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Vivo Company: Analysis and breakdown

EXECUTIVE SUMMARY

Vivo is a mobile telecommunications service provider - cellular phone services, data transmission and Internet - that is in operation since 2003 in the telecommunication industry. The business's main focus is to provide more and better products and services of mobile communication, having invention and advantages to make customers' life easier and gratifying. Currently, the business supports about 30% market talk about and a person bottom of 50 million users in the Brazilian market.

The pursuing Situation Evaluation will describe the current conditions bordering Vivo and its products. It offers detailed home elevators the business's products and services, an examination of the market, an evaluation of Vivo's opponents and marketers, historical results of marketing work, an industry-wide financial evaluation, and macro environment information.

This marketing plan intends to handle a fresh and cutting edge opportunity within a saturated mobile market. Operating in an extremely competitive industry makes companies go after new strategies to be able to distinguish themselves from challengers. It has been difficult to tell apart from the pack only using words and standard data (as short messages). In addition, Vivo has always been concerned about as an innovative company looking to make life much easier to its customers.

For that reason, this task is dependant on a new product development known as mobile-payment. This method basically is composed on financial business deal using cell phones as a means of payment, swapping credit/debit credit cards, money and assessments. It has been identified that there is a great chance of the parallel market and small financial orders that are not attended by financial institutions. In additional, this service aspires to facilitate customers' lives since mobile phone became an indispensible gizmo for majority of people. Vivo will take benefit of these opportunities by developing a new service that could provision that need.

INTORDUCTION

COMPANY PROFILE

Vivo Participacoes S/A (Vivo) is a Brazilian mobile telecommunication company, manipulated by two Western european companies: Portugal Telecom and Telefonica. The joint venture was established in Apr 2003 and since then it is the greatest mobile operator in the Southern Hemisphere and one of the major in the world. It is a leading mobile phone market with a show of 29. 9% and a base of about 50 million subscribers and roughly 10, 500 direct employees. It has national coverage and it is the only real operator in Brazil that offers wireless services in developed two key systems used in the world - GSM and CDMA. Also it is the sole the one that offers services of third generation, 3G and CDMA EVDO.

For the 3rd consecutive year, Vivo's brand has been regarded as the Country's most valuable cellular phone brand in the rank sorted out by the British isles consulting company Brand Finance, recording a value of R$ 5. 8 billion. The company is continuously focused on expanding and enhancing connection among individuals, a committed action that is summarized in the appearance "Vivo - Quality Signal". For this function, it has been investing in the development and improvement of solutions and services, as well as in guidelines geared to client satisfaction. Because of this, Vivo has been offering to its customers a wide and innovative collection of tone of voice and data products and services.

Vivo's definitive goal is to provide more and better services for customers to be able to hook up themselves - whenever they wish, however they wish, from wherever they wish, each time more. Thus, it handles to induce a networked world, which brings along a huge source of opportunities for people to develop progress and live better. Accordingly, Vivo feeds a virtuous pattern which is reflected on the self-sustainable evolution of its business.

In 2009, the business recorded a net income of R$ 16, 4 Billion, a 5% expansion over the previous year. The business shares have been bought and sold at the Sao Paulo STOCK MARKET (BM&F Bovespa) since 2006. These shares are also outlined on the brand new York Stock Exchange.

1. 2 RATIONALE

The cellular phone industry is one of the speediest growing business in Brazil. In 2009 2009, about 23 million new mobile phones started operating and regarding to Anatel (regulation institution), the year concluded with 175 million mobile phones in operation, a growth around 16% in a time. Vivo quotes that until 2012 the amount of mobile phones in Brazil will exceed 200 million. This means, normally, each Brazilian person will have a mobile phone of his/her own. These days, mobile phones have been regarded as part of consumers' lives, essential rather than luxury. People can forget their wallets but not their cell phones.

