This action might not be possible to undo. Are you sure you want to continue?
of Review History of Mobile Telephone Mobile Telecommunications Industry Progression Industry Key Players Key Offering Marketing Marketing Mix Product Price Promotion Place People Process Physical Evidence Competitive Nature of the Industry Industry Future Trend Question for further Research Research Method and Methodology Research Questions Justification of Method Secondary Data 1.0 2.0 2.1 2.2 3.0 3.0.1 3.0.2 3.1.1 3.1.2 3.2.0 3.2.1 3.3.0 3.3.1 126.96.36.199 188.8.131.52 184.108.40.206 220.127.116.11 18.104.22.168 22.214.171.124 126.96.36.199 3.4.0 3.5.0 3.5.1 4.0 4.1.1 4.1.2 4.2.0
Technique for Data Collection Observation Personal Interview Telephone Interview Data Analysis Techniques Cost Limitations Ethical Consideration Resources Requirements
4.3.0 4.3.1 4.3.2 4.3.3 4.4.0 4.4.1 4.4.2 4.5.0 5.0
7% compared to the previous year (Keynote 2006).0 Statement of Research Problem 3 . This proposal shall focuses more on the market forces as a result of interplay of different marketing strategies and core competencies which has made the UK mobile telecommunication industry the battleground for some of the largest industrial groups in the world. 2. This indicates that many network operators have entered the UK mobile telecommunications industry in the past decades hence made the industry the most dynamic telecommunication market in UK (Keynote 2006).6bn at the end of business year in March 2006 with an increase of 7.Contemporary Marketing Mix in UK Mobile Telecommunications Industry. a case of Vodafone UK 1. industrial structure and identify the key players in the market with respect to their recent performance. this report shall identify and discuss key competitive variables in the industry. the industry is said to be maturing at an increasing rate and it is estimated to worth £13.0 Introduction Considering the constant technological change and the impact of increasing market forces in the UK mobile telecommunications industry. Based on the dynamic and competitive nature of the industry.
This dissertation will critically investigate the profitability of the acquisition of Mannesmann of Germany and the huge investment on 3G technology to Vodafone and also shall focus on the strategic business objectives of Vodafone group considering operating in a turbulent and dynamic UK mobile telecommunications market and how the firm’s marketing strategies has cope with the market forces in an industry that is categorised as highly regulated and highly competitive (keynote 2006). some pursue profit maximisation objective while some pursue growth and expansion objectives and some pursue sales maximisation but most importantly all organisation despite their objective bear in mind the profit objective to keep the organisation in business as a going concern. 2.1 Aim: Identify the key driving forces in the industry and match the firms marketing strategies and objectives with the commercial forces of the turbulent and dynamic business environment it operates 4 .Different organisations pursue different marketing objectives. It will also seek to discuss ‘how competition has impacted growth in the industry and why Vodafone is the leading mobile network operator in the UK? Marketing theories and appropriate business tools with empirical evidences will be used to investigate these questions.
2 Research Objectives • • • • • • Analyse the general business environment Identify the key competitive forces and market driver Analyse the firm’s core competencies and key resources Create a SWOT analysis for the firm Critically analyse expansion profitability Analyse the industrial structure and identify key industry players 3.1 Purpose of literature review The purpose of this review is to examine the history and progression of the mobile telecommunication industry in the UK with respect to market forces and also syntheses published information about the driving forces of the market.2.0 Rational/Literature review The importance of marketing in our day to day activity can not be over emphasised. communicate the benefit of the product to the customers and make them available at every point in time (Brassington & Pettitt 1997) 3. develop a product to satisfy the needs. this review will examine the marketing mix of Vodafone UK. 5 .0. most organisations that operates in the global market are successful because they are able to identify customers need. Also.
Agar (2003) claimed that the success of this car radio telephony and AT & T highway service between New York and Boston in 1947 was the beginning of mobile telephony success story. The first fully automated MTA (Mobile Telephone System A) was commercially lunched by Ericsson in Sweden in 1956 but have a disadvantage of weight as it weighs 40kg.2 Sequence of review This review will begin with the history of mobile telecommunication in the UK then discuss the progression to the 21st century and the market forces. But it was just in 1995 the mobile 6 .0.1 History of Mobile Telephone Mobile phones were originally used in the 1940s after the II world war in vehicles such as taxi cab radios. Finally. although in Europe. two way radios in police cruisers.1. also discuss the business environment and the nature of the competition in the industry. radio telephony has been in use since 1926 in Germany between Berlin and Hamburg on first class passenger train (Wikimedia 2007). 3.3. Next is identify major player of the industry and the key offering of the market. anticipate the worth of the industry in another five year and what the market forces will be then.
