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Research Paper on Marketing Strategy

Posted by admin as Example papers

Free Research Paper on Marketing Strategy

Marketing Strategy for Mobile Communication Companies in Kuwait
1. Abstract:
I will discuss the marketing strategy for mobile communication companies in Kuwait. How it is different in Kuwait market and other countries markets. Also I will discuss the culture and the traditions affecting the Companies’ decisions.

By using many of the Companies that operate in Kuwait I will be able to defined and have better under standing of marketing extractor. I can determine the elements that affect the Kuwaiti market, and how it can affect the marketing strategy.

2. Introduction.
Market overview
The Middle East telecommunications market has changed dramatically in recent decade. Once dominated by state-controlled monopolies, the telecom sector has become a market that welcomes open competition among the participants. The change was driven in part by the requirements for joining the World Trade Organization, and most Arab countries have gained accession to it in the recent years.

The competition increased the prices for license fees, but the consumers are lucky to benefit from improved quality and better services. In the wealthier countries of the region, the mobile market, including 3G services, is well developed.

There are more than 30 mobile operators in the Arab market. Many countries (e.g. Saudi Arabia Jordan and Egypt) have three or more mobile operators. Bahrain, Kuwait, Qatar and the UAE have the highest mobile penetration rates in the world and continue to grow (the penetration and growth rates in 2007 were 140% and 23% respectively in Bahrain, 127% and 35% in Qatar 134% and 21% in UAE. The corresponding figures for Kuwait were 103% and 6%). (see App.1).

Kuwait presently has two mobile operators, Zain (former MTC, established in 1983), and Wataniya (established in 1999). In the government of Kuwait has decided to establish a third mobile phone operator in the country in December 2006. In late November 2007, Saudi Telecom won (beating out Etisalat) a 26% stake in this third mobile company.

Qatar Telecom (Qtel) has become the new owner of the Kuwait’s Wataniya in March 2007, purchasing a 51% stake.

Analyzing the mobile market of Kuwait, I will focus on the marketing strategy of the country’s leading operator – Zain. Zain has rapidly expanded internationally, now being present in 22 countries in the Middle East and Africa, including Kuwait, Jordan, Bahrain, Sudan, Iraq, Lebanon, Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Madagascar, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. The group also plans to commence operations in the Kingdom of Saudi Arabia in 2008, and rebrand the MTC Atheer (Iraq) to Zain. The company intends to become the top-ten global mobile operator by 2011.

The company
Zain (effective in Kuwait since September 8, 2007) is the leading mobile telecommunications provider in the Middle East and Africa. The comparatively modest beginnings with the time and effort of numerous professionals turned Zain into a team of more than 13,500 employees serving over 36.47 million customers in seven Middle Eastern and 15 sub-Saharan African countries, providing basis for the company’s global aspirations.

The brand is wholly owned by Mobile Telecommunications Company KSC and is listed on the Kuwait Stock Exchange (ZAIN). The market capitalization in 2007 exceeded US$ 30 billion.

Zain plans to become a global wireless operator executing its focused 3x3x3 profitable expansion plan by 2011. It has initiated the ACE-program aimed at extracting superior value from existing assets, namely through accelerating the growth in Africa; consolidating the existing assets; and expanding into bordering markets.

Zain’s main competitor is Wataniya Telecom, which has been a driving force in increasing the mobile market penetration in Kuwait (over 93%) and continues growing rapidly through acquisitions (expanding in MENA & ASIA). Wataniya Telecom operated in Kuwait, Maldives, Saudi Arabia, Iraq, Tunisia, Algeria and Palestine.

(Qtel), which has recently purchased 51% of Wataniya Telecom’s shares is the exclusive telecommunications provider in Qatar, also providing services in Oman, Singapore and Indonesia. Qtel is a winner of the 2006 GCC Economic Award. The company is listed on the Doha Securities Market and other stock exchanges.

The competition on the Kuwait mobile market is getting tougher, especially after the announcement of the new market player now being connected with the Saudi Telecom.

