INTEGRATED MARKETING COMMUNICATIONS MIX STRATEGY (Research Paper Sample)

COMPARATIVE ANALYSIS OF INTEGRATED MARKETING COMMUNICATIONS MIX STRATEGY FOR MOBILE SERVICES PROVIDERS: VODAFONE VERSUS O2
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EXECUTIVE SUMMARY
The UK telecommunication industry plays a huge economic role, and among the key players involved includes Vodafone and O2. Due to the stiff competition, the mobile service operators have embraced innovative marketing strategies with the aim of increasing consumer base and financial performance. In addition, companies are diversifying in the data market and expanding their operations in the developing economies. In order to increase its profitability, Vodafone has entered into the Indian market, where it initiated the ‘pug’ campaign and thereafter, the ‘zoozoo’ campaign. While Vodafone has embraced creative and viral advertising, O2 has focused on maintaining long-term relationships with the customers. To improve its popularity and brand awareness, O2 should consider too embracing creative advertising, and in this regard the company could use the English Premier League to launch the initiative. Furthermore, O2 should increase the number of one-stop-shops and integrate the pre-seal, sales, and post-sales activities.
Table of Contents
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1. Introduction  PAGEREF _Toc373962262 \h
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2. Market Review  PAGEREF _Toc373962263 \h
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3. Literature review  PAGEREF _Toc373962264 \h
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4. Vodafone: Analysis  PAGEREF _Toc373962265 \h
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4.1 The zoozoo campaign  PAGEREF _Toc373962266 \h
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5. O2 Analysis  PAGEREF _Toc373962267 \h
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5.1 O2 arena  PAGEREF _Toc373962268 \h
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5.2 Integrated communication strategy  PAGEREF _Toc373962269 \h
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6. Discussion  PAGEREF _Toc373962270 \h
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7. Conclusion  PAGEREF _Toc373962271 \h
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Introduction
The mobile telephony industry is one of the fastest growing sectors, especially in the developing countries. The investment in the industry has been on the increase due to the immense growth opportunities present. Researcher indicates that increased mobile penetration has led to positive outcomes such improved communication, social inclusion, economic activity and productivity. The available research has also established an econometric relationship between mobile usage and GDP per capita growth. In the UK, the mobile telecommunications market generates more than £21 billion annually and the leading service providers include Vodafone, O2, and Orange. A significant segment of the mobile telecommunication sectors is dominated by the virtual network operators such as Virgin Mobile, Tesco Mobile, Giffgaff, Asda Mobile, Talkmobile, Vectone Mobile and BT Mobile. This paper examines some of the marketing strategies that the O2 should adopt in order to compete with Vodafone.
Market Review
For the past two decades, the UK telecommunication industry has recorded phenomenal growth as evidenced by the high number of mobile service providers. The current environment is encouraged by the deregulation of the market, and consumers are able to enjoy many differentiated offerings from the numerous operators. Competition in the industry has forced firms to adopt predatory pricing strategies and invest more in the data market. Vodafone was established on 1st January 1985, and was the first cellular network company to launch in the UK. A few years later, the company expanded its presence through acquisition of Racal Telecom and Cable & Wireless. In the subsequent years, the company registered huge success and its first high street store was established in 19993. 1n 1990s, the company made huge achievements such as developing low-earth orbiting satellite mobile phone service, launching of data, fax and text messaging services, and introduction of the pay-monthly, analogue packages and per-second billing services. Finally, in 1999 Vodafone Air touch Plc was formed following a merger between Vodafone Group and Air Touch communications Inc.
Vodafone was the first mobile company in the UK telecom sectors and one of the world’s biggest telecommunication groups. The company is renowned for its pay-as-you-go service and offers its clientele a wide range of quality services. Just like Vodafone, O2 also offers pay-as-you-go packages and has a wide customer base. Vodafone Company has entered into sponsorship deal with the Manchester United football club and provides its fans with a wide range of accessories such as printed t-shirts, and gifts. Sponsorship deals allow the company to improve the visibility of its brands besides increasing the current revenue stream. On the other hand, O2 was formed in 1985 as Cellnet and is a major player in the UK telecommunication industry. Beside offering voice and data services, O2 has diversified into financial services industry with the launch of the O2 money. At the same time, the company has partnered with Vodafone to pool their network technology, with the aim of reducing the operating costs.
Literature review
The need for a proper pricing strategy is reinforced in the available literature, and according to the researchers, a poor pricing strategy could lead to bankruptcy. The importance of the pricing strategy is recognized by Kerin (2012) who argues that pricing can help an organization to attain the necessary competitive advantage. But what differentiates a proper pricing strategy from a poor one? In Kotler and Philip’s (2005) view, a proper pricing strategy should consider the external and internal environments, and should be affordable to the customer. In respect to mobile telecommunication industry, customers are very sensitive to price differences, and so the operators are forced to come up with affordable prices as well as adopt the ‘price bundling’ concept. Product bundling as Kotler and Keller (2012) suggest could be beneficial to organizations operating in competitive markets, and whose objective it to expand their market share. Companies in the telecommunication industry have also adopted the discount pricing strategy which helps them to sell a huge quantity of products especially in the developing markets.
Appropriate distribution channels allow companies to deliver goods to customers within limited time. In the mobile telecommunication industry, one of the common channel strategy used is direct marketing in order to increase the profit margins. Customers are able to access phones and other accessories from retails stores. Ziethmal (2000) recognizes the need of incorporating direct customer interface in the firm’s value chain. The one-stop-shops allow the mobile operators including Vodafone to integrate the pre-seal, sales, and post-sales activities. In addition, the one-stop-shores allow the customers to access a variety of service including consultations, product presentation, contract arrangements and product delivery (Proctor, 2000).
The mobile service sector relies on heavily on relationship marketing to popularize their products and services. As competition becomes stiff, firms are being forced to keep loyal customers in order to improve the long-term profitability of the company. The concept according to McDonald (2001) evolved from direct response marketing and emphasizes on long-term relationships. The concept replaces the traditional marketing framework, and extends communication beyond intrusive advertising and sale promotional messages. Unlike the traditional marketing framework, this new concept emphasizes on customer retention, customer contact, customer value, and customer. In regard to the mobile telecommunications sector, relationship with the customers can be improved by providing them with quality services. The quality of services can be improved by increasing reliability and the capacity of the firms to handle customers’ concerns. Lovelock (2001) observes that other key determinants of quality service include the rate of responsiveness and the degree of empathy accorded to the customer. According to the available literature, good perceived service quality should have the following elements; accessibility and flexibility, service scope, service recovery, reputation and credibility (Vargo and Lusch, 2004).
The importance of the relationship marketing in the UK mobile phone sector is highly recognized and already companies like O2 and T-mobile have committed themselves to developing long-term relationship. It is assumed that developing enterprise-level systems could help firms to acquire real-time information for the improvement of customer services (Vargo and Lusch, 2004). In addition, such information provides telecom companies to interact with customers on a regular basis and helping the marketer to identify and prospect new leads (Moller and Halinen, 2000). Although mobile service providers are already using relationship marketing to achieve customer loyalty Dev, and Don (2005) believe they could do more by integrating their systems with call centre operations. Such a strategy will help the firms to collect consumer-related data and use it to meet their needs and wants. The information obtained could also be used to identify consumers’ demographics and their buying pattern and providing personalized services to different consumer segments (Sudhir, 2001).
The marketing communication strategy should involve differentiation of products and services. In the modern economy differentiation of products and services can be achieved trough branding. The available liter...