Introduction
The concept that marketing is warfare can be said to be largely true in respect of the Zimbabwean mobile sector where players have drawn lessons from established battlefield concepts of planning, maneuvering and outwitting fellow players in order to stay ahead of the pack. However the marketing is warfare concept does not adequately charectirise the competitive nature of the mobile industry as there are other factors to be taken into consideration such as customer needs.
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The mobile sector was introduced in Zimbabwe by Strive Masiyiwa through his Econet brand.
A protracted battle with authority ensured before he was finally granted the licence to operate a mobile network. In the meantime, Net-one was granted a licence to operate and started offering Mobile phone services in 1996 followed by Net-one which was granted a licence in 1998 with Econet being the last to enter the market after its legal battle in July 1998.
The mobile sector has since grown to incorporate other players who offer mobile services such as Africom, Broadacom and most recently Tel one who offer the (086) mobile line range.
Going by the concept that marketing is warfare, the increase in players thus equates to an increase in the number of armies in the battlefield.
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This essay shall analyse how the players in the mobile sector industry have utilized well known battlefield strategies in order to control the giant share in the mobile industry.
‘Marketing is warfare’ defined
Al Ries and Jack Trout have drawn a parallel between military warfare and the competitive strategies employed by competitors in the marketplace. Ries and Trout propose that there are four strategies that can be used in fighting a marketing war; defensive, offensive, flanking and guerrilla tactics. In any industry there is a market leader, market challenger, market follower and market niche. The market leader employs the defensive strategy in order to maintain its position as market leader and to expand its market share further. It has to continuously protect its market share from offensive attacks by its competitors.
The market challenger is the one which follows behind the market leader and can employ offensive tactics to out rightly attack the market leader and its smaller competitors in order to increase its market share. It can also choose to accept its position as a market challenger and fight to maintain and defend their position as such.
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The market follower is much smaller and commands a smaller share of the market. It can chose to use the flank attacks which is an indirect approach rather than the offensive which can prove to be a more expensive and less effective method. The market follower recognizes the areas of the market not being covered by the market leader and challenger and focuses its attention on those areas in order to gain competitive advantage.
Econet as the Market Leader
Econet, commands about 58% of the mobile market in Zimbabwe with about 8million subscribers whilst Telecel has a market share of about 28% with subscribers amounting to 2.5 million.Net-One is last with a market share of around 15% and a subscriber base of 700 000.
The above statistics clearly show that Econet is the market leader in the Zimbabwean mobile sector. However this has not always been the position as Net-one, the first to offer mobile services in Zimbabwe was at one time the market leader. This could be attributed to the fact that Net- one was the first to provide mobile services with Telecel and Econet entering the fray two years after net- One had already started providing services to the market. As such it was only normal that Net-One was the market leader at this stage.
Due to the economic challenges experienced by the country especially the period before 2008, Net-One failed to maintain its position as market leader resulting in Econet taking over that position
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Amongst the tactics used by Econet to gain its position as market leader, is the offensive tactic. It quickly came in to increase its market share by increasing its subscriber base. This it did by upgrading their capacity to enable them to sign up as many new customers as possible. Econet took advantage of the fact that initially, mobile services were a scarce commodity and a preserve of the elite, to outwit its competitors by increasing its subscriber base and flooding the market with its mobile lines way before its competitors followed suit.
Another factor which might have contributed to the rise of Econet to the position of market leader is the fact that, for it to get its licence to operate, Econet went through a protracted battle with the authorities even though they had come up with the idea to introduce mobile services in Zimbabwe. This protracted battle endeared the public to Econet as it was a general perception that Econet was being victmised. Consequently when it launched its own mobile services it had already won the loyalty of customers way before it started offering the service.
Mobile defence.
When it gained the position of market leader Econet then adopted the defensive strategy in order to maintain its position as such. It did this by a continued increase in its subscriber base whilst at the same time introducing new products so as to lure more customers. By continuously increasing its capacity in terms of the subscriber base, Econet ensured that it shut out its competitors, who due to a lack of resources were not able to match Econet’s continued rapid growth.by so doing Econet used the mobile defence strategy which entails more than just a leader maintaining a fotress position whilst assuming that its competitors will never catch up.
