Principle Marketing Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

Orange Strategic Marketing Plan

Hello Kind Customer! ( I have added in additional comments in your paper per your instructions. Thanks again for being awesome to work with and please let me know if I can be of any additional assistance. Your changes and additions are marked with red text. Cheers!

Based on the successful merger of Orange and T-Mobile, the company is one of the world's largest mobile operators and the second leading operator throughout Western Europe. The company has over 30M subscribers worldwide, with 10M on the more profitable and long-term post-paid plans and leads Europe with over 1.5M users subscribing to the GSM 3G speed class of performance (Orange Investor Relations, 2012). As of January, 2012 the company and its subsidiaries operate in 25 nations worldwide and has an aggregator market share of 40.4% and one of the highest consistent Average Revenue Per User (ARPU) levels of 31.6, netting an average minutes per user or subscriber of 190 minutes

(Orange Investor Relations, 2012). Despite these impressive statistics however, Orange is suffering for a very high level of customer churn in its core markets, is challenged with how to ramp up into the smart phone market globally (which could revolutionize their business if they succeed at it), and continual lean process improvements over time (Andlauer, Pouillot, 2011) (Orange Investor Relations, 2012). The continual consolidation of the European and global telecommunications provider industry as evidenced by rapid price declines (Benzoni, Deffains, Nguyen, Saleese, 2011) and the nationalization of telecommunications services by governments is increasing the intensity of competition (Clifton, Comin, Diaz-Fuentes, 2011). Amidst all of these challenges the potential of 3G networks and their high Average Revenue Per Unit (ARPU) levels offer considerable upside revenue potential for the company going forward (Orange Investor Relations, 2012).

As bundling of services has proven to be a highly effective strategy for minimizing churn, increasing ARPUs, and developing long-term customer lock-in, bundling text messaging, phone and broadband is a natural progression for Orange (Li, Jhang-Li, 2011). For Orange to compete effectively over the long-term, they need to consider how best to move into a bundled strategy rapidly that also sets the foundation from platform stability over the long-term. Creating a bundle of unlimited text messaging, local phone calls, intra- and internetwork calling and broadband gives Orange a very competitive strategy for stabilizing and growing ARPUs relative to competitors. For purposes of clarity in this analysis, these bundle of services will be referred to as the Value Bundle. It is critically important for Orange to make the Value Bundle successful and tie it back to their smartphone strategies to fuel future services growth.

For Orange to gain market share over the long-term, they need to embrace a platform-based strategy that includes smartphones and the high-margin services opportunities they represent. As the introductory bundle of unlimited text messaging, unlimited local and inter-network phone calls and broadband are designed to attract new customers, the smartphone strategy can be used for upselling them to more profitable services accessible on that platform. Orange must integrate their bundling and smartphone strategies for both to be successful and lead to long-term profitability by reducing churn and increasing ARPUs over the long-term. With the penetration rates of smartphones relatively low today yet the churn on the core services of the bundle relatively high, interlinking each will lead to significantly greater levels of revenue and predictability of profits.

With these strategic considerations in mind, the intent of this strategic marketing plan is to provide an audit of the company today, an assessment of their macroenvironment, market analysis, competitive overviews, market shares of competitors, profitability analysis and SWOT analysis of the Value Bundle and the long-term platform of the smartphone strategy for the company. The core strategy of the company will also be assessed. Marketing mix decisions and control points will also be provided as part of the analysis.

Marketing Audit

The intent of this Marketing Audit is to define where Orange is today, how they got there and where they are heading. An internal analysis of their marketing mix (the 4Ps) and an external analysis is provided. The primary focus of the external analysis is on Total Available Market (TAM) and its distribution by classification of subscriber.

Where Orange is Now

As of the close of calendar, 2011 the company has over 30M subscribers in total and over 10M on their highly profitable 3G service (Orange Investor Relations, 2012). Please see Figure 1 for a breakout of their subscriber trends by service.

Figure 1: Orange Subscriber Trends by Service

Source: (Orange Investor Relations, 2012) (Defraigne, de Streel, 2011)

Over the last nine financial quarters Orange has lost market share, sliding from 43.1% to 40.4% while also increasing Mobile Broadband Adoption at the same time. The most critical metric of ARPUs is slowly dropping however as is shown in Figure 2, Orange Subscriber Analysis.

Figure 2: Orange Subscriber Analysis

Source: (Orange Investor Relations, 2012) (Defraigne, de Streel, 2011)

By balancing marketing strategies across B2B segments and services including the Value Bundle tailored to consumers and small, medium and corporate businesses, in addition to offerings created specifically for the public or government sector, Orange has been able to sustain ARPU and mitigate customer churn (Orange Investor Relations, 2012). In the past the company had faced churn rates approaching 35% or higher, which translated into extensive costs for recruiting and keeping new customers across both B2B and B2C segments. When all of these factors are taken into account it is clear the future direction of Orange is to sell high-value services and increase the Customer Lifetime Value (CLV) by subscriber. The ability to accomplish this over a very broad geographic area encompassing Western Europe will be challenging. Yet the highest performing telecommunications companies are able to traverse geographic regions relatively easily based on the strength of their brand and ability to execute on complex marketing strategies (Bomsel, 2011). What is most critical for Orange today however is the ability to manage their current base of 3G customers and maximize ARPU while also increasing the level of customer satisfaction and loyalty (Troulos, Maglaris, 2011). The Value Bundle strategy has the potential to accomplish these objectives by driving up ARPUs while also nurturing higher 3G adoption rates by upselling smartphones and its related services.

