Background to the study
Virgin Mobile Australia (VMA) is a private limited company which operates within the Australian telecommunication industry. Its headquarters are located in Sydney. The firm was founded in 2000 and has a human resource base of 400 employees according to 2008 statistics.
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As a result of acquisition by Optus, VMA operates as a subsidiary of Optus. Optus owns 74.15% of VMA limited. Through the acquisition, Optus attained the right to deal with Virgin Mobile brands within Australia. The license is applicable for 15 years since the acquisition in 2006. The license is not limited to dealing with Virgin Mobile brands only (Bergholcs, 2006, para. 1-5).
In its operation VMA has incorporated the concept of Mobile Virtual Network Operator (MVNO). This was attained as a result of utilizing Sing Tel Optus (STO) network. Despite the alliance, the firm owns a billing system in addition to a number of value added services and prepaid platforms.
In its operation, VMA’s main focus is provision of a number of services such as mobile and home broadband within Australia. In addition, the firm’s management team has also incorporated the concept of customer focus. As a result, the entire firm’s management team ensures that its operations result into customers attaining value for their money.
In order to attain this, the firm has formulated an effective mission statement which entails transformation of the mobile phone industry in Australia. This is by ensuring that its operations do not compromise the intended quality of service. The firm’s management team is also committed at ensuring that the firm provides fair and simple deals. The firm has adopted a strong brand strategy. The strategy entails treating its customers as member of the firm. This has played a significant role in instilling customer confidence.
The aim of the report is to identify and evaluate marketing opportunities with specific reference to Virgin Mobile Australia.
A number of issues are considered in the report. VMA marketing strategies and their impacts on customer base are evaluated. In addition, the firm’s post sale services, products and services are also identified and analyzed. Some of the marketing strategies which VMA should consider are outlined. In addition, the necessary monitoring and resource requirement are discussed. Finally a recommendation and a set of recommendations are outlined.
Marketing strategies used by VMA
Marketing strategy is a vital consideration in the success of a firm. It entails a firm selecting a target market which it commits itself to satisfy via provision of products and services. This is achieved through incorporation of a marketing mix which includes price, promotion, distribution and the product (Kurtz, MacKenzie & Snow, 2009, p.55). In order to attain its goal of increasing its business and customer base, the VMA has adopted a number of marketing strategies. Some of the current marketing strategies are outlined below.
|Strategy||Impact on business/ customer base|
|Competitive pricing strategy||The firm has adopted a simple rate which declines depending on the frequency in which the phone is used. In addition, the call rates are billed on the basis of seconds compared to minutes. In addition, the firm offers free voicemail and everlasting recharge. The firm has not set monthly access fees or put a limit on the amount to spend. Considering the price conscious nature of customers, the low pricing strategy has played a vital role in attracting customers.|
|Public relations via incorporation of User Generated Content||All You Can Eat (AYE) campaign is a form of public relation campaign that VMA has adopted to enable the firm gain insight on the level of understanding of the firm’s promotion strategy. The firm also participates in festivals which are endorsed by prominent musicians. The campaign helps in establishing a relationship with the customers which is paramount in increasing its customer base (Newshound, 2010, para. 5).|
|Mass coverage ( intensive distribution strategy)||The firm has established more than 3,500 retail outlets which are located in various cities in Australia via which it distributes its products. In addition, the firm has developed web-based stores and also incorporated telemarketing. These two strategies have not only helped the firm increase its customer base but also its business base.|
|Product diversification||The firm offers a wide range of products and services in an effort to meet the diverse customer product and services requirements. According to Penrose and Pitelis (2009, p.120), product diversification aids in increasing a firm’s customer base by attracting new customers.|
Post sale services offered by VMA
Offering post sale services is one of the ways through which a firm can develop customer loyalty. In addition, post sale services are vital in differentiating the quality of a firm’s services from those of its competitor.
Dormann and Zijlstra (2004, p. 306) are of the opinion that there is a high probability of customers being more loyal to products which are associated with other services even after closing the sale. According to Dormann and Zijlstra (2004, p.307) post sale services also contribute to an increment in the level of customer satisfaction. It is a requirement for firms operating within the Information Technology (IT).
In its operation, VMA has instituted a call centre. Dormann and Zijlstra (2004, p.307) assert that call centers are also cost effective in ensuring that the firm delivers quality service to its customers. This arises from the fact that it creates a contact point between the firm and its customers thus addressing their problems in a more responsive manner.
