Marketing essay
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article.docx1.0 Executive Summary
The purpose of this report is to develop the marketing plan for KKTC Telsim, a telecommunication company developed after Vodafone Group acquired Turkey’s Telsim. The report identified the background information of Vodafone Company and describes the proposed methodology aimed at collecting information for the generation of an effective marketing plan. Also, it describes the current situation faced by the organization using the internal environment analysis, market audit, and situational analysis.
Table of Contents
1.0 Executive Summary 2
2.0 Introduction 2
3.0 Methodology 2
4.0 Situational Analysis 2
4.1 Internal Environment 2
4.2 Market Audit 3
4.3 Competitor Analysis 3
5.0 SWOT Analysis
6.0 Objective
7.0 Recommended Marketing Strategy
References 4
2.0 Introduction
Vodafone Group is a UK based telecommunications company operating in more than 60 countries spread across Europe, Asia, North and South America, Oceanic, and Africa. The company is the number one provider mobile and fixed network services to customers and businesses in Europe, and the world’s number one provider of Internet of Things (IoT) connectivity (Vodafone Group Plc 2021). Vodafone has been eying Turkish market its main target market.The main entry strategy used to enter the Northern Cyprus Turkish market was through the acquisition of Turkey’s biggest mobile operator, Telsim. According to Vodafone Group PLC (2019), Vodafone aims at deepening their customer engagement by converging different customer needs and bringing out an additional service to customers. The above strategy has been used by the organization to improve lives of people in Cyprus, Turkey.
3.0 Methodology
The secondary methodology was used to collect data about Vodafone Group expansion to Turkey. The secondary methodology was selected because it was the easiest, cost-effective, and most convenient method of acquiring data about the Vodafone’s strategic entry to Turkish market. As such, it was possible to acquire large volumes of secondary data with rich information about the topic. The main sources of information used were: Company financial reports, Business reports targeting the company, or the telecommunication firms in Turkey, past studies conducted by students, scholars, and business researchers like Mintel, and newspaper reports.
4.0 Situational Analysis
4.1 Internal Environment
The organizations internal capabilities influence its position in the local and international market. Vodafone’s priority has been to extend its competitive advantage and improve returns through innovative and unique positioning strategies. One key area that has led to the growth and expansion of Vodafone market in Europe is its over-reliance on technology development (Vodafone Group PLC 2013). The organization continues achieving high economies of scales through its innovative and updated technology infrastructure that is practiced in all the operating countries. Moreover, the company’s brand image has led to an increase in the global market share (Niaz, & Garcia-Medina 2018). As such, Vodafone possesses a solid foundation to enter different target markets and create a significant impact. For example, Vodafone’s Turkish subsidiary created after acquiring Telsim led to the exploitation of different market opportunities making it the Vodafone Turkey the fastest growing and most competitive telecommunication company in the country. On the other hand, Vodafone laid little emphasize on customer service and marketing while concentrating on competing in specific high-level consumer segments that affected its market positioning in Turkish Republic of Northern Cyprus (TRNC). The company failed to consider internal factors such as change in management and leadership while planning for the market entry, which affected its long-term performance in Northern Cyprus.
4.2 Market Audit
Vodafone is the leading telecommunications brand in Europe and Africa, and continues to extend its market presence in other regions like Asia and North America. Smith (2020) claimed Vodafone has been focusing on learning new trends to meet changing consumer demands. It has deployed the 5G technology and made it commercially available to its customers. Moreover, the company uses clear strategies to invest on new markets. The acquisition of Turkish telecom company, Telsim, was based on clear strategies that inform the company’s strategic path. The organization is working on a growth strategy to increase its market share in new markets like Turkey where they have invested in technology and innovation to remain competitive (Vodafone Group PLC 2021). However, issues such as strong bargaining power of suppliers have influenced Vodafone’s strength to remain competitive in new markets. The different consumer structure experienced in the new market affected the company’s future sustainability as the global telecommunication leader. Additionally, the legal, cultural, and political factors in Northern Cyprus affected the market and corporate decision making creating a delay in strategy implementation (Vodafone Group PLC, 2021). As such, there is a need to carry out an extensive study to identify strategies that the company could adopt to overcome market challenges in Turkey.
