Social And Environmental Context Influences On Consumer Behavior: Case Study Of Vodafone

Identification of the social and environmental context influences on Vodafone

In the scope of this report, the socio-cultural as well as the other macro environmental factors that influence the global business of Vodafone have been highlighted through a PESTLE analysis of the Vodafone Plc. The nest part of the discussion is focused on how the consumer purchase decision and brand switching process works for the brand. In the last part, the marketing mix of the Vodafone Company have been highlighted through the 4Ps of marketing theory and the Market segmentation theory.

For the analysis of the various external influences exerted on the Vodafone Group Plc. a detailed PESTLE analysis have been conducted by the researcher. For evidence, Ghosh (2016), states that one industry where the company is serving, might be highly profitable and also having a great growth trajectory. However, Vodafone Plc. would not be able to reap any benefit out of it, if the industry is situated in a political environment that is highly unstable.

The company have been operating in the domain of wireless communications in over 15 countries and thus the company exposes itself to a large number of political environment as well as political system risks. Before entering in to business relations in a dynamic political domain or in a VUCA country, Naidu (2017) states that the company should be mindful of certain political consequences, which are as follows:

• Political stability attained in the country in the last 5 years and the importance of the sector of wireless communications in the economy of the country.
• High risks of military invasions if the political situation have been unstable
• The level of corruption in the country and how it is affecting the regulatory framework in the technology sector of the country.
• Bureaucracy in the government and its interference in the industry of wireless communications (Orlando, 2016).
• The legal framework that is available for contract enforcement in the country
• The level of protection that the government provides for intellectual property
• Trade regulations as well as tariffs that are related to technology
• Favoured trading partners of the government and their influence over the country’s telecommunications sector
• Anti-trust laws entrusted by the government in the context of the wireless communications industry
• The implementations regarding pricing regulatory mechanism in the technological sector of the country where the company is operating
• The taxation policy implemented by the government up on the sector (tax rate as well as incentives)
• Wage legislation of the country and its suitability with the minimum wage as well as overtime norms of the company (Boateng, 2016).
• The work-week regulations that are prevalent in the wireless communications sector
• The regulations for industrial safety in the technology sector of the respective countries

The factors of Macro Environment like inflation rate, interest’s rate, rate of savings, foreign exchange rate as well as economic cycle helps in determination of the aggregate demand as well as aggregate investment in a certain economy (Fielding, 2015). On one hand, micro economic factors like competition norms highly influence the competitive advantage of the company. The most essential economic factors that might influence the company are:

• The kind of economic system that is prevalent in the economy of the country and level of stability of the economic conditions
• The level of intervention of the government in the free market as well as related technology
• The exchange rates in the host country compared to the other markets where the company have been operating
• Efficiency of the financial markets and conclusively determine if the company needs to raise the capital in the zonal markets of the economy where they have been operating (Strauss & Frost, 2016)
• The quality of infrastructure in the sector of wireless communications
• Skills level of the local workers in the sector where the company have been operating
• Labour costs in the sector in that country
• Business cycle stage in the sector
• The average annual growth rate of the economy of the country
• The level of discretionary income
• The rate of unemployment
• Inflation as well as the interest rates

The culture of the society and the way in which things are done influence the operational culture of a company while working in a certain environment. Shared beliefs as well as attitudes of the people have crucial role in the determination of the way in which marketers of the Vodafone Plc. Group understands the customers of a given market and the way in which the company have to accomplish the marketing message for the customers in the wireless communications industry (Hapsari, Stoffers & Gunawan, 2017). The social factors that the upper management and other organisational leaders of the Vodafone Plc., should be aware of while starting operations in any new business domain are as follows:

• Precise idea about the market demographics as well as skill level of the basic population engaged in the industry
• The class structure, level of hierarchy as well as power structure of the industry
• Cultural aspects like gender roles, social conventions and so on.
• Spirit of entrepreneurship as well as broader nature of the society
• The health standards as well as the environmental consciousness along with other factors (Marasco, Picucci & Romano, 2016)
• Leisure interests

A company should not only do the technological analysis of an industry but at the same time also analyse the pace at which technology speeds up the disruption of the industry. If the speed is low, the company has more time in adapting to the situations while in case of a fast speed, technological disruption might take place giving the company scanty time to cope-up with the industrial norms and thus emerge profitable. The analysis of the technological aspects by the company incorporates the need for understanding the understated factors:

