Marketing Analysis: Vodafone's Strategies and 5G Launch Plan

This report provides a comprehensive marketing analysis of Vodafone, a leading telecommunications company in the UK. It begins with an overview of Vodafone, detailing its market position and service offerings. The report then delves into Vodafone's marketing strategies, including STP segmentation, targeting, and positioning, and compares them with those of its main competitor, BT. A significant portion of the report focuses on Vodafone's plan to launch its 5G network, including a proposed penetration pricing strategy to attract customers and gain market share. The implementation plan, challenges, and potential outcomes of this strategy are discussed, along with recommendations for Vodafone's marketing approach. The report examines the marketing mix elements and analyzes Vodafone's strengths, weaknesses, opportunities, and threats. The analysis concludes with insights into the company's future direction.

Introduction to Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Overview of Vodafone...........................................................................................................1
TASK 2............................................................................................................................................5
Improvement in organisation's marketing approach at the time of product launch...............5
Plan of implementation...........................................................................................................5
Recommendations..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Marketing is a process of creating, keeping and satisfying customers of a company
(Lovelock and Patterson, 2015). It plays a crucial role in increasing revenue of an organisation.
Vodafone is leading telecommunication company of UK with a global presence. This document
will discuss about marketing strategy of Vodafone, it will also have a comparison with one of its
competitor. A new idea, launching of 5G network, will be applied for improving marketing
approach of selected enterprise. Recommendation, based on potential results, will become part of
this project.
TASK 1
Overview of Vodafone
Vodafone is a public limited company whose headquarter are present in London. This
organisation is known for their quality telelcommunication service and possess a very strong
hold in Asian, African and European region. In UK, firm is providing 3G and 4G network to
almost 98% of the total population. Britain is a nation where mobile market achieve maturity in
short span, specially among young generation. Company have understood this issue and they are
continuously adding values in their service. It can be considered as most significant part of their
marketing strategy and it is helping them in retaining number spot in domestic
telecommunication market (Most valuable telecommunications brands in the United Kingdom
(UK) in 2017 (in million U.S. Dollars), 2018).
Marketing strategy of Vodafone and its comparison with BT
STP
Segmentation – Vodafone understand that they cannot earn more revenue until they
operate in more than one segment. As a part of their long term strategy, currently they are
offering mobile network, broadband and enterprise services. They are using geographical,
demographic and psycho-graphic segmentation. BT, main competitor of Vodafone, also provide
similar products and service but they do not form strategies on by considering psycho-graphic
segments.
Targeting – Vodafone is not concentrating on particular section of UK like young
generation. They have adopted selective and differentiated targeting strategy (Babin and
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Zikmund, 2015). On the other hand, Corporates and wholesale are they main target of BT but
this does not mean that they ignore consumer segment.
(Source: What is STP process? (STP - segmentation, Targeting, Positioning), 2016)
Positioning – Vodafone concentrate on value based positioning. They improve & add new
features in their offerings and through advertising, they create awareness of their services. BT do
not concentrate on aggressive promotion, like their rival, and position themself as a company
who provide facilities to corporates and government organisations. They are strong in retail
division with almost 18 million customers.
Marketing Mix
Basis Vodafone BT
Product Pre-paid, post-post and value Vodafone and BT, both are in
2
Illustration 1: What is STP process? (STP - segmentation, Targeting,
Positioning).

added services are main
products of the company.
Earlier they were more
concentrating on message and
calling but now there are
focusing on data tariff plans as
internet has become major
priority for target customers.
same industry so their services
are also similar but British
telecommunication have
diversified product line. It
include land-line telephone,
consultancy and business
solution services.
Price Vodafone changes price of
their products according to
rivals pricing strategy but This
business have opted for
premium pricing when it
comes to their tariff plans
rates they offer better quality
services (Kumar, 2015). They
have loyal customers and they
are present in almost every
part of UK.
BT understand that there
competition is high in
telecommunication industry.
They have competitive pricing
strategy in order to match the
prices of competitors.
Place Vodafone is selling their
services through customer care
centres, own stores and
independent retailers. Their
distribution channel is strong
which is the prime reason
behind their sound domestic as
well as global presence
(McDonald and Wilson, 2016).
BT believe that retail shops
and exclusive stores can
become reason of conflicts in
company. They target
customers by sending emails,
post and door to door sales.
Their website is another
medium which help
organisation in communicating
with potential clients.
