Vodafone Case Study

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  • Topic: Advertising, Vodafone Essar, Vodafone
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Marketing Management
Term Paper:
Vodafone’s Advertising Strategy In India

Submitted To: Written By:
Mr. Vivek Singh Tomaravani kukreja

(Vodafone Essar Ltd.)

India “Zoozoo”ed

The Background:
The Indian telecom scenario had changed ever since the Union government of India changed its strategy on the presence of private sector in the Telecom sector. As a result Vodafone entered India in the year 2005, by acquiring a stake of 10% in Bharti Televentures which later became Bharti Airtel Limited. Vodafone had a greater interest in the Indian market ,which were supported by the Indian government by increasing the limit of Foreign Direct Investment(FDI) from 49 per cent to 74 per cent . Vodafone is the world’s leading international mobile communications company. It presently has operations in 25 countries across 5 continents and 40 partner networks with over 200 million customers worldwide. Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market. The Essar Group is a diversified business corporation with interests spanning the manufacturing and service sectors like Steel, Energy, Power, Communications, Shipping & Logistics and Construction. The Group has an asset base of over Rs. 400 billion and employs over 20,000 people. At that time, Hutchison Telecom International had an equity holding of 67% in Hutchison Essar Ltd. Hutchison Essar wanted to exit India and in the process found Vodafone as a suitable buyer for its 67 per cent stake in Hutchison Essar Ltd.Essar was a minority stakeholder with a 33% per cent equity stake in the company. Hutchison Essar Ltd. Operated under the brand name of “Hutch”. In March 2007, Vodafone entered into an agreement with Hutchison Telecom International Ltd. Under which Vodafone bought a stake of 52% in Hutchison Essar Ltd. While Essar continued to hold 33% in the enterprise. The remaining stake of 15 per cent was held by minority stakeholders. Vodafone also sold back its 5.6 per cent stake to Bharti, but continued to hold a stake of 4.4 % in Bharti Televentures. In July 2007, Hutchison Essar changed its name to Vodafone Essar Ltd. Commenting on the future prospects of Vodafone Essar, Arun Sarin, then Chief Executive Officer of Vodafone said “India is a terrific market , a fast growing one,.. we are excited and here returns would be about 14% every year. Right after its entry, it made clear the intent it had for India- to become a popular brand keeping intact its international character. In September of the same year Vodafone carried out the rebranding of Hutch. To convey its rebranding Vodafone launched its international logo into India. For the rebranding exercise Vodafone launched an advertising campaign in India. The entire brand positioning exercise depends on the manner of promotion. Vodafone was caught in this dilemma of brand positioning in India.

The transition from Hutch to Vodafone is probably the largest brand change ever undertaken in this country and arguably as big as any in the world. It is even larger than Hutch’s own previous brand transitions. The migration from Hutch to Vodafone was one of the fastest and most comprehensive brand transitions in the history of the Vodafone Group, with 400,000 multi brand outlets, over 350 Vodafone stores, over 1,000 mini stores, over 35 mobile stores and over 3,000 touch-points rebranded in two months, with 60% completed within 48 hours of the launch. The Vodafone mission is to be the communications leader in an increasingly connected world – enriching customers’ lives, helping individuals, businesses and communities be more connected by delivering their total communication needs.

The Challenge faced by Vodafone:

Hutch , ever since its foray into India it had established itself as an honest brand committed to quality service at a reasonable pricing. The brand recognition of the brand Hutch was immense amongst the mobile users in India...
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