MKT11445 Report: Vodacom's Marketing in a Changing Environment

This report provides a comprehensive analysis of Vodacom Group's marketing strategies within the context of its macro-environment. It begins with an introduction to strategic management and a PESTLE analysis of Vodacom's operating environment in South Africa, examining political, economic, social, technological, legal, and environmental factors. The report then evaluates Vodacom's marketing strategies, including its competitive advantage through cost leadership, segmentation approaches targeting various consumer classes, and branding initiatives. It explores how macro-environmental factors impact these strategies. Finally, the report identifies and assesses opportunities for Vodacom's growth, based on the analysis of the external environment and internal strategies, linking the findings to marketing theory. The report utilizes data from Vodacom's public information and external sources to support the analysis and concludes with a discussion of the key findings.

Marketing

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Contents
Introduction......................................................................................................................................2
Macro-environment.........................................................................................................................3
Marketing Strategies........................................................................................................................5
Competitive Advantage................................................................................................................6
Segmentation, targeting and positioning......................................................................................7
Branding.......................................................................................................................................8
Opportunities Analysis....................................................................................................................9
Conclusion.....................................................................................................................................10
Bibliography..................................................................................................................................12

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Introduction
Strategic Management is the process of planning, monitoring, analysis and assessment of all the
necessity of an organization to meet its goals and objectives. Strategic management helps the
organization to analyze the current situation. It is essential for the organization to analyze the
market situation before developing the strategies for growth (Ansoff, et. al, 2018). Vodacom
Group has been taken into consideration to analyze the macro environment. Vodacom Group
Limited is a mobile communication company in South Africa. The company provides the voice,
messaging, converged services and data to the 55 million customers. Vodacom expanded its
business in different locations such as Tanzania. The company is retained in a 50/50 partnership
by the African telecommunication group and Vodafone operator. Vodacom is the leading cellular
network in South Africa with the 58% of market share and more than 103 million consumers
across Australia.
In the beginning of this report, the macro-environment analysis will be done to identify the
factors that affect the growth of organization. Later on, the impact of macro-environment factor
on marketing strategies such as competitive advantage, segmentation, targeting and positioning
will be discussed. At the end of the report, the opportunities will be analyzed in which the
organization can attain the higher level of success.
Macro-environment
PESTLE Analysis
Political  The government of South Africa
develops the Protection of Personal

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Information (POPI) Act that prohibits
the transfer of personal information to
the third party.
 The government of South Africa set the
budget for the sector to increase the
usage of ICT to facilitate socio-
economic justice and inclusion.
 The government of South Africa
focuses on their cyber security hub,
cyber security tools and monitor
services offerings due to which the
company has to develop the policies
as per these rules and regulation of
government.
Economic  It is the second largest economy in
Africa after Nigeria.
 Gross Domestic Product of the country
$400 billion.
 Foreign Exchange reserves increased
from $3 billion to $50 billion to create
the diversified economy.
 The government of South Africa
develop the budget for IT growth that is

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beneficial for the company.
Social  The 80% of people of South Africa use
the smartphones due to which the
demand of services of the company is
increasing day by day (Glibert, 2019).
 The population of South Africa was
57.7 million in the year 2018, this is a
clear indication of huge customer base.
The users of smartphones and mobiles
networks are increasing.
Technology  The need of security products is
increasing with the 8% of total IT
budget.
 South Africa is the leader in terms of
smart city technology. It is beneficial
for the organization to grow in the
market (Export.gov., 2019).
Legal  According to the government, Business
Software Alliance is installed software
by the percentage of 35 in SA as illegal.
Environmental  Technology consumes the higher
energy in huge amount (Lexisnexis,

