Within society forces such as family, friends, and media affect our attitude, interest and opinions. These forces shape who we are as people and the way we behave and what we ultimately purchase. The end users of wireless products are becoming increasingly aware of quality and expect a product that is reliable during use. GSM has been an unqualified success because it works, offers definite advantages over first generation and is at a price where everyone can access the technology.
One problem that has been apparent over recent years is the high market exposure given to new features and technologies, which are not well proven and tested before launch. WAP was a prime example of this. A great deal of effort has been injected into WAP to make sure the early teething problems have been overcome, but the public can sometimes demonstrate memory akin to an elephant and changing opinions is a much harder marketing nut to crack. The market expectation for Bluetooth(tm) and 3G has been raised considerably so now we are at a critical stage in fulfilling the advertised dream.
Technological Advanced technology is changing the way businesses operate. The Internet is having a profound impact on the marketing mix strategy of organisations. Consumers can now shop 24 hours a day, comfortably from their homes. Vodafone has been using the Internet for advertising like a lot of other organizations trying to sell their business. There is renewed interest by many governments to encourage investment in research and development and to develop technology that will give their country the competitive edge.
The “one-stop-shop” customer need, and the manufacturers’ success in integrating cellular, cordless and internet user applications into a single unit has meant that a wireless test company has to consider all major technologies and review each for their commercial benefits. In some instances some technology advancements will not create a profitable business in isolation. Vodafone has introduced new technology such as Vodafone ‘Live’, and now the introduction of the new 3G mobile phones means Vodafone will implement the new technology into their system to bring the service to the customer.
Porter gives one of the best known explanations of competitive advantage in his generic strategy framework. Porter is of the opinion that competitive advantage occurs as a result of the selection of a generic strategy, which is most suitable for the organisation in light of its’ competitive environment. Vodafone has completed a number of major business transactions over the past three years, the most significant of witch were the merger with AirTouch, the acquisition of Mannesmann AG and, recently, the acquisition of further interests in Japan Telecom and the J-phone group.
By combining with these companies it is reducing cost and at the same time improving services and facilities. In early 1994 Vodafone launched a new service called ‘ALL IN ONE PACKAGES’. This allowed customers to pay for their line rental up front and use their mobile phones without having to pay for the line rental for the rest of the year. This illustrates how Vodafone is extending its existing core competences. Here Vodafone has taken customer perceptions into account and the company is constantly looking to improve and develop their products in order to get ahead of their competitors.
Vodafone have partially adopted a differentiation and cost-leadership based strategy, as they have charged more for there services than those of the competitors as Vodafone customers know that they will be receiving quality and reliable products and service. What makes this an appropriate strategy to use in this situation is the fact that with this particular market segment, demographic variables such as income, and psycho-graphic variables such as lifestyle have to be taken into consideration.
Vodafone also launched ‘PAY AS YOU GO’ packages, which targeted school and college students, and aims to encourage more students to use ‘PAY AS YOU GO’ services as they will have the opportunity to own a mobile phone before they become 18 years of age. This is an example of the implementation of a cost-leadership strategy, as it involves low costs. This strategy is appropriate is because students represent a large part of the population around the world. The fact that secondary and college students are not legally allowed to own monthly payment contract phones is to the advantage of the company to provide the ‘PAY AS YOU GO’ service.
More students using ‘PAY AS YOU GO’ service leads to the increase in sales and as a result a potential increase in profits. Profits can be used in a variety of ways in which a company can benefit in a long term and secure its position in the industry, and market in which it operates. A Successful strategy can also be based upon a combination of differentiation, price and cost control. Such strategy is known as HYBRID strategy (see figure 2). The degree of differentiation, price and cost control will depend on the nature of the market in which the business is operating.
If consumers prefer quality rather than lower prices, emphasis on price and cost will be lower, but in markets where demand is price sensitive, the company will try to keep price and cost as low as possible. In order to adjust to market conditions, advertising and different promotion strategies may be used to influence preferences of consumers. (5) Figure 2: Diagram of Hybrid strategyVodafone engages in two forms of marketing: Brand Marketing designed to increase general public awareness of the Vodafone brand – its values, products and services-and marketing specifically directed at certain distribution channels.
Brand communication includes sponsorship and advertising on radio, television, in general circulation newspapers, in magazines and in specialized publications. This activity provides us with an insight of how the company is trying to achieve its aims. It is an example of Kay’s framework, where distinctive capability results from sources such as Innovation. The company now has interests in 28 countries across five continents.
Based on ownership interests at 31 March 2002, the company, through its subsidiary undertakings, joint ventures, associated undertakings and investments, had approximately 101.1 million registered customers, excluding paging customers, calculated on a proportionate basis in accordance with the company’s percentage interest in its ventures. There were over 229. 1 million registered customers in ventures in witch the company has control or invests. In order for strategy to be implemented successfully, it is essential that the organisation has deduced maximum benefit from any strategic analysis, which has taken place.
This is vital as it gives the organisation an accurate account of their internal and external strengths and weaknesses, and also identifies any opportunities or threats that may exist. Once this information has been gathered, the organisation can then make informed decisions as to how they can implement their strategies in the most effective form, and as smoothly as possible so as to minimise impact on the operational activities of the business. The output from strategic analysis becomes one of the inputs into strategic implementation. Strategic analysis also assists in successful resource planning.