. The business operates in 28
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. The
Vodafone uses Marketing Mix worldwide to promote its products to get a public
awareness. The Vodafone uses the following as a Marketing Mix, they are
Product – Vodafone product with Multifunctional Options.
Place – Vodafone operates in 28 countries worldwide.
Price – Vodafone price strategy satisfies economical class to premium class
Promotion – Vodafone works with David Beckham to promote its Brand Value.
Vodafone believes that it has gained an important advantage in a highly competitive
market place as a result of having such a high Marketing Mix Models.
INTRODUCTION
THE ESSENTIALS OF MARKETING
The 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
emphasizing the uniqueness of the brand.
Vodafone’s 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, color 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 (seeing the person you're calling) 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.
VODAFONE – AT A GLANCE
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. The Group's mobile subsidiaries operate
under the brand name 'Vodafone'. In the United States the Group's associated undertaking
operates as Verizon Wireless. During the last two financial years, the Group has also
entered into arrangements with network operators in countries where the Group does not
hold an equity stake. Under the terms of these Partner Network Agreements, the Group
and its partner networks co-operate in the development and marketing of global services
under dual brand logos.
At 31 December 2008, based on the registered customers of mobile telecommunications
ventures in which it had ownership interests at that date, the Group had 289 million
customers, excluding paging customers, calculated on a proportionate basis in accordance
with the Company's percentage interest in these ventures.
The Company's ordinary shares are listed on the London Stock Exchange and the
Company's American Depositary Shares ('ADSs') are listed on the New York Stock
Exchange. The Company had a total market capitalization of approximately £74 billion at
31 December 2008.Vodafone Group Plc is a public limited company incorporated in
England under registered number 1833679. Its registered office is Vodafone House, The
Connection, Newbury, Berkshire, RG14 2FN, England.
Mobile is always at the heart of what we do, but now we are moving into integrated
mobile and PC communication services. We are doing that in two ways – wirelessly
through 3G and HSDPA (High-Speed Download Packet Access), but also using fixed
line broadband services like DSL (Digital Subscriber Line).
Our customers benefit from a complete Vodafone experience in and out of their homes
and offices. They are notified about email with our consumer push email service, access
existing instant messaging services on the move, and share images and video captured on
their handsets.
We offer a suite of products that, starting with voice calls, offers our customers an
alternative to a traditional fixed telephone line. Vodafone Zuhause in Germany and
Vodafone Casa in Italy, provide our customers with an easy-to-use mobile service,
combined with low-cost fixed line telephony and DSL (Digital Subscriber Line)
broadband.
We have extended our reach into the office by delivering richer business applications and
integrated fixed and mobile services, such as higher speed internet access. With
developments in technology we can provide integrated mobile and PC offerings to give
our customers a consistent experience whether they are at home or on the move.
VODAFONE OVER THE YEARS
Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. Then
known as Racal Telecom Limited, approximately 20% of the company's capital was
offered to the public in October 1988. It was fully demerged from Racal Electronics Plc
and became an independent company in September 1991, at which time it changed its
name to Vodafone Group Plc.
Following its merger with AirTouch Communications, Inc. (‘AirTouch’), the company
changed its name to Vodafone AirTouch Plc on 29 June 1999 and, following approval by
the shareholders in General Meeting, reverted to its former name, Vodafone Group Plc,
on 28 July 2000.
Key milestones in the development of Vodafone can be found in the following sections,
organised by year:
2008
Vodafone acquires a 70% stake in Ghana Telecom for $900 million (July)
Vodafone lauches the M-Paisa mobile money transfer service on Afghanistan's Roshan.
Afghanistan is added to the Vodafone footprint. (February)
2007
A consortium led by Vodafone Group is awarded the second mobile phone licence in
Qatar. (December)
Vodafone agrees to acquire Tele2 Italia SpA and Tele2 Telecommunication Services
SLU from Tele2 AB Group. (October)
Vodafone announces completion of the acquisition of Hutch Essar from Hutchison
Telecommunications International Limited. (May)
Safaricom, Vodafone’s partner in Kenya announces the launch of M-PESA, an
innovative new mobile payment solution that enables customers to complete simple
financial transactions by mobile phone. (February)
Vodafone agrees to buy a controlling interest in Hutchison Essar Limited, a leading
operator in the fast growing Indian mobile market, (February)
Vodafone announces agreements with both Microsoft and Yahoo! to bring seamless