Promotion Vodafone is known for BT has spent long time in this
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aggressive promotion of their
tariff plans. Their
advertisements like ZooZoos
have capability to get wide
attention. Sports stars like
David Beckham also promoted
their brand as a part of
celebrity endorsement.
Another part of their
promotion strategy is frequent
press releases. This assist
business in making sound
connection with their
customers.
industry and understand that
shops for directly advertising
their products is not an
appropriate approach. They
have used internet, T.V and
Billboards for advertisements
like Vodafone but at the same
time, they also offer discount
and have scheme like buy one
get one free to lure more
customers.
People Customers are key priority for
Vodafone and they organise
training session for their
employees by keeping
customers in centre. The
reason being knowledgeable
and trained staff can assure
that organisational objectives
are fulfilled.
BT understand that technology
up-gradation means more
training to employees and
agents. They organise various
programmes for personnels
and modify their incentive
scheme in regular interval of
time (Cross, Belich and
Rudelius, 2015). It is essential
for motivating workers and
ultimatley achieving
competitive advantage.
Process Vodafone believe that
effective process is essential
for delivering results. They
worked on some key points
BT always concentrate on
simplicity in the process. They
have a customer support
number which resolve all kind
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like easy availability of top-
ups, fully function towers, etc.
in order to assure that
customer get promised quality
of service.
of issues faced by service
users. Focus on speed and
customer friendly service is
crucial part of their key
processes.
Physical evidence Sim cards, Vodafone stores,
service outlets etc. are various
evidence of company's
existence. Their advertising
attract customers across the
globe (Martín-Herrán and
Taboubi, 2015).
BT is operating in more than
180 nations and their punch
lines grab attention of more
than million customers. They
release financial reports on
both quarterly and annually
basis.
TASK 2
Improvement in organisation's marketing approach at the time of product launch
Vodafone is planning to launch their 5G services at the starting of year 2020 (Vodafone
5G in the UK, 2018). They are positioning themselves as a company which provide quality
services. But, they need to understand that this tag is also include high priced tariffs. Customers
have a clear perception that if organisation is providing better network and customer service then
it means that Vodafone is a premium brand. At the time of launching 5G network, they should
adopt penetration pricing strategy. Few of company's competitor may launch 5G service before
them, this policy will assist them in attracting customers from different segment. Another
advantages of introducing 5G services at low price will be on promotional strategy of company
(Seringhaus, 2015). Currently they are spending huge amount in promoting their products but
after implementation of this tactic, they would not need to spend thousands of pound on T.V,
internet or billboard advertising. When an enterprise like Vodafone sell their services at low rates
then they do not need to put efforts in promotional activities.
Plan of implementation
Current network
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Almost 98% population of UK can use 4G network of Vodafone. Widespread coverage
will play crucial role in success of 5G services of company. At initial level, Vodafone is going to
use mixture of 4G and 5G technology. Enterprise is committed to upgrading and expanding their
present network and they can convince 4G users to opt for 5G without switching service
provider. This corporation paid almost £378,240,000 in 5G spectrum auction and their rivals like
EE & O2 are far behind them (Vodafone 5G in the UK, 2018).
Launch plan
EE and BT are two companies who may launch their 5G network prior to Vodafone.
These firms can earn benefit of early entry but Vodafone does not consider it a challenge because
according to their estimation, not more than 50% devices will get 5G enable before mid of 2020.
Vodafone will start their services in 6-7 cities including London in first phase. Company has
started trail of 5G network and they are having a collaborations with Nokia and Qualcomm.
Challenges
Cost – Vodafone invested huge amount of money in buying spectrum. They may have
better technology then others but this does not mean that they can attract more number of
customers in less time period (Fielding, 2015). This organisation has to wait for many years in
order to achieve break even point. If their plans will not work according to their expectation then
they have to face huge loss. The idea of selling better services at low rate will minimise this risk
and help company in covering their cost in short period of time.
Obsolescence – 5G will be the latest technology in upcoming time but there is a big
question mark on its sustainability. Every enterprise understand that technology is rapidly
changing and it has become crucial to adapt change to ensure sustainability. Vodafone
understand that 5G services will assist them in retaining top spot but if they get outdated in few
years of its launching then company may get in loss and lose their leaderships in
telecommunication industry.