it was used massively across the world. iDEN.1.telecommunication became low cost. the sequence of this generation indicates increasing capacity (higher transmission speed) and richer message (Dunnewijk T. But the third generation technology 3G has proven to be more sophisticated and has challenged the 2G technology. the market was then categorised as duopoly market structure until two other network operators were also licensed in the early 1993 (Cave & Williamson 2006). Despite the 7 . IS-136 and IS-95 technology. and the mode of communications world wide (Tom Farley 2005). & Hulten S. (Wikimedia 2007). Next on the scene is the second generation 2G which includes the GSM. rich in features. this are handheld mobile phone known as Motorola DynaTAC8000X which was a phone based on cellular network with multiple based stations located relatively close to each other. 2006) 3.. ARP network was lunched in Finland and was considered a zeroth generation (0G) which provides slightly wider network coverage compared to the early and proprietary network. Following this was the first generation (1G).2 Mobile telecommunication industry progression The mobile network operation began in 1985 in the UK with Vodafone and Cellnet (now Telefonica 02). In 1971.
yearbook statistic. telecommunications service 19932002 8 . Vodafone and Cellnet still maintain 40% each of the total market share and were considered to have strong market power (Valletti & Cave 1996) which also was one of the reasons for the intervention of Ofcom. Table 1 show the percentage increase in the use of mobile telephone across Europe.entrance of these two network operators. The government developed a policy to regulate the pricing system by creating a competitive marketing environment which allows the interplay of different marketing strategies from the existing operators and the new entrants. The UK market is not an exception of European mobile telecommunication as the mobile phones became increasingly used for business and personal activities worldwide (Tom Farley 2005). Table 1 Fixed and Mobile phones connections in percentage of population 1993-2002 European Union -25 Main telephone lines Public payphones Cellular mobile subscribers 1993 40 2 2 2002 51 2 76 Sources: ITU.
Orange.g. Virgin Mobile. but there are others known as the mobile virtue network operators (MVNOs) that buy bulk airtime from network providers and resell them to subscriber’s e. The five network providers are Vodafone. in an attempt to figure out whether the industry progression is standard created market or market created standard. the contemporary market forces and strategies adopted by different network operators will be critically examine as the industry over the past decade has been reshaped by commercial forces and technological change (keynote 2006). So this dissertation work shall also anticipate five years future market trend and weather or not commercial activities and rapidly changing technology will still be the industry driving forces 3. 02.The industry is well regulated but however.2. For the purpose of this study. There are eight mobile companies in the UK but Vodafone will be the case study for this dissertation. 9 . T-mobile and Hutchinson 3G according to their market share (Keynote 2006).0 Industry Key Players Though there are five network providers in the UK. economist have argued that free market system of high competition is the best guarantee for technological progress and market growth while some government advocates argument negates this argument (Harald Gruber 2005).
the attention of network operator’s have shifted from speech (voice calls) provided by the 0G.1 Key Offering Over time.5G radio technology which permits two radios to share frequency channel and allows transmission of data.2. 02. watch TV (Sky Online TV). video. there have been new entrants like Mobile World of Carphone Warehouse 3. The 3G phone system such as UMTS and CDMA2000 1xEV-DO enables live streaming of radio and television (Wikimedia 2007). GPRS. CDMA (code division multiple access) are a 2. Since then. check weather forecast and download data from the internet with the 3G technology 10 . internet access. Orange and T-mobile have 87% of the market share (Mintel 2005). 1G and 2G technology to added services like data transmission. VIOP.Vodafone Group. The mobile telecommunications market in the UK can be characterised as oligopoly because four companies namely Vodafone. Subscribers can now listen to radio. a UK own company became the largest mobile telecommunication company and the 4th largest company in the world after acquiring Mannesmann of Germany for $183bn which gave the company a competitive edge and prospect in the global market (BBC 2000).
