The Company Vodafone Albania Is A Company Marketing Essay

Published Date: 23 Mar 2015

During the last 10 years the technology of mobile telephony has experienced a very large development. Vodafone is one of the leading companies operating in the Albanian market. All companies operating in the Albanian market tries through mechanisms that are available within their companies to increase both the number of subscribers and the revenues. The purpose of this paper is to analyze how Vodafone introduces a new product like bundle post paid tariffs on the market based four factors and make proposals on the way that company could overpass difficulties in the near or longer future

The description of company activity

The company Vodafone Albania is a company that operates in the mobile market and is one of important multinational investments in the country. The company was founded in 2000 by winning the second license and breaking the monopoly of mobile telephony in the country from the company AMC. Already in the telecommunications market in Albania operate four mobile phone companies by creating a very large competition in products and prices. Banker, Rajiv D and Mashruwala, RAJ.(2007 )said that the more the market will be opened and the competition will grow , the client will have the opportunity to select from a variety of products and therefore it will encourage the company to increase the performance.

The company has about 1.5 million subscribers and occupies second place in the market. Vodafone has based its work with prepaid subscribers, but should be noted that subscribers with fixed contracts bring about 35% of company revenue.

The company has a wide range of products and services that must offer mobile telephony such as the voice and data. Introducing of the third and fourth operators in the market brought a substantial reduction of tariffs and therefore Vodafone has found new ways to provide products and services to gain, to keep or to absorb new customer. All the companies in the market provide variety of products in order to gain the market share. Lattin, James M and McAlister, Leigh (1985) mentioned that consumers needs consist on having a wide range of products and pass easily from one product to another and such consumers attitude drives the companies to add capacity and present in the market series of products in order to respond to the customers' demands.

Due to the fact that the market has been grown with 2 more operators after 2009 and such operators have aggressively entered in the market with low prices Vodafone should readjust all its own prices and products activity and respond new market situation and evaluate new chances for increasing the profit .( Marshall and Pearson, 2007)

The four key indicators of mix marketing plan

As Ivy, Jonathan and Naude, Peter (2004) said marketing mix are the mechanisms that the company uses in order to better respond to market as customers. Since the year 1960 after Jerome McCarthy revealed four PS factors, there were many discussions and suggestions on them. Four factors are product, price, promotion distribution (place). We mention that Vodafone has at least 35% of revenue from postpaid subscribers. Such significant element makes it clear to us the attention that the company should have to the new product offering in the market based on four elements mentioned above. Let's take a detailed analysis for each of these factors taking under consideration the product that the company wants to launch.

Product analysis

Kotler and Keller (2006) mention that the successful introduction of a product from the company will result in a rapid absorption of the product by the customers and the fastest growing company. Presentation of a product and place that will take it on the market is very important for the company. Lovelock (1984) reinforce the idea that a successful introduction of the product is important but add that the position can be affected by the price, promotion campaign of the company or the method of distribution, but what is important is that the product itself must have parameters such as to meet the needs of clients and be a product that really is required and attractive from the market.

Whereas competitors have aggressively entered the market with low prices but with a low range of products, Vodafone decided to launch this product that will affect more to revenue for calls entire Vodafone network and for calls outside the network towards other operators or international calls. An important factor that pushed the organization to launch this product is the cut of the spending by postpaid clients and usage drop due to financial crisis in the country. In order to realize the launch of the product in the market the company made a substantial investment in its network and several important sectors such as IT and Billing. Those investments are made in order present a high standards product in market. Srinivasan. ET, al (2009) mention many marketing initiatives are costly and the company expects to gain earnings from these investments but to measure the investment return should be used after other important rating drivers. In the same line Agarwal and Barry (2002) argue that serious investments for a new product will lead to a high quality product which would differentiate this from other products on the market and thereby make the brand differentiation. Having a very large experience in introducing of new products in the market and standing among the best in the world in mobile telephony is very important that Vodafone Albania to operate for the extraction of product in the market with a special way ,worthily representing the brand. Introduction of a new product by a brand gives a greater security to the client on the quality and durability of the product (Greifeneder at, el 2007). After so many years at least three of the four companies operating in the Albanian market have a wide range of similar products. Having in mind such arguments different designed product should be launched in the market in purpose differentiating Vodafone among the competitors. Creusen and Schoormans (2005) mention that a product designed differently from others will have enough influence in the market and make an essential difference from the rest of the company

Market segmentation that will be approaching new product is a couple of detailed analysis that company made in order to target group of clients whom this product will be offered. As Smith (1956) cited in Bailey et al (2009) said that the segmentation is a technique that should be used to differentiate the group of the clients to whom product will be introduced by the company .Such segmentation will make the company more competitive in the market.