4.3 Competitor Analysis
Vodafone has to compete with numerous other firms in the industry. In UK, the main competitors are O2 and EE. The two have an established business presence in the country and their strategic approaches have the capability of changing consumer decisions. In the Northern Turkish market, Vodafone Turkey competes with KK Turkcell. KK Turkcell has been the leading telecommunication provider in Turkey and the main competitor of Telsim. The company wins customers’ tastes through three key strategic options namely: communication, distribution, and pricing. Also, it has invested more on product development through a strong research and development team that ensures customers get superior products and services at all times. However, Vodafone Turkey has been keen on introducing strategic movements to overcome rivalry from KK Turkcell by coming up with new strategies to win the Northern Turkey market competition. Vodafone annual report (2019) revealed the company continues to promote organizational accomplishments by bringing on board new avenues to address competition issues.
5.0 SWOT Analysis
Vodafone is one of the leading telecommunication companies in Turkey. In 2018, the company had acquired over 80.12 million Vodafone mobile customers, which is an increase as compared to from 77.8 million subscribers in 2017. The company has always focused on being a leader in the converged services. The telecommunication industry is associated with stiff competition due to the existence of several players fighting for the market share in various markets. Ideally, the company has invested heavily on innovation and has focused on digitization for customer engagement as well as faster growth. Based on the SWOT analysis of Vodafone, it comprises of various strengths, weaknesses, opportunities, and threats. SWOT analysis can be discussed as follows:
Strengths
The key strength that Vodafone in Turkey is currently having is brand equity, whereby with high brand equity, it depicts a sign of reliability as well as strength. Additionally, Vodafone is known to be customer centric and popular brand that is recognized by most of the customers across the globe. This is also one of the main reasons why the company has large customer base in different countries. Another key strength associated with Vodafone is marketing whereby the key focus of the company is based on customer convenience and marketing. Notably, the brand has invested heavily on marketing and application of several marketing channels for marketing as well as promotion of the company products and services. Other strengths include large range of products/ service, strong presence in Turkey, and technological innovation.
Weaknesses
Despite Vodafone's strong emphasis on technological innovation and development, the company's customer base has shrunk in some key markets, especially in Turkey. The industry's rivalry has intensified, and other companies are investing in marketing and consumer acquisition as well. Although Vodafone maintains a strong position in most Turkish market and is a major player in the market of this country, the company will have to change on this trend (Adamkasi, 2018). Another weakness is weak position in US, whereby even though there is a technological advancement in this country.
Opportunities
Ideally, existence of Vodafone in Turkish market has created opportunities which include customer engagement. With the technological growth and development such as AI and digital technology, this has provided massive potential for growth. Existence of these technologies is ideal in driving the customer engagement to a higher level, as well as designing better and more engaging customer requirements that is geared towards reducing churn rate as well growing market share (Notesmatic, 2019). Notably, customer experience has grown tremendously in relation to marketing and promotions. Another key opportunity available as a result of Vodafone is digital marketing which is paramount for faster growth. In the recent years the company has grown tremendously especially in digital technology. Lastly, technology and innovation is another opportunity that have helped Vodafone greatly, to grow and expand its customer base in different markets globally..
Threats
One of the main threats is competition, which is dominant in telecommunication industry particularly in Turkey. In some of the Turkish markets, the brand has lost market share, and hence revenue. And customers as well. Additionally, the rate of penetration by the competing business is alarming and has grown tremendously. The company will have to focus on its pricing customer engagement, as well as its marketing strategy to increase its customer base.
6.0 Objective
The main objective of Vodafone Company in Turkey is to ensure that it has satisfied all its stakeholders, which include the society, employees, customers as well as government entities. This is made easier through approachable and clear vision. Based on the marketing objective of Vodafone, it to keep and maintain market, leadership, based on revenue per customer, network quality as well as customer’s satisfaction. Additionally, achievement of this objective require continuous updating of various phones to be ahead of the competitors. This will also continuous advertising of the products and the brand name to ensure there is wider customer outreach in all the target markets. Other aspects relating to the marketing and brand objective include introducing new technologies and best practices as well as increasing infiltration of the new data service especially with the technological innovations and advancements so that the company can remain relevant in the local market.
7.0 Recommended Marketing Strategies
Concerning the recommended marketing strategies that Vodafone ought to adopt include: distribution strategy which is geared towards reaching more countries as well as retail outlets. The repercussions of this strategy is increased sales and profit maximization. Another key strategy is customer analysis whereby the market is analyzed through the customer purchasing pattern and power. It can be affirmed that 92% of the Vodafone customers in Turkey are individuals and families, while 8% are customers from enterprises. Another recommended marketing strategy is by putting higher focus on digitization. It is important to note that digital technology play a critical role in marketing of the Vodafone, promotion as well as access and delivery of services to customer globally (Pratap, 201)). The existence of digital program by Vodafone Company through the delivery of the most engaging digital experience for the users of the products and services offered by Vodafone. Additionally, with digital marketing channels and Vodafone app, this will establish the main acquisition point of this product. Lastly, the use of technology is critical especially in data analytics, as this will help the company to gather necessary data regarding customer ordering as well as helping in achieving higher user engagement and reducing the churn rate.
