Vodafone STP & Marketing Strategy - MBA Project Report Free PDF Download
Vodafone STP & Marketing Strategy - MBA Project Report Free PDF Download
Vodafone STP & Marketing Strategy - MBA Project Report Free PDF Download
A REPORT
ON
VODAFONE ESSAR LIMITED
2. Introduction 5
3. Segmentation 6
4. Targeting 8
5. Positioning 8
5. Enterprise Services 9
9. SWOT analysis 19
13. Appendix 26
14. Interview 32
15. References 35
OBJECTIVES:
INTRODUCTION:
SEGMENTATION:
Product Segmentation
Telecommunication
means
Landline Mobiles
GSM CDMA
GSM
Consumer Segmentation
Geographic :
Vodafone segments its market as metros, A-circle, B-circle and C- circle. Here, the segmentation is
done on the basis of regions in which they operate. Also, rural and semi-urban markets are fast
emerging as profitable market segment, so Vodafone is trying to enhance its operations effectively
Demographic:
Income :
Vodafone further segments its market according to various income levels and have various plans
Age:
Vodafone does not primarily segment its market on the basis of age but they have specific
Depending on the fact that whether the customer is institutional or sole, the services and plans
provided by Vodafone varies and thus, it forms an important bases for segmentation.
Psychographic:
Vodafone segments its users on the type of service they use based on their lifestyle
Behavioural:
Benefits Sought:
Vodafone segments its customers on the basis of the benefits sought by them such as such as:
local call ,STD call or ISD call makers ; users of value added services, connectivity , coverage.
Usage Rate :
Vodafone also classify its users as one with heavy usage rate, medium usage rate and light
usage rate and have different targeting schemes for each of them.
The Type of the service provided by Vodafone to its customers also plays a crucial role in
BUSINESS SEGMENTATION
The Group continues to grow usage and penetration across all business
segments. VGE manages the Group’s relationship with Vodafone’s 270 largest
multinational corporate customers. VGE simplifies the provision of fixed,
mobile and broadband services for MNCs who need a single operational and
commercial relationship with Vodafone worldwide. It provides a range of
managed services such as central ordering, customer self-serve web portals,
telecommunications expense management tools and device management
coupled with a single contract and guaranteed service level agreements.
Targeting:-
Vodafone has full market coverage with differentiated offerings. Market is
targeted through many different tariffs, services and propositions for every
segment according to specific customer preferences and needs. These often
bundle together as: voice, messaging, data and increasing value added
services. The various examples for this include:
Home calling cards for the family of those professionals who use to work abroad.
Rs.10 recharge for small users
Cheap SMS facility for youths
Facilities for circle users etc
POSITIONING:
Vodafone has continued to build brand value by delivering a superior,
consistent and differentiated customer experience. Their tagline “Where ever
you go our network follows” gives the customer indication of their vast
coverage.
ENTERPRISE SERVICES:
Voice services
Pre – Paid
Post – Paid
Entertainment
Devotional
Sports
Astrology
Finance
Travel
Mail, Messaging
Dial in Services
Bill Info
Vodafone Live
Business application
Vodafone Office
market%
7.09 3.94 1.33 0.72
32.29 Bharti Airtel
14.9 Vodafone Essar
BSNL
Idea Cellular
Aircel
Reliance GSM
MTNL
Loop
15.57
24.16
40
0
120,000,000
Vodafone
100,000,000Essar is the second largest GSM operator in India after Airtel from
the80,000,000
perspective of market share and subscriber base and is increasingly
expanding its share (the detail figures are given in Appendix) . It still is quite far
from Airtel due to Airtel’s strong presence in rural areas
60,000,000 and loyal customer
SUSCRIBERS
base along with larger reach and first mover advantage.
40,000,000
20,000,000
0
Branding, Advertizing,Pricing and Distribution:
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Vodafone’s products and services are available directly, via Vodafone stores
EA
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ID
and country specific Vodafone websites, and indirectly via third party service
providers, independent dealers, distributors and retailers, to both consumer
and business customers in the majority of markets under the Vodafone brand .
The Vodafone Group has created a Global Customer Value Management team
to support operating companies with their aim to engage with customers
directly through a data driven approach. Recent examples of this include:
rollout of a consistent and innovative store, successful trial of an innovative
handset based self service solution and creation of a global training academy
for customer facing staff.
