After years of focus on voice-telephony, Vodafone should now focus on new areas like Value Added Services (VAS) and data based services for growth in future. Attractive offers in this segment would also help improve the Average Revenue per User (ARPU), a critical profitability parameter for cellular companies.
Vodafone India revenue has grown by 10.6% in FY13 compared to FY12. Its Operating Margin stands at ~ 30%. However, upside in terms of margin improvement with the current focus on voice telephony looks difficult. Thus, the focus needs to change from voice based services to non-voice services where there is significant scope for improvement in terms of revenue growth.
With the sale of 2G and 3G licenses last year and introduction of Mobile Number Portability, these has been a significant change in the competition canvas in the country with all the cellular service companies vying at each other’s share. In such times, it is important to be clear in terms of your target segments based on STP and on how would you differentiate your products vis-à-vis competition based on the 4Ps or 5Ps analysis.
This report seeks to provide insights into what efforts or specific action Vodafone should take to catapult itself to the number 1 position in the Indian Telecom Industry where it faces stiff challenge from the market leader Bharti Airtel and the others.
The current market share position in the Wireless Telephony segment is as follows:
Introduction
Vodafone Group
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Vodafone Group PLC is a British multinational mobile network operator and Britain’s third largest company which is also the world’s largest mobile telecommunication network company in terms of revenue £44.47 billion and market value of £80.2 billion (August 2010) at UK FTSE and leading the global market with 7% market share. It started in the year 1984 and the name Vodafone is acronym for Voice Data phone. Vodafone has its presence in all the continents (direct operation in 31 countries and partner network in more than 44 countries) and by the end of June 2010, it has a customer base of 347 million proportionate mobile customers across the world.
Vodafone India Limited (VIL)
Vodafone India Limited (VIL) is a member of the Vodafone Group and commenced operations in 1994 when its predecessor Hutchison Max acquired the cellular license for Mumbai. The company has operations across the country serving over 150 million customers. Vodafone India has firmly established a strong position within the Vodafone Group too, becoming the largest subscriber base globally. This journey is a strong testimony of Vodafone’s success in a highly competitive and price sensitive Indian market.
In India, Vodafone Essar Limited was created in the year 2007, when Vodafone Group Plc made its entry to India and acquired entire indirect and direct interests and rights of Hutchison Essar. Hutchison Essar had their presence in the Indian market since 1994. The company now has more than 109 million subscriber bases in India which counts to 23.89% market share of the total 457 million subscribers in India as of June 2010. Vodafone had its existence already in India, as it had 5.6% stake in Bharti Airtel. However, Vodafone entered in India with a joint venture having sensational 67% stake with the Essar Group as its partner for the Indian market for purchasing or taking control of Hutchison Essar owned by Hong Kong’s Hutchison Wampao Telecommunication. There was a tough competitive bid between Reliance Communications and the Hinduja Group to purchase Hutch which was the second largest GSM brand in the Indian Telecom Market, but the deal was finalised at $18.8 billion, whereas Vodafone paid estimated $11.1 billion for its 67% stake in the company. It was considered to be a hard-fought deal which is the biggest foreign acquisition in India ever.
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Indian telecom market is a typical case of an oligopoly market. This project is aimed at formulating a Marketing Plan for elevating Vodafone to the coveted Numero Uno status in the market with the help of a focused STP, a suitable adjustment in the 4Ps, and adoption of the right Marketing Mix.
Key Performance Indicators
The Customer Base and Percentage Market Share of each of the players is a key indicator of market penetration while Average Revenue per User (ARPU) is a key profitability indicator. From the compiled statistics, the Concentration Ratio (CR) and the Herfindahl – Hirschman Index (HHI) were also calculated and analyzed.
Subscriber Base: The mobile subscriber base in India is estimated to reach ~ 874 million by June-14 i.e. a rise of 9 per cent this year, according to the technology researcher, Gartner. The mobile service penetration in the country is currently at 51 per cent and is expected to grow to 72 per cent by 2016. It provides a tremendous opportunity to the operators to increase their subscriber base beyond the traditional urban populace.
