University of National and World Economy

International Business in English

Telecom Assignment

Prepared by: Examined by:

Ilia Georgiev, 1420429 Chief Assistant Dr. Christian Zhelev

Konstantin Uzunov, 1420427

Galina Yakimova, 1420430

Alexandra Bozova, 1420433

Sofia, January, 2015

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Table of Contents

Abstract ..................................................................................................................................... 3

Telefónica ................................................................................................................................. 4

Company Brief .......................................................................................................................... 4

Brand Portfolio ......................................................................................................................... 4

Strategy ..................................................................................................................................... 5

Digital Marketing Tools implemented by O2 ........................................................................... 6

Vodafone ................................................................................................................................. 11

Introduction of the company ................................................................................................... 11

Essentials of marketing ........................................................................................................... 12

Vodafone’ Social Service Strategy in Australia ..................................................................... 12

Digital Media .......................................................................................................................... 13

Vodafone’ global brand programme, ‘Firsts’ ......................................................................... 15

Vodafone and TagMan's technology ...................................................................................... 15

Vodafone’s marketing mix ..................................................................................................... 16

Product: ............................................................................................................................... 16

Place: .................................................................................................................................. 16

Price: ................................................................................................................................... 17

Promotion: .......................................................................................................................... 17

Marketing campaigns of Vodafone India ............................................................................... 17

Marketing campaigns ......................................................................................................... 18

Positioning of Vodafone ......................................................................................................... 19

Digital marketing campaigns of competitors .......................................................................... 20

Mtel ......................................................................................................................................... 21

Overview ................................................................................................................................. 21

Strategies ................................................................................................................................. 22

Business Level strategy .......................................................................................................... 23

Relationship with the corporate parent ................................................................................... 25

Recommendations to Mtel ...................................................................................................... 26

Used References ..................................................................................................................... 29

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Abstract

The purpose of this paper is to outline the specifics in digital marketing strategies of two

international telecom operators and to compare them with the national one Mtel. Our

choice was to examine Telefónica and Vodafone as leading worldwide mobile operators

and see how they are expanding their digital strategy, what methods they use, which aspects

to they pay attention to more when assessing their strategy. Mtel is viewed as a corporate

client, which expects from us to deliver the best practices, already adopted by these two

foreign operators and possible improvements in digital marketing.

Disclaimer: Neither of these recommendations should be taken as plans of action, given

the fact that this is a pure academic work, based on fundamental research techniques, using

available public sources. The authors of this course project cannot be held responsible for

any actions, taken by the Mtel management team or other individuals, based on the

conclusions, written in this paper.

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Telefónica

Company Brief

elefónica is one of the largest telecommunications companies in the world in terms of market

capitalization and number of customers. With its best in class mobile, fixed and broadband

networks, and innovative portfolio of digital solutions, The Company is transforming itself into a

‘Digital Telco’, a company that will be even better placed to meet the needs of its customers and

capture new revenue growth.

The telecom has a significant presence in 21 countries and a customer base that amounts more than

316.1 million accesses around the world with a strong presence in Spain, Europe and Latin

America, where the company focuses an important part of its growth strategy. Telefónica is a

100% listed company, with 1.5 million direct shareholders. Its capital traded on the continuous

market on the Spanish Stock Exchanges (Madrid, Barcelona, Bilbao and Valencia) and on those

of London, New York, Lima and Buenos Aires.

Telefónica Digital is a global business division of Telefónica Group. Its mission is to seize the

opportunities within the digital world and deliver new growth for the company through R&D,

venture capital, global partnerships and digital services such as cloud computing, mobile

advertising, M2M and eHealth. It is also driving innovation in over the top communications under

a new umbrella brand called TU and in Big Data through Telefónica Dynamic Insights. Telefónica

Digital will deliver these new products and services to a whole of 316 million customers as well

as entering new markets. It is headquartered in London with regional centers in Silicon Valley,

Sao Paulo, Spain and Tel Aviv. Axismed, Eleven Paths, Jajah, Media Networks Latin America

and Terra are all managed under the Telefónica Digital umbrella.

Brand Portfolio

ustomers identify Telefónica through several commercial brands, of which Movistar, O2 and

Vivo are the most well-known. Movistar operates in Spain, Argentina, Chile, Uruguay, Peru,

Ecuador, Venezuela, Colombia, Mexico, Guatemala, Panama, El Salvador, Costa Rica and

Nicaragua. Vivo is the Brand for Brazil and O2 in the United Kingdom and Germany.

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Commercially, Telefónica also responds to the needs of large corporate clients, especially those

needing to coordinate services in different markets. They also have several “specialist” brands

focusing on specific businesses. Wayra is worldwide start-up accelerator, which in just a few years

has become one of the largest networks of innovation on a global scale. Tuenti is a social network

with a strong presence in Spain, which is diversifying its services into instant messaging. The

company also has other virtual mobile brands in several countries including giffgaff (UK), fonic

(Germany), Tuenti Movil (Spain), and Quam (Argentina). Specialized services are also offered,

such as dynamic marketing (On the Spot) and security (ElevenPaths).

Each of these brands have great value, due to the number of customers who trust them and their

reputation in the marketplace. The strategy of the company is to try to build the bonds between

each of them and Telefónica as an institutional brand in order to create a brand family.

Strategy

he communications sector continues to face challenges and unceasing changes that have

made it completely redefine in a short period of time, with new business ecosystems

appearing which oblige companies to adapt and transform in view of new realities. This

peremptory need for transformation is linked to that for innovation and companies have to create

ecosystems which promote innovation to ensure long-term success and that means putting people

at the heart of the business. Telefónica, a Digital Telco, is ready to lead and assist this process of

digital transformation. The strategy of the company is to be a key player in this ecosystem and to

provide everyone with the best that technology can offer.

Telefónica had identified talent and entrepreneurship as key components of the digital revolution.

The accelerator of start-ups, Wayra, as well as all the initiatives set in motion under the Think Big

and Talentum programmes, and even the Campus Party, have enabled innovation to become the

engine of growth and it has also become globalized.

