Executive Summary
For a very long time, companies having managing marketing and promotion functions separately. This is, however, becoming a thing of the past as many are now realizing that an integrated marketing strategy offers greater returns.
This new approach to the art of marketing and promotion is what now referred to as the integrated marketing communications (IMC) campaign. The idea behind the use of IMC is to create synergy among the different marketing functions in order to reduce operational costs and realize better results.
This paper presents an IMC campaign plan for Safaricom Limited, a mobile services provider with its operational base in Kenya.
It starts by giving an introduction of Global Advertising Services (GAS), an advertising firm with branches in different countries across the world, which has been contracted to device an IMC campaign plan for Safaricom.
A brief background of Safaricom and the problem to be addressed is then given. A discussion of the prevailing market situation is presented and then an IMC campaign strategy tailored for Safaricom Limited is explained.
The paper concludes with an advice on how the IMC campaign plan may be tested to see whether it yielded the expected results.
Introduction
Recently, GAS Limited was approached by Safaricom Limited to the company with its restricting exercise geared towards ensuring that the company does not lose its market share in the Kenyan mobile phone sector. For a very long time, Safaricom has the dominant and preferred mobile phone service provider in Kenya.
This was so until recently when Bharti Airtel, another telecommunications industry player, stormed the market in a way that created fear for Safaricom. In an attempt to attract more customers, Bharti Airtel decided to offer mobile phone calling and messaging services at nearly half the price that was being charged by Safaricom Limited.
Shortly later, Essar Telecom (Yu Mobile) and Telkom Orange, who are also mobile service operators in Kenya followed suit. This left Safaricom with no option but to drastically cut down the charges for its services especially calling rates by half in an attempt to stop its customers from making a switch to other networks.
In the process, the company was made to lose massive profits. Even though the company still made profits, these were far much less then what it managed in the previous years.
It is on this background that GAS Limited has assigned me the task of coming up with an IMC campaign plan for Safaricom Limited to see to it that the company continues to reign as the most preferred mobile phone services provider in Kenya.
The move is also meant to ensure that in spite of this recent development that has changed the market terrain, customers will not be lost to competitors. I will therefore work closely with the company to devise an integrated marketing campaign (IMC) that will strengthen Safaricom’s position in the face of the existing competition.
The Mobile Phone Industry in Kenya
The competitive nature of the mobile phone industry in Kenya has pushed mobile phone providers to turn to almost any available marketing option to survive. Unfortunately, some providers have gone to the extent of increasing the number of free services to customers at their expense leading to a huge loss of income.
These providers are, however, confident that the approach will allow them to attract more clients to their network and in turn benefit from an expanded market share.
The population of Kenya is approximately 38 million, and according to a report by the Communications Commission of Kenya (CCK), the total number of mobile phone subscribers by the end of the year 2011 was estimated to be roughly 28 million (CCK, 2011 p.8).
By all standards, this presents a good market base for the mobile phone providers in Kenya. As can be seen from table 1, the number of mobile phone subscribers rose from 24,968,891 in the year 2010, to 26,493,940 in September, 2011 and finally, to 28,080,771 in December 2011.
Clearly, there is a big indication that the number of subscribers will continue to grow with time. As a result, the mobile phone industry in Kenya presents a very lucrative business opportunity for service providers.
Table 1: Mobile Phone Subscribers (CCK, 2011 p. 8)
As noted earlier, Safaricom Limited has the biggest market share. Table 2 shows the mobile subscription per operator.
The figure is the table indicate that by December 2011, Safaricom enjoyed the biggest market share of 18,687,923 subscribers followed by Airtel with 4,272,964, Essar Telecom (Yu Mobile) with 2,229,974, and finally, Telkom Orange with 2,889,910.
Based on the results in the table, it turns out that the market share for the different operators has continued to grow steadily although at a small scale for some providers.
Table 2: Mobile Subscriptions per Operator (CCK, 2011 p. 9)
Current Market Situation
Although Safaricom Limited controls a larger market share, its services are very highly priced in comparison to those of the other providers. In a bid to attract customers from Safaricom, Bharti Airtel, Essar Telecom (Yu Mobile) and Telkom Orange chose to offer lower prices for their products.
It all started when Airtel announced very low charges for its calling services and later Yu and Orange followed suit. Disgruntled customers almost instantaneously started migrating to Airtel with most people opting to acquire mobile phones with the capability of supporting two Subscriber Identity Module (SIM) cards to allow them to keep their Safaricom line and still enjoy the services offered by Airtel and the other providers.
In response to this development, Safaricom was forced to quickly cut down its calling rates. This move immediately led to a drastic fall in the profits realized by Safaricom during that financial year.
Assets and Liabilities
A condition that has greatly favored Safaricom Limited is its expansive market share. Although the company lost a huge chunk of revenue as a result of the competitor’s activities, the effect was neutralized by the company’s huge market share.
With a big number of customers on its side, a reduction in the cost of its services was definitely not going to affect the company adversely. In addition, Safaricom has invested a lot in newer technologies and unlike the other operators, the company’s network runs on a very powerful infrastructure.
While competitors are still struggling with 3G and 3.75G services, Safaricom is already looking ahead and thinking about 4G services. This stands out as a distinct disadvantage for other operators who are unable to match the quality of services offered by Safaricom Limited.
With its network, Safaricom is also able to offer great voice as well as data services to its customers. The mobile money transfer service, MPESA, offered by Safaricom has also greatly contributed to helping the company retain its clients.
