Strategic Marketing Vodaphone

STRATEGIC MARKETING 1
Strategic Marketing: Vodaphone
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STRATEGIC MARKETING 1
Contents
Introduction ..................................................................................................................................... 3
Macro-Environmental Analysis (PESTEL) of the Market. ............................................................ 3
Main Market Entry Modes .............................................................................................................. 5
Market Segmentation and Targeting ............................................................................................. 10
Porter’s generic strategy ............................................................................................................... 12
Conclusion .................................................................................................................................... 12
References ..................................................................................................................................... 14
STRATEGIC MARKETING 1
Introduction
Vodaphone is a company that has established itself in UK and Europe as well. The company has
been the leader in mobile network provision in the region and has formed partnerships with
many mobile phone manufacturing companies to enhance their customer experience. The
company also has a good capital base, and it would be ideal for the company to venture in
Africa. Among the most dynamic countries in the mobile phone network is Kenya. The country
has been interesting in reference to the growth of the internet use as well as internet penetration
rate. This make me choose the country as a location for investment as leading companies in the
country have been making abnormal profits and progress. This has been perpetrated by the
invention of mobile money "M-Mpesa"; the technology was first invented in the country and has
given the mobile phone industry a new look. The paper will seek to evaluate and make a report
on how Vodaphone will penetrate in the Kenyan market and become a leading brand. The
company has to use strategic marketing techniques to get a sizeable market share (Kotabe, M.
and Helsen, K., 2014, 98).
Macro-Environmental Analysis (PESTEL) of the Market.
Political
Kenya is one of the countries in Africa which has been enjoying political
stability following its growing democracy. There has been a successful
succession of power. The government has also been offering a positive
entrance to new investors. A good example of multinationals which have
come and invested successfully in Kenya is PWC, Delloit, among others.
Economic
Kenya is located in the horn of Africa and thus acts the point of entry for
central and eastern Africa. This makes the country the best location for
STRATEGIC MARKETING 1
investment for investors in Africa. The country is also the strongest
economy in eastern and central Africa; the country also holds a couple of
headquarters thus acts as a focal point for investors. Kenya has also been
experiencing steady growth of over 6% annually. Cost of labour is also
low thus the company will have quality labour at a reasonable rate.
Social
The Kenyan culture is quite pleasing to investors. Residents are very
flexible to change. There is a population of about 0.5 Million Indians in
different investments around various cities in the country. Penetrating in
new markets is always challenging, as there is a sense of belonging and
relationship between existing firms and new companies. This means that
Vodaphone will have a hard time convincing customers to drop their
current mobile network company and shift to the new company.
Technological
Kenya has recorded to be the leading in ICT industry growth Africa. This
means that in the next few years, the country will be the leading ICT hub
in Africa. Mobile network industry is wholly dependant on the growth on
the ICT sector. There is also a trend in the growth of the use of the
internet; it has got 85% internet penetration rate making it the best rate in
Africa. This means the company can convert some of these clients, as the
country proves to be quite ideal for investment (Kotabe, M. and Helsen,
K., 2014, 98). The company will face competition from companies such
as Jamii Telcom which is new in the market, and it is offering eye-
catching internet packages. Safaricom will also pose a challenge as it has
already created roots in the market. However, the industry is quite
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dynamic and will welcome any new investors.
Environmental
The country is located in a calm environment. The environment is quite
ideal for investment with mobile network users and internet users ready to
engulf any new service provider offering more competitive rates than
Safaricom which the market leader.
Legal
There are flexible legal procedures in starting a new venture in Kenya.
The government is quite welcoming, and that is why it has been working
for years to welcome new investors in the country. The market is open as
it will benefit the country by offering.
Main Market Entry Modes
There are three main existing strategies in a market strategy that are to be included in this report.
However, I can start with explaining the meaning of this concept of a market entry strategy
which is applied to mean a controlled style of out bringing and distributing services and goods to
a new market that is targeted and has been discovered (Ang, S.H., Benischke, M.H. and Doh,
J.P., 2015, 76). Also, it can be described as an act of exporting or importing goods and services
to establish and manage the contract in a foreign nation. The three categories are the strategic
alliances, mergers and acquisition, and the foreign direct investments.
