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Vodafone Plc.

  1. 1. Tajudeen Ogunsola Project – Marketing Plan MOMN009H7: Marketing Management
  2. 2. Ourjourney
  3. 3. 1982 established as 1984 Racal & Millicom partnership Became Vodafone HQ in London 1985 1st mobile phone call made 1991 1st to launch digital service 1997 Changed to red 1994 1st Retail store 1995 1st operator with 5 million users 1997 Rebranded 2010 little nip-tuck 2006 ‘The power to you’ look 1st to launch 3G voice call 2012 1st 4G Data-data-focused operator 2006 Entered 26 markets, Control 16 mobile operations & hold 10 minority stakes in other Telco's 2014 (March 31st) Has 434 Million Global subscribers Thefutureisexciting. 1995 Acquired two third of Talk Land 2017 New Global Brand Position Strategy Timeline – We have made progress. Business Sector: Telecommunications Operating Geography: United Kingdom, Global Revenue: €2.7 billion (FY ending March 31st 2017) – UK Marketing budget: £55 Million per year Source: Vodafone, 2017; Marketing Week, 2017; Forbes, 2017
  4. 4. Vision & Approach
  5. 5. Vision Unleash the power of Vodafone to contribute to sustainable living for all Approach • Delivering transformational solutions • Operating responsibly and ethically Business principles The Vodafone Way Code of Conduct Subscribers Stakeholders People & Culture Source: Vodafone Group Plc, 2017
  6. 6. Strategy Direction
  7. 7. Strategy Eliminates the negative associations of poor service, excessive fees and inadequate customer service. Implement a comprehensive, integrated marketing communication programme that positions Vodafone in the profitable premium segment Source: Based on SWOT Analysis by (Baines and Fill 2014) (A). Strengthen cross-platform communication channels to encourage purchasing decisions and build customer loyalty. (B). Increase monthly contract sales; PAYG, SMS / Voice and data services. (C). Strengthen the competitive advantage to expand market leadership. Objectives Goal
  8. 8. SWOT Analysis
  9. 9. W Weaknesses 1. Poor network convergence. 2. Losing customers. 3. Decrease of brand valuation. 4. Impact of Brexit SWOT Analysis S Strengths 1. Profitable revenues generated. 2. Increased subscriber base. 3. Differentiator strategy is fuelling growth. 4. Premium cost T Threats 1. Strong competition 2. Low margins. 3. Mobile Number Portability. 4. BT and EE monopoly O Opportunities 1. 4G capabilities. 2. Improvement of network coverage. 3. Digital “gigabyte society”. 4. Emerging markets. Source: Based on SWOT Analysis by (Baines and Fill 2014)
  10. 10. PESTLE
  11. 11. PESTEL Analysis P Politics E Economy S Social T Technology E Environment L Legal ▪ Political & economic uncertainty causing sharp currency fluctuations (Parliament, 2017) ▪ The gigabit society (His Technology, 2017). ▪ Growth in smart devices is giving consumers a ‘connected mind-set’ (GSMA, 2017) ▪ Vision of zero environment harm safety culture (Jackson, 2017). ▪ Increasing reused and recycling culture (Freehill, 2017). ▪ High spectrum cost, amidst talk of 5G (Ofcom, 2017) ▪ Impact of Brexit on business growth (parliament, 2017) ▪ Investment in 5G (FT, 2017). ▪ Growth in SVOD (Subscription Video on Demand) service via mobile from networks providers (Williams, 2017) ▪ Regulatory clearances hindering business restructuring (Gov.uk, 2017) Source: Based on PESTLE Analysis (Francis Aguilar, 1967)
  12. 12. Porter’s Five Forces
  13. 13. Threat from New Entrants Potential New Entry Bargaining power of customers (buyers) Buyers Bargaining power of suppliers Suppliers Supplier's power of negotiation Substitutes Changing business models by MVNO (Mobile Virtual Network Operators) (Ofcom, 2017). A "better offer" is the second most common factor for switching suppliers, which gives buyers (subscribers) more bargaining power (Mintel, 2017). Competitors are strong and pose high threats (EY, 20217). The replacement of traditional telecommunications services by MVNOs, but the threat is moderate for the time being (Deloitte, 2017). MODERATE HIGH HIGH MODERATE Competitive Rivalry Price competition to attract subscribers (Mintel, 2017). Porter’s Five Forces Source: Based on Porter’s Competitive Five Forces (Michael E. Porter, 1979)
  14. 14. BCG Matrix
  15. 15. Source: Based on Boston Consulting Group (BCG Matrix), 1970 GROWTH Relative Market Share (Cash generation) AVERAGE flow versus those of competitors Poor Dog Cash Cow Question Marks Star High High Low Low BCG Matrix C3) Voice & SMS on contract monthly is a prerequisite to generate continuous cash flow and preserve Vodafone's relative market share. Invest defensively in resources and marketing to drive brand leadership and maximize cash flows into PD4. PD4) Minimize investments in voice and SMS, both products are a monthly contract requirement, drive broadband services in question marks to continue positive free cash flow. QM2) Build an aggressive market share for broadband, data and internet companies and then follow the PD4 strategy. S1) Maintain & increase the relative market share for monthly data / contracts & PAYG with aggressive marketing investments. Invest in resources to drive 4G infrastructure forward, to drive up profit to QM2.