In order to become a reference in the field of telecommunications as Digital Telco, Telefónica has

set four areas to focus their efforts:

1) Product development and innovation,

2) Partnership and venture capital,

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3) New digital services (M2M, eHealth, financial services, or cloud computing), and

4) New Business Areas (creating new business opportunities in areas such as the Big Data

(Telefónica Dynamic Insights) or HTML5 (Open Web Devices)).

We truly believe that the company is a leader in the field of digital marketing and that is why we

decided to analyze the way they have turned into a leader in this sphere.

Digital Marketing Tools implemented by O2

2 is the commercial brand of Telefónica UK Limited and is a leading digital

communications company with the highest customer satisfaction for any mobile provider

according to Ofcom. With over 23 million customers, O2 runs 2G, 3G and 4G networks across the

UK, as well as operating O2 Wi-Fi and owning half of Tesco Mobile. O2 has over 450 retail stores

and sponsors The O2, O2 Academy venues and the England rugby team.

What clearly makes an impression when you go its website is that there are two sections – a

personal and a business one.

To start with the personal section, first comes the e-shop of the company. It is for sure that O2

have carefully segmented the market and provided different value propositions to different

customers. There is a search engine for those who “know the device they are looking for”. Still,

there three sub categories.

Top Handsets where you can find iPhone 6, Samsung S5, or, in other words, the most popular

currently on the market. This section should have been designed for those customers who still do

not know what phone they want but they do not want something exceptional at the same time.

The second sub category is Popular Brands where clever watches, tablets and refurbished phones

are offered at lower prices. The latter provides the consumers who are keen on brands but cannot

afford them with the opportunity to own one at a lower than market price.

The next sub category is Best of the Shop which offers bundle offers with everything you need for

your phone including cases, car chargers and more for either more price sensitive consumers or

those who are extremely brand loyal and want to own everything the brand can offer.

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One last segment is taken care of in the Coming Soon section which provides information about

manufacturers, operating systems and the latest phones. That would be perfectly suitable for lead

users and people who love innovations and want to be the first to have a certain gadget.

There is something even for the environmentally conscious customer. Recycle Your Phone for

Cash is an initiative where the process is very simple. You just type the model into the quick search

engine, click sell my mobile, sent it to O2 using your chosen delivery method, and get paid. And,

there is a Top Price Promise that if you see your item advertised for a higher price within 7 days

of placing your order with O2 Recycle, they will check it out and match it for you. This is not only

a brilliant sustainable solution that shows corporate social responsibility but also it adds value for

the customer. Why not give you old phone for good and guaranteed cash to O2 instead of trying

to sell it online or just throwing it away? Implementing such a strategy helps you milk profits from

multiple segments of the market while at the same time providing a high level of customer

satisfaction since different groups of people find offers tailored to their specific needs.

Devices from all sections come with a free next day delivery when you order before 10pm and a

possibility for a refund or exchange within 14 days. In addition to that, when you buy a phone,

there is a special section called “O2 Gurus” where you can get help for basically everything from

setting up your new device to getting up to speed with the latest tech. As a matter of fact, O2 Gurus

are friendly experts in all things tech who are there to assist you. You can book a Guru session in

your nearest store, take a look at specially developed videos or chat to them online. And last but

not least, Telefonica provide insurance for mobile phones and tablets. According to the Kano

model, these could have been perceived as a basic requirement since in e-commerce fast delivery,

return policy, online advice and insurance are a must. Nevertheless, we truly believe that O2 have

outperformed competitors in this regard and exceeded the customer expectations due to the late

hour for orders, long time for return, and various opportunities for interaction with experts not only

with regards to the initial choice of a device, but with assistance in its after sales usage.

Beyond all expectations goes the O2 Wi-Fi initiative. It can be categorized as an excitement

requirement. You can connect to O2 Wi-Fi that is 10 times faster than a normal mobile connection

whenever you are near one of O2 hotspots. This way the company saves your money for paying

for mobile internet or prevents your speed from falling which all we know is quite unpleasant.

And, it is not just for O2 customers. O2 Wi-Fi is free for everyone, no matter the mobile or home

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broadband contract. This way, O2 not only increases the satisfaction of its customers, but creates

brand popularity as well. The experience is further complemented by the O2 Wi-Fi app that can

be downloaded for free and used to locate the hotspots that are closest to you. This is quite a clever

strategy since hotspots are normally located near fast food restaurants and cafes which is a

mutually beneficial arrangement that draws more customers to these venues and, subsequently,

charge can be required for it.

There is a special section devoted to O2 apps. All of them are downloaded very easily and for free.

O2 Tracks gives you nonstop access to the Official Top 40 songs together with playlists, album

tracks, songs from featured artists and celebrity news and gossip. Every song is downloaded to

your mobile. However, so that you do not worry about your data, they will make sure that Wi-Fi

is your default setting. It seems that the company is rather proactive in its strategy since it even

anticipates circumstances that will make customers feel frustrated and unhappy and strives to avoid

them.

An app that is designed for busy and more practically oriented people to use on a daily basis would

be My O2 which presents tools for managing your account 24/7. It provides you with the

opportunity to keep an eye on your bills and data usage, to make payments and top up your credit

card as well as to manage your upgrades. It also highlights who you call and text the most by

syncing with you contacts.

Priority is an app for the younger and more socially active audience that lets you get tickets to

1000s of music, comedy and sports events across the UK up to 48 hours before general release. In

addition to that, with My Priority, you can set preferences so that you will never miss your favorite

artists. You only have to let O2 know what kind of music you are into and to decide if you want

to be alerted on Facebook, Twitter or by message.

TU Go lets you text, call and check your voicemail over Wi-Fi even if you do not have signal. It

is to some extent like Viber but it is a way better since Wi-Fi, as mentioned earlier, is provided by

O2 near popular venues.