Due to a higher rate of penetration (almost 94%), cellular phone operators have been struggling to find new alternatives to increase their income and retain their customers. Making profit from new subscribers or voice profits is becoming more and more challenging, because the market is nearly saturated and tone revenues have become a item. Bearing this in mind, Vivo has been seeking applications that could allow them to provide long-term services because of its customers. Besides, Vivo identifies that offering additional services can catch the attention of new customers and stabilize its customer base. Data revenues development is one of the answers that cellular phone operators developed to avoid reduction in ARPU (Average Revenue per User). In Brazil, non-voice revenues represent only 13% of total ARPU. Though, Vivo is also the primary cellular phone company regarding data ARPU revenues -18. 4% on the previous trimester of 2009. Mobile providers in mature wireless marketplaces such as South Korea and Japan have already come to 19% and 29% of ARPU respectively.

On the other hands, customers are constantly looking for convenience and added value services. They have grown to be extremely demanding, taking good thing about the highly competitive market that mobile companies are inserted in. Moreover, people expect companies to build up products that go over their objectives. Considering this scenery, Vivo spotted a great possibility to defeat those issues which consists of technology to build up something called Mobile Repayment.

Mobile repayment shows signs to be on the verge of extensive growth and, consequently, offers several strong incentives for mobile phone providers - including a fresh source of incremental earnings and an incentive for customers to stay with a specialist instead of moving over.

PART A - MARKETING PLANNING PROCESS

SITUATION ANALYSIS

Vivo currently offers cellular phone services to customers in its marketplace. Its center products are voice-services (telephone calls) and non-voice services (text, media messaging, internet etc. ). Those services meet the needs of its market by offering the very best quality from the customers' view point. Most consumers purchase Vivo's services through stores (self-owned and retailers), internet, telemarketing and consultants (corporative).

Its products offered it a competitive border because Vivo has committed to the enlargement of its network across Brazil and in the improvement of its functions so that they can offer customers greater coverage and an improved signal quality. In the last few years, they have got centered all their resources and initiatives in all that matters to the customers: services, customer relationships and billings/recharges.

Voice traffic continues to be the main source of income. In '09 2009 the full total service's revenue was R$ 15, 006 thousands and thousands (around 5, 000 million) and words added with R$ 12, 000 large numbers and internet data with the remaining - R$ 2, 000 million.

The reason behind this panorama is basically price. Access to the internet is still expensive in comparison to speech tariffs.

Macro environment Analysis

Mobile phone providers, finance institutions, brokerages, credit card issuers and systems businesses have been making an investment over time in payments services over the phone. Several pilot projects are being tested. The stimulus cannot be better. The amount of mobiles mobile phones in Brazil come to 175 million last year.

The mobile money copy and payment sector represents a substantial prospective market for mobile providers, financial service organizations, government authorities, retailers, and customers, especially in producing markets like Brazil.

In the recent times, the complete Latin America was influenced by hyper-inflation, resulting in the desire for ways of fast money copy in Brazil.

The desire to increase electronic obligations to a convenient device like the ubiquitous and personal cellular phone is high and, with mobile obligations, the transaction can occur in real-time - also attractive in a country with fluctuation inflation.

The rapid expansion in access to mobile telecommunication in Brazil has generated great opportunities to provide secure, low-cost financial services using the local mobile systems.

Furthermore, mobile payments could also improve the market and leverage financial trades since millions of individuals don't have standard bank accounts.

Even though this seems to be more beneficial then damaging, there continues to be no legislation which could control this service over cell phones. Though, the Federal government Bank has already been following this issue.

Industry Analysis

The cellular phone industry is one of the quickest growing industries in Brazil. In 2009 2009 about 23 million new cell phones started functioning and, relating to Anatel (legislation agency), the entire year finished with 175 million mobile phones in operation, a rise around 16% in a time.

Regarding the mobile phone rate payment strategies, the prepayment programs extended to lead. These are used by 80% of the complete domestic base. Meanwhile, post payment ideas reached 28 million readers, that is, 20% of the full total number.

Vivo quotes that until 2012 the amount of mobile phones in Brazil will surpass 200 million. This implies, on average, each Brazilian person will have a mobile phone.

The speech traffic is becoming saturated. Increasingly more, people are demanding new services and mobile phone providers have been attempting to come up with new ideas. Services which could improve its profits as well as delivering services that can create value for customers.

The focus of this product development is about micro-payments. A higher volume of deals of low portions should attain overall economy of scale. Repayments among people, door-to-door businesses, delivery, devotion programs and parallel market offering are some examples of opportunities which mobile payment could utilize.