8.0 Marketing mix strategy
According to David and Damien (2010) said, appropriate marketing mix strategy can help the company effectively improve profits. In this part, we will explain how Vodafone Turkey should improve its marketing mix strategy to gain more performance and more stable market position through 4Ps marketing mix strategy (product, price, place, promotion).
8.1 Product strategy
The key of making product strategy in international marketing is how to adjust the standardization and adaptability of products (Ghauri and Cateora , 2014) and the basis for making a judgment is to make the product conform to the local culture (Ozsomer and Simonin, 2004). According to the survey, 72.8% of the total population of Cyprus are Greeks, 9.6% are Turks and 17.6% are foreigners (Guide to countries of foreign investment cooperation of Chinese Embassy in Cyprus, 2014). This may also lead to the diversification of consumer demand, but Vodafone’s advantage lies in its high brand awareness. This requires it to develop more products for different consumers, and in the service should make full use of digital technology to achieve online services to improve consumer recognition. For example, Vodafone can set up a variety of service packages, including more local call duration and a small amount of international call duration for international students, which is convenient for students to contact classmates and call relatives abroad. At the same time, it can also provide more international time packages for business personnel who often travel to meet the needs of consumers.
8.2 Price strategy
Our pricing strategy in the international market should start from the cost of products, consumer demand and competition (Ghauri and Cateora , 2014). In terms of customer demand, mobile communication has long been a part of daily life. In terms of product cost, Vodafone owns a lot of ownership of infrastructure. From this perspective, Vodafone’s product cost is still high. From the competitive environment, Vodafone is still not dominant.
Figure 1 The chart of Turkey mobile market share (Unit : %)
Data source: Companies, TEB Investment sector report
As can be seen as figure, Vodafone is at a competitive disadvantage. Although Vodafone may be superior to other competitors in terms of product quality, its pricing should not be too high because of its small market share. Therefore, the company should adopt a competitor oriented pricing strategy on the basis of Turkcell pricing. The company should try to keep the price lower than that of turkcell to gain more market share, But don't be too low to avoid ethical issues that can cause malicious competition.
8.3 Distribution strategy
For distribution strategy, according to Kotler et al. (2016), the development of multi-channel distribution mode has become the mainstream. Therefore, Vodafone should seize the characteristics that retailers pay attention to circulation, strive for market share with differentiated regional products. At the same time, it ought to gradually improve the quantity and quality of distribution channels. While ensuring the efficiency of Turkey’s offline stores, online distribution channels should be developed to provide convenience for consumers. Because, in Srivastava Mala and Kaul Dimple’s research(2014) findings that whether consumers feel convenient is an important factor affecting market share.
8.4 Promotion strategy
As shown as Figure 1, Vodafone’s main competitor in Turkey, Turkcell, has almost twice as many users as Vodafone. Therefore, Vodafone should strengthen its publicity. The company should launch a large number of advertisements in Turkey and Cyprus to promote its round the clock service and high service quality. In the process of publicity, the company should make rational use of large billboards, and use the Internet and radio to achieve the purpose, when necessary, new services can be introduced to users through SMS (Yongjian Lv, 2017).
9.0 Planning budget
9.1 Planning assumption
According to the above analysis of marketing mix strategy, the company will increase the cost of publicity. At the same time, in order to better compete for market share, the company also needs to give consumers a certain degree of discount. Therefore, it is estimated that the cost will be higher than the average in previous years. However, Turkey and Cyprus are the hubs connecting Europe and Asia, its market potential is very large, so their market share is worthy of cost competition.
9.2 Forecasts
Figure 2 The chart of Vodafone group’s profit and operating cost chart in the past four years(Unit: million, Euro)
Data source: Annual Report of Vodafone 2020 and New York Stock Exchange
As can be seen from Figure 2, the company’s profit and cost expenditure are basically stable. Therefore, in order not to affect the normal revenue of the company, it is best that the budget increase should not exceed 800 million euro. The specific budget should be determined according to the actual cost.
10.0 Implementation and control
Overall, Vodafone Turkey should strengthen its investment in advertising and use its own brand advantages to expand its presence in the target market. In the meantime, the company can gain market share by offering discounts and a variety of package services. But because of the lack of early understanding of the target market, the company still has a big gap with its biggest competitor, Turkcell. The development of the company in the target market needs more time to reach the ideal level.