O2 Train Travel is special for people on-the-go either they are explorers looking for a new

challenge or business people who travel. It lets you check timetables, find the fastest routes or the

cheapest fares, and book tickets from any UK mainland rail company on the go, with no card or

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booking fees. As a complement to the previous add is O2 Travel which can help you discover local

attraction and read other traveler’s reviews. You can also download maps that will work even when

you are offline.

O2 Academy rather unexpectedly has nothing to do with education. It is more like a social network

which gets you the latest O2 Academy gig information, plus clips and updates on your favorite

artists. With it, you can tell your friends which gigs you are going to and see if they are going as

well, count down to the event with your timeline, get directions to the venue, weather forecast and

more, see social media updates, upload a video of your nights, etc. Certainly, this app is targeted

at those between 15 and 25. In addition to everything that, there is a room for chat apps where you

can be part of the conversation in O2 community and you can check out App Lab to hear about

the latest and greatest apps from O2 gurus.

It is quite obvious from the data presented above that O2 is and should be a market leader in digital

marketing with high customer satisfaction score. The site of the company is simple and user

friendly and at the same time care is taken of for all that a customer requires and expects and even

beyond that anticipating future and problems and providing delightful solutions.

Now, the business section of the web site. Although the blue theme is kept it looks much more

simplified and much less dynamic. There is clear distinction between two groups – Small &

Medium Business and Enterprise & Public Sector. There is a Business Shop that offers devices,

apps, connectivity and deals. O2 gurus are present when you want to choose a device. However,

nothing is written about free delivery or return policy.

Apps are also different. Now, they are carefully selected to help you work smarter and more

effectively, with benefits you can see immediately. With Microsoft Office 365, you can work

smarter on the move with Word, Excel, PowerPoint and Outlook on your desktop, laptop, tablet

and phone. You can also build your brand with your own website and business email addresses

and save time and money with online conferencing and shared calendars.

With McAfee Multi Access, you share state-of-the-art security for all your devices. Security know-

how is provided from the world's largest dedicated security company and up to 5 devices can be

protected with one license which should also create cost saving. This add also makes your life

easier since although having many passwords makes you difficult for you to remember them, this

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is necessary so that they are harder to crack. McAfee secures all your passwords for all your

important sites, so you only need to remember one.

With Box Cloud Storage, you collaborate, store and share documents online. Whether you're in

the office, at home or on the road, you can access the latest versions of all the documents you need,

edit them and share with your colleagues, clients and customers. It's the way business is heading,

and it helps you and your team make quick decisions, finish projects fast and keep teams up-to-

date - that's why 99% of Fortune 500 companies use Box. Automatic file synchronization means

you always know which version of a document is the latest - even if several people are working

on it at the same time. And you can see all previous versions too, just in case someone makes a

mistake. Certainly, O2 is proactive in the business sphere as well.

Evernote makes it easy to remember things big and small using your computer, phone, tablet and

the web. You can clip web articles, capture handwritten notes, and snap photos to keep all the

details you need with you at all times. And with Evernote Premium you can get to your notes fast,

even without a network connection. Faster everything. Load notes faster on mobile devices by

keeping notebooks offline. And get priority image recognition to find text in images, fast.

TU-Go Stay in touch, even when you can't get a signal. Download TU Go for free and use Wi-Fi

to keep you and your business connected even when you can't get a signal. You can make or take

calls, send or receive texts and check your voicemail, wherever you are. Calls are charged at your

standard rate and you can set your phone to automatically switch to TU Go when you can't get a

signal - so you're always in touch. Use TU Go on all your devices

All apps are paid approximately £4 per months. When opening the description of the add there are

three sections - arguments what are the benefits provided by the app, why customers should choose

exactly O2, and why this app provides a solution to the problem of the business.

For Enterprises & Public Sector, business solutions are provided rather than mere goods and

services. These solutions are designed to help customers address two fundamental challenges.

First, to help an organization become more efficient, stripping out waste from ICT infrastructure

and enabling people to work productively from wherever they need. Certainly the company has

managed to meet an evolving need of business organizations – there transformation to the so called

lean enterprises. Second, a better service is delivered to customers. O2 provide the insight and

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digital tools to better understand and engage customers, so you can be more responsive to market

changes and customer demands. Whether you are looking to give employees remote access to

corporate applications on the move, keep customers up to date on the status of an order via their

smartphone, or remove cost and complexity from managing your network, they can help you make

it work.

As we already mentioned, no free delivery and apps as well as return policy are available for

companies. This is clearly, a very different segment of the market with distinctive features and

needs. Respectively, the strategy of O2 for serving this segment is quite different as well as its

positioning – now O2 has to be a partner that shows a clear understanding of where the market is

heading and to provide not merely mobile services but whole business solutions designed to help

companies that buy them more profitable in the long-run by empowering their most important

asset – people.

Vodafone

Introduction of the company

odafone Group plc is a British multinational mobile network operator headquartered in

Newbury, England. Vodafone is the world's largest mobile telecommunication network

company, based on revenue. It currently has operations in 31 countries and partner networks in a

further 40 countries. Based on subscribers, it is the world's second largest mobile phone operator

behind China Mobile (538 million subscribers), with over 434 million subscribers in 31 markets

across 5 continents as of March 2013. As of March 31, 2013, the company employs more than

93,000 people worldwide.

The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision

of voice and data services over mobile phones".

Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. Then known as Racal

Telecom Limited, approximately 20% of the company's capital was offered to the public in

October 1988. It was fully demerged from Racal Electronics Plc and became an independent

company in September 1991, at which time it changed its name to Vodafone Group Plc.

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Essentials of marketing

he world is a global market with few barriers, so Vodafone has to be highly visible as ‘the

brand to buy’. Effective marketing is the key to this high visibility. Marketing involves

anticipating customers’ needs and finding the right product or service to meet those needs, thereby

encouraging high sales levels. Vodafone goes further by looking to impress on its customers not

merely what its products are i.e. features, but also what they can increasingly do i.e, benefits.