Logo
Advertisement:
The inaugural TV commercial showed the trademark pug (minus the boy)
moving out of a pink kennel into a red one. An energetic version of Hutch’s
signature ‘You and I’ tune played towards the end, as the super concluded,
‘Change is good. Hutch is now Vodafone’. There were four more commercials
featuring Hutch’s animated boy and girl, introducing the new brand’s logo to
consumers.
Vodafone put in close to Rs 150 crore into the first phase of the rebranding
exercise—with Rs 60 crore in mass media and another Rs 90 crore in retail
activities.
In the second phase, Vodafone ushered in its global strapline—“Make the most
of now”, which replaced “How are you?” in 2001. By then it was apparent, the
boy-and-pug chapter would soon be over. In 2008, Vodafone used the platform
of cricket when it unveiled the ‘Happy to Help’ series during the first season of
the Indian Premier League (IPL).
This season the Zoozoos are all the rage. These characters have virtually
hijacked the online media as well as television—to convey a value added
service (VAS) offering in each of the new commercials.
In Indian scenario when other major telecom service providers are using
celebrities(Airtel-Shahrukh Khan, BSNL-Deepika Padukone, Aircel-Mahendra
A new Marketing Framework has been developed and implemented across the
business, which includes a new vision of expanding the Group’s category from
mobile only to total communications “to be the communications leader in an
increasingly connected world”. Brand and customer experience continues to
implement Vodafone’s promise of “helping customers make the most of their
time”. The brand function has also developed a methodology to develop
competitive local market brand positioning, with local brand positioning
projects now implemented in 12 markets.
Sponsorships
Vodafone majorly sponsors the following teams and events, apart from various
regional and timely sponsorship:
Distribution
Vodafone directly owns and manages over 1,150 stores. These stores sell
services to new customers, renew or upgrade services for existing customers,
and in many cases also provide customer support.
A standard store format, which was tested in 2006, was rolled out in 11
markets during the 2008 financial year. All stores in India were rebranded as
Vodafone and over 40 stores were refurbished to the Group’s standard format.
The Group also has 6,500 Vodafone branded stores, which sell Vodafone
products and services exclusively, by way of franchise and exclusive dealer
arrangements.
The internet is a key channel to promote and sell Vodafone’s products and
services and to provide customers with an easy, user friendly and accessible
way to manage their Vodafone services and access support.
Indirect distribution
The extent of indirect distribution varies between markets but may include
using third party service providers, independent dealers, distributors and
retailers.
The Group hosts MVNOs in a number of markets. These are operators who buy
access to existing networks and resell that access to customers under a
different brand name and proposition. Where appropriate, Vodafone seeks to
enter mutually profitable relationships with MVNO partners as an additional
route to market.
Presence in India:
Market potential
Buying decision process
Infrastructure
Country’s political, social and economic scenario
Government policies and business climate(Interest rates and Inflation)
Technology and Special zones
Competition
Income levels
Employee skills and unionization of employees
Ethical considerations
The Group’s key sources of liquidity in the foreseeable future are likely to be
cash generated from operations and borrowings through long term and short
term issuances in the capital markets as well as committed bank facilities. Due
to the recent volatility experienced in capital and credit markets around the
world, new issuances of debt securities may experience decreased demand.
Adverse changes in credit markets or Vodafone’s credit ratings could increase
the cost of borrowing and banks may be unwilling to renew credit facilities on
existing terms.
The Group faces intensifying competition and its ability to compete effectively
will depend on, among other things, network quality, capacity and coverage,
the pricing of services and equipment, the quality of customer service,
development of new and enhanced products and services, the reach and
quality of sales and distribution channels and capital resources. Competition
could lead to a reduction in the rate at which the Group adds new customers, a
decrease in the size of the Group’s market.
The Group uses technologies from a number of vendors and makes significant
capital expenditures in connection with the deployment of such technologies.
The introduction of software and other network components may also be
delayed. The failure of vendor performance or technology performance to
meet the Group’s expectations or the failure of a technology to achieve
commercial acceptance could result in additional capital expenditures by the
Group or a reduction in profitability.