promoting and distribution of ideas. Authors like Brassington & Pettitt (1997) are of the opinion that the AMA definition is ambiguous and does not make reference to the customers. This definition has seen marketing as a social and management process 11 . anticipate and supplies customer’s requirement efficiently and profitably. distribute and promote their service in an effective manner such that customers can get whatever service they want and when they want it. goods and services to create exchange and satisfy individual and organisations objectives (AMA.3. 1985). Another useful definition is that of AMA (American Marketing Association) which defines marketing as the process of planning and executing the conception. Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others (Kotler & Armstrong 1999). pricing. Various attempts have been made to find a perfect definition for the contemporary marketing activities which is claimed to be more than ordinary selling and advertising by many authors.0 Marketing Network operators after making services available need to price. The most widely accepted definition is that of the CIM (Chartered Institute of Marketing) UK which defines marketing a managerial process which identifies.3. This is known as marketing activity (Kotler & Armstrong 1999).
as the market expands more and more organisations strive for larger market share with respect to their profit maximisation objectives 3.which indicate that marketing activity is not all about providing services but providing services with customers concern. Different organisations pursue different marketing objectives. CIM (2004) defined marketing mix as the combination of tactics used by business to achieve its objective by marketing it products or services effectively to a particular 12 . some have the objectives of increasing market share in a particular region while some objective is to develop a new product either for a niche customer group or a potential market. It is with this objective that organisations develop a marketing strategy which could be either to increase product availability. promotion and place). The UK mobile telecommunications industry is said to be face with stiff competitive (BBC 2007). otherwise known as the 4Ps’ (product. cut prices or spend more money on promotion and advertising (Kotler & Armstrong 1999). price.3.1 Marketing Mix Marketing mix was first defined by Borden (1964) as the combination of four major tools of marketing. The implication of this is that there is aggressive interplay of different marketing strategies in the industry.
radio DJ. its Product/Service). now the 3G technology provides added service such as e-mail. video or live television from mobile phone.1.1.2. Constant changing technology is responsible for development and improvement in mobile telecommunications services. video call to mention a few (Tom Farley 2005). This improvement can be pointed out from the use of analog system in the 1980s to the GSM in the 1990s. While what charge for it is the price and how it communicate the service benefit to subscribers is through advertisement. live TV.2 Price Kotler & Armstrong (1999) describes price from customer’s perspective as the amount of money they are able to pay to obtain a product. Booms & Bitner (1981) added people.3.e. MMS. 3. A network operator objective in the UK might be to have the largest market share in the pay as you go segment of the market or to provide wider network coverage (i. data transmission.target customer group. 13 .1 that the product organisations in the mobile telecommunications industry offers to customers is effective means communication which can be voice. 3.1 Product It can be inferred from section 3. process and physical evidence to the 4Ps to make it 7Ps.3.
1. while the number of MVNOs and service providers can not be determined because some are not actively in business (Mintel 2005) 3. public relations and direct marketing.3 Promotion This basically means the activity that communicates the merit of the product and persuades target customers to but it (Kotler & Armstrong 1999 pg 49) the promotional mix includes advertising.3. It is therefore necessary for the government to regulate the price of calls and other service so that the interest of customers can be protection. a firm’s pricing decision is largely dependent on interaction with other network operator and also constrained by regulatory decisions (Harald Gruber 2005 Pg.From an organisations perspective. personal selling. sales promotion. Cave & Williamson (1996) opined that competitive nature of the industry has forced down the prices of calls and other services since Tmobile and Orange has entered the market in 1992. TV 14 . and now there are five network operators. 171). In the UK mobile telecommunications industry. price is a flexible element of marketing mix which can be manipulated to encourage patronage or indicate high quality and desirability for a product (Brassington & Pettitt 1997 pg 25). since the industry is characterised as oligopoly because 87% of the market share is being controlled by four firms.
This has since been abolished and services are now being provided to customers directly or trough retailers (e. This is a very important contribution because it emphasis why and how promotional activities are embarked on and its contribution to sales and turnover. they will 15 . If high skilled staffs are employed.4 Place Place is referred to as the mode of getting product/services to customers. attitude change and behaviour towards their products (Bamigboye 2001). are common in main the mobile for telecommunications Organisations objectives promotions are to expose. create attention.3. The UK mobile telecommunications market has different mix of distribution. supply mobile phones and issue bills (Keynote 2006).1. Vodafone and 02 market their service trough separate service providers which manage dealers. 3.g.5 People The people employed in an organisation to carry out certain production/service task are determinant of the quality of service the customers receive. customer comprehension.and internet advertising industry.1.3. carphone warehouse and phones4u) and MVNOs (mobile virtue network operators) 3.