In the mobile defence strategy however, the market leader, ‘concentrates upon market broadening and diversification.’ (Gilligan) Econet also went about the business of expanding its network coverage area. It did this hot in pursuit of Net-One which had gone on a network expansion drive, particularly in the rural areas an area which Econet had not yet penetrated. Econet went on a counter- offensive attack and expanded its network faster and wider than its competitors thus maintaining its position of market leader.
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This method was used by Cadillac when faced with stiff competition from Mercedes. It went on to produce a newer and better model than that which had been released by Mercedes. This is the method which was applied by Econet, because even though Net-One’s now covered the rural areas which previously had no access to mobile services, Econet’s network coverage was now bigger and even wider than any of its competitors.
Since attaining its market leader position, Econet has worked on developing new products and services to maintain its present customers and to lure more customers. For instance, Econet introduced the Ecolife service to provide lie assurance services to its customers. This was a means of Econet diversifying from its main services and also worked to ensure that customers from other networks could migrate to Econet as their networks were not providing a similar service. On the other hand, Econet might have offered this product before doing their homework as regards their capacity to offer the product as they had to withdraw it following disputes with their partner.
In order to maintain its market share whilst at the same time making meaningful inroads into hitherto unconquered territory, Econet was also the first one to introduce 3G services which enabled its customers to send and receive multimedia messages. The introduction of this service was long overdue as most of its customers already owned phones which could perform this task. The fact that it did so before any of its competitors did gave Econet a competitive advantage.
In further diversifying, Econet ventured into internet services through its division Ecoweb. It further developed this concept by ensuring that it was the first to offer internet services on its mobile platform thus enabling users to access internet services on their mobile phones.
Counter-offensive defensive
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When Net-One and Telecel introduced mobile banking through ‘One wallet’ and ‘Isikhwama’ respectively, Econet launched a counter- offensive defence by launching its own Ecocash. A counter-offensive attack is one in which the market leader responds to an attack by the market challenger. As they say that a bigger army has got an upper hand and is more likely to overpower the smaller armies, Econet could afford to embark on massive advertisement and roll out of their new product so as to outdo its competitors. Econet used all its resources and went into overdrive marketing Ecocash. This had the impact of overshadowing Telecel and Net-One’s own mobile banking services to the point that it is now as good as if they do not exist.
Econet used the counter offensive defence in order to ensure that its competitors’ new products had a still birth. Using its enormous resources as the market leader, Econet went on to roll out its programme by recruiting agents all over the country, rural and urban areas alike which also serve as a marketing tool for them. By allowing its competitors to introduce their new products before coming in from behind after realizing that the product was viable, Econet also used a marketing strategy known as ‘constructive following’(Mercer1996).
Econet took advantage of the gap in its competitors who, although they had a good idea, did not have as much resources as the market leader to roll out the programme as effectively as Econet did. In this particular instance it can be said that Econet went ahead to counter attack its competitors as it did not spare any resources in ensuring that the product gained attention. Furthermore it has set to flex its muscles by preventing Telecel and its partner Cabs, access to its customers through their ‘Textacash’ product.
Position defence
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The position defence is a strategy used by a market leader to erect barrier around its company and ensure that its brand position is invincible. This can be done through massive advertisements and promotions to ingrain its position as the market leader. Econet has invested a lot of money in entrenching in the mind of the customer that theirs is the best brand to such an extent that even their competitors might also believe that this is a fact.
Its vast profit margins ensure that it has the money to dominate the advertising sector and to promote its brand as the leading brand. The ‘Inspired to change your world’ catch phrase is used to imprint in the consumer’s mind that only their company can bring positive change to the consumer’s life and that the purpose of its very existence is to provide the best service to its customers through continued innovation.