In addition, the firm has a technical service center whose role is to provide technical support to its customers. Institution of the technical service centre arose from the fact that most customers are not conversant with technology. Therefore, the firm’s management team considered it wise to offer technical support in an effort to ensure that the customers receive value for their money via successful utilization of their telecommunication devices. The technical service center as one of the post sale services helps the customer to attain operational efficiency.
As a part of its post sale services, VMA has incorporated the concept of Customer Relationship Management. The core objective of this decision is to create a relationship with its customers by tracking various customer issues. In order to attain this, VMA has integrated the CRM software in 2008 via utilization of the RightNow SaaS software. The software will enable the firm to track and manage all the customers’ calls and emails. Through the software, the firm has been able to develop a database from which it is possible to obtain customer’s history
(ComputerWorld, 2008, para. 2-5). As a part of post sale service, CRM helps a firm in sustaining brand loyalty.
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Virgin Mobile Australia’s current products
VMA has incorporated the concept of product diversification in an effort to appeal to a wide range of customers. The table below gives an illustration of the various products and services that the firm is currently offering and their respective price.
|Mobile broadband plans (post paid) |
USB Modems (Size GB).
|Prepaid mobile broadband |
Prepaid USB modem 4GB
Prepaid WiFi modem
Bring Your Own modem 300MB
|WiFi Modem (size GB) |
|Micro SIM plans (size GB) |
|BYO modem (GB) |
In order for a firm to succeed in its target market, it is paramount for the firm’s management team to devise a comprehensive promotional strategy (Story, 2006). There are a number of ways through which a firm can create market awareness for its products and services. Some of these include sales promotion, advertising, publicity, public relations and personal selling (Harper, p.108).
All these components form the promotional mix. In an effort to increase consumption of its products, VMA’s management team has instituted a comprehensive promotion strategy.
Sales promotion and price discounts
One of the ways through which the firm creates awareness is via sales promotion. VMA offers its customers incentives in an effort to influence their consumption pattern through integration of other VMA’s products in their consumption pattern. Price discounts are issued to Virgin Credit customers with regard to its various mobile phone services.
To ensure that it creates effective market awareness, VMA has established a number of customer contact points through which it interacts with the customers. This has contributed towards the firm developing its brand value. In addition, the contact points have also enhanced a strong relationship between the firm and its customers (Dahlen, Lange & Smith, p.107).
Direct and online marketing
In its sales promotion strategy, the firm has incorporated direct marketing. This is evident in the fact that the firm uses direct mails in offering the discount to its customers. In an effort to increase its customer base, VMA has incorporated the concept of online marketing.
This has been implemented vial integration of Affinum marketing software which is owned by UNICA. The core objective of incorporating the software is to enhance the process of direct customer marketing. This has played a significant role in enabling the firm to attain its objective of being customer focused (Unica. 2006, para. 1-3).
VMA has incorporated advertising campaigns as one of the major ways to promote its products. Most of the campaigns which the firm has held are very innovative. Most of these campaigns are conducted via the television. Some of the most innovative VMA’s campaigns include Warren Campaign, 5c campaign, Flickr advertising issue and Enjoy Our Rates Responsibility (EORR) campaign (Media Man, 2010, para. 7).
The firm also participates in corporate sponsorship such as major music festivals such as the Australian V Festival.
Considering the nature of its products and services, VMA’s management team has appreciated the fact that coverage is paramount. This arises from the fact that it is one of the factors which consumers consider in deciding the wireless broadband or mobile service provider to use.
In order to ensure that its products and services have a wide coverage, VMA has developed a link with Optus network which has a strong network across Australia. By linking with Optus, VMA has been able to attain a relatively high competitive advantage since a wide range of customers can be able to consume the firm’s products and services.
In line with its customer-focus objective, VMA provides other products and services. Some of these include multimedia messaging, short messaging service, international calls, global roaming, voicemail, Java games and ringtones. VMA also deals with post and prepaid mobile phones, phone-on-us plan, cap plan. In addition, the firm has developed an online prepaid product referred to as Bean Counter The firm launched the 3G service which enabled it to offer a number of services. These include
- Data services
- Mobile web browsing
- Video calling
The firm also deals with products and services belonging to various firms. For example, some of the products which the firm deals with include Apple iPhones.