Mobile mobile providers already have enough knowledge and technology to develop this service. Their main benefit is that they could use their own network, steering clear of extended costs. Furthermore, they can reap the benefits of its great customers platform.

The mobile repayment service has a potential for rapid expansion, since the platform widely used is SMS, appropriate for any device. In the foreseeable future, technology must be substituted by the NFC, where the personal debt in the cell is done by passing these devices in a sensor. In Japan, a pioneer in mobile payment, this technology has already been used for those using the phone as a transportation vouchers, similar to the Oyster cards system. There are already about 55 million mobile phones operating as "electronic budget" and the marketplace increases 70% per annum and really should reach 190 million people in 2012.

In Kenya, the mobile is becoming the main method of moving money. The M-Pesa, used by 8 million people, equivalent to 18% of the populace, is an substitute that was found to triumph over media precarious existence, how to send money by mail or bus individuals, in a country where in fact the populace is little subjected to banking. This circumstance shows how the telephone providers, who generally have a variety in the low income population much bigger than the bankers, can exploit this chance to offer various financial services.

In Brazil, this is actually the keynote of the strategy of Oi Paggo, the only real supplier of mobile repayment service in the united states where the service penetration is still low, however the probable is high. To the general public with usage of mastercard, the mobile repayment functions are more functional and safe. As for the pyramid's bottom part, it's the gateway to the same convenience similar from what a bank can offer. The fact that the mobile POS payment is the shopkeeper's own cellphone becomes a great advantages due to low priced of implementation, scope and practicality, since even the seller of coconut drinking water on the beach could use the phone as method of payment. The opportunities are never-ending.

Critical Success Factors

Differentiate in an extremely competitive market by expanding impressive services which reduce peoples' life and add value

Being recognized as the best cellular phone provider regarding service and signal quality

Distinctive Competency

Strong brand image

Leader in Market share

Knowledgeable staff - people

OBJECTIVES

Based on the examination of our marketplace, competition, and the opportunities available inside our market, Vivo is rolling out marketing objectives and financial aims for its marketing efforts. In the end, these objectives support the business's mission declaration.

This section includes the targets because of this marketing plan, combined with the secrets to success and critical issues that are associated with these targets.

Corporate Objectives

The ultimate goal because of this marketing plan is to improve the important thing and increase shareholder value. Financial objectives are in four categories: Sales, Margins, Revenue, and Ratios.

To provide more and better services that foster a network population and to create potential opportunities of development and improvement - for folks, corporation, contemporary society and country.

Quality services - Efforts to ensure that customers have access to quality services at that time and where desired.

Customer services - Ensure customer satisfaction. Investing in training and systems which provide an designed view of information on the customers.

Increase shareholders revenues - regular improvement in the business's corporate and business governance practices

Keep its authority in the Brazilian mobile phone market - innovative alternatives and increasing coverage network.

Marketing Objectives

Increase the ARPU (average revenue per end user) by 15%, within the next 24 months.

Retain the most dynamic and profitable customers on the marketplace - minimizing the churn rate by 10% next 24 months - annualized 31. 3% in 2008.

Continue lowering acquisition expenses investing in segmented marketplaces - from R$ 102 ( 34) in 2007 to R$ 77 ( 26) in 2009 2009 (per customer).

Introduce a new and cutting edge service that will alleviate customers' life, creating other ways of repayment (Mobile Payment) - register 2. 5 million customers by the finish of 2010 and increase 10% on a monthly basis on the following year.

STRATEGIES

Vivo and its own competitors have always been chasing differentiation and technology to get and sustain customers. Having this in mind, within the last few years Vivo spent some time working hard on its market development, broadening its coverage nationally.

At as soon as, in order to achieve its future goals, the most appropriated growth strategy is one of product development. This could be achieved by allowing a ground-breaking service, which would add value for the business and for its customers.

The chosen competitive strategy was Differentiation. Vivo seeks to be unique in its industry expanding services that are broadly respected by customers.

Segmentation, Targeting and Positioning

The segmentation examination (proved below) shows how customers are categorized within the company. These clusters were determined through behavioral methods. It includes service usage and actual patterns such as buying habits, usage data, channel, ownership, amounts, brand loyalty, behaviour, etc. They may have the following segmentation:

"Descomplicado" (Uncomplicated) - interested only in chatting on the phone. Do not value the device which is highly price delicate.