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2019)
It has been seen that the changes in factors affects the market strategy of the company. Legal and
economic factors are the two factor in which the changes is occurred. The changes in the factors
directly impact the strategies. Increasing the GDP enhance the willing power of consumers due
to which the demand of consumers is also increases towards the telecommunication services. It is
observed that the increasing demand of the consumers impact the competitive strategy of the
company as the numerous companies enter the telecommunication industry to deliver the
services. Social factors is also affects the market strategy of the organization. The percentage of
population is increasing due to which the market strategy of segmentation positioning is also
affected.
Marketing Strategies
Market strategy is a long-term, forward-looking method which is designed to achieve the
fundamental goal or to gain the competitive advantage in the market. Marketing strategy helps
the organization to grab the market share or expand the business at the international level (Ahrne,
Aspers, and Brunsson, 2015). The marketing strategies of the company contains the competitive
advantage, segmentation, and branding. It is observed that macro-environmental factors of the
company affect its marketing strategy due to which the organization can face challenges
(Morden, 2016).
It has been seen that the external factor affects the marketing strategy and it is also difficult for
the company to control these factors. External factors play a large role in the growth of an

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organization as these are fluctuated according to market condition (Ocasio, and Joseph, 2017).
The impacts of external factors on the marketing strategies are as below:
Competitive Advantage
Competitive advantages are the conditions in which the company produces the good or services
in low price or in more attractive way to attract the large number of consumers. Attracting the
large number of consumers towards the organization helps to earn the high revenue (Noe,
Hollenbeck, Gerhart, and Wright, 2017). Competitive advantage includes the cost structure,
quality of product offering, branding and others. It is observed that the company gains the
competitive advantage by implementing the marketing strategies at the workplace due to which
their cost of production is reduced (Madsen, and Walker, 2015).
Vodacom offers the services to consumers at the low prices as compared to its competitors so
that it can gain the competitive advantage in the world. The company ensures the cost efficiency
to ensure the cost of growth with 0.5% due to which it offers low price to consumers. Offering
low prices to consumers is called cost leadership strategy. Cost leadership strategy refers that the
cost offered by the company is low as compare to the competitors to attract the consumers
towards the services. This strategy helps the organization to gain the competitive advantage in
the market. It is a fact the consumers are more attracted towards the lower services. It is observed
that the organization provides the low price services to consumers to attract the huge number of
people towards its services. The main motive of the company is to increase the demand of
consumers towards the services (Waldman, and Jensen, 2016).
Price Plan of Vodacom

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(Source: Vodacom, 2019b)
The macro-environmental factor of the company directly affects the competitive strategy of the
company. Cost leadership strategy relies on the cost of production of the product but it has been
seen that the cost of raw material is fluctuated with the fluctuation of economic condition of the
country (Namada, 2018). It has been evaluated that the South Africa is the second largest
economy in the world due to which the willing power of consumers is high. There are many
consumers who prefer to buy the premium product. However, the foreign exchange rate is also
increase that affects the cost of raw material of product that affects the cost leadership of the
company.
It is estimated cost of production for spreading its telecommunication services:

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Segmentation, targeting and positioning
Segmentation is the activity of dividing broad consumers into the sub-groups of consumers
which is based on some type of shared characteristics. The division of consumers is commonly
based on common interest, shared needs, similar lifestyle or even similar demographic profiles.
The main aim of segmentation is to segment those consumers from which the company can earn
the high revenue or profit. Different markets have different market segments to target the
consumers for earning high profit (Vodacom, 2017).
It has been seen that the company provides the different services to the different types of
consumers as per the segmentation. The company divides the consumers as per the class such as
upper class, middle class and lower class. Vodacom provides the services of emerging prepaid
segment to the lower or middle class consumers or the people who spend the low amount in the
services (Marquis, and Raynard, 2015). The main target of the company is higher value market
that mainly focuses on the best-in-class service experience. It also offers the data-rich with
seamless international roaming supported by lifestyle rewards. This strategy helps the
organization to invest their time or money on the consumers from which the company can earn
the high profit (Lasserre, 2017).
It is observed that macro-environmental factor directly affects in both aspects such as positive or
negative on segmentation, targeting and positioning. Government policies of the company are
changed with the changing government as per the different perceptions or market situation of the
country. It has been found that the government of South Africa developed the act or policies to
protect the consumers. Protection of Personal Information (POPI) is developed to protect the
personal information of the public. The other focus of the South Africa’s government is on the
cyber security tool that helps the organization from hacking or frauds. The government also

