Virgin Media Marketing Services

Services marketing are the form of marketing which direct focuses on selling services. Services can be delicate to sell and the marketing approach for service is much different than the approach for goods. Some companies might be offer both products and services and must use a combination of styles; for example, a store which sells mobile phone also tends to offer services such as helping people decide on mobile phone as contract and providing broadband service and mobile set repair etc. Such a store must market both its products and the supporting services it offers to appeal to their consumer.

In which time people market services, the aim is not to get customers to purchase their product, but to get person to do business through an exacting company, often in a particular location. For example, virgin media offers broadband and internet service for customer: It provides phone, internet and Television service for their customers, both on-site and in to-go form in many cases. When the company markets itself, it must convince people that it is preferable to other broadband and that its facility is worth the trip.

Virgin Media

Virgin is one of innovative new media business that was formed as an outcome of a combination between NTL and Telewest and then a re-branding as Virgin Media. The strength lies in the branding and the innovation that the name their offers. Internally, Virgin is the only media company in the UK that offers all four of the main media services, which aree digital TV, broadband, land line phone and mobile phone packages. The ability to offer these products all together in one package is the unique selling point of the compeny and it’s clearly sets them apart from their competitors in market.

Virgin Media /Business

Last year on February Virgin Media announced that their business division would be rebranded as their Business with immediate effect. The company, which had been operating as ntl: Telewest Business, is now the largest B2B brand in the Virgin Group. This marked the end of the NTL and Telewest being used by the company.

Virgin Media Business is the UK’s only telco with a national fibre optic Next Generation Network. Organisations working with Virgin Media Business include London City Airport, Arqiva, Hampshire and Isle of Wight Partnership and South West Water.

User Preparation/virgin media

Before implementing new arrangement, it is essential that personnel, employees, managers and others in the organization are prepared for it. This process is also called process of readying the decision makers, managers, employees, and stakeholders for the new system. In this regard, user training becomes very essential, because without it the success of the system cannot be guaranteed. This process of user preparation is planned and executed properly and involved a lot of arrangement, and consideration (Stair & Reynolds, 2008).

The UK leader company fibre-optic broadband provider presently has more then 60,000 SME and public sector broadband consumers, but has announced that it is looking to grow this significantly.

They have unveiled plans to target their the small and medium business customers of its competitor broadband giant BT.

The move comes soon after BT’s commitment to undercut Virgin Media’s residential super-fast broadband prices, with its new fibre-optic broadband service which BT is rolling out this year. They have currently revenues of about £600m pa from business broadband customers and this is forecast to increase to about £1bn pa in three to five years.

The chief operating officer Andrew Barron said: “This is another step forwards. We’ve been working in the business division for one and half year on getting the business processes to the right level. We’ve improved it dramatically. We can use the fibre-optic network to differentiate ourselves.”

Advertising

Virgin Media decided to launched too much fanfare from February 2007, through the public relationship event and an expensive advertising campaign which covered major United Kingdome TV channels, daily newspapers and billboards. In an effort to raising awareness of the group and their services, their campaign always used bright red colours to portray its brand image. They are using different business strategy through online. Customer can get different kind of service and offer through their contract.

Consumer behaviours

Consumer behaviours is the mental and physical activities undertaken by household and business customers that result in decisions and action to pay for, purchase, and use products and services

“Understanding how consumer behaviour is changing will be a main requirement of Virgin Media’s upcoming music offering and, should they become law, the Government’s legislative proposals will also require measurement of the level of copyright infringement on ISPs’ networks. Detica’s CViewâ„¢ technology potentially offers a non-intrusive solution which enhances our understanding of aggregate customer behaviour without identifying or storing individual customers’ data.”

Consumer Segment

They face strong competition from a variety of entertainment and communications service Providers, which offer comparable broadband internet, TV, land line phone and mobile telephony services. Besides, technical advances and product innovations have increased, and will likely continue to increase; they have offered the number of alternatives to their consumer from other providers and increase the competitive environment. See ”Risk Factors-they operate in highly competitive markets.” However, virgin media believe that they have a competitive advantage in the United Kingdom residential market due to the superior technical capabilities of their cable network over the network of the incumbent BT, which many of their competitors rely on to, provide their services. They also face strong competition in their mobile telephony market, primarily focused by increased pricing strategy from both established and

New service providers, evolving consumer needs and technical developments.