Mobile Value Added Services (MVAS): India’s current MVAS industry has an estimated size of US $ 2.7 billion. The industry derives its revenues largely from the top five to six products such as game based applications, music downloads, etc, which continue to form close to 80 % of VAS revenues. The Indian MVAS industry estimated to grow to US $ 10.8 billion by 2015, with the new wave of growth in subscriptions expected to come from semi – urban and rural areas. ARPU: The fall in the telecom subscriber base has reversed since the beginning of the current financial year. Telecom operators have added around 6.4 million new subscribers during April-July 2013. The ARPU has been a story of fluctuating fortunes for the telecom companies from FY09 to FY14. However, the companies need to focus on how to extract more value from its offerings given the intense competition in the industry.
ANALYSIS OF BUYER POWER
“Consumer is the king” – Buyer Power or the buyer bargaining power refers to the pressure consumers can exert on businesses to get them to provide higher quality products, better customer service at lower prices. When analyzing the bargaining power of buyers, the industry analysis is being conducted from the perspective of the seller. The High Buyer Power in the Cellular Phone Segment can be attributed to the following reasons.
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Buyer switching costs are low: Mobile Number Portability requests increased from 89.70 million subscribers at the end of March 2013 to 91.73 million at the end of April 2013
Buyer is price sensitive
Buyer is well-educated regarding the product
Product is undifferentiated
Substitutes are available in good numbers
The idea is that the bargaining power of buyers in an industry affects the competitive environment for the seller and influences the seller’s ability to achieve profitability. Strong buyers can pressure sellers to lower prices, improve product quality, and offer more and better services. All of these things represent costs to the seller. A strong buyer can make an industry more competitive and decrease profit potential for the seller. This was the precisely the scenario in the Indian Mobile Segment from FY09 to FY13. With the realization of the non-viability of the Price War, the sector is poised for more consolidation through mergers and acquisition. Buyer Power will definitely come down with the players calling the shots on prices and the buyers left with lesser options for substitutes. Moreover with Value Added Services, product differentiation would be created and switching costs may also become higher. Therefore on the whole, the future would see a decrease in Buyer Power in the Telecom Sector.
ANALYSIS OF CURRENT SITUATION
Market situation
The Indian Telecommunications industry is one of the fastest growing in the world. Government policies and regulatory framework implemented by Telecom Regulatory Authority of India (TRAI) has provided a conducive environment for service providers. This has made the sector more competitive, while enhancing the accessibility of telecommunication services at affordable tariffs to the consumers.
Vodafone India in its long-term commitment to India has been providing innovative, customer friendly and reliable offerings (products and services) by continuously differentiating itself with a strong brand, best quality network, unique distribution and advertisements and great customer service. For this contribution, the company has been receiving several awards and recognition across different segments.
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Competitor Situation
With new players coming in, the intensity of competition in the industry has increased, especially over the last four years. The market share of various telecom operators reflects the fragmented nature of the industry, with as many as 13 players. As of June 30, 2013, Bharti telecom led the market with 21.86 per cent share. Vodafone (17.29 per cent) is second in terms of market share. The breakup of the market share among various operators is as below:
The Government of India adopted the new National Telecom Policy (NTP) in 2012. The policy directs new initiatives, which includes free roaming, unrestricted Net telephony and new unified licensing regime for operators. The policy also endorses a boost to broadband expansion and an increase in local manufacturing of telecom equipment. Under Green Telephony TRAI has mandated for all the operators that at least 50 per cent of all rural towers and 20 per cent of all urban towers are to be powered by hybrid power by 2015.
Today, the Indian Telecom network is the second largest in the world after China. A liberal policy regime and involvement of the private sector have played an important role in transforming this sector. The total number of telephones as on 31st August 2013 was 897.2 million.
The Telecom industry has witnessed significant growth in subscriber base over the last decade with increasing network coverage and competition-induced decline in tariffs acting as catalyst for the growth in subscriber base. This has also attracted newer players to the industry.