2. History, Mission, and Goals of the Company
MTC (now Zain) was the first mobile operator in the Middle East back in 1983. Known for the innovative approach, it was one of the first to introduce GSM pre-paid services in 2000.

The 2002 Partner Network Agreement with Vodafone created MTC-Vodafone Kuwait. The agreement offered the customers broader roaming services on any of Vodafone’s networks. The Vodafone brand name enabled MTC-Vodafone Kuwait become a leading brand in the area.

The company now has the customer base of 1.576 million, covering the market share of 58%. It provides roaming services in 146 countries through 274 Operators. 3G services launched in April 2006 and PC data card and HSDPA (3.5G) capabilities launched in November 2006. In May and August 2007 respectively Blackberry enterprise mobile email services were launched for business and consumer segments.

The mission of the company is to cement Zain as a leading global mobile operator that provides professional, world-class mobile and data services to all customers worldwide.

Their goal (the 3x3x3 plan) seeks to make Zain a global player in three stages: regional, international and global, with each stage completed in three years, with an aim of reaching a 70-million subscriber base.

The company focuses on business development and innovation, providing the customers with the latest technology and constantly improving customer services and benefits.

The culture of every country is unique and it influences greatly the marketing strategy of the company in a certain region. Zain operates through acquisition of local mobile operators and thus preserves specialists that have better understanding of needs and values of local population. The marketing techniques are being implemented with considerable attention to the specifics of the market Zain covers.

3. Managerial hierarchy and division
The company’s executive management team includes Deputy Chairman & Managing Director, Chief Financial Officer, Chief Technical Officer, Chief Strategy Officer, Chief Operating Officer Middle East, CEO Celtel International, Chief Information Officer, Chief Commercial Officer, Chief Human Resources Officer, Chief Communications Officer (Dealing with the Corporate Communications, Investor Relations and Corporate Social Responsibility) and the Chief Regulatory Officer(responsible for Regulatory & Government Affairs and Roaming overseeing all Zain Group operations).

The company’s main divisions include accounting, business development and planning, contact centers, HR, facilities and procurement, facilities management, legal and regulatory, finance, management, marketing development, PR and marketing, marketing communications, IT, government and regulatory affairs, customer service, customer support, commercial department, administration, customer helpdesk, VAS and IN, quality and revenue assurance, radio planning and transmissions, sales and much more.

The marketing division depends on the strategic marketing division and is supported by the communications division. The core marketing divisions include Sales and Marketing (involved in developing different solutions that meet consumer’s needs through targeted products and services), the CCR (Corporate Communication & Relations) Department (responsible for building and maintaining the brand image of the company through event management, conferences and seminars, media relations, press releases, advertising, website content and much more). The Sales and Marketing team is responsible for innovation, product development, business cases, product design, building product management, and life cycle management, etc.

The Call Center provides customers with easy and timely access to the services they want.

Zain’s competitive advantage in marketing strategy is the “price-only” focus and “value proposition.” The company classifies customers into value segments. The needs of different classes are all being addressed. The technological leadership and improved customer services add up to the successful strategy of the market leader.

According to the statements of the company’s officials “Zain strategy focuses on combining value creation and internal growth from existing operations with aggressive expansion into new geographies”, to pursue it, Zain focused on mass market and segmented customer strategy, competitive positioning and differentiation strategy, high-value technology strategy and company management.

4. Impact of the Company in the economy
Arab stock markets have greatly benefited from the telecom companies’ activities. In some countries the telecommunication companies represent over 30% of stock exchanges. The amount of wealth generated by these telecom IPO’s, a US$1,000 invested since the listing date in Etihad Etisalat, Mobinil, Orascom Telecom and MTC would have generated US$14,500, US$12,000, US$11,500 and US$33,500, respectively.

In 2007 Zain stated consolidated revenues of USD 5.91 billion (adding 32% if compared to 2006). The consolidated EBITDA increased by 25% compared to last year and reached USD 2.56 billion and consolidated net income of US$1.130 billion showed an increase of 11% to the results of 2006. Earning per share equals US$0.61, offering the same 11% increase to 2006.