Possible outcome
Customers do not hesitate in paying more money if they get better services like 5G
internet. But if they will get 5G at low price then it will disrupt telecom sector of UK. Vodafone
can easily cover incurred cost in 2-3 years if the plans get successfully implemented. This
innovative idea will reduce growth opportunity of many key competitors of Vodafone like EE,
BT and O2. Most of the enterprises in telecommunication industry would charge high price for
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5G services because they know that customer will buy it without any much question (Verhoef,
Kannan and Inman, 2015). Selling better speed and more data at low rate will provide an edge to
Vodafone. Penetration pricing is not a short term strategy which concentrate on attracting
customers for few months by offering heavy discount. It is a long term plan for getting more
market share without compromising profits. An organisation may have less profit margin but if
their number of customer is high then they can easily earn more money compared to their rivals
(Heyden, Sidhu and Volberda, 2018).
Opportunity cost of decision
Vodafone paid highest amount in spectrum auction and they can launch expensive tariff
plans in the initial stage. Customer will pay more money for 5G technology because they want
superfast internet and better connectivity. But penetration pricing concentrate on selling products
at low rate. Although, it is difficult to calculate the amount which Vodafone can charge by
selling 5G tariff higher rate but it is expected to reach approx £40000000.
Recommendations
Vodafone currently have around 19.5 million customers in UK i.e. approximately 30%
population of United Kingdom. Launching 5G services at low price, initially, can easily increase
customer base of company and their total number of consumers can touch 30 million at the end
of 2020. Some experts in the industry may criticise penetration pricing strategy by raising
questions like ''Why sell at low rate when you can sell at more price'' but Vodafone need to
understand that they cannot earn billions of pound without increasing their subscribers. Once
company start dominating telecommunication industry, they can increase tariff rates according to
their own strategy.
Penetration pricing strategy was not adopted by any firm in UK telecommunication sector
but Jio, leading 4G network in India, disrupted Indian market by offering high speed internet and
free calling at almost free price. This organisation has 215 million subscribers in 22 months of its
launching (Jio Subscriber Base Touches 215 Million: Mukesh Ambani at RIL AGM, 2018). Jio is
running their business in a country which has 1.3 billion population, they do have advantage of
operating in developing nation whose economic growth rate is more than 7% but this does not
mean that Vodafone cannot apply same tactic in UK market.
Making product launch plan does not ensure its successful implementation (Davilla,
2017). Vodafone UK should go with penetration pricing at the time of launching 5G services
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because it can provide them same results which Jio got in India. Vodafone UK can have more
than 30 million subscribers in six to eight months of launching if they adopt same strategy.
Revenue of telecommunication industry was 35.6 billion GBP in 2017 (Total
telecommunications industry revenue in the United Kingdom (UK) from 2007 to 2017 (in billion
GBP), 2018). If company get success in attaining more than 50% market share before 2021 then
than it means that penetration pricing worked for company.
CONCLUSION
From the above report, it can be concluded that Vodafone can achieve remarkable
success at the time of launching 5G network if they execute price penetration strategy. Company
will face different challenges when they will launch new product but market disruption approach
will definitely help organisation in earning competitive advantage.
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REFERENCES
Books and Journals
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Davilla, M., 2017. Is Big Data a Different Kind of Animal? The Treatment of Big Data Under
the EU Competition Rules. Journal of European Competition Law & Practice. 8(6).
pp.370-381.
Fielding, D., 2015. Non-verbal communication: The biggest brand-building asset in modern
marketing. Journal of Brand Strategy. 4(4). pp.322-331.
Heyden, M. L., Sidhu, J. S. and Volberda, H. W., 2018. The conjoint influence of top and middle
management characteristics on management innovation. Journal of Management. 44(4).
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Kumar, V., 2015. Evolution of marketing as a discipline: What has happened and what to look
out for. Journal of Marketing. 79(1). pp.1-9.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Martín-Herrán, G. and Taboubi, S., 2015. Price coordination in distribution channels: a dynamic
perspective. European Journal of Operational Research. 240(2). pp.401-414.
McDonald, M. and Wilson, H., 2016. Marketing Plans: How to prepare them, how to profit from
them. John Wiley & Sons.
Seringhaus, F. R., 2015. Export knowledge, strategy and performance. In Proceedings of the
1988 Academy of Marketing Science (AMS) Annual Conference (pp. 97-101). Springer,
Cham.
Verhoef, P. C., Kannan, P. K. and Inman, J. J., 2015. From multi-channel retailing to omni-
channel retailing: introduction to the special issue on multi-channel retailing. Journal of
retailing. 91(2). pp.174-181.
Online
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