The number of broadband subscribers increased to 15.05 million as of March 31, 2013 from 14.98 million as of December31, 2012. The number of non-mobile internet subscribers in the quarter ended March 31, 2013, grew to 21.61 million from 21.57 million, registering a quarterly growth rate of 0.16 per cent.
Telecom sector has witnessed a continuous rising trend in the total number of telephone subscribers and hence the teledensity. In simple terms, “Teledensity is the number of landline telephones in use for every 100 individuals living in the area. A teledensity greater than 100 means there are more telephones than people.
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Wireless subscriptions in urban areas decreased from 525.30 million in March 2013 to 521.18 million at the end of April 2013. The wireless subscription in rural areas increased from 342.50 million to 345.85 million during the same period. The urban wireless Teledensity has decreased from 140.67 to 139.33 and rural Teledensity has increased from 40.23 to 40.59.
ANALYSIS FRAMEWORK
PESTEL Analysis
Macro environments are hard to control for any business organization. Pestel analysis will help to find out the external factors which affect the potential of Vodafone.
Political: Political factor is one of the macro factor which play important role to develop telecommunication operating business in any country. It may include from the government licensing process, legal issues, regulation etc to various pressure of pressure group. These factors play vital role to build infrastructure for any network operating industry.
Economic: The rates of economic growth, inflation, income distribution process etc are the economic factors which also influence the growth of telecommunication operating network. Growing income or increase in purchasing power which may help to increase in the usage of Vodafone. Similarly falling prices of handset could affect the market of Vodafone. Rising in telecommunication density which will target 45% by 2010 is also challenge.
Social: Growing demand for broad band services among youth which affect the level of competition in telecommunication sector. Increase in urban population which may affect the market of Vodafone. Rapid urbanization and rapid increase in income increase more competition for Vodafone in India.
Technology: Some of technological advancement in India is CDMA- there are already three big players in this segment Reliance, Tata. 3G- value added services potential still to be tapped fully. 2G/3G – GSM currently commands 70% of mobile subscribes in India. These current scenarios of technological advancement in Indian telecommunication market could pressure Vodafone also. Vodafone’s competitors are now offering the same GSM hand set as Vodafone. So these all prove more external pressure and new challenge for Vodafone.
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Environmental: The Indian government is forcing Vodafone and other telecommunication operators to be environmental friendly. Like while putting up towers any negative externalities given out will have to be paid by a fully social cost by Vodafone.
Legal: Vodafone is in only one legal force that it is to provide safety in the use of its services through the handsets they sell and provide. So this means that development cost will need to be done to produce handsets that attract low radiation.
Vodafone is one of the popular brands in Indian telecommunication industry and has been able to create a different position in the mind of Indian customers. However this industry is one of the most competitive industry in India but Vodafone seems quite successful in fulfilling the requirement of various customers by offering different services in India. Technology is one of the crucial factors for this industry and growing demand of young customers are increasing day by day so company should try to follow the more latest technology which will help them to be more strong among competitor.
SWOT Analysis
Strengths: Vodafone is a very visible brand. It spends heavily on innovative and catchy advertising and brand promotion Its strengths are as follows:
1. Largest Telecom operator in the world – global operations synergy helps bring in best practices to Indian operations
2. Most popular cellular service provider in India with innovative and novel offers on its services
3. Only Indian operator, along with VSNL, that has an international submarine cable connectivity
4. High brand visibility – strong advertising with ZooZoo concept
5. Tie-up with international sports events like Formula-One racing
Weaknesses: Vodafone‟s is a premium cellular service provider. However, its positioning leads to the following weaknesses in a Price sensitive market like India:
1. Price competition from other players like Reliance, Tata Teleservices, BSNL and MTNL
2. Vodafone is urban focused and has failed to tap the significantly large rural market (bottom of the pyramid benefits)
Opportunity: The rapid urbanization and tele-density headroom compared to global standards provide an opportunity to Vodafone to improve its performance by:
1. Taking a lion share of the fast expanding cellular market
2. Investment in latest and low cost technology for better geographical coverage and connectivity
3. Tap the vast untapped rural market for “Bottom of the pyramid” gains
4. Increased migration towards data and value added services on mobiles
Threats: The Telecom policy has resulted in competition-induced decline in tariffs acting as catalyst for the growth in subscriber base and has attracted newer players in the industry, with the result that the intensity of competition has kept increasing. The threat of such a scenario to Vodafone is as follows:
1. New entrant’s low price offering
2. Saturation point in Basic telephony service
3. Mobile Number Portability
Given the above analysis, we understand that the competition in the Indian mobile telephony market is intense. However, Vodafone should formulate strategies in a manner as to differentiate its offering to be able to charge a premium for its services.
