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Running Head: CHALLENGES FACING VERIZON COMPANY 1

CHALLENGES FACING VERIZON COMPANY 6

Verizon Communication International Company (VZ)

Saiteja Mundru

New England College

Marketing Strategies

Date: 11/05/2020

Verizon Communication International Company (VZ)

VZ communication Company was formed in the year 2000, and it recently celebrated its 20th anniversary as one of the leading communication company in the world. It provides services that are related to communication, information, and technology (King, Case & Premo, 2012). Its main headquarters are in New York, America, with several branches all over the world. According to the financial reports of 2019, the company generated an annual income of $131. 9 billion (King, Case & Premo, 2012). The company’s strength includes offering data, voice and video services, delivering products and services that match the customers’ demands and mobility. It also provides reliable internet connectivity, security and control over many places in America. The paper below is a description of VZ communication Company and the main marketing challenge that the company is facing.

Description

The company has succeeded in its expansion worldwide by acquiring other business organizations. For example, in 2015, Verizon acquired AOL organization, and two years later, it would go on and acquire the Yahoo. The two companies were amalgamated into a new division within Verizon referred to as the Oath international company, that is currently known as the Verizon media. In 2019, Verizon subsidiary company, known as the Verizon Wireless was named the leading communication service providing organization in the USA; giving services to more than 150 million customers. The same year it was ranked as the second-best telecommunication company slightly behind AT&T international company.

Marketing Campaigns and Strategies

Over the years it has been operating, VZ has developed several marketing campaigns that have been crucial in ensuring that it expands its customer base worldwide. For example, the company ran a campaign dubbed, “the can you hear me now?” in the year 2001. The campaign was famous because of featuring actor, Paul Marcarelli who played the main role in this campaign and travelled all over the USA asking people, “can you hear me?”. The marketing campaign above ran for close to ten years. As a result of the campaign, the customers of the Verizon company rose by 10% in 2002, by 15% in 2003 (Hopkins & Turner, 2012). Besides, the campaign resulted in the dropping of customer turnover rates by 1.8 % in 2001 compared to 2.5% in 2000. The actor, Paul Marcarelli parted ways with the Verizon company.

The second marketing campaign ran by the Verizon company was controversial one because it pitted Verizon against the AT&T company. The campaign (there’s a map for that) was launched in the year 2009, and designed to counter the market influence of Verizon’s main operation rival, AT &T Company (Hopkins & Turner, 2012). The campaign depicted a broad side by side comparison of the two companies; an act that made the AT& T company file a lawsuit against the Verizon in Atlanta federal court. AT&T company claimed that the comparisons made by the Verizon company in this campaign were misleading its customers. The lawsuit was dropped later the same year after an agreement by the two companies to settle the case.

The latest marketing campaign launched by the company was the human ability campaign which was established in 2017. By undertaking this campaign, Verizon aimed for this advertisement to showcase its diversification of technology services to customers and investments; technological diversification that was beyond the production of smartphones only. The human ability campaign covered data collection, telematics, media, and online advertisement.

Marketing Problem facing the Verizon Communication Company

Verizon communication international company has dominated the USA’s wireless market for an extended period. But now it is on its hard time caused by the fall in the profit and the company’s stock. A recent report shows the company has shed more than 20% of its real value. The marketing challenge facing the company is due to the current saturation of the USA wireless network by various companies. Significant companies are locked in a battle of trying to control the wireless networks in the USA. New wireless network companies are wrestling customers away from giant companies like the Verizon and AT&T. completion of these companies has spurred growth in the wireless network.

The struggle for customers has also resulted in a vicious price war regarding wireless services and products. For example, Verizon company initially resisted pressure from T-Mobile to offer unlimited network plan, but it finally relented in the wake of significant customers loses. Initially, Verizon boosted its strength regarding wireless network but this competitive advantage reduced due to the entry of T-Mobile in the wireless network. Recent studies have placed T-Mobile company at par with the Verizon company on matters wireless network provision (Musonera, 2019). Therefore, Verizon is now forced to offer wireless network customers what they crave most for, which is data for fewer charges.

Unfortunately, the provision of cheap data has dented the average revenue per use collected by the Verizon company; this is despite the increment in the company’s customer base. The loss is because most customers of Verizon who opted for the new unlimited data plan paid less for this new data option provided by this company; in return, the Verizon’s revenue and profitability have shrunk. The marketing plans and strategies of Verizon are also negatively impacted by the growing cancellation of wireless network cables. However, the revocation does not adversely affect the operations of the Verizon company because procedures done through accounts for only 10% of the company’s total revenue. Acceleration of cord-cutting is also negatively impacting the gains of the Verizon company. Development of online video streaming applications such as Netflix, Hulu, and Amazon Video prime has made it possible for people to view videos without necessary using Television cables. This situation is likely to make things worse for companies that provide lines (Yankelevich, Shapiro & Dutton, 2017). Close to 10.8 cable users are likely to cut the cord in a period of five years, rising the figures of customers opting for cord cut significantly; this is terrible news to Verizon company whose TV segments have been for long considered as the source of growth. Cord-cutting has made things terrible for Verizon company until recently it started to bleed customers.

In response to the cord-cutting, Verizon has sold some of its FiOS assets; with the recent sale coming being effected in April 2017. An action that has made some people think that it will be better for the Verizon company to exist in the TV business industry. However, the management of the Verizon company has assured its customers that it intends to keep the remain FiOS assets. Verizon Company has developed the interest of countering the cord-cutting by establishing its own online video streaming services. However, its previous attempts to develop these services have not gone on well. Again, video streaming services have lower profit margins compared to the use of traditional TV cables. On a positive note, the online video streaming services won’t be disrupted by the constraints resulting from the company’s FiOS infrastructure. Therefore, it will offer online streaming services on larger basis. However, it is still expected to face stiff competition from its rivals like the Sling TV and Direct TV who now have a sizeable head start.

References

Hopkins, J., & Turner, J. (2012). Go mobile: location-based marketing, apps, mobile-optimized ad campaigns, 2D codes and other mobile strategies to grow your business. John Wiley & Sons.

King, D. L., Case, C. J., & Premo, K. M. (2012). An International Mission Statement Comparison: United States, France, Germany, Japan, and China. Academy of Strategic Management Journal, 11(2), 93.

Musonera, E. (2019). Marketing Strategies in the Telecommunication Industry and Network Services: A Case Analysis of Wireless Carrier T-Mobile. Journal of Marketing Perspectives, 1, 18-37.

Yankelevich, A., Shapiro, M., & Dutton, W. H. (2017). Reaching beyond the wire: Challenges facing wireless for the last mile. Digital Policy, Regulation and Governance.