All throughout the country, Econet has put up billboards asserting its position as the market leader. This has the effect of making their presence felt not only by its competitors but society at large. The net effect of this is that its competitors will end up believing in Econet’s assertion that its position as market leader is unassailable thus preventing/ reducing attacks from competitors.
Econet has also endeared itself to its customers through various social corporate responsibility activities such as Capernaum trust, Joshua Nkomo Scholarship fund and the National Health Trust. These activities enhance Econet’s competitive advantage as people begin to perceive it as a caring organization which is not just after their money.
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Telecel as the Market Challenger
From the above statistics, it is can be deduced that Telecel is the market challenger. As a market challenger, Michael Porter suggests that a market challenger has three ways in which to offset the market leader’s advantage:
i) By creating a competitive advantage in cost or differentiation.
ii) By neutralizing the leader’s strong points.
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iii) By setting up a defence against counter- attack by the market leader.
Telecel has been able to employ one or more of these tactics as the market challenger through various promotions and incentives to give it a competitive edge against the market leader. A market challenger also has to decide whom to challenge between the market leader and the market follower.
Frontal attack
The frontal attack is a military tactic in which the enemy is attacked head on. As a marketing tool, it involves the market challenger matching the market leader product for product and price for price (C. Gilligan 2010, pg 487). Telecel has kept itself on Econet’s heels by trying to keep abreast of all new products offered by Econet. Even though Econet was the first one to launch 3G services and mobile internet services, Telecel also quickly followed suit offering the same service to its customers and at similar cost.
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By so doing, it made sure that it did not lose a substantial number of customers to Econet seeking a better service. However a frontal attack is not always the best method as it very expensive and risky considering that the market challenger is dealing with a well resourced competitor.
Not to be outdone by Econet, Telecel has also launched its own social corporate responsibility initiative through supporting old people’s homes which also can be seen as a frontal attack on its competitor.
Flank attacks
Telecel has taken advantage of those areas in which the market leader is weak in order to assert itself as a superior brand. This strategy is called the frontal attack and is less risky and less costly than the frontal attack. Telecel has identified those products that Econet does not provide and its weaknesses to fill the void left by Econet. A good example is the pre activated lines which are being offered by Telecel. Econet does not offer the same service, the result being that it takes longer for a customer’s new line to be activated than for a Telecel customer. This gives Telecel a competitive advantage over Econet.
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Telecel also provides airtime on credit up to a certain limit, another service which Econet does not provide. Through this product, Telecel customers can use airtime then pay for it later upon topping up their pre-paid lines. Upon purchasing a new mobile line, it is mandatory that one registers their details with their service provider before accessing service.
Telecel has provided for this service to be provided via the phone without the need for filling in of forms. On the other hand Econet does not have a similar facility and one actually has to visit their offices to fill the forms with a considerable waiting period.
Telecel was also the first one to provide call me back facility. This facility enables a customer without credit to send a message for another subscriber to call them back. Econet then launched a counter- offensive defense by immediately following suit. Nonetheless, Telecel still has the upper hand in terms of customer satisfaction as their subscribers are allowed to send call me backs across all networks. Econet on the other hand, only allows call me backs on its own network. This could give Telecel an advantage resulting in customer migration from Econet to Telecel, for those who require the service to be across the board.
Telecel has consistently looked at ways to outwit their market leader by taking advantage of those service gaps left by Econet. Telecel took advantage of the social media platforms by being the first to encourage the market to like them on Facebook before Econet did. Econet has since taken a counter- offensive response by also signing up on the social network platform.
Telecel also took the lead on teletunes a service whereby a caller can listen to a tune whilst waiting for their call to be connected. It also initiated a quiz facility where its customers would stand a chance to win prizes if they answered the questions correctly. All this enhanced Telecel’s brand as it would constantly seek to provide a differentiated service from that of its competitors.
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Telecel offered mobile banking services before Econet did. Econet immediately launched a massive counter-offensive as outlined above. This shows that it is a risky business to attack the market leader, as it has more than enough resources to counter the offensive and even surpasses the market challenger.