Ansoff Matrix Analysis
Ansoff Matrix helps to focus the mind on how each opportunity fits with the business strategy in terms of products and markets. It is simple to use and very effective in driving clear strategic thinking around growth. It works on the basis that to deliver growth a company must decide how and where it needs to compete: in current or new markets and through existing or new products.
a) Market Penetration (Present market with present product): Since Vodafone is still riding high on its current Zoozoo advertising campaign; it should capitalize on this and try to increase their presence by opting for their further emphasis on their urban distribution network. In the case of Mumbai, Vodafone has made its presence felt by opening 25000 distribution outlets. This model can be adapted and customized as per the regional parameters in order to become the nation’s leading cellular service provider.
b) Market Development (New market with present product): According to recently conducted surveys, statistics showed that 45% of the overall telecom sector growth is to come from the sector. A major chunk of Vodafone’s revenue is still generated from tier1 and tier 2 cities. So it needs to focus on rural areas. Thus it provides a more regional focus to the advertising and promotional strategies in order to establish a good connect with the rural customers.
c) Product Development (Present market with new product): Vodafone is further trying to provide new services in order to establish a stronger foothold in its current subscriber base. It is in the process of rolling out its 3G service in India which would be a quantum leap for browsing and internet based mobile applications and services. According to recently updated government regulations, the 3G market is open only to 4 telecom sector players in that particular circle. Hence getting the license for providing 3G services in India would further give Vodafone a distinct advantage over its competitors.
d) Diversification (New market with new product): In order to diversify its current market portfolio, Vodafone is launching a global Machine to Machine (M2M) service platform for helping companies to deploy and manage large, wireless M2M projects for applications in customer service enhancement and central control and automation of projects. In the Indian context, M2M is an untapped sector with enormous potential for growth. WiBRO (Wireless Broadband) has the capacity to overcome data rate of limitation of mobile phones by providing a staggering 30 to 50 MB/s speed. As in the case of M2M platforms, WiBRO is a very promising market in India. Providing these two services in India would open new avenues of growth for Vodafone and would help it to diversify into different market verticals.
STP STRATEGY
Segmentation: It is apparent that Vodafone has segmented Indian Market as:
a) Geographical segment. Vodafone has a significant urban presence and is now focusing on the rural areas as it is a huge potential market for telecom.
b) Demographical segment: Vodafone has different set of offerings based on the income profiling if its subscribers (middle and low income groups).
Both the segment comprises the major population of the country.
c) Psychographic (students, professionals etc); and
d) Behavioral aspects (high users and low users) and have provided the services as per the needs of the market and customers.
Targeting: After the segmentation, Vodafone has selected the target customers which it is focusing on to sell its product and services given the above segmentation. Vodafone’s is targeting its marketing strategy to the people living in small towns and villages, lower or middle income group of population, youngsters and Business people.
Vodafone’s good network of distribution channel is helping to reach and provide services to the people living in remote villages and areas of India. Their prepaid service has attracted the lower or middle income group customers and the youths. Products like iPhone and Blackberry are targeted towards the high / middle income people or business persons in India. They are offering series of differentiated products to their respective markets.