Vodafone’s aim is to grow its revenue and improve its profit margin by adding value to its products

and services i.e. earning more from each product sold. The ‘Vodafone live!’ service enables

customers to use picture messaging and to download polyphonic ring tones, color games, images

and information, through an icon-driven menu.

This service will soon be further enhanced by picture messaging libraries, video clips and video

telephony (seeing the person you're calling) and improving download speeds. Another service is

the Vodafone Mobile Connect Card, which enables customers to access their normal business

applications on a laptop when out of the office. Such services add value to the product, and high

profile effective promotion will help sell these services to existing and new customers.

Vodafone’ Social Service Strategy in Australia

n Australia, Vodafone provides mobile services to more than 6 million customers. Vodafone

provides 3G and 4G coverage to Australians, giving consumers and businesses affordable

choices for mobile services. Australia went from a low smart phone adoption country in 2010 to

being one of the world’s leaders in smart phone adoption in 2011. At the same time, Australia also

saw an uptick in social media usage. These increases altered the communication mix, changing

consumer expectations and transparency requirements. Vodafone faced well-publicized criticism

relating to service and network issues and the time taken to respond to its customers. These

customers quickly took to social channels—Facebook, Twitter, blogs, and communities—to voice

their concerns. According to Erik Jacobsen, Online Development and System Strategy Manager at

Vodafone, the company saw a 2,500% growth in social media interactions. Vodafone knew it

needed to adapt quickly to re-engage its customers.

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In addition to rebuilding and expanding its infrastructure, Vodafone set out to change the

experience of its customers and sentiment around its brand in social channels. Vodafone chose

Bluewolf to execute a strategic blueprint to improve retention and demand by engaging customers

and enabling self-service and rapid response in social channels. Vodafone introduced

salesforce.com’s Service Cloud® platform, allowing flexibility in the customisation and

collaboration across service channels. The first phase of the strategy was to socialize the process

internally, empowering reps with the knowledge and tools to better serve customers. A

‘knowledge-centric’ team was developed to create more relevant information that could be easily

tagged, shared and posted through social. Bluewolf also helped Vodafone initiate a proactive Live

Agent Chat feature, which opened a screen to offer a live chat to the user after 15 seconds of

inactivity. This eliminated the need for users to search for a button to speak with a representative—

they are now prompted to do so. The entire solution was designed and delivered in less than four

months, including a publicfacing knowledge base, an integration into Lithium, and a migration

and onboarding for 130 case agents into Service Cloud.

Vodafone wanted deeper and more meaningful metrics that would give them insight into critical

online conversations. To capture this intelligence, Vodafone integrated the Radian6™ Console,

which allowed it to monitor brand sentiment, industry conversations, and competitive activity.

Most recently, Bluewolf has worked with Vodafone to implement the Social Hub, which pushes

Twitter, Facebook, and blog posts through the Service Cloud as real-time cases. Service reps are

now able to respond directly through the customer’s social channel of choice, reducing the time-

to-respond in order to serve more customers, faster.

Digital Media

odafone’s objective was to design and take advantage of new technologies and trends to

develop a new approach to accurately measure media effectiveness. Vodafone’s goal was

to position itself as something different in the market and transform it from a product-oriented

company to a consumer oriented one, while stressing its vast market experience in a quest to attract

new customers. They also wanted to maintain a dialogue with existing and past clients and to start

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a conversation with potential new ones. They wanted to increase social signals and make them

stronger.

Vodafone needs to make sure the right people are seen using their products. This is becoming more

important with the growing socialization of actions (through tools such as Zeebox, GetGlue or

Facebook Connect). Similarly, a separate study has shown that brands with higher levels of “buzz”

enjoy stronger growth. As Les Binet states: “It seems we’re willing to pay much more for brands

everyone’s talking about.” Generating social signals needs to be a key objective for Vodafone.

Establish a new non-linear mechanism in order to track the efficiency of each campaign, adjust it

promptly to customers’ needs and expectations, and most importantly, to convert viewers and

visitors into customers.

Vodafone’s strategy is based on how to provide the best possible campaign for each audience. The

company works in the direction to understand how the market is segmented, the expectations of

each different group, how Vodafone is positioned in each group, and how we can target each

market segmentation in the best possible way.

Tactics, Actions and Control

In order to maximize the efficiency of digital media campaigns and at the same time drive

Vodafone to establish itself as a customer oriented brand, the telecom has to be able to run

customizable campaigns, track them in every possible detail, define and measure the desired goals,

and most importantly, rapidly adjust them to our results.

With lean practices applied, advertising campaigns will be executed faster, effectively tested, and

continuously reiterated to efficiently optimize their advertising/market fit. Campaigns will start off

as tests to see which media and messaging resonate with its customer archetype.

Vodafone created a world/ ecosystem where their ads and media placement are so effectively

targeted that only the potential customer would see it. Vodafone’s messages would reflect real

values and bring out the best of people who align themselves with a particular product or service.

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Vodafone’ global brand programme, ‘Firsts’

odafone Firsts is Vodafone’s global brand programme, activated across the world from

2014. A social media-led programme, Vodafone Firsts is about inspiring people to do

something remarkable for the first time using mobile technology. Vodafone began by recruiting a

series of inspirational people to help them achieve their Firsts. Vodafone will also ask consumers

what they would like to do for the first time, helping to make their ambitions a reality.

The journey of each Vodafone First can be viewed at www.firsts.com. More stories coming soon

include the world’s first: crowd-sourced theatre production, colour-conducted choir and singing

forest. Later in 2014, Vodafone asked people to tell us what they want to do for the first time and

details will be shared on Firsts.com.

Barbara Haase, Vodafone Group Brand Director, said, “Vodafone Firsts is about personal

innovation and inspiring people to think in a new way. Mobile technology has changed so much

about our lives in a relatively short time frame, from being able to plan a journey in seconds to

helping people achieve their ambitions.”

Vodafone and TagMan's technology

odafone UK has partnered with tag management system TagMan as part of its plan to extend

its digital marketing strategy.