The new product has been linked with a number of new-sub-products such as lower tariffs for international calls and for messages within or outside company network, in order to create a package product itself ,taking under consideration that competitors still are not introducing such product to the market .

As much as competition is growing in the mobile market it makes that Vodafone be looking at ways and launch as much as it could different products in order just to maintain current market and to gain ground versus new operators. A very good opportunity for company is getting 3G license which will enable Vodafone to enter the market with products that today are highly sought by the youth or even the customers whom spend a significant amount of money in mobile telephony.

Price of product

Florin at, el (2009) divides the price should be based on three main pillars on the customer, competition and cost of product.

a-A higher priced product can't be purchased by the client

b-the price and price policies should be driven based on the market and competition conditions.

c- Prices should justify the cost of the product or be a unify cost and quantity sold for the relevant product.

At the time Vodafone entered the Albanian market was quite a demand for its products. At the same time competition in the first years of operation the company was quite small and the prices were much higher for products based on pre-paid and those with post-paid basis. Requests by the customers were growing and competition was at the lowest levels since the market was dominated only by two companies. Now that the market is quite open and the competition has become fierce enough Vodafone has to follow a strategy of not only lowering the price of current products on the market but to follow a different rice policy for new products and services that wish to launch to the customers. As Tomek and Hikaru (2005) have mentioned that different environments lead to different strategies, different behaviors and decisions on price setting by adapting to current situation.

A very important aspect that the company has to consider in price setting is price image. This affects the perception of customer for the price and thus the perception towards the company. Consumers expect to pay for a brand product a different price from a product provided from a company that does not stand out as a brand. It makes the company take into account when define the prices of product or when they advertise the product price in the market (Thaler 2008). Adaval and Kent (2002), push on how the clients recognize individual prices. Is the price qualitatively able to represent the product? Also other no- price factors should be under consideration such as guarantee of the product, product lifecycle etc.

During its activity for almost a decade Vodafone has offered packages with very attractive prices that are well perceived from the market like:

a-Business consumer package -Vodafone U 120 min, U 60 min .For businesses.

B-Bundle product for inbound consumers.

C-Vodafone package combined prepaid and postpaid in order to push the acquisitions .In reality Vodafone package was the same with other operator offers.

D-Regular price reduction in order to face the competition or pushed by governmental rules.

The examples mentioned above are a determinant factor on how Vodafone has faced market with a wide range of products which have left a positive perception for the company by customers. As we mentioned aim of the company after entry into the market of other operators which has entered with fairly low price is to keep the market at the previous level and continue to be the market leader in terms of post-paid clients not losing the clients but at the same time company is trying to keep the same level of revenues, profit margins and allowing the clients to have the same level of the services for voice and SMS as previous. Up to now the company has responded to the market with the best price reductions in order to face aggressive competition, especially from those who does not have a wide range of products but playing in the market with cut-rate. Does the [rice cutting is a solution for the future?"Absolutely no "

The company should in the future to guide customers around the values ​​of its products Affected by economic conditions after the financial crisis in a country where people are keen about low prices should make Vodafone customers to focus more on product values rather than about the price. Taylor and Bearden, (2002 ) argue that the clients should never distrust the values ​​of the product launch of the brand even if the product price to be higher or equal to the price of previous products.

Network Distribution ( Place )

One of the main factors for the success of the sale of a product is Distribution Network .Distribution is the connecting link between the producer and clients through direct or indirect distributors in order to promote and sell the product (Kotler et al. 2008).

Vodafone uses different ways to bringing this product to the client made ​​in directly or indirectly. Considering that the company has a sales department including sales / retail ways that the company uses are as follows:

-Contacting clients directly with representatives of sales activities through making the appropriate presentation of the product. This is done especially with the big clients post-paid cards.

-Direct sales activities through stores that own the company where the number of employees for each store goes up to 4 employees per store.

-Activities through stores which are owned by distributors. A total of about 200 stores,

-Activities through shop / corners they occupy a significant place in the business of the company about 150. In this context Nordin (2005) has mentioned that in order to send the product to the end point (client) company has to optimize the distribution services through every possible distribution channel.

Work to extend the distribution network relying on some basic principles that the company has been taken into account as follows:

1 - The place where the company or distributor of the company will perform the activity. .Vodafone has expanded its network throughout Albania almost being present in every part of Albania.

