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Marketing Management

TABLE OF CONTENTSQuestion One...1 Question Two...5 Question Three....10 Question Four..13 Question Five...16 Bibliography.....21 Figures Figure 1.1...5 Figure 1.2...9 Figure 1.3......11 Figure 1.4..13 Figure 1.5..14 Figure 1.6......18 Tables Table 1.1....20

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Marketing Management Question One Many companies are now embracing target marketing to compete more effectively in the market place. According to Kotler and Keller, (2006:40) instead of scattering their market effort (a shotgun approach, they should focus on those consumers they have the greatest chance of satisfying (a rifle approach). 1.1 Discuss how Cell C has segmented the market and profiled the distinct group of buyers who differ in their needs and preferences for cellular phones. A shotgun shots a number of small bullets with the hope that at least some of them hit the target. In the same way, 'shotgun marketing' involves reaching as many people as you can, such as mass marketing through TV, Cable, radio and the web without a particular end-target in mind. On the other hand, a rifle brings things into focus, takes a careful aim, and then only you

pull the trigger. 'Rifle marketing', thus, typically involves selecting target audience based on their demonstrated interest. According to Kotler & Armstrong (2001:64), market segmentation is the process of dividing a market into distinct groups of buyers on the basis of needs, characteristics, or behavior who might require separate products or marketing mixes. The different ways of segmenting a market are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. Geographic segmentation is dividing a market into different

geographical units such as nations, states, regions, countries, cities or neighborhoods whilst demographic segmentation is dividing the market into groups based on the demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality. Psychographic segmentation is dividing a market into different groups based on social class, lifestyle, or personality characteristics and behavioral segmentation is dividing a market into groups based on consumer knowledge, attitude, use, or response to a product. In addition, a firm can use different segmentation variables like socio cultural variables, use-related characteristics, use-situation factors, benefits sought, etc. for segmenting a market. The main bases used by Cell C for segmenting the market and profiled the distinct groups of buyers who differ in their needs and preferences for cellular phones were geographical segmentation use of clever distribution to make it available everywhere by using a number of distributing systems. Cell C has also used demographic segmentation in terms of age, and MBA Year1 Page 2

Marketing Management income to profile its different customers. Cell C was able to take everyone needs into account by designing multiple packages for each of its market segments, that is, from the youth segment and the corporate market segment. Income segmentation was also used to meet the needs of different income groups by providing the best deal for those who are more prices sensitive and at the same time offered interesting corporate packages to corporate users.

1.2 Discuss how Cell C targets each of its identified segments with appropriate market offerings. Kotler & Armstrong (2001:64) confirms that market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter. Cell C used a differentiated marketing strategy where there is many marketing mixes for different segments of the market. It has targeted several market segments and designed separate offers for each. The youth segments which is an attractive segment for Cell C was able to design an appropriate offering to meet their needs in terms of up-to-date technologies cellular phones with high-tech functions and at the same time cheaper than competitors as Cell C subsidized a portion of the handsets to make cheaper contract and service rates to them. Moreover Cell C innovated its service by offering both pre- and postpaid and SIM card with more storage capacity. The service provided by Cell C allows for more flexibility and can be adapted to the need of the different users. In order to be more cost effective, the segments served by Cell C can easily swap between the different tariffs structures available. Furthermore, duration of contracts is more flexible and the customers can choose a 12 and 24 months contracts, a service that has not been offered by its two main competitors. Cell C has also not neglected its corporate customers, a market which is more difficult to attract. Different types of contract have been designed to be able to meet to the needs of the different companies using Cell C services. Different products offering are available with different pricing strategies and with appropriate promotional strategies that helped Cell C to build a profitable relationship with the corporate customers. Cell C is also engaged in providing after sales service to all its customers by installing a customer call centre where all the different customers may have free access to and have their

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Marketing Management problems solved and can also make their valuable suggestions for the improvement of services offered by Cell C. In fact this strategy of Cell C is helping the company to be in close contact with its different types of customers and at the same time to bring customer loyalty.

1.3 Explain how Cell C positions its brand in the minds of its target audience. Kotler & Keller (2009:276) tells us that the American Marketing Association gives the definition of branding as being: a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of the competitors. Essentially, a brand is the flag which signifies to the buyer what they can expect from purchase in terms of quality, service, functionality, etc. A brand is a recognition factor which, particularly at the point of sale, can help a buyer to reach a purchase decision. To develop a brand takes time and involves long term planning and investment which is the case for Cell C which started its advertising campaign well before the brand has been launched. The main objective of Cell C was to bring complete awareness of Cell C in the minds of its public. That was the reason why Cell C uses the different media from television, radio outdoor communication and the press to communicate with its customers. The use of specific messages and associating nature with the brand name was not innocent on the part of the company. In fact the messages were used to gain commitment of the target customers emotionally and attached them to the brand name. Cell C wanted to position itself as a very strong brand in terms of excellent quality, up-to-date technology, a solution to all customers in terms of cellular phones without any barrier in terms of cultures background, economic background. Cell C can accommodate all types of customers. Cell C also wants to build its reputation in terms of its capability to serve the new generation; the youth market segments who is always on the move looking for innovative products.

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Marketing Management Question Two Once a company identifies its primary competitors, it must ascertain their strategies, objectives, strengths and weaknesses. 2.1 Evaluate how Cell C analyses its competitor. The competitors forces form part of the macro environment and it is very important to analyze its competitors before deciding on what marketing strategies to be adopted to be to compete on the market and at the same time to be able to its market place. The best way to analyze its competitors for Cell C would be to do a SWOT analysis, that is analyzing the strengths and weaknesses of its competitors and also identify opportunities and threat. The SWOT analysis as shown in figure 1.1 below provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W).Those external to the firm can be classified as opportunities (O) or threats (T).

Strength Internal Internal capabilities that may help a company reach its objectives

Weaknesses Internal limitation that may interfere with the companys ability to achieve its objective

Opportunity External External factors that the company may be able to exploit to its advantage

Threats Current and emerging external factors that may challenge the companys performance Negative

Positive Figure 1.1: The SWOT matrix MBA Year1

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Marketing Management The strengths of the competitors are as follows: i. Vodacom and MTN are strong brand names and therefore this makes it difficult for a third licensee to enter the market. ii. Vodacom and MTN have good reputation among customers as they occupy 54% and 40% of the market share respectively. This means customers buy more often. iii. Both MTN and Vodacom provide prepaid facilities besides already providing postpaid facilities. iv. v. vi. vii. Vodacom and MTN were able to build their networks over a realistic time period. Vodacom and MTN provide nationwide coverage as soon as they were operational. Both Vodacom and MTN provide per second billing system. Both MTN and Vodacom enjoy constant visibility either through advertising or through their massive sponsorship spend. The weaknesses of the competitors are as follows: i. MTN and Vodacom still operate 90

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