Positioning: Vodafone has presence in almost every part of India with its excellent distribution channel. And for creating sales and enquiry, it has introduced various exciting advertisements and sales promotional activities. The tag line used by Vodafone says “wherever you go, our network follows”, also creates a good image in customer’s mind about the network coverage which is superior and consistent. Introduction of advertisement character like Zoo Zoos has been highly appreciated by the customers and is a great hit. Cricket is like a religion in India, sponsorship in IPL T20 cricket has also positioned Vodafone favorably in the Indian market.
VODAFONE CORPORATE OBJECTIVES (PROPOSED)
Given the competition climate and the need to focus on greater market share and better ARPU, Vodafone should seek to attain the following objectives:
Enhance value for stakeholders and contribute to society by providing customers with innovative, affordable and customer-friendly communications through excellence in services. Aspire to be the most trusted, respected and successful telecommunications company in India.
Vodafone shall seek to achieve its corporate objectives by offering:
a) Products that make a difference: From inclusion to education, from grass-root entrepreneurship to protecting the environment, and from promoting renewable energy to energizing local economies, our products have been developed to usher economic, environmental and societal well-being.
b) Processes that make a difference: From strengthening governance to
periodic performance disclosures, from encouraging a green supply chain to empowering the talent pool, our processes are geared to institutionalise sustainable practices and make them second nature.
c) People that make a difference: From simple acts like donating blood to more difficult ones like donating time, and from volunteering to teach children to picking up the broom to clean cities, our people are the change we wish into see in the world around us.
d) Pursuits that make a difference: From in-depth research on EMF to network optimisation through timely interventions, from conserving energy through technology to managing waste through a strong resolve, our pursuits are the manifestation of our passion for sustainability.
e) Partnerships that make a difference: From joining hands with the government bodies and collaborating with NGOs, from empowering rural women to accelerating environment friendly transport, our partnerships demonstrate that what one can do well, two can do better.
IMPACT ON KEY STAKEHOLDERS
The proposed road map for Vodafone to achieve the Corporate Objectives in a successful and sustainable manner would revolve around the shareholders, customers, employees, and the community where Vodafone operates. All of them are important stakeholders for the business. The benefits to the overarching group of stakeholders mentioned above as part of the Corporate Objectives would be essentially taken care of through the following Marketing Objectives:
Shareholders: Shareholders would trust and respect Vodafone because of its:
ethical business practices
communication in a fair and transparent manner
enhancement of the company’s reputation and brand value
companies effort to protect shareholders‟ interests
Vodafone enhances value through growing the company’s revenue and profitability while creating sustainable free cash flow through efficient resource utilization and effective risk management. Vodafone defines success as creating sustainable value and delivering great shareholder returns.
Customers: To enhance value through delivering affordable, reliable and customized communication services which are simple to use, enjoyable, seamless and secure. The customers would trust and respect Vodafone because:
their needs are understood
creation of innovative services
consistent adherence to promises
transparent and trustworthy in interactions
provision of a secure and reliable network
affordable products and services
Success is defined as delighted customers who recommend Vodafone to others.
Employees: Vodafone would enhance value by providing enriching careers and long-term growth opportunities in a fair and collaborative work environment. Employees would trust and respect Vodafone because of:
healthy and safe workplace
mutual respect, trust and appreciation
promotion of diversity and treat them inclusively
transparency and integrity in all dealings
pursuit with speed and simplicity
recognise and admire accomplishments
We define success as happy employees with great careers.
Community: Vodafone contributes to the society by supporting and enabling social and economic development of local communities in India. The company acts in a sustainable way and creates value for all the business partners by offering them fair business opportunities.
The community trusts and respects Vodafone because they:
act responsibly towards our environment
create community connect
stimulate business and economic growth
have high standards of corporate governance
conduct our business with transparency, integrity and fairness
Vodafone defines success as being the most trusted and respected telecom company in India
MARKETING STRATEGY
Vodafone’s Marketing Mix in India:
Marketing Mix is the combination of 4 major variables which a management must take care of and controlling it in order to best satisfy customers in the target market and creating wealth. Those 4 variables are also known as 4 P’s of Marketing and these are: Product, Price, Place (distribution) and Promotion. In the changing world, nowadays another ‘P’ is added as People, making it 5 P’s of Marketing. Vodafone acquired Hutch in 2007 and has used the marketing mix to gain success in the vast telecommunication market of India to emerge as the 2nd biggest company in India in terms of GSM mobile technology, which is growing day by day.