The many telecom reforms throughout the EU and the continual policy direction that attempts to neutralize differences between markets is also a challenge for Orange to overcome in its pricing and marketing strategies over time (Bacchiocchi, Florio, Gambaro, 2011). These regional variations in global markets also accelerate the need for Orange to have more effective strategic market planning across the entire spectrum of market requirements (Stockdale, 2011).

Increasingly these internal analyses indicate that the future of Orange is aligned with the ability to get customers to migrate into higher-value 3G and 4G plans in addition to adoption smartphones as the new platform of services growth (Orange Investor Relations, 2012). Using the Value Bundle to accomplish this transition is possible by concentrating on minimizing competitive threats by continually adding to services as needed to the bundle to further mitigate threats to the customer base. At Orange today the specific configuration of the Value Bundle does not exist, yet if it can be created with enough flexibility, the company can use it as a preemptive competitive strategy against global competitors. From a SWOT perspective the Value Bundles' greatest potential is in mitigating threats by continually adding to and augmenting the breadth and depth of services sold. It must also be used as a means for driving upsell and cross-sell of value-added services as well.

As the smartphone is critical to the future of Orange from a platform and profitability perspective, it is analyzed as the most significant strategic factor in the next section on Macroenvironment Analysis. Inherent in this strategy of using smartphones as the foundation for value-add of highly profitable services, Orange needs to think more as a platform marketer in addition to purely-play services.

Macroenvironment Analysis

The greatest disruptive innovation that has impacted the global telecom market is the rapid adoption of the smartphone platforms and corresponding operating systems including Apple iOS, Google Android, Windows MobilePhone and nearly a dozen others (Andlauer, Pouillot, 2011). As smartphones are pivotal to the future of global telecom, its profitability and has proven to be the single best defense against continually deflating ARPUs (Orange Investor Relations, 2012) this dynamic in the macro-environment is analyzed in Figure 3. The interaction fo Substitute Products, Bargaining Power of Suppliers, New Market Entrants and Bargaining Power of Buyers are combined to form the competitive rivalry levels within the telecommunications industry. The Value Bundle initiative is used as the foundation for smartphone marketing, promotion and aftermarket service. The following Five Forces Analysis assumes incremental sales of services on this platform based on the Value Bundle driving up ARPUs and stabilizing churn rates, making it possible for smartphone growth to occur.

Figure 3: Smartphone Five Forces Analysis

Sources: (Orange Investor Relations, 2012) (Defraigne,…[continue]

Cite This Essay:

"Principle Marketing" (2012, January 21) Retrieved October 26, 2016, from

"Principle Marketing" 21 January 2012. Web.26 October. 2016. <>

"Principle Marketing", 21 January 2012, Accessed.26 October. 2016,

Other Documents Pertaining To This Topic

  • Marketing in a Less Developed Country

    Marketing in a Less Developed Country A less developed country is that country with a Gross Domestic Product (GDP) of less than 2% of global trade in goods relative to other countries. Less developed countries are characterized by little industry and sometimes a comparatively high dependence on foreign aid. These countries are grouped as the poorest and weakest market economies and consist of more than 880 million people. They rely heavily

  • Marketing of a New Sports Drink That Can Keep Cool for 6 Hours

    Marketing Sports Drink In today's current marketplace, there is stiff competition among sports drink manufacturers. Our company has developed a product with an edge on the competition. The product is a sports drink that comes in a container that effectively keeps the drink cold for approximately six hours. In order for sales of this product to succeed in the marketplace, it is necessary for our company to devise effective strategies for

  • Marketing Plan Name Location Nature the Business

    Marketing Plan Name, Location, Nature The business will be a food truck specializing in chicken and waffles. It will be called Big Mabel's Chicken & Waffles, the namesake being a fictional grandmother who, according to the marketing myth, developed the recipes. The food truck will have a number of different locations, which is normal in the business. The city will license out specific spaces and times for the truck, generally when those

  • Marketing Mix Distribution Channels

    Marketing Comparison of Distribution Strategies for Automobiles and Soup Distribution strategies are an essential part of the marketing mix; without a suitable strategy the process of effectively bringing together customers with the goods or services they wish to purchase maybe inefficient and a potential failure, potentially costing the firm both lost sales and incurring unnecessary expenses. To assess the way distribution strategies may be developed in an effective manner, two different products

  • Marketing in Recent Times People Have Become

    Marketing In recent times, people have become more conscious of their health and they are choosing products that are healthy such as organic products. This has also been the case when it comes to organic wines. These wines improve the health of soil and vines at the same time improving the productivity of older vineyards. Organic wines are also beneficial to customers in that the wines are healthy as they contain

  • Marketing Mix Promotion

    Marketing Mix: Promotion Promotion strategies for CARBONATED SOFT DRINKS and AIRLINE FLIGHTS Companies across all industries always seek to market and sell their products as much as possible. They always desire to have more shareholder value, more market share, and more profits. Companies have achieved these objectives through R&D, successful initiation and monitoring marketing strategies across various domains (Baines Fill & Page, 2013). In the business world, for firms to attain such

  • Marketing Grade Course Satisfaction of Market Needs

    Marketing Grade Course Satisfaction of Market Needs as the First Step towards Product Development Product, Price, Place, and Promotion are the core foundation of the marketing mix. The designing of a product initially goes through the product-development process. It starts off with the idea itself, then the concept, followed by a prototype, which is then placed under a product test, market test, and then finally launched. The success of high performers in the

Read Full Essay
Copyright 2016 . All Rights Reserved