Segmentation Strategies

Vodafone is the world's largest mobile telecommunication network company, based on revenue, and has a market value of about £71.2 billion (November 2009). It currently has operations in 31 countries and partner networks in a further 40 countries.

Vodafone owns 45% of Verizon Wireless, the largest wireless telecommunications network in the United States, based on number of subscribers. Vodafone has significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company's subsidiary undertakings, joint ventures, associated undertakings and investments. It operates either as a majority owner of the company or as a minority owner of the company(where the local player is the majority owner) and acts as a partner.The company has segmented the world market on the basis of a country’s potential and the growth prospects in a country. Vodafone started its Australia operations in 1993. In November 1998, Vodafone purchased BellSouth New Zealand, which later became Vodafone New Zealand. From 2002 till today, Vodafone has been involved in transactions with players in European countries to make its presence felt in the most of the Europe.

Below is the geographical segment-wise data which shows the strength of Vodafone and its significant presence in all the segments to make it the world’s number one telecom operator.

Vodafone has been following the process of acquiring certain amount of stake in a country’s local telecom operator and gradually acquire the majority stake so it can have control over the company and the company can be run with the name ‘Vodafone’. If not majority, then a certain level of partnership in the company that Vodafone can make a good amount of revenues and make the presence of its name felt in the market. High revenues from one segment are directed as investment in the weak segments. And loss from one segment is compensated by the high revenues from another segment. The global presence has helped Vodafone survive in difficult market conditions such as India where the ARPU is declining and the money to be paid for gaining the 3G spectrum, in 9 out of 23 circles, is too high.

Segmentation Strategy in India

Hutchison-Essar(1994-2005) Hutchison Essar was the company before Vodafone purchased the complete stake of Hutchison Whampoa in the business. In a country growing as fast as India, a strategic and well managed business plan is critical to success. Initially, the company grew its business in the largest wireless markets in India — in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well known brand and large distribution network -all vital to long-term success in India. Then it

also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User ("ARPU") than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide. The company won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai in 2001. In 2003, it acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan, Uttar Pradesh East and Haryana telecom circles and renamed it under Hutch brand.

Vodafone Essar(2007-) On September 20, 2007 Hutch became Vodafone in one of the biggest brand transition exercises in recent times.

The company has brought its international standards along with carrying forward the legacy of Hutch. To cope up with the challenges of Indian market and targeting the number one spot in the industry Vodafone has been catering to the needs of every section of the country. This can be understood through the different tariffs, Value added services and talkplans offered to different customers. Various plans(Prepaid) offered are: 1. Talktime offers

It includes:
• • •

Full Talktime Recharge(For those who look for value for money) Bonus Cards with talktime benefits(for those who change the talk plans frequently) Chhota recharge(For low end user, mainly rural)

2. Validity Offers

Validity offers are: • Life long prepaid

3. Bonus Cards

They are:
• • • •

SMS pack(For those who love texting) Mobile internet pack(Connect to internet anywhere) Conversations @ 1p/second(For small talks) Call anyone anywhere @ 50p/minute(For people who call a lot to other circles) Talk all night @ 10p/minute to Vodafone(For lovers) SMS @ 10p(For those who text often) Night Minutes(For those who talk freely at night)

• • •

4. Tariff offers

Tariff offers are: • • • Vodafone Campus pack(For Students) Vodafone Gappagoshti(For elder people who like to chat) Vodafone friends circle(For young people who love to be in touch with friends)

Postpaid services are: 1. Talkplans for everyone

2. Bill in your Inbox

3. My Vodafone

Vodafone Business Solutions

Some services are specially designed for high end business customers which help them keep track of their businesses in a much better and easier way. Some Business Services are: 1. Vodafone Mail(For businessmen who travel a lot)

2. Vodafone Mobile Connect 3G(Anytime Easy high-speed internet connectivity)

3. Essential Downloads(Basic Application Softwares for utilising all the services)

Apart from these specific prepaid, postpaid and business services, there are various other Value Added Services like Vodafone Live, Caller Tune, Ring tone download, Wallpaper download, Cricket and Business updates etc. All these services cater to different segments of the market. The services are being updated and the talkplans are revised from time to time to cater to the needs of different segments and avoid churn.

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