Product: Product is the major variable in marketing mix, because without product no other variables can work. Product refers to tangible, physical products as well as services. The brand Vodafone was itself able to sell its products in the Indian market but Vodafone introduced various suitable and affordable ranges of products and services for the various strata of customers. For the low income customers, Vodafone provided facilities of pre-paid offers and for the high income customers, Vodafone served with their post-paid offers. Vodafone also introduced easy to use, low cost handsets addressing the rural community of India who cannot afford high end mobile phones.
Price: Price plays an important part in the buyer/seller relationship. A trust develops between seller and buyers, who mutually agree that prices will be set at a fair level. A significance of price can be reduced when the factors such as quality and reliability of service delivery is equal or greater than the price buyer is paying for the product. In case of India, Vodafone is in a low price strategy to gain high market share of the people who are in the rural areas of India and cannot afford higher or premium prices. As 71% of total population of India lives in rural part, Vodafone has taken this strategy to reach out to the higher volume of people. Vodafone has introduced various products with the range of prices which a customer has option to choose and customers also receive the quality service they pay for their products.
Place: Vodafone has opened maximum number of outlets in each and every part of India. The outlets are direct distribution through their own distributors, indirect distribution through associate distributors to the local retailers, who provide products and services to the local customers. Vodafone has also established many service centres in almost every part of India, so that the customer is always satisfied with the products and services of Vodafone and we can see that the customers of Vodafone are significantly increasing every month. Vodafone is also selling their products and services through their own website as well.
Promotion: The promotional mix comprises of advertising, sales promotion, selling and public relations. Promotion refers to the method used to inform the customers about the products and convincing them to buy. Vodafone has used this strategy since its inception in India as Vodafone Essar. Vodafone’s advertisements and promotions were hearty welcomed by the audiences. Introduction of the advertisement of Zoo Zoos and pug was a great sensation which also got popularity in many social networking sites like Facebook etc. Actor Irfan Khan’s advert was highly popular due to his style. Vodafone also sponsored many sporting events and Indian Premier League helped Vodafone to create attraction in customers. Other sponsorship like MTV reality show named Splits villa which was famous in the circle of Indian youngsters also helped Vodafone to gain good success in a very short span of time.
Vodafone has introduced various new beneficial schemes/offers to attract the customers like various talk time offers, validity offers, Bonus Cards, Tariff offers, low cost handsets etc for the prepaid users and ISD, STD, SMS, MMS offers, iPhones and Blackberry handsets to the post-paid users. Thus, Vodafone has been successful in applying their marketing mix strategy and STP strategy in the vast Indian market; they are now in their eighth year of operation in India and are securing their second place every year and seeking opportunities to nudge Bharti Airtel and become “numero uno”. As per the mission statement of Vodafone, “to be the world leader in the field of communication”, Indian market will surely help them to achieve its long term objective.
MARKETING ACTION PLAN
Integrated Marketing Communications Action Plan
Sales Promotion
Continue with the youth oriented packages and value adds because youth is the largest market segment. Promote post-paid connection with value enhancing features apart from the regular pre-paid which is the more favored type for the youth. Differentiate packages from other similar packages by adding new innovations.
Advertising Campaigning
Target typically youth oriented telecasts like commonwealth games telecast, sports channels, information media etc. Shift focus to feature-oriented campaigning from a general target audience oriented marketing. Use youth icons of India as brand ambassadors to represent the brand as a trendy and youthful network as well as reliable service provider.
Event & Programme Sponsorship
Vodafone will strategically continue to align with mega sporting events which attract the TG which the company also desires to woo for its products. The event list may include the IPL and the upcoming Cricket World Cup in 2015.
Continuous patronage of strategic soaps and reality shows across premier TV channels would also add value to the company. The list can continue to include Big Boss, Yeh Hai Mohabbattein etc.