  16. 16. STP–Segmentation,Targeting&Positioning
  17. 17. Segmentation i. Identify the firms dimensions &/or variables to segment market. ii. Analyse opportunities for market growth. iii. Support segmented group(s)/cluster(s) with updated relevant findings. STP – Implementation i. Select the firm’s targeting strategy/methods ii. Apply appropriate market/brand challenge(s) to target strategy. Targeting i. Identify firms customer perception & or opinions. ii. Position offering (product, service &/or experience) in the mind of customers. iii. Now, apply this to the Marketing Mix strategy. Position Marketing Mix SIVA framework is used for Vodafone Analyse, Apply & Act before Positioning Target 1: ‘younger millennials’ looking for smartphone, with purchasing power above £1,000. Aged 18-45, fathers with kids aged 16 or under. Target 2: ‘matured millennials’ adopters in socio-economic group A. Aged 46-75, price-sensitive non-smartphone owners, looking to upgrade or purchase new £500 and above range. STP – (Segment, Target & Position) Source: Based on ‘STP – Segmentation, Targeting & Positioning’, (Aaker, 1995; Kotler & Keller, 2011; Bayer, 2010)
  18. 18. Segmentation Contribution Expectation Value Commitment Customer Value The contribution of the customer (e.g., new or existing) to the profitability of Vodafone UK is based on the current relationship. Expected (predicted) contribution to Vodafone UK's profitability based on expected "lifetime" relationships. Residual profitability (e.g., 6, 12, 24, 36 months) of customer relationships based on the value of income Type of relationship (i.e., PAYG, SIM-only or monthly contract) based on loyalty to Vodafone UK Segmentation High roller Budget candy Negotiator Explorer Customer Behaviour Promote a contract with premium phones. SMS dialogue relationship only, but can NEVER opt-in. Receptive to offers, but incentives are a MUST! Suitable candidate for VAS (SVOD services or third- party) offerings. Segmentation New Growth Maturity Decline Customer Life Cycle Will be a new customer. Opt for a new contract, buy top-ups, upgrades or get a second phone. The use of the customer's phone is stable End of the relationship between the parties. Segmentation Challenger Unhappy Sally/Bob Disloyal Goner Customer Migration Customer circumstances changed or sought variety. The dissatisfaction of customers but the potential to stay. Loyalty to several competitors It was great while it lasted. Source: Based on ‘Customer segmentation in the telecommunications industry’, (Bayer, 2010)
  19. 19. TargetCustomers
  20. 20. Push innovative premium hardware “Future optimism” campaign AI; Voxi; SVOD; Digital Content Revenue growth Change expectations Pull Contract, Data & Voice Earn Customer Loyalty Push Uninterrup ted Service Revenue growth Build on Experience Push ‘All Things Digital’ Unlimited Data for Best Experience Entertain urself – Movies, music, & SM Revenue growth Drive expectationfor experience Mobile Handset Ownership Contract & PAYG Data Bundles & Digital Content INVEST IN 3 KEY AREAS TO GENERATE GROWTH THROUGH A VIRTUOUS CYCLE PLAN BUSINESS STRATEGY EXPLORE, ATTRACT AND PULL YOUNGER MILLENNIALS TO THE BRAND OFFERING BEST FLEXIBILITY AND DIGITAL CONTENT MOBILE EXPERIENCE NETWORK VODAFONE UK STRATEGY: ‘The future is exciting. Ready?’ BUSINESS GOALS DRIVE PAYG, SIM- ONLY & FLEXIBLE CONTRACT BUNDLES TO INCREASE ANNUAL REVENUES TARGET 1: YOUNGER MILLENNIAL Target 1: Connect with fathers with children aged 16 or under ‘younger millennials’ looking for smartphone, including accessories with purchasing power above £1,000. Aged 18-45 target the groups, using through digital communities across regions, to retain existing subscriber’s and gain new subscribers.