The phone company will use TagMan to see how its online marketing activities combine to deliver

sales. Vodafone UK has implemented real-time attribution and tag management technology in

what the mobile operator is calling its strategy for “unstoppable digital”. It says this will transform

the company's understanding of the digital marketing campaigns it runs, radically altering its

approach to that investment as it expands activity in this area.

With the that platform, marketers can now track their customers’ entire marketing experience on

any device across all channels and easily activate and share data for campaign optimization,

personalization, and site experience. With this new functionality, companies can truly analyze the

success of campaigns beyond the last clicked ad, before a sale, to ensure they’re making the biggest

and most optimized marketing decisions to drive revenues.

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TagMan will enable adding new tags to its web pages in minutes rather than months. Vodafone

affiliate and performance marketing manager James Talbot added that the collaboration will help

to generate further savings through the optimization of the company's digital model. TagMan’s

announced a partnership with call tracking specialist AdInsight back in December that combines

online with offline analytics. The companies, said that this would connect the dots between

customers’ entire online journey and any phone calls to a business by housing AdInsight’s tracking

inside the TagMan tag management system. At the time, the companies were investigating their

client bases to develop a joint trial programme of the integration, which Vodafone is to be a perfect

candidate for. With successful implementation of TagMan’s offering under its belt, it seems only

a matter of time before the mobile operator implements even more sophisticated digital strategies

for further growth in that sphere.

Vodafone’s marketing mix

longer term marketing strategy is underpinned by careful planning and a successful

marketing mix. The marketing mix is a combination of many features that can be

represented by the four Ps.

product - features and benefits of a good or service

place - where the good or service can be bought

price - the cost of a good or service

promotion - how customers are made aware of a good or service.

Product:

A product with many different features provides customers with opportunities to chat, play

games, send and receive pictures, change ring tones, receive information about travel and

sporting events, obtain billing information - and soon view video clips and send video messages.

Vodafone live! provides on-the-move information services.

Place:

Vodafone UK operates over 300 of its own stores.

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It also sells through independent retailers e.g. Carphone Warehouse.

Customers are able to see and handle products they are considering buying.

People are on hand to ensure customers’ needs are matched with the right product and to

explain the different options available.

Price:

Vodafone wants to make its services accessible to as many people as possible: from the young,

through apprentices and high powered business executives, to the more mature users.

It offers various pricing structures to suit different customer groups.

Monthly price plans are available as well as prepay options. Phone users can top up their phone

on line.

Vodafone UK gives NECTAR reward points for every £1 spent on calls, text messages, picture

messages and ring tones.

Promotion:

Vodafone works with icons such as David Beckham to communicate its brand values.

Advertising on TV, on billboards, in magazines and in other media outlets reaches large

audiences and spreads the brand image and the message very effectively. This is known as

above the line promotion.

Stores have special offers, promotions and point of sale posters to attract those inside the stores

to buy.

Vodafone’s stores, its products and its staff all project the brand image.

Vodafone actively develops good public relations by sending press releases to national

newspapers and magazines to explain new products and ideas.

Marketing campaigns of Vodafone India

n the following part, marketing campaigns of Vodafone India are presented to analyze their

marketing strategies and target customers. It was observed that with innovative and customer

centric campaigns either on Television or otherwise, Vodafone tried to cover every segment of

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Indian society. Campaigns gained popularity and helped the company to gain market share. Then

positioning of Vodafone vis-a-vis its competitors is presented with the help of a perceptual map.

A brief about the recent marketing campaigns of Vodafone’s nearest competitors i.e. Airtel and

Idea is also presented. Then a comparative analysis is done, which is depicted in tabular format.

Marketing campaigns

May 25 2009 - ZooZoo spots were created by O&M to communicate Vodafone’s value added

services, which were titled “Most Valuable Puppets” at that time. Everywhere; wherever we used

to go, people came up with their own ZooZoo story. This is an example of their success.

August 12 2009 - Vodafone rolled out a new campaign for its latest value added service - 'Record

a Busy Message'. The campaign was created by O&M. Vodafone was targeting customers who

wanted to use this service instead of receiving a call immediately.

August 14 2009 - Vodafone's ZooZoos made a comeback for the first time after the IPL, this time

to promote the telecom service provider's “Independence Day” special caller tunes. However, they

were not seen on television, but on the Internet in the form of a viral.

Vodafone believed that, this was a completely one-off viral for Vodafone's new VAS. They

decided to go with the ZooZoos this time, since they were in great demand.

September 27, 2011 - As the title sponsor and total communications partner for Vodafone

McLaren Mercedes team, Vodafone announced something for small and medium enterprises.

Vodafone gave one SME a chance to put its logo on the Vodafone McLaren Mercedes race cars,

during the motor racing event which was held in Delhi October’11.

November 3, 2011 - Vodafone India launched a new campaign to indulge their consumers in a

volley of voice based services. The campaign created by Ogilvy worked on the thought that phone

is not just meant for talking.

January 30, 2012 - Vodafone India launched “The Adventures of Super Zoozoo” – an online

comic series which featured Super Zoozoo, which was made available exclusively on Vodafone

Zoozoo’s Facebook page (facebook.com/Zoozoo). The comics were conceptualized and created

by Vodafone India’s digital agency – Ogilvy One Worldwide.

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April 9, 2012 - Vodafone launched a fresh campaign for IPL5 which took cue from the concept

of “telematch” (popular in the 70s) to communicate how mobile internet navigation is a fun

experience on Vodafone. Ogilvy & Mather, Mumbai, was the creative hand behind the campaign.

It was believed that the concept of telematch belonged to a simple era of the 70s and yet it

incorporated interesting activities which synced well with their communication strategy.

October 30, 2012 - Vodafone created a new campaign to lure the SEC B and C segment of

customers towards an IVR (Interactive Voice Response) service called 121. The service allowed

customers to avail the offers for products like STD, SMS, VAS and data. In the TVC, a voice-over

says that Vodafone provides 'Made for You' offers to its customers that could be availed for, by

dialing 121.