• Recent technological developments that have been achieved by the rivals of the Vodafone Plc. in the same country.
• The impact of technology on the product offerings by the industry (Schlegelmilch, 2016)
• Impact on the structure of the value chain in the technological sector
• The rate of technological diffusion

The markets of wireless telecommunications have different environmental norms for different parts of the world. They can thereby impact the profitability of Vodafone Plc. in that designated market. Even, it happens that within the same country, various states have different environment laws. For evidence, in the US, the two cities, Texas and Florida have variable clauses of liability in contexts of mishaps or environmental disasters. In a similar way, Daas & Sinha (2015) stats that it is seen that many of the European countries pay healthy tax breaks to the companies that are an active constituent of the renewable sector.

Political factors impacting Vodafone Group Plc.

Prior to entering any new market, the company should carefully consider the environmental standards which are needed for operating in those specified markets. Some essential environmental aspects that the companies should consider are:

• Weather denominations
• Climatic changes
• Laws that regulate environmental pollution
• Air as well as water pollution regulations in the industry of wireless communications
• Recycling
• Waste management in the technological sector
• Attitude of the government towards the “green” or the ecological products
• Endangered species and how they are affected by the radiations of the wireless communication technological setup (Üner, Güven & Cavusgil, 2015).
• Support from the wireless communications industry of the country for renewable energy

Legal framework as well as legal institutions are not enough robust for protecting intellectual property rights of the organisation. The company should carefully evaluate prior entering such markets. Some of the legal restraints of the Vodafone Plc. that the company’s leadership should consider are as follows:

• The anti-trust laws in the industry of wireless communications
• Laws of discrimination
• Intellectual property law
• Consumer protection laws and ecommerce
• Employment laws
• Data protection laws
• Health and Safety standard laws

Recently, Vodafone have been exponentially launching the 3G and the 4G data connectivity in markets of UK, Australia, Middle East and parts of American continent as well. In the important markets where the company have been operating, they have had over 50% of the service share in the wireless telecommunication market (Shrestha, 2017). This is why, the brand switching process effectively worked towards Vodafone when they started their business in Asia also. Since 2012, Vodafone and its partner franchises have been providing highest broadband speed in UK. The average age of the major target customer segment also have a huge influence over the profit ratio of the company. In UK, the average demographic age of the people using mobile phones and mobile internet network have been becoming over 30 years. On the other hand, there have been many new users of mobile wireless network emerging in Asian countries. This emphasised Vodafone to provide active interest towards the Asian market. This is the time when about 32.5 million customers from South East Asia switched to Vodafone (Farrag & Raafat, 2017). The company also generally offered lowest tariff rates in the markets where it operated. The political changes like the privatisation of the service of telecommunication in many countries was an opportunity that was effectively used by Vodafone. Hence most of the users of public network users were enticed to switch to Vodafone at that time. Besides, economic factors also have a role to play. In SE Asia, Vodafone was able to beat many of the major local market players at the time of 3G and 4G license bidding (Steenkamp, 2017). This was possible because, the market liquidity that the company had injected in the new markets was very high. Compared to that the bidding values of the other network providers were not substantiate. As an outcome, in many countries, Vodafone could assert itself as the first network to introduce this revolutionary technology.

In most of the countries where Vodafone have active network, the company have tried to adopt a promotional and branding strategy that mostly enticed the new and young age users. This is because, it has been evident that mobile technology is mostly used by the people of age group between 18 to 40 years of age (Harlow, 2016). This is another reason why in many high value business markets brand switching have taken place at a high rate in favour of Vodafone.

The buying decision of the customers is also influenced by some other economic as well as social aspects. For evidence in the UK market, where Orange, T-Mobile and Tesco have been providing monthly tariff packages, Vodafone tended to keep implying its micro tariff strategy (Whittington, Yakis?Douglas & Ahn, 2016). This is one popular leadership decision that has went against the brand and they lost customers lately in UK market.

4Ps of marketing

Economic factors impacting Vodafone Group Plc.