Virgin offers most of their products on a stand-alone basis or as part of bundled packages designed to motivate their customers to subscribe to multiple services. They offer broadband internet, mobile telephony, fixed line telephony, and data services all over the United kingdom., and currently offer TV services exclusively in areas served by their cable network.

Segmentation, Targeting, Positioning (STP)

The STP Process

The increasing use of the STP process has occurred as a direct result of the prevalence

Of strong markets, the larger diversity in customer needs, satisfaction and the capability to reach specialized or niche segments. While this type of marketers are increasingly segmenting markets and identifying attractive segments (i.e. who to focus on and why?),to identify new product opportunities, develop right positioning and Communications strategy (i.e. what message to communicate), and effectively allocate resources to key marketing performance (i.e. how much should they spend and where?).

Company will often commission segmentation research when they want to re-scope their marketing tactic investigates a declining brand, produce a new product and restructure their pricing strategy. Company operating in well dynamic environments seek to conduct market segmentation investigate at regular intervals, to keep in touch with changes in the open market.

STP refers to the three activities segmentation, targeting, and positioning

We must understand about STP process, before start think about marketing mix (4P), . Terms of STP consist of: market segmentation, target markets and positioning.

Segmentation

we need to identify all segments of market for effective marketing. Segmentation should be Measurable, Accessible (can you reach them), Profitable, and Distinct from one another. The objective of segmentation is to find attractive markets. Strategies include Break market into components Regroup into market segments Select which segment to target

Targeting

Virgin Media is presently second in the home broadband market in the United Kingdom; however, it obviously doesn’t want to be left behind when it comes to broadband on the move. The company has their own-brand mobile phone service, so it’s wasn’t that much of a leap for it to add mobile broadband into the mix.

They are offering mobile broadband through the number of different deals for their customer , For example, if you’re already a Virgin customer using it’s XL (20Mb) or L (10Mb) cable broadband packages or its ADSL Bundle 1 offering, you can get mobile broadband with a 1GB usage allowance for an additional fiver a month. If you’re on one of the lower-end home broadband deals you can get the same package for a tanner a month.

However, for this review they are looking at the standard retail pack which targets customer who doesn’t already have a Virgin service. This deal costs £15 a month on an 18-month contract for a 3GB monthly download allowance and a free USB modem. You can get a significant discount or deal on mobile phone , if you are existing customer of virgin customer, for example you can get Blackberry curve 8250 just £10.21 per months with monthly allowance ,on the other hand they are charging for the same package on £15 per month for new customer.

Position

Positioning in different areas is quite hard. They are aware of the difficulties so virgin media have to think about their brand name. They have never entered in a business before doing solid researches and analysis. Virgin have reviewed the business and tried to look from customers’ eyes. They are aware of the trade-offs they had to think before entering a new business venture and they have never underestimated the risks behind new entrance.

The flower of service

Facilitating elements(services)

Information: Customers often require information about how to obtain and use a product and services. They may also need remainders and documentation. Example,

Of virgin broadband information services are: Direction to service site and using instruction, warning and insurance, terms and condition of services.

Order taking: Many goods and services must be ordered or reserved in advance. Customer needs to know what available and may want to secure commitment to delivery. Customer can order through the online and direct phone contract and they have to stay on queue.

Billing: Customers deserve clear, accurate and intelligible bills and statements. Normally, virgin media are using paper bill and e-bills.

Payment: Customer may pay faster and more cheerfully if Virgin makes transactions simple and convenient for them. we can pay through different way such as direct debit, debit or credit card, direct cash and internet/phone banking, cheque .

2) Enhancing services:

Consultation: Value can be added to goods and services by offering advice and consultation.

Safe keeping: Customers prefer not to worry about looking after the personal possessions that they bring with them to a service site.

Exceptions: Customers appreciate some flexibility in a business when they make special request. They expect it when not everything goes according to plan.