"Multifuncional" (Multifunctional) - interested in technologies, however in a moderate way. Wishes to utilize every efficiency of these devices, such as email, plan, video and photos to be able to assist in their lives.

"Fashion" (Fashion) - worried about individualization. Really wants to be different and modern. Focus on beauty than practicality.

"High-tech" (High-tech) - interested mainly in new solutions. Wants to have latest models. Little price very sensitive.

TACTICS

The marketing combination methods product, price, place, advertising, people, process and physical facts in the following ways:

Product

Our main service, mobile repayment, enables customer to benefit from convenience, service and an innovative service. The product would be the focus for focusing on the "multifunctional" and "high-tech" customers segments as it addresses the customers' needs.

This is an intangible product and involves 2 layers described on the visual below:

Here are some reasons to develop the product:

Retain and acquire new (profitable) customers

Continue to improve brand image

Increase non-voice services revenues

Price

The pricing in our product is based on Intermediate prices. Our market is fairly developed and has many competitors; therefore, our rates strategy should maintain series with competition.

A similar service was already made available from one of our competitors (Company named Oi). However, this company has an alternative approach of focus on, and the strategy used is just a bit not the same as ours. Besides, they haven't reached great market share and its product is as yet not known of the general public - 0. 8% of its customer bottom part is registered to use the service. Because of this, we still considered our product as a USP.

Based on studies and research of our marketplace, customers appear to be normally hypersensitive to pricing of your products. We have to price our product slightly above our opponents pursuing our strategy of having high quality products.

The chart below shows information on our Pricing placement.

Place

The main distribution channels for our products are through our own stores, traders, internet and telemarketing.

We want our product to be seen as an added value product, so it is practical that it might be available atlanta divorce attorneys distribution channel. The syndication strategy adopted will be Direct and Indirect Circulation.

The motives for choosing those two strategies is that people wish to have control of our services, identify customers' fads/behavior as well as using intermediates channels to enhance marketing penetration.

Promotion

Launching a revolutionary product, we should communicate clearly with our customer and potential clients customers, it is important that we present a consistent marketing concept between the different marketing programs. Effective communication is essential to ensure that our service produces significant impact within industry.

Objectives

There are 4 goals to market our products known as DRIP - Differentiate, Reinforce, Inform and Persuade. Our main goal is to create awareness of our service. As stated before, an identical service is offered by one of our own competitors, but is not wide spreading. Therefore, it continues to be considered a fresh product to consumers and market.

Strategy

The company will put into practice both "push" and "pull" promotional strategy. However, we can do this in 2 phases. At the start, we will focus on push strategy in order to better assess the response. Then, we can go to a more hostile strategy, investing in heavy advertising and promotions.

Extended Marketing Mix

Since Vivo is recognized as a major service category of company, there are some limitations regarding tactics strategies which is easier find in companies that deal with tangible products. Services have four distinctive quality that greatly impact the look of marketing programs: intangibility - cannot be seen, tasted, felt, observed or smelled before they are really bought; inseparability - services are usually produced and consumed simultaneously; variability - services are highly adjustable, depends on who provides them; and perishability - services cannot be stored. To overcome those limitations we need to use the extended P's (People, Process and Physical Proof).

One of the most crucial competitive features of the company has been recognized as the best mobile phone specialist regarding service quality. Therefore it is very important to aggregate the expanded mix inside our tactics.

People

Staff (front desk and rear office) will learn to build understanding of the new product

Presentations and demonstrations will be produced to the business - every staff should be able to manage and describe the new product

Process

Systems will be totally included to deal with this new service

Rules and steps will be develop to avoid failures and beat with possible problems

Physical Evidence

Procedures will be standardized inside our branches and internet sites to avoid disconnected information

Manual and leaflets will be intended to demonstrated how the service works, step-by-step

ACTION

Using the strategy and aims in this marketing plan, Vivo has established milestones to ensure that plan is put in place successfully.

CONTROL

Controls are being set up to cover implementation and the organization of our marketing activities

Targets

Sales target - register 2, 500, 000 customers within the end of the first year

Customer service

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