Social Media and e-Word of Mouth
Vodafone will continue the good work with its robust presence on the Social Media leveraging its presence on Facebook & Twitter to the utmost. Strategic use of Blogs will be increased to bolster its presence and reach. Further, strategy of using the Youtube would be streamlined to increase the appeal and cater selectively to the different TGs in different manner.
E-mail & Internet Marketing
This powerful medium will also be put to active use by having strategic tie-ups with selected handset manufactures to advertise Vodafone actively on their respective sites.
Vodafone‟s special “Ready to Help” initiative would be further strengthened with web based service with active chat platform to sort out any customer complaints and grievances.
Pricing Action Plan
Continue with the low price products and add slight modifications and innovations like 1 paise/sec for the first 10 mins and lower call rates for 10-15 mins and so on. Differentiate the pricing from other competitors as most networks follow the prices to stay competitive. Use the “Lead” strategy in pricing decisions taking care of decent profit margins to retain consumer’s confidence as an economic brand.
Channel Action Plan
Continue to use the distribution channels established by Hutch & Essar and strengthened by Vodafone over the years. Provide incentives to retailers to promote their brand more than other networks that they sell. Promote the brand in the small-store market where the store-keepers sell connections and SIM cards of various networks by incentivising them with offers and shares of profit.
Customer Management Action Plan
Maintain good levels of grievance control mechanism in the form of efficient call centre executives. Identify profitable customers and provide special schemes and offers to suit their specific needs. Provide customised discounts to subscribers that are a major profitability prospect to the company for specific needs. Try and find more customers in both rural and urban areas by tapping potential customers who have the need by making them realize the benefits and economy of the brand.
FUTURE PRODUCT POSITIONING STRATEGY
The framework that we shall be using to categorize Vodafone and other rivals has been developed by us and is not a standard framework. Although it follows similar principles used in standard matrices like BCG etc.
Infancy
High Growth
Adolescence
Growth with Aggression
Adulthood/ Maturing stage
Stability and gradual growth
Ageing
Product fading away(Decline)
(To pave way for new ones)
Though services through the same set up or infrastructure was available under a different brand name, Vodafone as a brand is a relatively new entity in the Indian Market and may be termed as “Adolescent” with an all-out strategy to take a lead in the race. Therefore, it would target the Maturing Brand of Airtel to woo more customers with a new genre of innovative products high on customization which are specifically designed keeping in minds the needs and aspirations of the TGs.
As addition of new customers would be at a much slower rate, Vodafone will promote its Data Services in a big way to project it as an ideal gateway to result in large shifts from competitors networks on the grounds of better and reliable data services.
PROJECTED PROFIT AND LOSS ACCOUNT
Note: FY14 & FY15 are expected numbers based on our estimate of revenues and profit given adoption of our Marketing Plan.
The share from Value Added Services and Data is growing at YoY rate of 50%. The mobile usage is slowly but surely moving from voice telephony to data usage in terms of highest revenue generator.
CONTINGENCY PLANS
The strategy devised by us has taken certain things for granted in terms of the goals that the company can achieve and the demand of the product. There might be some problems in the implementation of the strategies suggested. The possible problems and their backup plans are as follows:
Obstacle 1
Network expansion may not be easy as it requires permissions and grants and a lot of investment.
Solution: An alternative to network enhancement could be the use of the network width of the other partner services and integrating it with the Vodafone network by sharing a certain amount of bandwidth that can be kept as buffer.
This way there can be a short term solution in case the expansion of the network takes too long or is to capital intensive to be taken up in the immediate plans of the company. Suitable M & A initiatives may also be taken up for consolidation.
Obstacle 2
Pricing may not be easy to control as the competitors can also slash their prices to match the low prices of Vodafone.
Solution: Vodafone should try to become a “Lead mover” and set the trend instead of playing the catch up by adopting wait and see approach. Being the first mover in any kind of competition adds to the competitive edge of the company. Choosing innovative and minimal prices not only gives the company a good amount of market share but also gives them goodwill of the customers.