Product

One of the most important reasons why the services of Vodafone Company is being highly favoured by the customers is that they offer most of the important products in the market of wireless telecommunications, namely pre-Paid, VAS and Post Paid (ZENELAJ, Gambarov & Bilge, 2016). This is the main part of the product strategy of Vodafone. In variousgenres of the communication sector, Vodafone have their offers. The likes of such include phones of the Vodafone brand, a small range of smartphones, voice as well as messaging services, broadband services as well as value added services. Primarily Vodafone offered services that enabled only texting as well as calling. However, when data services started to play a big role in the telecommunications sector, Vodafone started to offer tariff packs of various valuation.

The prices of Vodafone were fixed competitively in order to beat the competitors. Vodafone ensured customer loyalty through provision of high quality services as well as strong range. The pricing strategy of Vodafone is done differently by Vodafone for various set of target customers based on the needs that can be satisfied within an affordable price range (Kull, Mena & Korschun, 2016). Based on the criteria of the service like long range or high bandwidth, the price of the services of Vodafone is decided.

Most of the products of Vodafone are sold through the customer care shops as well as service outposts of Vodafone. However, in some economies, the retail shops also sells the products of Vodafone. In most of the countries, Vodafone generally have a large number of service networks and their distribution network is also strong in the country.

Vodafone Plc. is one of the leading global networks that gives high emphasis on advertising. The chief promotional strategy of Vodafone in almost all the countries where they have active operations, is an aggressive promotion of the products of their company through the means like television promotions, print media ads, online paid and promotional ads, billboards and so on. The brand is promoted by various famous personalities like David Beckham, Michael Schumacher, and Mary Kom and so on. This is how the brand value of the company is also enhanced. However, television commercials as well as social media platforms are the two most popular ways in which the products of Vodafone are promoted. The press releases of Vodafone that are held on a regular basis helps in updating the customers regarding the latest products of Vodafone. Again, by means of this strategy, the company can reach out to the customers more frequently (Hatzithomas, Fotiadis & Coudounaris, 2016). The company also carries out marketing researches in order to determine the ways in which the products as well as the products of Vodafone are being perceived as well as used. Out of the marketing mix, the strategy of promotion through Vodafone zoo zoos makes advertising the strongest promotional point.

The Vodafone Company is developing one solid and loyal customer base owing to the fact the company offers excellent product as well as service. The market segmentation of Vodafone is as follows:

Vodafone’s Segmentation :
Sl. No	Segmentation	Categories	Description
1.	Demographics	Age	Thirteen to sixty five years
		Income	Small, medium as well as high level markets (B2B as well as B2C )
2.	Psychographics		Essentially Youth and the customers of the urban and the semi urban areas
			People who are willing to give higher price for premium services
Targeting Strategies of Vodafone
1.	B2C Market	Recharge Plans	Starting from small to high
			Same  for the data plans
2.	B2B market	Recharge Plans	Plans as well as packages have been launched for the SME and the large scale businesses

Social Factors impacting Vodafone Group Plc.

The company offers both premium as well as basic services in terms of voice, messaging as well as data packages and IT solutions. The prices are set accordingly in context to the small, middle as well as high level markets. The distribution of Vodafone is based on the exclusive retail stores as well as the small retail shops.

Conclusion

Vodafone caters to customers over a global market and that is why various macro environmental factors highly impact the business of Vodafone. The company has however achieved success in an atmosphere of dynamic wireless communications industry. This has also helped to diversify the systematic risks that the company might be facing in multitude of political environments. The Vodafone Group can use the economic factors of the country like growth rate, rate of inflation and the economic indicators of the industry like the industrial growth rate of the wireless communications sector, consumer spending and so on, in order to forecast the trajectory of growth of not only the wireless communications sector, but also that of Vodafone Plc. The corporate security and the anti-trust laws and regulatory frameworks of the individual countries are also very important. One of the most important reasons why the services of Vodafone Company is being highly favoured by the customers is that they offer most of the important products in the market of wireless telecommunications, namely pre-Paid, VAS and Post Paid. This is the main part of the product strategy of Vodafone. Television commercials as well as social media platforms are the two most popular ways in which the products of Vodafone are promoted. The press releases of Vodafone that are held on a regular basis helps in updating the customers regarding the latest products of Vodafone. The market segmentation of Vodafone shows in the end that the company have various service patterns based on the spending capability and the market trends of the areas where they are serving.

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