Marketing strategies that VMA should consider
In an effort to increase its business and customer base, VMA management team should consider implementing the following marketing strategies.
|Undertaking new product development||$ 350,000|| || ||3/3|
|Niche marketing||$ 100,000|| || ||2/3|
|Brand connotation through adopting a simple and catchy tagline.||$ 50,000|| || ||1/3|
Monitoring the success of the strategy
In order to determine whether the above strategies are successful, the firm’s marketing department will undertake continuous market research. The consumers and the firm’s competitors will be considered as the main market research variables. In order to determine the extent to which the brand connotation has impacted individuals in their consumption patterns, the firm will evaluate their response regarding the brands tagline.
This will help the management team to determine whether the adopted brand connotation has an effect in the consumers’ personality and culture. Similarly, the success of niche marketing strategy will be monitored using the same strategy. In order to effectively monitor the success of the new product development strategy, the firm will make use of the customer relationship management software.
The customers will be requested to rate the firm’s products in comparison with those of the competitors. The rating criterion will be based on various aspects such as practicability of the product and value received.
Resource management and necessary changes
In their quest to identify and evaluate marketing opportunities, a considerable amount of resources are required. Resources are also required in the process of implement the proposed marketing strategies so as to effectively exploit the market opportunities.
Therefore, a firm’s management team should evaluate its strength and weaknesses in reference to the available opportunities (Kurtz, MacKenzie & Snow, 2009, p.55). In order to implement the above marketing strategies, VMA should conduct a comprehensive market research. The entire market research should be focused at the consumer.
Considering the competitive nature of the telecommunication industry, a high degree of expertise is required in conducting the research. This will ensure that all the market variables are considered. For example, VMA’s management team should formulate the most effective way of understanding its competitors operations.
This will enable the firm to understand its competitor’s strengths and weaknesses. By understanding the competitors’ weaknesses, it will be possible for VMA management team to capitalize on them thus enhancing its competitive edge.
In its quest to attain its business base and customer base, the firm’s management team will be required to improve its research and development capability. To attain this, the firm’s management team should train its research and development team so as to equip them with skills necessary to scan the environment effectively.
This will contribute towards the firm identifying viable market opportunities. Training will also contribute towards the market research team understanding consumer requirements effectively. In addition, training will contribute towards the firm enhancing the employee’s creativity and innovative capacity.
The resultant effect is that the firm will be able to undertake niche marketing more effectively. This arises from the fact that training will enable the research team identify customer needs more effectively. As a result, it will be possible for the firm’s research and development team to develop a product which meets the market demand. Through training, the firm’s management team will be able to differentiate the new product more effectively.
This will limit the probability of the competitors mimicking the new product. This will increase the probability of the new product penetrating the market. One of the ways through which the firm can conduct employee training is by outsourcing the service from experienced consumer research agencies.
VMA will be required to undertake a number of changes in its operation upon implementing these marketing strategies. For example, as a result of new product development, VMA will be required to undertake a market awareness campaign. One of the ways through which this can be attained is via adoption of integrated marketing communication.
For example, VMA should consider incorporating social networks such as facebook, twitter, YouTube and MySpace. Brymer (2008, p.29), is of the opinion that social networks are increasingly being adopted by firms in their marketing strategies. Social network will enable the firm to create sufficient publicity of the new product.
Identification and evaluation of market opportunities is one of the ways through which a firm can develop a high competitive advantage. Upon identification of market opportunity, the firm should develop marketing strategies to exploit the opportunity. In its operation, VMA has been successfully incorporated various marketing strategies. This has enabled the firm to market its products in the Australian market despite volatile nature of the market.
In order for VMA to succeed upon implementing the aforementioned strategies, the management team should consider the following.
- Continuous consumer and competitor research should be conducted to determine the changes in the market. This will enable the firm to undertake effective innovations to the marketing strategies.
- Effective scanning of the environment should be conducted to identify business opportunities which the firm can exploit. The identified opportunity should be evaluated to determine its feasibility.
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Dormann, C. & Zijlstra, F. 2004. Call centre work: smile by wire: The European journal of work and organizational psychology. Vol. 12, issue 4. London: Psychology Press. Mediaman. 2010. Virgin mobile Australia.( Online). Web.
Kurtz, D., MacKenzie, H. & Snow, K. 2009.Contemporary marketing. New York: Cengage Learning.
Penrose, E. & Pitles, C. 2009. The theoryof the growth of the firm. Oxford: Oxford University Press.
Story, J. 2006. Segmenting customer brand relations: beyond the personal relationship metaphor. Journal of Consumer Marketing. London: Emarld Group Publishing.
Unica. 2006. Unica to make difference at Virgin Mobile Australia. Web.