As part of its strategy, the Group will continue to offer new services to its
existing customers and seek to increase non-voice service revenue as a
percentage of total service revenue. However, the Group may not be able to
introduce these new services commercially, or may experience significant
delays due to problems such as the availability of new mobile handsets, higher
than anticipated prices of new handsets or availability of new content services.
In addition, there is no assurance that revenue from such services will increase
ARPU or maintain profit margins.
The Group has entered into several cost reduction initiatives principally
relating to network sharing, the outsourcing of IT application, development
and maintenance, data centre consolidation, supply chain management and a
business transformation programme to implement a single, integrated
operating model using one ERP system. However, there is no assurance that
the full extent of the anticipated benefits will be realised in the timeline
envisaged.
As the Group increasingly enters into emerging markets, the value of the
Group’s investments may be adversely affected by political, economic and legal
developments which are beyond the Group’s control.
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The Group has made substantial investments in the acquisition of licences and
in its mobile networks, including the roll out of 3G networks.There can be no
assurance that the introduction of new services will proceed according to
anticipated schedules or that the level of demand for new services will justify
the cost of setting up and providing new services.
SWOT analysis:
Strengths
Weakness
Opportunities
Threats
FUTURE STRATEGIES:
Factors and Trends Relevant for Future Policy Initiatives
The trend towards convergence of services may lead to major changes in the
structure of industry and markets.
Since Vodafone is still riding high on it’s current zoo zoo advertising campaign,
it should capitalize on this and try to increase their presence by opting for
further emphasis on their urban distribution network. As the impact of any
promotional strategy does not last for more than a limited timeframe, it is
imperative for Vodafone to make sure that they retain their current popularity
levels by pushing forward their advertising campaign in a much more
aggressive manner. In the case of Mumbai, Vodafone has made it’s presence
felt by opening 25000 distribution outlets and has hence captured the numero
uno slot in this metropolis. A similar business model can be adapted and
customized as per the regional parameters in order to become the nation’s
leading cellular service provider.
2. Market Development:
India is still an agrarian economy and 70 percent of it’s population still dwells in
rural areas. According to recently conducted surveys, statistics showed that
45% of the overall telecomm sector growth is to come from the rural sector. A
major chunk of vodafone’s revenue is still generated from tier 1 and tier 2
cities. This leads us to conclude that Vodafone needs to place further focus on
rural penetration so as to create economies of scale as well as the top line
growth of revenues. Development of infrastructure in rural areas is a
bottleneck due to the cost factor associated with it. Project MOST (Mobile
Operators' Shared Towers) by COAI was initiated in order to reduce these
heavy costs by sharing infrastructure between the service providers, hence
resulting in better coverage and quality. Optimal rural penetration can be
achieved by taking into account the economic environment prevailing in the
rural sector. This would encompass the socio economic factors and would
hence provide a more regional focus to the adversting and promotional
strategies in order to establish a good connect with the rural customers .
3. Product Development:
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Vodafone currently faces stiff competition since new players have also entered
the fray recently. Players like Loop, Hash10, MTS etc are set to roll out their
services due to which Vodafone may find it difficult to maintain it’s current
share of customer base in india. Expansion, further focusing on it’s current
segments, implementation of a revised business model and intensive
marketing would be the key features Vodafone should be concentrating on in
order to retain it’s current position in india.
• Expand distribution:
APPENDIX:
However, much like Bharti Airtel and Idea Cellular, Vodafone India reported a
decline in ARPU, impacted by the mobile termination rate cut.
Customer Base
Of its total customer base, 93.2 percent was Pre-paid. The companys average
customer base grew by 56 percent year on year, on launching in seven new
circles.
Net additions for the company declined quarter on quarter - Vodafone India
added 7.68 million subscribers in the quarter, as opposed to 7.83 million
subscribers added in the previous quarter.
Much like other operators, Vodafone India has suggested that usage per
customer declined on account of multiple SIM usage, which is being attributed
to the free minutes and free SIM cards being given by operators, particularly in
new circles.
Churn
Vodafone reports churn on an annualized basis, and the company saw a pre-
paid churn of 26.3 percent churn for the last four quarters, with a Pre-paid
churn of 26.4 percent, and a post-paid churn of 25.3 percent
Indian Telegraph Act 1885: This act empowered the government of India to
take control of the existing telegraph lines and lay down the necessary
infrastructure for further expansion of telecommunications in India.