Positioning of Vodafone

Mission Statement of Vodafone – “We will be the communications leader in an increasingly

connected world”

Vodafone wants to help people enjoy richer, anywhere, anytime, always reliable, always easy,

always great value mobile services. Before Vodafone took over Hutch, the positioning strategy

followed by Hutch was already a success in Indian Telecom Market. Differentiating its services

from the competitors and presenting it in a form of an advertisement helped Hutch in positioning

its brand in a world class manner. Showing its class in the telecom industry was important and that

reflected when the company signed the two class acts in their fields, Rahul Dravid and Irfan Khan

as its brand ambassadors.

A position for the company was establishing as a company focusing on providing good services to

the subscribers by giving them network anywhere.

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Digital marketing campaigns of competitors

AIRTEL

Har Ek Friend Zaroori Hota Hai' TVC – With this campaign Airtel tried to target young

customers.Nearly 200 million Indians are between 15-25 years of age, and it is this segment

of the population indeed, that is leading today’s India and will pave way for its future.

Bharti Airtel took forward its eminently popular ‘Har friend zaroori hai, yaar’ campaign

on to the digital space, with Youtube. Created by Taproot, the twenty videos on the Airtel

channel were inspired by interesting ‘friend types’ or tags created by the online audience

on Facebook during an outreach program initiated by Airtel earlier.

Airtel to “Touch Tomorrow” with a new brand vision

The Bharti Mobile promoted Air-Tel cellular service for repositioning of its brand image.

The new brand ethos portrayed in two distinct fashions - the tag line "Touch Tomorrow", which

underscored the leading theme for the new brand vision, followed by "The Good Life", which

underscored a more caring, more customer centric organization. Aimed at re-engineering its image

as just simply a cellular service provider to an all-out information communications services

provider, Touch Tomorrow was meant to embrace the new generation of mobile communication

services and the changing scope of customer needs and aspirations that come along with it. The

new communication is about a new dimension in the cellular category that goes beyond the

Internet, SMS, roaming, IVRS, etc. but which engulfs wireless digital broadband services that will

constitute tomorrows cellular services.

IDEA

In October 2012, Idea launched an advertising campaign for the festive season that looks

to promote secularism. The film created by Lowe Lintas and Partners depicted a Muslim

man standing outside a shop and looking at the price of a certain watch. He reads the price

and is disappointed. Seeing this, the shop keeper shows him a card about the special festive

offer for Diwali. Pleasantly surprised, the man rushes in, purchases the watch and sends a

picture of it to his loved one with a 'Happy Diwali' message.

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The idea is gaining popularity among the minds of customers in India. Recent campaigns focused

on social issues like secularism, happiness and equality.

Mtel

-tel also known as "Mobiltel", is the first and largest GSM mobile phone operator in

Bulgaria. It has more than 5.5 million customers. Company was founded in March 1994

but was not launched commercially until September 1995 (as Citron).In 2001 M-Тel launched its

pre-payment SIM cards which allow customers to purchase credits prior to calling friends, this was

a great success and saw the amount of customers using their network increase dramatically. The

company had a market share of about 58% and 3,000,000 clients in September 2004. On 14

September 2006 M-Тel reached 4,000,000 clients. As of May 2006 the company has 4,400,000

subscribers and its market share fell to 51,1%. Its contract customers increased to 1,7 mln, while

the profit per customer dropped to 9, 9 euro for Q1 2007.

The operator has been owned by Mobilkom Austria Group since July 2005, when it was acquired

for up to €1.6 billion in one of Central and Eastern Europe's largest deals and one of the largest

foreign investments in Austria. Mobiltel was the first Bulgarian operator to

offer EDGE, UMTS, HSDPA, HSPA+ and LTE (for testing) services to its clients, with video

telephony services being available since 6 March 2006 in the capital Sofia and since mid-July 2006

throughout the Bulgarian Black Sea resorts.

Overview

he highly competitive telecom industry in Bulgaria stimulates companies to actively seek

new ways to gain competitive аdvаntаges in order to maintain or increase their market share

or offset the negative influence of the environment on their profitability. Over the years, Mtel hаs

constantly tried to maintain an edge over its competitors. As the dominant player, Mtel hаs а 45%

market share and that is mainly because it was the first mobile operator in Bulgaria. The sheer size

of their customer base and the derived revenue gives Mtel аn аdvаntаges in developing and pushing

new services while keeping the costs distributed. Unfortunately for Mtel, the recent EU regulations

have greatly increased the customer mobility between carriers and therefore it made the current

M

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market share less sustainable. Also, in the recent years there is а downward trend for Mtel’s market

share due to the aggressive price competition form Vivаcom and Telenor. This further indicates

that Mtel’s market share is not sustainable and requires considerable efforts to be maintained and

based on criteria of suitability, feasibility and acceptability the best strategic option for Mtel is to

enter new markets, such as the cable television and home internet markets. That would enable

them to provide a complete telecommunication package of services to its customers and thus

increase its profits. The 147% market penetration of the mobile services market in Bulgaria

justifies the selected best strategic option because in a highly saturated market as this one it is hard

to gain new customers even with lower priced subscription plans. The strategy which will assist

Mtel in retaining its leader position in the market is implementing the 4G Long- term Evolution

(LTE) network in Bulgaria. The technology hаs been adopted by carriers round the world,

especially in the US, and it is considered the future of mobile data broadband because it provides

а tenfold increase in download and upload speeds compared to the current 3G technology.

Strategies

owadays Mtel is offering both mobile and broadband services. It order to achieve this,

heavily investment in mobile infrastructure and competence took place. On the other side,

through acquisitions Mtel has the necessary broadband networks in order to enrich the portfolio

offerings.

Mobiltel has key technology partnerships with RIM to provide Blackberry services to its business

customers. Also the company has on a Telekom Austria Group, general partnership with

Vodafone, for providing VAS (value added services) through Vodafone’s systems.

During the years prior 2011, Mtel was primary focused on its mobile service offerings.

