Marketing Segmentation of Cellular Network Operators in UK
Category : International Business Review, Market Segmentation, Marketing Papers, Smartphones, Vodafone Marketing Strategy
Marketing Segmentation of Cellular Network Operators in UK
In the current situation of telecommunications, more and more people are subscribers of mobile telephone services. The mobile phones are also called as handsets come in innovative features, pocket-sized, and in affordable costs. For over the years, the manufacturers are continuously developing the mobile phones in which the people described as effective way of communication. And today, different brand of mobile phone are emerging and competing in the field of wireless communication with innovative services. In UK, there are two leading brands of Cellular Network Operators that competes in the market.
The telecommunications industry is usually composed of technological advances, including the development of the alternative infrastructures and new services and created a dramatic impact in the economy (Goldman, Gotts, and Piaskoski, 2003). The competition in the industry of telecommunication gains the advantage in the scale and scope in the market entry (Banks, 2001). The rapid growth of the competition is unpredictable due to the continuous development of the technologies and changes (Goldman, Gotts, and Piaskoski, 2003). The business activity in the telecommunications industry is also plagued by different uncertainties and too much uncertainty and lack of international coordination can decrease the confidence of business leaders and not beneficial in the atmosphere of the company (Peterson, 2002). Through the target marketing or market segmentation the competition between the mobile companies became more aware on the appropriate strategies that they should implemented in order to support their long-term goal and objectives.
Vodafone identifies the evolving challenges in the macroeconomic environment. Within that environment, there is a competitive pressure that continues to be strong and contribute to the price declines. Also, the consumers have an increasing choice of service providers because of the close competition and new entrants. In addition, the mobile services are also regulated that contributes to the lower mobile terminations rates and roaming prices. Through the expected challenges, Vodafone increased their approach on the value enhancement and cost reduction (Vodafone Strategy Review). Due to the customer relationships that the company value most, Vodafone is willing to shift their approach away from unit pricing and unit based tariffs to propositions that deliver much more value to customers in return for greater commitment, incremental penetration of the account or more balanced commercial costs. This will require a more disciplined approach to commercial costs to ensure their investment in focusing on those customers with higher lifetime value. This gives the confidence for Vodafone to effectively targeting their market and delivers more value to customers and had a better financial outcome for Vodafone.
Vodafone has three key attributes which strongly differentiate from the competitors: firstly, the scale in technology with which we continue to drive network and IT savings through consolidation and centralization of core activities; secondly, the strong presence in the enterprise market, in large corporate as well as in small and medium sized businesses; and finally, the brand, especially in consumer pull markets. The Vodafone’s strategy is focused on four key objectives: drive operational performance, pursue growth opportunities in total communications, execute in emerging markets and strengthen capital discipline.
The trend in the market became an advantage for O2 and drives the market to use more of their services. The increase in the use of alternative to cash and having access to payments became the ace card of O2, especially n the developing world. This increase lowers the agitation among the mobile operators because there is a relative demand in the use of Smartphones that are quicker than cash. In addition, segmenting the market is not a pressure for O2 because of the availability of the capable handsets that are ready to the experience the business model type and functions. The transactions that can be used using the phone are based on the partnership of the mobile services with the recognizable banks. In addition, the support of the global technological standards, financial regulations and legislations can help the industry to create answers on the issue and associated transactions.
The target of O2 in the market is the individuals who are engaged in a long distance communication and encouraged them entrust their financial transactions through the mobile payments. With the help of market forecasts in market segmentation such as approach and assumptions in mobile payments, geographical splits, and mobile subscriber forecast, O2 identified their strategies like easy ticket purchasing that can provide convenience on the consumers (Mobile Payment Markets).
Both operators are competing based on their overview on the market’s needs. Through the help of the market segmentation, both organizations can identify the factors or their strategies that they should emphasize to effective in the market and gain their respective advantages.
Banks, C., (2001) The Third Generation of Wireless Communications: The Intersection of Policy, Technology, and Popular Culture, Law and Policy in International Business, 32(3).
Goldman, C., Gotts, I., & Piaskoski, M., (2003) The Role of Efficiencies in Telecommunications Merger Review, Federal Communications Law Journal, 56(1).
Mobile Payment Markets: Strategies & Forecasts 2008-2013 [Online] Available at: http://www.juniperresearch.com/shop/products/report/pdf/brochure/9215mpaymentmarkets%20report_brochure.pdf [Accessed 14 September 2010].
Peterson, J., (2002) Unrest in the European Commission: The Changing Landscape and Politics of International Mergers for United States Companies, Houston Journal of International Law, 24(2).
Vodafone Strategy Review. [Online] Available at: http://www.vodafone.com/start/investor_relations/strategy0.html#1 [Accessed 14 September 2010].