Strategic alliances mode
This is a tool of business arrangement whereby the few or several organizations cooperate to
meet their desired mutual advantages (Kotabe, M. and Helsen, K., 2014, 98). The main reasons
why these alliances happen is to share knowledge, expenses, expertise and mainly get the access
STRATEGIC MARKETING 1
to new regions of customers. It may also help gain an advantage in competition. Similarly, the
emergence of alliances can change real competitors into partners struggling to achieve a similar
objective. The adaption of this means of market entry has increased rapidly over decades
especially for the firms that are making their operations international. Before creating alliances,
firms should choose partners with compatible leadership styles, look at the product and services
of the partner, and potential risks of an alliance should be considered.
Characteristics of strategic alliances
The first characteristic of strategic alliances is the joint venture.It is not a must that all strategic
alliances be in the form of a joint venture. However, a joint venture is achieved when two or
many organizations come together to create a new firm that is not attached to any of the original
owners. Joint venture with the subsidiary is the most known. To elaborate on this, two firms
form a third independent firm with it new regulations such as the Motor Corp in America has
created this type of venture with Japan owned Beijing Automotive resulting to a firm called the
Beijing Jeep.
The second is the non-joint ventures.This type of alliance that is not based on joint venture is
created due to few purposes and is considered narrow in its activities. This type of venture is
mostly short-term hence regarded to be less established. Examples are the British airport, and the
United airport created a strategic alliance with the aim of selling their services to the North
American and the Europe states (Kotabe, M. and Helsen, K., 2014, 98).
The last characteristics are linkages that are not strategic alliances.In general, not all linkages
between the international and the national firms are strategic alliances. This includes the foreign
STRATEGIC MARKETING 1
direct investment agreements, licensing, exporting and importing(Laufs, K. and Schwens, C.,
2014, 167).
Benefits of strategic alliances
The globalization of firms’ operations is promoted by the internet, better transport systems, and
improved telecommunications leading to the development of strategic alliances. The objectives
of creating strategic alliances solely rely on the targets and requirements of the firms involved
and on the policies of nations in which they are carrying out operations (Kotabe, M. and Helsen,
K., 2014, 66) One of the key benefits is to gain access to the market. The domestic entities can
provide knowledge of markets, customer needs, channels of distribution, and retailers. This has
been successful and witnessed in West Europe in the food manufacturing entities. Also, many
nations state that a given sum of ownership remains locally. For instance, in Mexico where the
law state that foreigners cannot locate their firms there without a joint venture. The other benefit
is the advantage of sharing losses and expenses. The involved entities can share risks equally. To
give an example is the film producers joined the camera producers, later they parted and both
firms gained through the sharing expenses and minimizing the dangers that would come forth if
both created new products.
Also, strategic alliances have benefits in that they have effects of shared expertise and
knowledge. A firm that has allied can acquire knowledge and expertise that results in improved
brands and skills. For example, Motorola formed alliances with many firms with the aim of
developing a worldwide satellite communications network. This new network-enabled other
firms to improve and create a global network for communication(Ang, S.H., Benischke, M.H.
and Doh, J.P., 2015, 75). The last benefit is acquiring a competitive advantage. A strategic
STRATEGIC MARKETING 1
alliance can promote an entity to access competition advantage in the market. This is through
existing good brand image that has been held previously by one partner.
Strategic Mergers and Acquisitions market entry modes.
Mergers can be described as the situation where two firms come together where only one firm
survives, and the other is eliminated from existence as it is joined with the other firm. However,
in the acquisition, a single entity gets the control over the other entity which is only issued at the
agreement of both parties (Ang, S.H., Benischke, M.H. and Doh, J.P., 2015, 43). In general,
mergers and acquisitions are key market entry strategies that mainly occur in international
business.