  21. 21. Push affordable premium phones “connect with love” campaign Access Digital Content Revenue growth Provide support Push Discount offers Develop Loyalty Push Internet Access Revenue growth Add friends & Family to Contract Push ‘Hello World’ Unlimited Data for Best Experience Watch, listen & Talk to your favourite celebs/BFF’s Revenue growth Support, Service & Experience with Vodafone Mobile Handset Ownership Contract & PAYG Data Bundles & Digital Content INVEST IN 3 KEY AREAS TO GENERATE GROWTH THROUGH A VIRTUOUS CYCLE PLAN BUSINESS STRATEGY ATTRACT,REASSURE AND WIN MATURED MILLENNIALS TO THE BRAND WITH INCENTIVISE AND DISCOUNTED OFFERING, SERVICE-FOCUSED NETWORK VODAFONE UK STRATEGY: ‘The future is exciting. Ready?’ BUSINESS GOALS DRIVE PAYG, SIM- ONLY & FLEXIBLE CONTRACT BUNDLES TO INCREASE ANNUAL REVENUES TARGET: MATURED ADOPTERS Target 2: Connect with male and female ‘matured millennials’ adopters in socio-economic group A. Aged 46-75, non-smartphone owners, who are price-sensitive but looking to upgrade or purchase new in the £500 and above range. Actively pull them into the brand usingOOH media (television, radio & billboard ads) and email marketing, offering incentives to retain existing subscriber’s or discount for new subscribers.
  22. 22. Positioning
  23. 23. Vodafone's current position on the perception map is based on five key questions answered in the 2017 Mintel survey. 1. Brand Attitudes 2. Brand Map 3. Brand Personality 4. Key Brand Metrics 5. Brand Awareness High Low High Low Source: based on Positioning Theory by Wedel et al, (2000) Positioning High Quality Low Quality High Cost Low Cost Source: based on 2017, Mintel Survey Vodafone's new position, based on the IMC plan proposed for 2018, is to reposition the brand in the premium segment.
  24. 24. Marketing Mix
  25. 25. SIVA Model replaces the 4Ps for a customer-centric driven connectivity experience. NEW Experience Solution, Information, Value & Access = SIVA Traditional Source: Based on SIVA Marketing Mix framework by (Dev and Schultz, 2005a, b, c ) Marketing Mix
  26. 26. SIVA Framework Model
  27. 27. S V A EXPERIENCE RELATIONSHIP OFFER Product Place Promotion Solution I VALUE Price Information Value Access PRODUCT is SOLUTION: Vodafone's sales are based on subscriber needs. PROMOTION is INFORMATION: Vodafone provides subscribers with information to decide. PRICE is VALUE: Prices are based on the values of the "subscribers" needs and not on competitive offers. PLACEMENT is ACCESS: The distribution of products is not dictated but is based on the preferences of the subscriber. 4Ps Mix SIVA Mix Engage & sustain relationship The solutions Vodafone’s offering Customers communication preferences Vodafone’s distribution marketing channels Source: Based on SIVA Marketing Mix framework by (Dev and Schultz, 2005a, b, c ) SIVA Model
  28. 28. CampaignTimeline Fit for growth
  29. 29. STEP 01 STEP 02 STEP 03 STEP 04 STEP 05 Campaign Timeline Pre- Launch & Post-Launch Review and algin Vodafone’s internal communication to IMC strategy Collect department agreements for ‘signs offs’ and launch IMC strategy; *Digital. Social Media PR, Advertising, Interactive; Postal, Apps; Radio & TV Recruit all third- party agencies attached to re- positioning project. Set out briefs for PR agency to roll-out PR campaigns. Digital: ‘Pull Strategy’ Keyword campaigns SEO activation Twitter: simulate discuss on Vodafone Instagram: Post latest handsets & partner with influencers. Youth: SVOD offer with Netflix & Amazon 6 months free (High-end phone products only) Matured: Discounted offer for existing subscribers upgrading or Free earphones for new customers. Key Implementations
  30. 30. Conclusion Stayconnectedyourway.