Guerilla tactics
These tactics entails hit and run moves which are designed to keep the competitor off balance. This can be in the form of temporary price reductions as Telecel did with the introduction of ‘mega juice’ airtime where their customers would get massive discounts within the network after topping up their airtime. This also worked to increase product as customers would buy more airtime knowing that they will receive bonuses. Telecel also reduced the price of their sim card starter packs as compared to those of their competitors. It can actually be argued that these two tactics alone helped Telecel to overtake its competitors from behind thus becoming the second largest mobile network in Zimbabwe.
Guerilla warfare can also be by way of product comparisons. When Econet changed its platform from ‘091’ to ‘0772’ whilst Telecel was changing its own from ‘023’ to ‘072’, Telecel took advantage of this changeover to put its product in comparison with Econet. Previously Econet was associated with the elite, whilst on the other hand Telecel was associated with the less affluent.
However with the changeover of the identifying numbers the difference was no longer notable. Telecel released advertisements encouraging people to ‘….move over to Telecel since they were changing numbers anyway’. On its website in an apparent dig on the market leader Telecel says ‘We might not be the biggest but we are the best’ Telecel also underwent rebranding and increased advertisements and visibility. It also gives a statement that you do not have to be the biggest in order to be the best.
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Net-one as the market follower.
Net-one having is the market follower in terms of the above statistics. It has the option of employing the following tactics:
i) Product imitation or the me-too strategy
ii) Guerilla tactics through price reduction
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iii) Use their Research and Development effectively
Net- One moved from being the market leader to being the market follower due. This could be attributed to the economic meltdown between 2002 and 2009 and also the introduction of United States Dollar. Net- One lost a lot of revenue as it had established a niche market among the corporate and parastatals that preferred its contract line service. The introduction of the United States Dollar meant that all money owed under the Zimbabwe Dollar era was lost.
Net-One has embarked on a number of warfare tactics in order to regain its market leader position. Initially, Net-one sought to regain its position as market leader through an aggressive network expansion drive. Net-One used the flanking attack by ensuring that they expanded to the rural areas whereas all its counterparts were concentrating on the urban areas.
Thus Net-One took advantage of the gaps left by its competitors to gain competitive advantage. Econet however countered by expanding its network even wider than Net-One. Nevertheless, Net-One is still perceived to be the network that is easily accessible in the rural areas.
Net-one has used the me-too strategy by also introducing airtime promotions and bonuses for topping up airtime. This it has done in imitation of the promotions done by Telecel under the ‘mega-juice’ promotion. It is reported that these promotions have resulted in it growing its subscriber by 500 000 subscribers.
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Net-One has also engaged in frontal attack in dealing with its competitors. In 2006 when Econet offered to sponsor the national Premier Soccer League (P.S.L), Net-One countered by offering to sponsor a team in the P.S.L. This would result in promotion conflict as Econet wanted players’ uniforms to all bear its brand whereas the Net-One sponsored team would also be required to wear the Net-One logo. In the end Econet pulled out of the sponsorship deal.
Shortfalls of warfare marketing strategy.
It has been argued that the warfare strategy’s shortfall is that it concentrates mainly on competitors moves whilst forgetting the customer. It has been proposed that there needs to be a strong focus upon the customer and that the organization must be customer-led.
The marketing is warfare concept leads to too much aggression and sometimes a company can lose sight of its own objectives and or its own customers’ needs. This can have a negative impact on its performance as the company engages in unnecessary aggression. On the other hand, one cannot be purely customer –oriented as customers very often do not realize what they want and relying on customer opinions can be misguiding.
Conclusion
Marketing has been likened to a football match where one cannot just concentrate on the game without looking at his opponents’ because they will not win the game. From the above it can be said that indeed if the players in the mobile sector were to totally ignore their competitors they would not gain competitive advantage. However the mobile sector should also concentrate on their customers if they are to give their customers value. Overall it should be pointed out that the competition strategies highlighted above result in value addition for customers as players try to outdo each other.
References
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• http://www.telecel.co.zw
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