Benefits of mergers and acquisition in the strategic market entry
Mergers and acquisitions have some benefits to the merged parties which include; new
technology is achieved when the two entities merger and use one name of the original entities,
then it means that the previous technology and expertise can also be merged to come up with
more improved technology. The second benefits are reduced levels of competitions as the two
previous competitors have now merged with a similar aim of controlling the market. When the
two companies’ merger then it means the competitors are decreasing hence the competition is not
stiff as before the merger. The last but not the least benefit is the provision of rapid access to
distribution channels and markets. This means that the local firm has already established a ready
market and proper distribution channels hence when a merge is performed there will be no
resources spent in locating the markets and distribution networks(Laufs, K. and Schwens, C.,
2014, 234).
STRATEGIC MARKETING 1
As a result of this mergers and acquisition, many Indian entities have adopted this strategy to
help acquire a base hold in the new countries markets. Strategic mergers and acquisitions are
meant to solve entity problems. Similarly, the aim of the acquirer is to get new product channel,
improve the facilities, acquire new market, get expertise, and grab intellectual advantages. The
outcomes of this strategic mergers and acquisition are improved value for both the organizations
in the deal. In simple term, it is a win-win situation.
Strategic Foreign Direct Investment as market entry mode
This is a type of strategic entry into the foreign country which can be described to mean direct
ownership of entities and firms in the new countries markets. In general, the new firms with the
aim of investing moves its resources such as technology, capital, and expertise to the markets
target for easy operations (Laufs, K. and Schwens, C., 2014, 39). Development of a new firm in
the new market is the major mode applied in the direct foreign investment. When a firm has the
full ownership of the facility, then there is a high chance of planning operations, controlling
competitive environment, and understanding the customers’ needs.
However, as a senior marketing consultant, I can recommend the Vodaphone network to adopt
the strategic mergers and acquisition mode compared to the other two. The Vodaphone company
can make a merger with the Airtel network in Kenya and get rid of its name to acquire the Airtel
name. In this case, the Vodaphone network company will have some advantages as result of the
merger. Some of the advantages include rampant access to supply networks and markets and
lowers the rate of competitions as the introduction of another network company would thrive
competition. Also, the merger and acquisition method would bring about new and more
developed technology into the new entity Airtel. This is with the aim of providing a competitive
advantage with Safaricom.
STRATEGIC MARKETING 1
Market Segmentation and Targeting
Market segmentation and targeting critically are major methods for firms to cater to their
targeted groups.In this case, as a Vodaphone consultant, I will critically examine it potential
target market using the idea of market segmentation. Market segmentation, when applied by the
Vodaphone Company, makes it simple to individualize their campaigns, and target what is
important. The Vodaphone network company also can arrange clients to focus a certain group in
a cost-effective manner. In general, the market segmentation is a way of sub-dividing the able
clients into various groups and levels on bases of various traits(Cross, J.C., Belich, T.J. and
Rudelius, W., 2015, 76). The members who belong to formed groups have common traits and
always contain few or many aspects similar to them. I recommend the Vodaphone company to
apply this means to develop a culture of mix marketing for each segment and maintain them as
required. Also through applying the market segmentation strategy and targeting, the Vodaphone
company is likely to become more conversed since it needs firms to divide the market,
implement more improved services and develop better communication programs according to the
requirement of the division.
The basis of market segmentation and targeting
The segmentation is the division of customers into small groups in accordance with laid basis.
The bases are critically analyzed ranging from age, gender, attitude, interest, and values (Venter,
P., Wright, A. and Dibb, S., 2015, 25). To begin with is the bases of gender. The Vodaphone
firm should apply the gender techniques to meet the target of the potential market. Gender comes
with requirements, interest and the needs of females and males may sometimes have a great. The
Vodaphone expertise should focus on implementing varied marketing and communications
means that meets the wants of both genders. The other base of segmentation is the age range.
STRATEGIC MARKETING 1
The Vodaphone company being a networking company should critically be able to target
potential age groups who are most likely to use their services. This target age groups may be
attracted through the change of charging rates that will always keep away customers. The
management of the company should come up with services and offers that meet the youth’s
needs. This because the youths are the readiest users of the network in the century.