Part of the reason why Safaricom’s customer base has been growing over the years can be attributed to the fact that MPESA is a reliable mobile transfer service that has created a need for people to widely adopt the use of mobile phone services. It is not just about owning a handset but having a tool that is useful.
Most people are also afraid of making a complete migration from Safaricom to other mobile service networks mainly because most of their friends are on the Safaricom network. Being a locally established company Safaricom also enjoys government support and good will from the locals.
Despite the wide support that Safaricom receives across the country, there are challenges to deal with. First of all, the company’s services are priced very highly in spite of the existing competition. This is, however, countered by the fact that most of the company’s services are more superior to those of other operators.
Safaricom’s coverage is also has limited in some parts of the Kenya and customers in such areas are forced to depend on other providers to survive. While the services are very reliable around cities and major towns, subscribers in some remote areas suffer poor a great deal due to poor connectivity.
To ensure that Safaricom survives the tough battle of market control, the following Integrated Marketing Communications (IMC) campaign plan is proposed.
Proposed IMC Campaign Plan for Safaricom
Until recently, most firms planned and managed their marketing and promotion functions separately. Increasingly, however, companies are moving towards integrated marketing communications (Mueller, 2008 p. 49). A major benefit associated with IMC is synergism.
This implies that individual efforts are mutually reinforced with the resulting effect being greater than if each functional area had selected its own targets, chosen its own message strategy, and set its own media scheduling and timing (Shimp, 2008 p. 214).
The American Association of Advertising Agencies (AAAA) views integrated marketing communications (IMC) as a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines such as general advertising, direct response, sales promotion and public relations and combines these disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages (Applegate & Johnsen 2007).
It has also been defined as the planning and execution of all the types of advertising and promotion selected for a brand, service, or company in order to meet a common set of communication objectives or to support a simple positioning.
It may also be viewed as the practice of unifying all marketing communication tools as well as corporate and brand messages, to communicate in a consistent way to and with stakeholders (Applegate & Johnsen 2007).
Clearly, the goal of an IMC campaign is to use promotional tools in a unified manner so as to create a synergistic communication effect (Ewing, 2009 p. 10).
The four elements of an IMC program are general advertising, direct marketing, sales promotion and public relations. Lehmann (1999 p. 8) argued that instead of linking marketing results to awareness or attitude, they should be associated with measures that are relevant in financial terms such as cultivating healthy public relations and direct marketing.
In an integrated campaign, general advertising enables a company to strengthen its brand. Direct marketing on the other hand helps to establish relationships and provides an avenue to close sales. Sales promotions are used to induce customers by providing short term buying incentives while public relations are useful in reinforcing paid advertising messages (Spence-Stone et al. 2011).
For Safaricom to triumph in the present competition in Kenya, its IMC campaign strategy must include a description of the target market, its competitive advantage, as well the different objectives that have to be met. These are all described in the following sub-sections.
The Target Market
This has to do with understanding the targeted market in order to device the best strategy that Safaricom Limited may use to reach them.
Although it will be prudent for the company to have a plan that allows it to reach a wider audience through general advertising, it is necessary to have the market segmented to allow the company to sell its products and services to specific locations (Ogden & Rarick 2009).
The company may classify customers demographically and develop advertising materials that uniquely meet the needs of the specific market segments (Yeshin, 2005 p. 28). While roadshows and musical concerts will appeal to the young generation, the older generation may prefer other channels such as newspapers and communication through television sets.
Building on the Competitive Benefit
As explained earlier, most of Safaricom’s services are generally superior to those of its competitors. One such service is MPESA which is the most preferred mobile money transfer service and is widely accepted and used across Kenya. Although the other operators have attempted to penetrate the mobile money market, it has not been easy.
The power of MPESA also lies in the fact that the service is available country wide and has made it possible for people who are far off to send money to each other with a lot of ease. Safaricom Limited should therefore work extra hard to strengthen its mobile phone services.
Another area where Safaricom has been excelling is in providing reliable data services. Since the company was forced to reduce its calling rates, it may need to turn to mobile money transfer and data services to generate more income for its operations.
The Objective
Different objectives will have to be met differently. General advertising may come in handy to inform, persuade and inform people about the company’s products and services (Clow & Baack 2007). Direct marketing can then be used to reinforce the outcome of general advertising.
It will also be important for the company may to further strengthen its customer loyalty scheme as a way of rewarding customers for sticking with it at a time when numerous opportunities for opting out are available. Sales promotions may also be quite useful as a means of encouraging customers to stay with the company.
Regardless of the form it takes, immediate purchase is the main goal of any sales promotion (Blakeman, 2011 p. 186). However, the objectives of a sales promotion will depend on the general behavior of target consumers (Lamb, Hair & McDaniel 2010).
An effective tool for strengthening brand loyalty is to have frequent buyer programs that reward consumers for repeat purchases (Kitchen, 2004 p. 45).
Evaluation
Although evaluation and control will come at a much later stage of the campaign, the means by which the success of the plan will be monitored, controlled, and measured needs to be established at an early stage (Egan, 2007 p. 114). Generally, evaluating an IMC campaign can be a very demanding task.
The concern is always how to assess if the campaign led to an increase in sales or market share. Most campaigns aim to create an image for the products and services rather than asking for action and so their real effect is never known (Jakacki, 2001 p. 31).
The effectiveness of the campaign material may be tested either before or after the IMC campaign (Lamb, Hair & McDaniel, 2010).
To test the success of the IMC campaign, Safaricom Limited will have to use indicators such as the number of subscribers added to their network after the campaign, increase in profits, and increased activity across its network.
References List
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