6 Process These are processes services are delivered to customers which have impact on how an organisation is perceived by customers. it can be concluded that a good process can lead to repeated purchase. customer service and quick response to complains. lock in and increased transaction. 3. Brassington & Pettitt (1997) pointed out that the relationship between customers and people that provide service for them matters for business success as it improves customer relation. keeping customers informed (CIM 2004). 3.products good product and services to the customers vies visa (CIM 2004). From this two definitions. staffs appearance and 16 . this mix is said to be applicable more to the service industry like the telecommunications industry as compared to consumer products market.3.7 Physical Evidence This is known as the image of the organisation through its physical presence. This can include premises. Though.1.1. logo.3. Brassington & Pettitt (1997) also view process as mechanism or ways of business activities which creates customer confident. This can include the after sales support. These processes are sometimes noticeable in an organisation’s culture.
Also. This can be seen as tangible evidences that makes customer know they are dealing with a business entity.0 Competitive Nature of the Industry According to BBC (2001) The UK mobile telecommunications industry is faced with stiff competition as more and more network operator are providing additional service. service providers or applications solutions provider.5. Most network operators in the UK are either merging or acquiring other operators.4.0 Industry Future Trend It can be inferred from the forgoing that the industry is driving by technology considering the era of 0th generation mobile phone to 1G 17 . the broadband and the 3G technology has generated a lot of competition in the past years. head quarters. the UK office of fair trading in its goal ‘to make market work well for customers’ has always encouraged competition in the mobile telecommunications industry and other industries in order to bring down price and expand the market (Economic review 2005) 3.official cars (CIM 2004). staffs etc. 3. mast and radios. posses’ physical evidences such as retail shops. Also the industry competition is said to steer by commercial forces (Keynote 2006). A network operator like Vodafone. Vodafone acquired Mannesmann. Telefonica O2 acquired Cellnet.
the 4G standards and specification was defined to be Millie-wave LAN with 200Mbps (Dunnewijk T. This will enable a proper in-depth studying of Vodafone as a case study.1. & Hulten S. 2006) 3.0 Research Method and Methodology A qualitative methodology will be used for this research work. Shortly after the development of the 3G technology.5G and the 3G have allowed people to communicate like never before. 4. the dissertation will anticipate ‘‘whether or not the current marketing mixes in the industry will be applicable in the next decade considering the changing technology and commercial activities’’ 4.1 Question for Further Research After examining the contemporary marketing mix in the mobile telecommunications industry..5. identify the marketing objectives of the firm.analog and 2G GSM.1 Research Questions How competition has impacted growth in the industry and why Vodafone is the leading mobile network operator in the UK? 18 . use appropriate tools to investigate why it is the leading firm in the mobile telecommunications industry in the UK and forecast the industry forces in the next decade. now the 2.
documentation review and case studies The reason for using these particular methods is explained below: • To identify all the stakeholders in the industry and explain the objectives and interaction of all the stakeholders in the industry. observation.g.2 Justification of method To achieve the objectives outlined in 2.1. • Consider the relationship of UK mobile telecommunication with other European countries and the rest of the world 19 . • To identify the rationale for regulation by the office of communication (Ofcom) and explain the aims and nature of constantly changing regulation • To give a detailed history and progression of the industry and evaluate the impact of regulations on price and competition • Ascertain current issues that are impacting the mobile telecommunications industry in the UK and consider possible solutions • Identify success of specific initiative by stakeholders e.4.2 several method of data collection will be employed ranging from telephone interview. industry player and Ofcom.
electronic journals. Data/information will be gathered from The Robert Gordon University. primary and secondary data will also be gathered in order to match different author’s opinion 20 .2. All this secondary sources of data will be used to write the literature review.0 Technique for Data collection A multi source form of data collection will be adopted for this research work in order to provide wide range of data from different institution and identify differing opinions. 4. Also. newspapers. This implies that various theories.0 Secondary Data Secondary research method will also be used for this study in other to obtain necessary background information which will help to monitor the trend and progression of the mobile telecommunications industry and also build credibility for the research work. techniques and appropriate literatures will be reviewed and critically evaluated. Though interview will be conducted with managers of Vodafone but observation and documentary review will also be used as data collection technique. internet search engines and directories and commercial bibliography. other Universities within and outside UK if necessary. magazines.4.3.