2-Shop lay out based on the company's marketing strategy.

3staff ready to distribute at the required lead- times the product in the market and to distributors.

4- Staff responsible on the services is prepared to serve customers with new products that provide company and to keep them up dated.

Considering that the network of stores to other companies is set almost in the same way as Vodafone then Vodafone has to establish a special service environment for clients. So clients ease can receive the services and products that require from company. To achieve this Vodafone should increase the demands on sales representative selection staff in order to be communicative and capable to understand customer' demands. In mean time Vodafone should build a training network not only for its own staff but even for distributors' personnel whom work side by side with Vodafone personnel in order to sell company products and achieve the company targets. Dealing with customers demands or it is a very important responsibility and a key role in distribution (Wagner 1992)

Strategy of Promotion

(Aaker 1991) said that promotion is the methodology and group of assets that organization posse in order to be in touch with public and persuade them to buy company products.

. Boush and Loken (1991) argue that a brand differentiate from other brand based on the methodology used for launching and promoting in the market a product. This is one of the key factors for success of a brand. The company makes the promotion of new product in order to make it as known in the domestic market but also to create a better image of the company itself by stimulating the market with new products. Agood promotion campaign will result in strengthening the image of the brand and t will differentiate the company from other operators. (Keller 1993). Dekimpe and Hanssens( 1999) argue that the promotion can effect directly or indirectly to sales increase for the company .

Vodafone based on a very great experience in promoting the product uses different ways in order to transmit the image of the product or the company in the market.

Some of the ways to promote the product are those through TV, print outdoor, leaflets, newspapers, magazines etc..

During communication campaign initiated by the company must be taken into account several important aspects regarding the client such as:

-The clear message that the client should receive on the product .

-The Brand image should be in the focus in order to differentiate the product offered by Vodafone from other products in the market.

- An immediate effect on customers.

-Price elasticity through promotion.

The author of this paper aim to analyze some aspect of printing and TV promotion campaign due to the fact that the budget spends for this part of promotion affects the Vodafone spends. One of the segments of the promoting is printing. Budget for printing of designed for brochures, Outdoors or layout of shops occupies about 25-30% of the entire budget that the company has for advertisement. This budget is determined from the company in the annual forecast within the products roadmap for next year. However, in special cases this budget has to refer deviations in order to respond better to market that can come with offers of products and services not predicted by annual forecast. TV, and Radio are very critical part of promotional campaign . Vodafone spends the core part of the budget on TV and radio spots around 60 %-70 % of annual budget . Different tools have been engage in order to promote brand image and various product and services . Sponsoring the events or public relation in order to establish brand preference have been considerate by the company .All the creativities activities like TV spots ,printing or other ways of promoting the product will increase awareness of the clients toward the product and the brand .( Heath at .el ,2009 )

The competitors use the same recourses and strategy in order to play in the market through spots or through publications .Vodafone must find other ways to promote its products and services in order to be more efficient in its battle to maintain the market .One other factor that must be considered is the period of financial crisis that the country is facing which makes companies reduce spending towards these services. New opportunities for promotion could be the Internet which is expanded, TV production, face-book etc.

Conclusions

Vodafone is one of the most famous brands in Albania with diversity of products, services, customer response distribution network it has occupied a very strong position and has created a strong image t in the country. The company has created a total-base Clients whom are loyal to the company.

New products that can be included are fast internet, TV or Vodafone Live, also being a company with a large prepaid base ,company should take into account new products and services for this group of customers not just Voice and SMS. So marketing department should be more creative and move fast in order to face the challenges . Mizik, and Jacobson, (2003 ) argue that the aim of marketing is to create an advantage versus competitors in products and services in order to create financial and non financial value.

Prices offered by the company are very competitive in the market for new products and for those already in the market. Given that the market is quite mature and aggressive with the entry of two new operators a different strategy of company needs to follow, especially for clients whom spend considerable amount monthly.

Distribution network and strategy that company follows make the difference the market with other operators. Also distribution network works efficiently in order to send the product to the end point at a time defined by the company. At the strategic level- medium and long-terms the company should absorb from the market qualitative personnel with the best knowledge for sales and distribution.

The company spends time, money and energy in the promotion of new product and increasing of the company's brand image. Being part of a group that already has created its own image worldwide Vodafone Albania has created a unique image for the company through approaching differently the promotion of the products and services. In the current crisis situation company's marketing department to find new ways to promote the company's products in order to keep the clients and increase revenues from sales.