Instant Messaging (IM) services to the mobile which can be accessed from both the PC
and mobile handsets. (February)
Vodafone signs a series of ground-breaking agreements which will lead to the mobilising
of the internet.
Vodafone reaches 200 million customers (January)
2006
Sale of 25% stake in Switzerland's Swisscom (December)
Sale of 25% stake in Belgium's Proximus. (August)
The number of Vodafone live! customers with 3G reached 10 million in March 2006.
We acquired Telsim Mobil Telekomunikasyon Hizmetleri (Turkey) in May 2006.
Launch of mobile TV capability and Vodafone Radio DJ, which offers a personalised,
interactive radio service streamed to 3G phones and PCs.
3G broadband through HSDPA launched offering faster than 3G speeds.
Japan business sold to SoftBank.
‘Make the most of now’ global marketing campaign launched.
Sir John Bond succeeds Lord MacLaurin as Chairman.
2005
We completed the acquisition of MobiFon S.A. (Romania) and Oskar Mobile a.c. (Czech
Republic) (May).
Launch of Vodafone Simply, a new easy-to-use service for customers who want to use
voice and text services with minimum complexity (May).
Introduction of Vodafone Passport, a voice roaming price plan that provides customers
with greater price clarity when using mobile voice services abroad (May).
2004
We launched our first 3G service in Europe with Vodafone Mobile Connect 3G/GPRS
data card.
Vodafone live! with 3G launched in 13 markets (November).
2003
At the GSM Association Awards Ceremony in Cannes, France, we won the mobile
industry's most prestigious awards in two categories, Best Consumer Wireless
Application or Service and Best Television or Broadcast Commercial for its global
consumer service, Vodafone live! Our premium handset for Vodafone live!, the Sharp
GX10, won the Best Wireless Handset Award for the Sharp Corporation.
Vodafone live! attracts 1 million customers in its first six months.
Verizon Wireless and Vodafone co-operate on laptop e-mail, internet and corporate
applications access for the US and Europe.
Arun Sarin succeeds Sir Christopher Gent as Chief Executive.
2002
We trial our global mobile payment system in the UK, Italy and Germany. The trial
enables customers to purchase physical and digital goods using their mobile phone.
We launch the first commercial European GPRS roaming service. Customers are able to
seamlessly access services such as corporate e-mail, intranet and personalised
information on their mobile phones, laptops or PDAs over GPRS.
The Vodafone Group Foundation is launched, with plans to contribute £20 million to
community programmes, guided by the Group Social Investment Policy.
In October, we announce the launch of Vodafone live!, a new consumer proposition, and
Mobile Office, a new business proposition. In November, Vodafone Remote Access is
launched as part of Mobile Office. The service gives business customers an easy way to
connect to their corporate LAN to access e-mail, calendar and other business specific
applications whilst on the move.
2001
We acquire Ireland's leading mobile communications company, Eircell.
Vodafone and China Mobile (Hong Kong) ltd (CHMK) sign a 'strategic alliance
agreement'.
The Group completes the acquisition of a 25% stake in Swisscom Mobile.
We introduce instant messaging to our networks, a faster and more efficient way to
communicate using text messages via SMS or WAP.
First global communications campaign launched in August. The campaign features TV,
cinema, print, online and outdoor media, each version asking the question, 'How are you?
First Vodafone Partner Agreement with TDC Mobil A/S, Denmark's leading mobile
operator. The agreement is the first of its kind in the mobile industry and means
Vodafone and TDC Mobil will cooperate in developing, marketing and advertising
international roaming products and services to international travellers and corporate
customers.
We make the word's first 3G roaming call (between Spain and Japan).
2000
On 4 February, terms are agreed with the Supervisory Board of Mannesmann by which
Mannesmann would become a part of the Vodafone community. The transaction almost
doubles the size of the Vodafone Group.
The agreement to acquire Mannesmann AG receives European Commission clearance on
12 April 2000.
Verizon Wireless is launched in May, the combination of Vodafone AirTouch's and Bell
Atlantic's US cellular, PCS and paging assets.
LITERATURE SURVEY
MARKETING MIX – AT A GLANCE
The Marketing mix is generally accepted as the use and specification of the four p's
describing the strategic position of a product in the marketplace. One version of the
origins of the marketing mix starts in 1948 when James Culliton said that a marketing
decision should be a result of something similar to a recipe. This version continued in
1953 when Neil Borden, in his American Marketing Association presidential address,
took the recipe idea one step further and coined the term 'Marketing-Mix'. A prominent
marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which would see
wide popularity. The four Ps concepts are explained in most marketing textbooks and
classes.
The set of controllable tactical marketing tools, product, price, place and promotion - that
the firm blends to produce the response it wants in the target market:

Product - A tangible object or an intangible service that is mass produced or
manufactured on a large scale with a specific volume of units. Intangible products
are often service based like the tourism industry & the hotel industry. Typical
examples of a mass produced tangible object are the motor car and the disposable
razor. A less obvious but ubiquitous mass produced service is a computer
operating system.

Price – The price is the amount a customer pays for the product. It is determined
by a number of factors including market share, competition, material costs,
product identity and the customer's perceived value of the product. The business
may increase or decrease the price of product if other stores have the same
product.

Place – Place represents the location where a product can be purchased. It is often
referred to as the distribution channel. It can include any physical store as well as
virtual stores on the Internet.

Promotion – Promotion represents all of the communications that a marketer may
use in the marketplace. Promotion has four distinct elements - advertising, public
relations, word of mouth and point of sale. A certain amount of crossover occurs
when promotion uses the four principal elements together, which is common in
film promotion. Advertising covers any communication that is paid for, from
television and cinema commercials, radio and Internet adverts through print
media and billboards. One of the most notable means of promotion today is the
Promotional Product, as in useful items distributed to targeted audiences with no
obligation attached. This category has grown each year for the past decade while
most other forms have suffered. It is the only form of advertising that targets all
five senses and has the recipient thanking the giver.
MARKETING MIX – DIGRAMMATIC VIEW
VODAFONE’S MARKETING MIX
A 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 four Ps.

Product - features and benefits of a good or service

Place - where the good or service can be bought

Price - the cost of a good or service

Promotion - how customers are made aware of a good or service.
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.Vodafone live! provides on-the-move information services.
Place

Vodafone UK operates over 300 of its own stores.

It also sells through independent retailers e.g. Carphone Warehouse.

Customers are able to see and handle products they are considering buying.

People are on hand to ensure customers’ needs are matched with the right product and
to explain the different options available.
Price

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.

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. Vodafone UK gives NECTAR reward points for every £1 spent
on calls, text messages, picture messages and ring tones.
Promotion
Vodafone works with icons such as David Beckham to communicate its brand values.
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.

Vodafone actively develops good public relations by sending press releases to
national newspapers and magazines to explain new products and ideas.
CONCLUSION
The Vodafone uses Marketing Mix worldwide to promote its products to get a
public awareness. The Vodafone uses the following as a Marketing Mix, they are
Product – Vodafone product with Multifunctional Options.
Place – Vodafone operates in 28 countries worldwide.
Price – Vodafone price strategy satisfies economical class to premium class
Promotion – Vodafone works with David Beckham to promote its Brand Value.
Vodafone believes that it has gained an important advantage in a highly competitive
market place as a result of having such a high Marketing Mix Models. With this
marketing mix models Vodafone attains the 130 Million Customers Worldwide across 28
countries.
REFERENCES

Kotler, Philip, Keller, Lane (2005) "Marketing Management", Prentice Hall,
ISBN 0131457578.

Barlon, Kimuli. (2006) "The concept of the marketing mix" Presentation on
marketing management, vol 1, September, 2006, pp 2–7-Turku university Finland - The same article can also be found in: Schwartz, G. (ed), Science in
Marketing, John Wiley, New York, 1965, pp 386–397 - and also in: Enis, B. and
Cox, K. (1991) Marketing Classics, A selection of influential articles, Allyn and
Brown, Boston, 1991, pp 361–369.

Bitner, J. and Booms, B. (1981) Marketing strategies and organizational structures
for service firms, in Donnelly, J. and George, W. Marketing, American Marketing
Association, Chicago, 1981.

Borden, N. H. (1964), “The Concept of the Marketing Mix”, Journal of
Advertising Research, June, Vol. 4, pp. 2–7. Available in Schwartz G. Science in
Marketing. John Wiley & Sons, NY 386-97

Culliton, J. W. (1948), The Management of Marketing Costs, Graduate School of
Business Administration, Boston, Mass: Harvard University.

Frey, A. (1961) Advertising, 3rd ed., Ronald Press, New York, 1961.

Hammer, M. and Champy, J. (1993) Reengineering the Corporation: A Manifesto
for Business Revolution, Harper Business Books, New York, 1993, ISBN 0-06662112-7

Hughes, M. (2005) "Buzzmarketing: Get People To Talk About Your Stuff",
Penguin/Portfolio, New York, 2005 Website

Lauterborn, R (1990) "New Marketing Litany: 4 Ps Passe; C words take over",
Advertising Age, October 1, 1990, pg 26.

McCarthy EJ (1960) Basic Marketing: A Managerial Approach. Homewood IL:
Irwin.

McCarthy, J. (1960 1st ed.), Basic Marketing: A managerial approach, 13th ed.,
Irwin, Homewood Il, 2001.