Slightly it started offering dual play service offerings like mobile data and voice plus the addition

of IPTV to the residential customers. This was done through the partnership of Neterra, a

traditional DTH (Direct-to-Home) and IPTV (IP Television) provider. After the acquisitions of

Megalan and Spectrum Net, which were described in the company overview, Mtel started offering

broadband services to its residential and enterprise customers. The expertise and competence from

these two companies were not only optical networks for transport, but also LAN networks for last-

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mile access to the subscribers. The expertise of Megalan in the residential business was

transformed so that the same people will manage and operate the business of the newly found

company M-Net, focused on residential market segment. On the other side, the sales and technical

experts from Spectrum Net, who had the enterprise background, were transferred in Mtel in the

Sales and Technical departments responsible for the SOHO, SMB, Enterprise and Key customers.

Lastly, the marketing department of Mobiltel is trying to capture the future needs of the local

market and define the services which will generate additional revenue streams. The plan is to

evaluate a new niche or service, which should address at least 100.000 potential residential

subscribers or 10,000 potential business customers. Otherwise the investment in expertise and

resources will not pay off to the company.

From this department, Mtel has launched new service offerings and built expertise for example in

M2M business, involving video surveillance cameras with 3G data link for streaming.

Business Level strategy

company’s long-term business strategy has to be based on a general aim and goal of how

this company will compete in the industry (Pearce & Robinson, 2005).

One way to assess Mtel’s business strategy is using Porter’s generic strategies model. As stated by

Baker (2007), Michael Porter proposes two main strategies for achieving supremacy over the

competition. These two strategies are Lower cost and Differentiation.

Mtel is using differentiation as a business strategy. Mtel is differentiating its products and services

in order to successfully compete within its industry. Using that strategy, Mtel aims at the mass

market and tries to make as many people as possible loyal to the brand. Being loyal to the brand,

the customers will be less price-sensitive and costs could be passed on to the byers more easily.

Evidence for this strategy is that Mtel tries to make the products and services it sells different and

more attractive than what the competition offers. An example for that is the goal of offering

complete telecommunication solutions for its customers. Mtel’s ambition is to differentiate from

other mobile operators by providing home phone, home internet, mobile phone, mobile internet

and TV all in one complete package. This way people loyal to the brand would use it also for the

other services it provides. Differentiation is also seen in the products the company offers. It is no

longer only sim cards and mobile phones but also laptops, tablets, TV’s etc. Another part of this

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strategy is to very well train the personnel in order to be able to competently advise customers on

the expanded range of products and services. Wheelen & Hunger (2012) stress that an indication

for a differentiation strategy involves a product or service that is unique for the industry. In the

case of Mtel that is to be the first telecommunication company in Bulgaria to introduce LTE 4th

generation wireless technology. Having the fastest 3G network in Bulgaria is another evidence for

their differentiation strategy. Last but not least Mtel has acquired big internet providers such as

“Megalan” and “Spektar net” which will give the company the option for additional differentiation

of the services they provide.

Another model that can be applied to examine a company’s strategy is the Bowman Strategy clock.

It is focused more towards the price to customers and allows for more choices and options than

Porter’s highly contrasted cost leadership and differentiation matrix (Johnson, Whittington &

Scholes, 2011). Mtel’s strategy is somewhere around the 12 o’clock position with a differentiation

without much price premium because the market penetration in the Bulgarian mobile market is

147% and each Bulgarian has 1, 5 mobile numbers. For this reason a differentiation strategy with

a large price premium cannot be applied and instead the focus should be on providing innovative

services. A strategy of a new service with a slightly lower cost (as the introduction of a new plan

“Mtel Smart” which will be in line with the growth of the mobile internet usage) can be placed in

the hybrid strategy zone on the Strategy clock. In this way Mtel plans (due to the over penetrated

market) to gain market share by stealing customers from its competitors. That will be possible by

providing a new and innovative service at a slightly lower cost.

The first strategic option is to enter new markets. M-tel started that by buying “Megalan” and

“Specternet” at a very high price – 70 million euro. This is a significant example of strategic option

by expanding due to acquisition of other firms- also an example of suitability by the method of

acquisition. This high selling price is the key reason which shows why the other suppliers of digital

TV and internet increase significantly their price and that was a serious obstacle for the M-Tel

main competitors.

The second strategic option is the future of telecommunication companies - providing 4G wireless

internet standards – LTE and WiMax. The start of the 4G is already a fact and rapid transition from

3G to 4G is expected in the future. This new type of network will provide much faster speed and

possibilities. This new 4G network will afford a serious decrease of the mobile calls price and

integration and a numerous additional multimedia services. Mr. Krasen Hinkov, manager of

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department “Telecommunication decisions and products” in M-Tel underlines some disadvantages

of the penetration of 4G in Bulgaria. Three are obstacles concerning this project. Hinkov defines

this investment as very expensive – the commission of regulation of the communications (KPC)

require 65 million BGN for licenses of small frequency range, moreover the construction will cost

billions. The obstacle continues with the presence of technical difficulties “As a small country we

can’t afford this easily” adds Hinkov. A third strategic option is to offer more affordable mobile

internet subscription plans. According to the data provided by Industry Watch, the mobile internet

is a significant source of income (between 15 % and 20% of the incomes of the mobile operators)

and provide a serious potential for Mtel. The decreasing prices of wireless connection internet and

the wide area availability of the service are strong concurrence of the 3G service. In order to sell

their 3G services the operators try to provide good prices of 3G service.

If a company gets too diversified the level of control can become weaker and that would lead the

performance to go down. The optimum should be a balance somewhere in the middle and the

results should be high performance and growth.

After all the analysis made above and based on criteria of suitability, feasibility and acceptability

the conclusion of a best strategic option for Mtel is to enter new markets, such as the cable

television and home internet markets. That would enable them to provide a complete

telecommunication package of services to its customers and thus increase its profits. The 147%

market penetration of the mobile services market in Bulgaria justifies the selected best strategic

option because in a highly saturated market as this one it is hard to gain new customers even with

lower priced subscription plans. Another reason for this option to be chosen as a “best” one is the

enormously high price of the construction of a LTE 4G network which is not very feasible and

suitable.