Indian Telegraph (amendment) Rules 2004: This act set the guidelines for the
set up and development of public telecom services in India.
Indian Wireless Act 1993: According to this act wireless telecom services
could be set up only after due licensing from the telegraphy authority of
India.
Information Technology Act 2000: The act defines the information
technology based communications in India. Telecom Industry of India was
shown e-commerce way through this act in a legal manner.
Telecom Regulatory Authority of India (TRAI) Act 1997: The act established
TRAI for the regulation of telecom business in India. Further amendments were
made in the act as per the needs of the Indian telecom market that surfaced in
the telecom market analysis and research conducted.
INTERVIEW
Vodafone India is barely two years old. Can you see the direction in which it
is heading?
Vodafone has experienced a fairly good run in the past few years. It has
emerged as one of the premium players in the telecom. Within a short period
being second in the industry is a tremendous achievement. It is one of the few
players which has a pan-India presence and it caters to not only the Premium
segment but also to the rural segments as well. Plus, Vodafone is at the
forefront of ushering in new technology e.g. 3G and Wi-max is about to roll out
within the next few months so Vodafone is on solid-turf.
For entry into any sector, say rural or urban, there should be focus on network
coverage and distribution. In addition to that, the affordability and
penetration also comes into picture. Considerable effort is being put in from
our side to increase our network coverage, customer satisfaction. We have one
of the best and largest customer support service which Is twice the size of our
nearest competitor.
It is very difficult already for the existing players as profit margins are reducing
with increase in number of players. The profits have reduced due to the
slashing of call rates. However, the profits realized are due to increasing usage
rates. Docomo is a very good launch and I believe it will change the rules of the
game altogether.
Our strategies are more towards customer service, value added services etc
rather than changing tariffs frequently. For instance, Vodafone India has 35
owned stores in Mumbai to provide help and customer services. This I believe
has made Vodafone the leading player in Mumbai. Our next competitor does
not have half the number of service centers that we have.
How are your strategies in India different from those of other countries?
Strategies are very different not only from country to country but also from
region to region. Our strategy for Europe which is a mature market is different
from that for India and Africa which are developing markets. While Europe
market is important in terms of revenues, Indian market is promising in terms
of growth.
What are the new products that are in the pipeline? Scope of 3G in India?
Vodafone has better expertise and technology than Airtel/MTN and even
though it will benefit them mutually the effect would not be much on
Vodafone and Airtel in India. Airtel is already a leader in India and it will remain
the same for some time. Our strategy is focused on how to be a market leader.
Can you say something about the effect of Zoo-Zoo campaign on the
customers?
It has almost created a wave and impact has been very encouraging. Existing
customers loved the campaign and many responded to the campaign through
phone and internet. The Zoo-Zoos’ effect has caught the public’s imagination
so much that there were Zoo-Zoo Ganapati and rakhis selling. We also
captured the attention of the public through our pug dog advertisements.
Advertising is something which differentiates Vodafone from others. While the
rates of all the service providers are almost same, you need to do something so
that the customer chooses your service over your competitors’ while opting for
a mobile connection.
In your opinion which are the major hindrances, in the way of regulations
and government policies, faced by the telecom sector ?
They are:
First it was for CDMA, later it was for GSM and now they have planned to offer
an unified license.
Can you throw some light on the distribution network of Vodafone India?
What are the other external factors that you feel had affected the telecom
sector in the recent past?
Every national event affects the industry as a whole. The drought in India
affected the disposable income in rural India. Naturally the spending on these
services will decrease. The sector is not immune to terrorist attacks or even
Swine flu scare as it affects the movement of tourists and in turn adverse
affects our revenues from roaming charges.
Why did you choose to enter India through Hutchinson Essar rather than
entering directly?
REFERENCES:
1. www. vodafone .in
2. www. trai.gov.in
3. www.google.com
4. en. wikipedia.org
7. wireless federation.com
8. telecomtalk.info
9. www.vodafone.com
10.telecomindiaonline.com
11.www.bestof indya.com
12. www.afaqs.com