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Diploma in Business (Marketing)
Unit Number and Title
Unit 2 Marketing Essentials Stp
The following pages perform a comparative analysis of the extended marketing mix of EE limited with that of Vodafone UK.
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The following pages provide a detailed analysis of the EE mobile company. The analysis starts with an overview of the external and internal environment of the company. The external environment of the company is analyzed through the use of PESTEL and Porter’s 5 forces. The internal analysis of the company has been performed using the Porter’s value chain model. In addition to these analyses the following pages also perform a STP overview of the company and it unravels that there is a fault in the positioning strategy of the company. The SWOT analysis s also performed and it reveals specific areas of strengths, weakness, opportunity and threat. In order to address the identified issues, objectives, strategy and tactics are clearly defined with a definition of budget and control measures.
In the year 2010, major players in the telecommunication industry that are T-Mobile and orange collaborated with each other leading to the foundation of EE. EE was the first company to introduce 4G in the market. The company has made huge investment in the 4G infrastructure and is committed to the delivery of 4G to 95% of the landmass in UK by 2020. EE is perceived as the largest mobile phone network operator and as of 2012 had more than 700 stores which were used to provide services to about 27 million customers.
Internal analysis: The organizational structure of EE is very efficient and the staff morale in the company is quiet high. Additionally it is seen that the company offers enough opportunities for the customers to take part in social volunteering activities. The revenue of the company in 2013 was £6.5 billion which was little lower than in 2012 when the company had generated revenue of £ 6.7 B. T5he amount of net cash that was invested in investing activities had increased sizably from 2012 to 2013. This signifies a commitment of the company to invest in stronger network infrastructure and to reach its commitment of delivering 4G services to 95% of the landmass in UK by the year 2020. A more tailed internal analysis of the company is performed in the following section by making use of value chain analysis (Álvarez, Casielles and Martín, 2010).
Value chain analysis: EE is arguably the largest digital communication company in the UK. Being in that position the company has tried to expand its selling approach into one that is based on omni-chanel environment of retail. There are more than 700 retail stores through which EE operates in addition to the operations that take place through its website.
Operations: Operations on the network
Outbound logistics: There is an online store in addition to 700 retail stores which are operated by the company
Marketing and sales: There are separate marketing and sales departments in the company
Customer service: After the customer service of the company was rated poorly by the customers of the company, the company has made a decision to bring the customer service of the company back in UK.
External analysis: The analysis of the external environment of the company can be performed with the use of PESTE analysis that includes the factors like political, economic, social, technological, Environmental and legal. Porter’s 5 forces that are used to analyze the competitive landscape can also be used to perform the task of external analysis. These two analyses are provided below.
The SWOT analysis of the company is presented below
Strong presence in 4G
Omni channel retailing strategy
Pioneer in 4G network
Customer service of the company is weak
The value for money proposition of the brand is low
Less recognition of the brand
High levels of complains by the customers
Opportunity to drive more profit through strengthening of the 4G customer base
Ability to offer new customers and packages and thus advance its products and offerings
The own brand of mobiles and tablets can be sold for higher profits by the company.
Other competitors of the company can dethrone it from leadership position
The popularity of alternate ways of communication is increasing
Aggressive competition from other players in the market
Following the above analysis it is apparent that EE’s greatest weakness which can threaten the leadership role of the company in the market and its position is disparity in its positioning strategy with the perceived value by the customers. Customers see the brand as one that offers low value for money. Thus the main objective of the company is
Objective 1: Improve the customer service of the company to improve the value proposition of the company and retain or improve upon its market leadership position.
Objective 2: Increase the subscriber base for its 4G services
Strategy: In order to achieve the above objectives the company should focus on taking part in PR campaigns to promote the features of their service offering and present it as one that makes it more attractive to the customers. Additionally the customer service of the company needs serious improvement and the company needs to entice more customers using the offering of a faster and more reliable internet connection.
Segmentation, targeting and positioning (STP): Segmentation is defined as the process by which the market is divided into several different segments based on characteristics of special affinity of them (Smith and Zook, 2011). This is done so as to analyze each group’s buying behavior and adjust the way in which company communicates to them. There are several demographic variables that are used for the segmentation of consumer markets and this involves age, socio economic status, level of income etc. However, the segmentation effort that is more suitable for the telecom markets is behavioral segmentation. In this type of segmentation the variables that are used to segment the market are promotion score, stickiness and average value.
After EE has been able to segment the market into a number of different segments, there are some particular segments amongst those identified which needs to be targeted at by the company. In order to target the perfect segment the company needs to remember the Pareto principle and target the top 20% customers who have the highest effect on the profitability of the company. EE should aim the customers of Vodafone who are mainly young people and thus are tech-savvy with their 4G network which is arguably the fastest in UK. In terms of positioning, it is seen that the company is trying to position itself as a premium brand as compared to Vodafone and UK in terms of both pricing and the quality of service that is offered.
Tactics & Action: In order to achieve the objectives stated above the strategy and objectives the company needs to modify the 7p marketing strategy of the company. The new 7P should focus on a service offering by the company that is unparalleled in the history of telecom industry. Since the company is lacking in terms of customer service the elements where in it needs improvement are mainly related to the additional elements of the marketing mix that are related to people, place and process. The people need to be given proper training so that they can handle the customer service requests of the company in a manner that is efficient.
Budget: The company needs to invest a good amount of budget in order to improve the customer service of the company by training the people in this regards and bringing the customer service department back to Europe. The company also needs to invest money for improving its network infrastructure and make it more robust. Money also needs to be invested to increase Pr activities so that the company is able to capture customers from rival companies.
Control: The expenditure in the budget and the execution of the plan or objectives of the company needs a careful control on part of the company. It is required for the company to schedule its investment in a part by part manner and carefully evaluate the success of failure of one part before proceeding to next part.
The above pages analyze the EE mobile company through a thorough analysis of the external and internal environment of the company. The SWOT analysis and STP of the company is also performed to understand the current position of the company. In accordance to the analysis a definite strategy and objective of the company has been defined. There has been also definition of tactics which the company can use to achieve those objectives.
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