Relationship with the corporate parent

tel’s corporate parent is Telekom Austria group. With its 23 million customers it is the

leading communications provider in Central and Eastern Europe. Its strategic objectives

are convergence of fixed line and mobile communications, consolidation and the realization of

value adding growth projects. Telekom Austria strategy for the Bulgarian market is to increase the

average revenues per customer and to slowly promote a merging product portfolio combining

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multiple services in one complete package. Mtel’s goal for offering a complete telecommunication

solutions package to its customers as stated by its current CEO shows that the company follows

its corporate parent strategy. The Telekom Austria purchase of two fixed line operators in Bulgaria

in 2010 through Mtel is the first step of the strategic direction which the group has taken. The

company aims to achieve similar convergence of fixed line and mobile services in other foreign

markets. The relationship with the corporate parent brings further benefits to Mtel by Telekom

Austria’s Partnership agreement with Vodafone. The reason is that in this way Vodafone global

products and services are introduced to the Bulgarian market which helps Mtel increase their

innovation leadership.

Recommendations to Mtel

udging by the outlined digital marketing strategies for both telecoms, we can conclude

that both of them are doing very well in that aspect being leaders in adapting adequately

to the contemporary trends. Mtel is relatively recent established company with a much

smaller market of customers, compared to its foreign counterparts with strong presence

around Europe and the globe. Therefore, Mtel is a follow up company in the Bulgarian

market, and relies on less opportunities for making digital campaigns and thus attract new

customers/improve customer satisfaction and retention. Currently Mtel has a well

segmentation for customers and designed services for the particular segments, however,

the company lacks a more “aggressive” approach, when delivering marketing messages

and digital presence. It is common for many companies, operating in Bulgaria, to ignore

the vast opportunities the digital market has to offer nowadays. These companies are not

utilizing the benefit from creating value through digital media and servicing customers

online like Vodafone does. This is definitely an area for improvement for Mtel as well,

therefore we propose a creation of an online other digital channel like Facebook, Twitter,

website form, forum etc., where the company will provide exceptional customer experience

with limited cost associated with it. To put that into perspective – a video chat platform

can be developed, which can run 24h. a day with an operator of the company, whose

competences are to resolve customer problems or various questions in a prompt and

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diligent manner. Issues might be related with the functions of the cell phone for example

as we assuming it will be useful for many users, living in smaller towns, who are

insufficiently familiar with the capabilities of their smartphone. This can be added as an

option to a technical support team, dealing with issues, which impact the customer in a

more major way.

More recommendation to be made are related with a long term partnership with mobile

social applications like Viber, WhatsApp and other, where customers will be tolerated to

use these applications, therefore incurring mobile data traffic and additional charges for

purchasing of data packages. Currently Mtel does not offer any cell-phone insurance,

which can lead to a dramatic growth in the young segment, where parents will rather pay a

small premium for insurance, than a lot more for spare parts and repairs. Although Mtel

has a recycling phones social program it does nothing to really spread this idea and gain

social approval.

Referring from the aforementioned mobile application strategy – Mtel should create a new

useful and feature-abundant app, which comes pre-installed on every phone sold. With this

application Mtel can create a strong partnership with various local

attractions/restaurants/cinemas, etc. to create a relevant and rich content mobile application

that inform customers of possible places to visit within a radius of 1 kilometer in all

directions around the person using it. It could also use Google maps for more simplified

directions. Mtel can invest funds to create other content applications targeting a particular

customer group – for example launching a “Loop” app, designed for young customers,

where they can easily download an album/song/video/picture for a reasonable price. The

applications should have a suitable relevant content, meeting their needs. Apps for the

business clients are also necessary. Mobile applications is definitely an area, where Mtel

lags behind other worldwide competitors, which are already using this tool to reach big

number of their subscriber and thus delivering various marketing messages,

advertisements, promotions, alerts and more.

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A new online platform for direct complaints and suggestions of users can be created, which

can even test a video message with the opportunity for feedback and periodically answering

customer inquiries / complaints / suggestions upon reaching a certain number of repeated

consumer issues / complaints.

Another good idea would be a special tailored programme with discounts for loyal Mtel

customers and certain corporate clients which can benefit from sending SMS for Parking

in the Green and Blue zone in Sofia. This, however, can only be achieved if an agreement

between Sofia’s government officials and Mtel is reached. Using this programme can be a

part of a campaign to promote cooperation between state and private business.

An excellent proposal to SMEs can be a package of services for business customers with

individual conditions and company discounts provided that the employees agree to use the

services of Mtel and their home (Internet, TV, SIM cards). In additions to that Mtel can go

even further with creating an integrated with every corporate customer network for

effective and reliable connection between their employees from everywhere in the world.

To sum up, we can conclude that Mtel is barely touching the enormous opportunity they

have in the digital marketing field. The company has presence in the digital channels but

not so major to reach high percentage of their target customers. In today’s fast developing

digital world, Mtel should strive to take the best practices from its foreign telecom

operators and even to steal some suitable for the Bulgarian market ideas and campaigns.

Otherwise the company will struggle more and more while competition is catching up with

the trends in the digital marketing, adopting new online strategies, implementing

innovative and creative digital solutions to a various challenges. The goal of transferring

most of the Mtel’s services online should be a target to pursuit in order to keep its leading

position and customer satisfaction. Another impact this goal will have is serving the

majority of the customer’s needs effectively and with a minimum cost, which will

undoubtedly have a positive outcome for profits and company performance metrics.

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effectiveness-0685915

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create-unstoppable-digital/

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firsts/

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own-brand-engagement-strategy-new-years-eve

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“Bulgaria Telecommunications Report Q12013”, Business Monitor International Ltd.

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2013, https://www.cia.gov/library/publications/the-world-factbook/geos/bu.html