Introduction
Vodafone Limited (1) suggested that the company is the first mobile operator of the UK, which started its journey in 1985; however, for its innovation, investment and appreciated customer service, the company has turned into the number one mobile operator in Europe and the rest of the world.
In 2010, the company gained the ‘Best Network’ award in the UK, providing one million satisfactory business solutions, connecting mobile and landline numbers, launching Vodafone VIP, Apple iPhone, 400 retails store, World of Difference programs, and service agreement with Twitter, and Secure Remote Access for the customers globally.
However, this report will discuss the affect of environmental variables on Vodafone, positioning strategies, competitive advantage, the marketing mix, timing and mode of entry and so on.
Affect of Environmental Variables on Vodafone
Economic Factors
It is important to note that the KSA consists of a prosperous oil- based economy with well-built administrative power in about seventeen percent of globe’s fuel assets, making approximately eighty percent of budget-revenues, forty-five percent of GDP, and ninety percent of export-profits; yet, it is extremely helpful for the international marketing activities of Vodafone to sustain in this market.
This is because the government of the country is supporting the enlargement of private sector for expanding the market and creating more employment; in addition, as the expansion works are concentrating on power generation and telecommunications, Vodafone is greatly supported by the country’s authorities to conduct international marketing activities in a profitable way.
Moreover, it is important to note that, as the people of Saudi Arabia are generally quite rich, with high-income levels and high purchasing powers, so while formulating the international marketing plans, the company is able to keep this in mind and structure the pricing strategy accordingly, in a profitable approach.
it is essential to note that last year, the per- capita gross domestic product of the country was 25700 American dollars, buying capacity parity was more than 740 billion, and expansion- rate was about six percent; this indicates that this country is highly lucrative for any international business for allowing its operations to flourish in the global market (Indexmundi 1). However, the following figure gives more information
Figure 1: GDP overview
Source: Indexmundi (1)
On the other hand, the key economic indicators of the country shows that on average, its government invests more than twenty- one percent of its gross domestic product and the budget surpassed about 12 percent in 2012; however, the inflation rates were less than five in the same year.
Figure 2: Economic indicators
Source: Indexmundi (1)
Political Factors
The political condition in this modern monarchy in Saudi Arabia is quite stable and instable conditions such as strikes, protests, political uprisings, and other forms of unrests are quite rare. This has meant to be greatly helpful for the international marketing activities of Vodafone, as it is able to operate without any hassles, interruptions, and any predicted losses.
As a result, compared to Asian countries like India, where political unrests is regular problem for business operations, in Saudi Arabia the peaceful political environment ensures prospective business atmosphere without any threats.
Legal Factors
While conducting its operations, this company needs to ensure that it conforms to all rules and regulations of the country in which it operates. It is important to state that without due compliance to the country’s laws, it would be nearly impossible for the company to sustain in long run, and there are chances for it to get engaged in lawsuits and other legal hassles.
However, it is quite good to know that Vodafone complies with all laws of the kingdom, which, for example, includes the environmental laws, labor laws, employment laws, health and workplace safety laws, company laws, taxation rules, as well as other rules and directives.
Culture
Even though this is one of the largest Muslim countries in the world with almost hundred percent of the population being Muslims, it is important to note that the old characteristics of the country contained numerous chronological customs and folk-traditions which included dance or music; however, most of the conventional cultural factors are subject to lawful-prohibitions since Prophet Muhammad (PBUH).
In addition, people who belong to other religions are also banned by rule from practicing their respective religions within the country; on the other hand, intoxicating drinks are proscribed as well; moreover, girls are not allowed to go outside alone by driving their own, and they are always in complete veil so that nobody could even see their toes.
The kingdom has its own religious polices, who arrests anyone who break this rules or do not veil themselves in a proper manner. In so much of religious conventions that are even binding on the foreigners, it would not be possible for Vodafone to sustain without complying with their customs and traditions.
As a result, while conducting the international marketing activities, or creating the advertisements, this company complies with all these rules having regard to the strict Muslim laws.
Strategic Planning
Muhammad (2) stated that Vodafone was seriously concentrated on joint venture and acquisitions strategies to gain cost advantages, to gain market share and to become technological leader in the mobile telephony industry; however, this report will analyze Positioning strategies and Competitive advantage of this company.
Positioning strategies
According to the annual report 2012 of this company, the motto of this group is to ensure simple, reliable and richer communication system at anywhere and anytime; however, the marketers of Vodafone considered positioning strategies of Hutch to develop world class marketing campaign to increase brand image.
On the other hand, Vodafone took over Hutch in 2007 for which this company redesigned positioning strategies and implemented it within the next four months, for example, it introduced simpler advertisement campaigns. However, the following strategies helped the company to become popular in the marketplace, such as-
- It never disappoints the subscribers and respect the customers;
- In addition, it ensures high quality services to the subscribers
- Each advertisement of this company is used to promote a specific value added service;
- customer care and happy to help attitude ensure better services and create strong position
Competitive advantage:
- Vodafone has long experience to operate in the telecommunication industry and its ranking is second in world;
- According to the annual report 2012 of this company, it has 86,373 high qualified employees in 65 countries (Vodafone Group 1);
- Chronological development, strong brand image in the global market, customer relationship management, outstanding supply chain and communication system;
- It has loyal customers base, for instance, 439 subscribers are the key success factors of the company (Vodafone Limited 1)
- Product line, new product development, product features and design help the company to gain competitive advantage over the global market players;
- Strong position in the market and financial capabilities enhance business opportunities such as enter new international market;
Timing and Mode of Entry
Vodafone considered several mode of entry strategy in order to penetrate global market place, such as, acquisitions, strategic alliance, and licensing; however, the decision markers have researched on the risk factors of global market place and alternative entry mode strategies to take decision in this regard.