Another good example is when stock broker and speculators observe the performance of a particular firm before making capital investment decision. The executive interview will be adopted for the purpose of this research work. This method of interview requires the interviewer to go to the residents of each selected industrial executives and obtain response for the items in the questionnaires by direct 21 . door-to-door interview. observe their behaviour and responses in order to make conclusions about the staff welfare in such organisation. 2006). self administered questionnaires and purchase intercept technique.3. The techniques for data collection for this research work include: 4. A good example is an investigator that wants to collect data about staff welfare in an organisation.3.about contemporary marketing mix and the marketing mix that is applicable to the mobile telecommunications industry in the UK. executive interview. mail intercept survey.2 Personal Interview: There are five different types of personal interview namely. Such investigator will speak with employees from different levels of the organisation. 4.1 Observation: The observation method allows the investigator to collect data through personal observation (Panneerselvam R.
2006). 2006).interviewing with the executive in respect of business issues such as customer preference and goods (Panneerselvam R. This is considered to be a cost effective and dominant method because: • • • Total elimination of travel time of the interviewer Cost of travelling is also eliminated Greater possibility of reaching the customers all over the geography • • Interview time is shorter when compared with other methods Possibility of random selection of respondents While the disadvantages of the telephone interview are: • • • • Exclusion of potential respondent that do not have telephone No visual contact Body languages can not be noticed Interview may discontinue due to connection problem 22 .3 Telephone Interview: This is similar to the executive interview as same responses are required of the interviewee but only that this is done over the phone and no one-on-one contact with the interviewee (Panneerselvam R. 4.3.
1 Cost: Since this research work is being conducted by questionnaires. Responses from all the questions in the questionnaire will be analysed and interpreted and will be attached to the appendices of the research work so that the reader can have in depth understanding of the question and solution suggested to them.188.8.131.52 Limitations: It is anticipated that there will be impossible to speak with major executives of Vodafone Group Plc and some other key competitors in the industry but an alternative interview will be conducted for branch managers and store managers if possible.0 Data Analysis Technique The data analysis techniques that are adopted for this research work are tabulation of frequency of event. 23 . the secondary data cost little or nothing to gather 4. cross case search for data gathered and creating a flow chart if required. Also. 4. executive interview and telephone interview.4. it is not associated with huge cost.
information will be gathered from The Robert Gordon University library and New York University in order to compare how competitive both markets are and point out what the driving forces are in both markets. the European telecommunications commission. 24 . and other government statistics about the industry and the general economic performance.4. However.0 Resources Requirements This research work requires large amount of information from office of communications.0 Ethical Considerations This research work poses some ethical problems as some sensitive information might not be disclosed by interviewee as some sensitive information can cause chaos depending on how competitors and other stakeholders perceive it. Edinburgh and New York will be budgeted as information from these sources is crucial to the success of this dissertation. anonymity will be offered to interviewees 5. Travel to London.5. Also.
Pettit S.. & Williamson P. 12 Oxford University press Dunnewijk T. Prentice Hall 25 . United Nations University Economic Review 2005.uk/kn2k1/CnIsapi. Cave M.stm [Accessed 18 April 2006] Brassington F. Leicester Harald Gruber 2005. Raithby..BBC News (2006) Vodafone joins broadband brigade [online] London Available from: http://news. & Armstrong. & Hulten S. and Regulation in UK Telecommunications Oxford review of economic policy vol. Lawrence & Company Ltd.bbc. New Jersey 07458. G.. 2006.co. Great Britain Pitman Publishing. is competition always desirable? Volume 23 University of Southampton. A Brief History of Mobile telecommunications in Europe. 1996 Entry.dll? nuni=60093&usr=11802srv=02&alias=kn2k1&uni=1168295355&fld=K &noLog=1&NotInWorkset=1&key=742 [Accessed on 1 April 2007] Kotler P. The Economics of Mobile Telecommunications UK Cambridge University Press Key note (2005) Mobile Telecommunications [Online]-UK Available from: http://www.keynote. (1999) Principles of Marketing 8th ed. Competition. 1997 Principle of Marketing.co.uk/1/hi/business/6135428.
Eastern Economy Edition. Seville. 2006. Mobile Telephone History. 2007 Mobile Telephone History.Mintel Group (2005) Mobile Phones and Network Providers [Online] – UK. T. California Private line Publishing Valleti. Wikipedia Foundation inc.com/sinatra/academic/my_reports/display/id=114641&anc hor=atom#atom0 [Accessed on 23 April 2007] Panneerselvam R. Research Methodology. Available from: http://academic. US 26 .mintel. Competition in UK Mobile Telephone ITS Conference paper. (1996). India Prentice Hall Tom Farley 2005. & Cave.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.