The income of the customers is also a key concern the Vodaphone company should embrace to
meet the target market. This because the income is always the determinant of the buying ability
of the target market. For this reason, the Vodaphone company should take this aspect seriously
and choose whether to advertise their services as needs or luxuries. However, firms always
divide the market into various types regarding income. This include; the high-income earners,
middle-income earners, and the low-income earners. Moreover, the segment may change about
service use and the area of business.
Vodaphone company should also apply the concepts of place as the basis for targeting the
potential clients. This because the place where the potential market is located influences the
purchasing of the Vodaphone company. The lifestyle of the of customers is another concept that
affects potential target market (Cross, J.C., Belich, T.J. and Rudelius, W., 2015, 35). These
lifestyles are such as hobbies, religion, culture, and marital status which will always affect the
consumers to purchase the Vodaphone services. Hence the Vodaphone Company should divide
its customers so that it plan the way forward in meeting various people lifestyle.
Also, the Vodaphone company should use the concept of types of segmentation to evaluate their
potential target market. These types of segmentation include the geographic segmentation which
mainly can help the Vodaphone company to meet the needs of different customers living in
various areas. For example, the company can build a satellite that will help boost their
STRATEGIC MARKETING 1
network.Another is the demographic segmentation which the Vodaphone company can apply in
its operations of examining potential customers (Dibb, S. and Simkin, L., 2016, 76). This is
much related to basis for segmentation as it will help the company to create a new offer that will
attract more clients.
Porter’s generic strategy
This is a strategy that explains how a firm achieves competitive advantage along with its target
market (Ouma, G. and Oloko, M 2015, 54). There exist three porter’s generic strategies such as
the lower cost, differentiated and focus. A firm may wish to use one of the two types of
competitive benefits through lowering costs as compared to its competitor. Also, it may
differentiate itself using features trusted by clients to demand an increase in costs. However, an
entity can decide to apply one of two scopes whereby it can choose to focus giving its services to
pointed regions of the market, or using the industry-wide scope to give it services to all available
market regions (Tansey, P., Spillane, J.P. and Meng, X., 2014, 23).
As a senior marketing consultant of the Vodaphone company, I will recommend the company to
apply the lowering cost strategy. If the Vodaphone company can lower its prices to a low level as
compared to Safaricom, it can attract plenty customers and users. Safaricom, though it is the
leading network provider in the market, it has very high charges. Due to this reason, the merged
Vodaphonecompany can lower it cost so that the customers can get another alternative way of
overcoming Safaricom high charges.
Conclusion
From the above, it is evident that a lot has to be done to ensure that Vodaphone can penetrate
into the Kenyan market. The company has to be creative and innovating in service delivery.
STRATEGIC MARKETING 1
Mobile phone internet services are highly dependant on technology; this means that the company
has to adopt highly adaptive tools to penetrate and make an impact. The report educates us on
different factors in strategic marketing. In any new venture, investors have to understand the
market to ensure the fully there are no faults in delivering a judgment on whether to invest on
not. Investors should also learn to understand market dynamics to avoid losses and wrong
decisions. 
STRATEGIC MARKETING 1
References
Dibb, S. and Simkin, L., 2016. Market segmentation and segment strategy. Marketing theory: A
student text, Sage, Los Angeles, pp.251-279.
Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing
Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative
perspective. Journal of Marketing Management, 31(1-2), pp.62-83.
Ang, S.H., Benischke, M.H. and Doh, J.P., 2015. The interactions of institutions on foreign
market entry mode. Strategic Management Journal, 36(10), pp.1536-1553.
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-sized
enterprises: A systematic review and future research agenda. International Business
Review, 23(6), pp.1109-1126.
Kotabe, M. and Helsen, K., 2014. Global marketing management.
Tansey, P., Spillane, J.P. and Meng, X., 2014. Linking response strategies adopted by
construction firms during the 2007 economic recession to Porter’s generic
strategies. Construction management and economics, 32(7-8), pp.705-724.
Ouma, G. and Oloko, M., 2015. The relationship between Porter's generic strategies and
competitive advantage. International Journal of Economics, Commerce,and
Management, III, 6, pp.1058-1092.

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