At the same time, Keegan and Mark (68) argued that acquisitions and strategic alliance are the effective entry mode strategies for the late entrants; however, this company has reputation as the first mover to bring new technologies as well as buy 3G licenses in the global market.
Former CEO, Chris Gent turned the company into a global company, for instance, the acquisition of Mannesmann started in1999, and it acquired a large mobile company in Japan called J-Phone in 2001, it took-over Hutchison Essar in India, and so on.
The Vodafone Group (1) added that the company at its tenth anniversary of international operation, it has established partnerships with the mobile operators of more than 40 markets all over the world where the successful strategic associations have generated reliance of technology and excellence of customer service.
Still the company has been striving to expend its global operation with superior market knowledge and experience in terms of both sides beneficial for Vodafone and its global partners with special attention to get entry in the emerging markets.
Vodafone’s Relationship with Zain KSA
Zain (1) pointed out that Zain Group is a Kuwaiti company started its journey in 1983 and now established itself as a regional telecommunication leader in the eight MENA1 countries including the Kingdom of Saudi Arabia with 6000 workforce serving 44.1 million active mobile services to the individuals and business communities.
In September 2012, the Vodafone Group and Zain Group signed a partnership agreement that contributed the company to extend its services in the MENA countries, under the agreement Zain gained the capabilities to meet the growing demand of complicated voice and data communications solutions for eight countries including KSA by accessing devices and services of Vodafone with enhanced network coverage.
Zain has already introduced ‘Vodafone Passport Service’ to the mass market of KSA that enhanced roaming data transfer with a rate of 0.75 SAR, such wonderful roaming solution has generated significant revenue boosts for Zain and encouraged this vender to enhance its further partnership with Vodafone for upcoming innovations and welcomed for major network improvement in this region.
The Marketing Mix
Products & Services
As a pioneer in the mobile network and service provider, the Vodafone has a large array of products and services to serve and support the global mobile industry and its enthusiastic customers, for better understanding, the company categorized its product and services into three types such as Business, Corporate, Public sector and the industry as a whole.
For business solution, the company aimed to resolve the business challenges with perfection of its business phone, internet solution, One Net Express for landline to mobile access, Dongles & Mobile Wi-Fi, Office 365, iPad & tablets including secure mobile working and Vodafone Data Sharer and so on.
For corporate solution the company provides secure mobile working, one net enterprise, mobile email, mobile voice and coverage, fixed network services, remote access, contact centre solutions, while its public sector solution works for all the above including enterprise telephony, remote access, machine-to-machine solution.
Promotion
The promotional strategies of this company actually diverge correspondingly along with altering buyer drift, wants, and other external situation in Saudi Arabia; however, Vodafone prepares the promotional offers by studying the issues, for example, special time of year, New Year, Mother’s Day, Father’s Day, Eid-ul-Adha, Eid-ul-Fitr, Ramadan month, as well as other countrywide holidays, like Shab-e-Barat, Eid-e-Miladunnabi, and so on.
In addition, irrespective of special occasions, this company all of the year broadcasts commercials on television channels, hoardings, periodicals, newspapers, radio, social media, blog, as well as in supplementary intermediate outlets that catches huge group of people, transmitting brand-image efficiently; the company’s outlets also have extraordinary offerings, promotions in addition to point-of-sale placards to draw people within the outlets.
Consequently, Vodafone attains viable benefit in comparison with the rivals through boosted sales in annual term
Price
In the Kingdom of Saudi Arabia, due to the fact that the economy is quite rich from the overall point of view and because of the fact that the purchasing power parity and GDP per person in very high, the company considers that the pricing strategies can be placed in rather high levels, as people of KSA can afford it.
However, the company does this in a smart way so that it does not impose too high call rates on the customers so that they stop buying the products and do not stay loyal. The key strategy is actually to balance the offered rates in a way to charge high, but still enough affordable for the people of KSA that they will not find themselves being exploited.
Place
Vodafone places itself in Saudi Arabia though numerous outlets within the country; it also sells by self- governing vendors, where clients are capable to observe and test the items they deem to purchase; employees are present to ascertain clients’ requirements with perfect products and to clarify diverse choices accessible.
Extent of Standardization Vs Adaptation Considering Market Entry
It would have been almost impossible for the company to make a successful market entry without aptly adapting to the Saudi Arabian culture. As a result, it has adapted its price, place, and promotional strategies with the Saudi market; however, even though no big alteration is brought in the products or services to fit the traditional distinctiveness, in case of price the company does not use permanent strategy at every global market.
In KSA, it charges the customers considering their income levels and local competitive situations; on the other hand, rather than using standardized distribution arrangements the company does the placement by modified allotment, and promotes itself by making particular transformations to suit customary circumstances:
Figure 2: standardization v adaptation
Source: Self-generated
Managing, Measuring and Controlling the Marketing Effort
Keegan and Mark (135) stated that managing the marketing effort is one of the most important processes, which deals with measuring the attainment of the objectives; however, marketing efforts should be different for foreign countries due to different social, cultural and economic background of the foreign nations.
In this situation, the board of directors and head of marketing department controlled the marketing efforts and focused on many areas particularly cultural and economic environment of particular country to make string position.
Works Cited
Indexmundi. Saudi Arabia Economy Profile. 2013. Web.
Keegan, Warren, and Mark Green. Global Marketing, London: Prentice Hall, 2011. Print.
Muhammad, Usman. Vodafone Strategic Planning. 2013. Web.
Vodafone Group. Vodafone and Zain Group Announce Multi-Country Partner Market Agreement. 2012. Web.
Vodafone Limited. Our company history: Vodafone through the years. 2013. Web.
Footnotes
1 Middle Eastern and North African