Vodafone Case Study
Situation Summary
The Vodafone case study has given us a good overall view of the company and shown the companies good and bad points, whilst showing the mobile phone business as a whole and explaining the ups and downs of the industry.
The SWOT analysis included in the appendix helps us see the situation of Vodafone and describes the strengths, weaknesses, opportunities and threats. This is an aid when looking at the internal and external aspects of the company. Although Vodafone are the biggest mobile network in the world, they also have their problems. As a global organisation Vodafone have learnt how to acquire customers, building up a customer base in the UK of 13 million. But, they have become far too focused on acquiring customers, and they forgot about the need to retain them. In 2003 77% of people in the UK were already signed up to a network. Therefore the retention of existing customers must be focused on, rather than the acquisition of new ones. This has led to a high churn rate of 28%, a level of customer turnover very high for the company and much more than Orange who have the lowest churn rate of all mobile networks. This leads to great losses in revenue, and is a problem that Vodafone have needed to address.
Vodafone realise that one month before a contract ends is the danger zone for losing customers, and it is at this point they must take action to ensure they do not lose the customer. This is where a direct marketing strategy may be effective in order to target customers more efficiently.
If Vodafone know the reason why customers are leaving, they are able to adjust the problem and solve it. Vodafone are able to attract customers with their image of quality and a strong visual identity that makes them instantly recognisable, but because of the level of competition in the market and the number of price offers available to customers from different networks, more needs to be done for the consumer to choose and remain with Vodafone.
The Vodafone case study has given us a good overall view of the company and shown the companies good and bad points, whilst showing the mobile phone business as a whole and explaining the ups and downs of the industry.
The SWOT analysis included in the appendix helps us see the situation of Vodafone and describes the strengths, weaknesses, opportunities and threats. This is an aid when looking at the internal and external aspects of the company. Although Vodafone are the biggest mobile network in the world, they also have their problems. As a global organisation Vodafone have learnt how to acquire customers, building up a customer base in the UK of 13 million. But, they have become far too focused on acquiring customers, and they forgot about the need to retain them. In 2003 77% of people in the UK were already signed up to a network. Therefore the retention of existing customers must be focused on, rather than the acquisition of new ones. This has led to a high churn rate of 28%, a level of customer turnover very high for the company and much more than Orange who have the lowest churn rate of all mobile networks. This leads to great losses in revenue, and is a problem that Vodafone have needed to address.
Vodafone realise that one month before a contract ends is the danger zone for losing customers, and it is at this point they must take action to ensure they do not lose the customer. This is where a direct marketing strategy may be effective in order to target customers more efficiently.
If Vodafone know the reason why customers are leaving, they are able to adjust the problem and solve it. Vodafone are able to attract customers with their image of quality and a strong visual identity that makes them instantly recognisable, but because of the level of competition in the market and the number of price offers available to customers from different networks, more needs to be done for the consumer to choose and remain with Vodafone.