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invests the huge amount in IT or these tools so that the data of consumers will be protected
(Kumar, and Pansari, 2016). According to the rules and regulation of the government of South
Africa, the telecommunication companies also have to invest in these tools to protect from frauds
due to which the price of services got increased that affected the segmentation of the company.
Due to increase in the prices the demand of lower class of consumers is decreased as they cannot
afford the services of high prices. Dividing the consumers into sub group basis the character is
affected by change in the policies of government. The decision taken by the government of South
Africa towards the cyber security affected the segmentation of the company (Dietrich, Rundle-
Thiele, and Kubacki, 2017).
The target market of the company is based on the type of target consumers. Social factor of
macro-environment affects the target market of the company. It has been found that 80% of
population of South Africa is using the data or smartphones to communicate with each other. The
demand of consumers is increasing with the increasing population in the country. It is beneficial
for the company to target the consumers as per their class (Thoeni, Marshall, and Campbell,
2016). The company targets all types of people by using the target strategy as 80% of people use
mobile phones to communicate with each other (Glibert, 2019).
Branding
Branding is the promotion of particular product or services by using different tools of
advertisement. Vodacom Group provides the telecommunication services to consumers such as
message, calls and the other data that can be transferred from one network to another network.
Brand development is the first priority of the brand strategy and that is understood by Vodacom
group. It has been seen that the company invested the huge amount in branding. There are two
companies of South Africa that are considered as high branding company as they invest the

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amount in branding such as Vodacom and MTN rank. Vodacom used the branding strategy at the
corporate level as well as the company level. The new branding strategy of the company is to
encourage and invite the consumers to look ahead and anticipate the positive impact of new
technologies and digital services enhancing the quality of life. The main purpose of the company
behind implementation of the brand strategy is to ensure the consumers choices are available
(Pretorius, 2017).
The external factors of the company affect the branding strategy of the company that helps to
attract the consumers. Technology factor of macro-environment affects the branding strategy of
Vodacom. South Africa is the second largest country in terms of smart technology advancement.
Vodacom gained the advantage of this external factors by using the advance technology in
promoting the services and improving the quality of services such as social media advertisement.
By developing technology, the company has the opportunity to promote the services in the wide
range. The external factor has a positive impact on branding strategy as it helps to develop the
brand reputation in the market.
Opportunities Analysis
Opportunity Analysis refers to the analysis of the chances from which the companies can grasp
high market share. From the above analysis, it has been found that Vodacom is facing many
challenges. The external factors also affect the marketing strategies of the company which is
developed to grasp the market share in the market as compare to its competitors. It is required for
the company to grab the new opportunities in order to reduce the challenges. The two
opportunities have been found from the above analysis and these are below:
Generation of Application

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It is observed that the company has the opportunity to generate the application to identify the
hackers. As per the above analysis, it has been found that the government of South Africa
invested on cyber securities to secure the data. As the technology developed or the investment of
government in cyber tool develop the opportunity for the company to generate their own
application by using the tools to protect their data. The company has to generate application with
the name of the company. Generating their own application will help to enhance the high brand
image in the market as the name of the company will be promoted. The company can grab this
opportunity and gain the advantage such as competitive advantage and it will also enhance the
brand image. The government is also supporting the company as they will promote the cyber
security.
Expansion of Networks or towers
The other opportunity for the company is to spread the network in the market. As discussed
above, it has been found that 80% of people of South Africa’s government use smart phones and
it is expected that the percentage of using the smart phones will increase in the coming future.
Developing technology and increasing percentage of users encourage the demand of consumers.
The increasing demand of consumers helps the organization to spread the network in the
different location of the country so that the large number of consumers purchases the services
from Vodacom.
Conclusion
At the end, it has been concluded that Vodacom Group offers mobile communication to
consumers. It is an international company that operates in different location due to which the
external factors affects its growth of business. The external factors of the company states the