Hospitality: Customers who invest time and effort in visiting a business and using its services deserve to be treated as welcome guests.

Current extended marketing mix.

Today marketing is far more customer oriented than ever before, because the service sector of the economy has come to dominate economic activity in this country. People, process and physical evidence is the three extended Ps for virgin media.

People – People is one of the important elements of service marketing mix. People define a service. In case of service marketing, people can make or break an organization. Thus virgin media nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer needs and satisfaction. In fact many companies have to undergo accreditation to show that their staffs are better than the rest.

Process – Service process is the way in which a service is delivered to the end user/ customer. The process of a service company such as virgin media in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer.

Physical Evidence – The last element of service marketing mix is physical evidence. Services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service and physical environment play the vital role in effective service. Physical evidence is used as a differentiator in service marketing.

Thus extended marketing mix is more important for Service Company.

Marketing communication Mix:

The marketing mix is the set of controllable tacticle marketing tools that the firm blends to produce the response it wants in the target market (Melewar. T.C., & Saunders.J, 2000).

Marketing communications are the means by which firm’s effort to inform, persuade, and remind customers directly or indirectly about the products and brands that they sell. A company’s total marketing communication mix also called promotion mix (Kotler, 2005) ,consists of specific blending of advertising, personal selling, sales promotion, public relations, and direct marketing tools that are used

by company to pursue its advertising and marketing objectives.

Swot analysis

Swot analysis is the most important and first stage of planning. It is a feedback mechanism to make new strategies for any organisation. Strengths, Weaknesses, Opportunities and Threats are the four components of a swot analysis. Weaknesses and Strengths are correlated and examine the internal part of the business analysis whereas Opportunities and Threats deal with the external environment of business operation. Weaknesses and strengths refer to aspect of marketing, finance, manufacturing or organisational structure. Swot analysis helps clarifies the objectives of the organisation

Strengths

In offering combined services, Virgin media has substantial economies of scale as they are able to combine many of their generic roles such as administration and finance, thus allowing the company to price more competitively for the benefit of their customers. Due to their perceived leading brand name in the media, Virgin Media has managed to secure an ongoing contract with Sky, extending further still its inclusive offering to its customers. Technological ability and infrastructure are the two important internal strengths of virgin media, which have been exploited to produce a market leading position.

Weaknesses

Virgin may have some internal weaknesses that need to be reduced. The merger between NTL and Telewest is still relatively new and there are cultural clashes between the two styles and the emerging Virgin style. Recently, there have been several redundancies and outsourcing of customer services, in an attempt to bring down costs. This has resulted in a degree of unsettled behaviour and lack of loyalty from staff. Due to the size and complexity of the growing organisation, there are likely to be ongoing conflicts which will need to be managed if this cultural shift is not to impact on the customer understanding.

Opportunities and Threats

Opportunities and Threats deal with the external environment of business of virgin media. The media sector is developing an exceptionally fast pace, resulting in both opportunities and threats for Virgin Media. Opportunities are widely available for Virgin Media, mainly in offering value added services such as online gaming and more reliable broadband connections. Bundling these media services together, as Virgin Media has already done offers yet further opportunities within the media sector, in terms of grasping greater market share. Customer likes simple, one-stop shopping when it comes to the media options available; this is something that they can continue to exploit, mainly now that it has signed an agreement with Sky.

Threats to Virgin Media come from other similar media companies such as Orange and BT who remain as large players in the market. Specifically, Virgin Media is rumoured to have difficulties with its infrastructure reliability, which could potentially allow competitors such as BT to increase market share. The media sector as a whole is extremely fast moving; therefore, the main threat is that Virgin Media might fail to keep pace, thus losing their customer support to another more inventive company.

Recommendation

SOURCES

1. Virgin Media, fourth quarter 2007 results presentation, February 2008.

2. Carphone Warehouse Plc fourth quarter trading update, April 2008.

3. “Domestic Competitive Market Review”, 2004, Ofgem.

1) The extended marketing mix (7Ps): Available on http://www.thetimes100.co.uk/theory/theory–the-extended-marketing-mix-(7ps)–319.php