  31. 31. FINANCIAL PERFORMANCE CUSTOMER/ MARKETING GROWTH PROCESS EXCELLENCE PEOPLE & LEARNING Revenue Growth Push the topline up Productivity Improvement: Annually increase bottomline Customer Acquisition: Don’t sell one – offs; sell groups Customer Retention: Thrive on a culture of intimate customer contact Product / Services Management: Enhanced with solid program support Marketing Management: Build brand awareness Sales Management: Solid organization with effective leadership Operational Management: Increase throughput & quality Human Capital / Competencies: Right people in the right positions Culture of Performance & Accountability: More rigorous attention to business metrics Vodafone's success is based on strong financial performance, revenue growth and productivity improvements. This is achieved by offering subscribers a great value. Improvements in management, process excellence and organizational effectiveness drive the company forward. Fit for growth 'The future is exciting. Ready?'
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  34. 34. Pfeffer, J. and Salancik, G., 1978. The External Control of Organizations: A Resource Dependence Perspective. 1st ed. California, USA: Stanford University Press, pp.p.39-59, p. 69-88. Porter, M. (1979). The Five Forces - Institute for Strategy and Competitiveness - Harvard Business School. [online] Isc.hbs.edu. Available at: https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five- forces.aspx [Accessed 20 Jun. 2018]. Schiffman, L. and Kanuk, L., 2004. Consumer behaviour. Upper Saddle River, NJ: Prentice Hall. Reeves, M., Haanaes, K. and Sinha, J., 2015. Navigating the Dozens of Different Strategy Options. Harvard Business Review, pp. Articles - dated June 24, 2015. Ries, A. and Trout J. (1972b). The positioning era commeth. Advertising age, (pp.24, 35-38) Ries, A. and Trout J. (1989c). Reviewed Works: Positioning: The Battle for Your Mind by Al Ries, Jack Trout; Marketing Warfare by Al Ries, Jack Trout; Bottom-Up Marketing by Al Ries, Jack Trout; Review by Robert Demaris. Journal of Marketing, Vol. 56, No. 1 (Jan., 1992), pp. 122-125 (4 pages) Published By: Sage Publications, Inc. https://doi.org/10.2307/1252139; https://www.jstor.org/stable/1252139 Souar, Y., Mahi, K. And Ameur, I., 2015. The Impact of Marketing Mix Elements on Customer Loyalty for an Algerian Telecommunication Company. Expert Journal of Marketing, Volume 3(Issue 1), pp., p. 1 -1 0. Reichheld, F.F. and Schefter, P. (2000) E-Loyalty: Your Secret Weapon on the Web. Harvard Business Review, 78, 105-113. Won-Moo h., Jungkun, P., Minsung., K (2010) “The role of commitment on the customer benefits-loyalty relationship in mobile service industry”. The Service Industries Journal, 2008. Vol. 30(No. 14,), pp. 2293-2309. M. Wedel and W.A. Kamakura, Market Segmentation: Conceptual and Methodological Foundations, 2nd edition, Norwell, MA: Kluwer Academic Publishers, 2000, 382 pp. : January 2002 Journal of Classification 19(1):179-182 Zineldin, M. and Philipson., 2007. Kotler and Borden are not dead: myth of relationship marketing and truth of the 4Ps. Journal of Consumer Marketing. Australasian Marketing Journal, 24(4),), pp.229–241. Marketing Mix Alternative marketing mix investigated before concluding on SIVA framework for Vodafone’s 2018 IMC plan. Alternative models failed to fit Vodafone's marketing mix such as the 7Ps (additional People, Process and Physical Evidence) Boom & Bitner, (1970); 4Cs (Consumer, Cost, Communication and Convenience) Lauterborn (1990); OVER (Offering, Value, Experience and Relationship) model (2012); Ettenson et al. (2013) S.A.V.E (Solutions, Access, Value and Education) and final 3M (Modern Marketing Model) Friedlein, (2017). Subsequently, Dev & Schultz (2009) SIVA (Solution, Information, Value and Access) framework apply here and recommended for the plan.
  35. 35. Thankyou Questions?
  36. 36. Marketing Plan, 2018