The Kuwait economy has certainly benefited from the emergence of the global mobile player – the revenues and taxation of the company provide substantial support for the country’s economy. Selling mobile licenses brings enormous profits as well.

5. SWOT Analysis in the marketing department
The company’s strengths are strong brand recognition, financial superiority, the Group Synergies (economy on scale, offering unique technological, marketing and customer support strategies). The high priorities are Customer loyalty programs and a strong focus on data services.

The weaknesses in marketing strategy may include the lack of addressing specific needs of the markets (especially African). Also, the company’s main competitor, Wataniya, is claimed to be more active in the NGN sector, seeking to deploy and expand an HSDPA network.

Zain’s opportunities in marketing strategy include the 3G market and the new growth and marketing opportunities based on future acquisitions.

Threats in marketing strategy are represented by the Qtel’s recent purchase of Wataniya’s share and the emergence of a new mobile operator, presented by the Saudi Telecom. The new market player’s pricing strategy would most probably be harmful for Zain’s current offers.

6. Impact on local business
Zain has donated millions of dollars through corporate social responsibility programs, aimed at health, environmental awareness, cultural resources and education.

The company’s corporate social responsibility (CSR) program covers activities from the corporate sponsorship to lower-profile charity-related grants for the local talents. Zain’s international activities influencing local communities include the establishment of the Sabah Ear-Nose-Throat Hospital in 1999 in Kuwait, supporting the elderly and the needy, continued support for the Kuwait Diving Team, the effort of improving education in computer literacy courses through donation of computers to various organizations and much more.

Globally, Zain sponsors numerous sports events Soccer Championships to Basketball, from Speed Boat Racing to Go-Cart and Rally all at local and regional levels.

Another sphere for sponsoring activities of Zain are the telecommunications conferences and other industry events in the Gulf and across the Middle East and North Africa, including the ‘3G Mobile World Forum’ in Tokyo in January 2005, the ‘Wireless Services in Iraq’ conference in London in January 2005 and the Arab Economic Forum in Lebanon in June of 2004 & 2005.

7. Culture affects on marketing strategy
The pattern of marketing influence for the mobile brands that represent Zain’s interests on the markets of Middle East and Africa are tailored for the local community needs and values, as well as the expectations and the paying capacity.

The richer and more developed countries need access to more sophisticated services and technologies, while other markets need basic services for a reasonable price. By adopting customer driven marketing strategies for each country, Zain guarantees marketing leadership in the region, further aiming at the 70% of the customer base.

The local cultural differences tailor the marketing mix and the advertising filling. The marketing strategy of Zain in every separate country is focused on the cultural differences of the region and is being developed by the local professional team that provides all the necessary information of the most efficient tools and factors.

8. Conclusion and summary
The situation on the mobile market in Kuwait is changing rapidly, as well as the whole telecom industry in the Middle East region. Several operators of the region have grown enormously through buying operators and licenses, with interests across the Middle East and extending into Africa and West Asia. The largest are Etisalat of the UAE (most subsidiaries focused in Africa), MTC of Kuwait and Qtel of Qatar. Batelco of Bahrain is getting bigger and may be expected to reach the level of the three mentioned above once.

The two of the three largest players – MTC (through Zain) and Qtel (through Wataniya) represent the existing mobile market of Kuwait. The third player has been announced to come to the market, mainly through the Saudi Telecom.

Now Zain and Wataniya are fighting for the market share implementing effective strategies and improving technology and customer care.

Zain’s market capitalization exceeded US$29 billion as at February 1, 2008. It is listed on the Kuwait Stock Exchange and there are no restrictions on Zain shares. Kuwait Investment Authority is the company’s largest shareholder (24.6%).

The mission of the company is to cement Zain as a leading global mobile operator that provides professional, world-class mobile and data services to all customers worldwide.

Zain plans to become a global wireless operator executing its focused 3x3x3 profitable expansion plan by 2011 (an implementation aimed at extract superior value from existing assets through three main thrusts: Accelerating the growth in Africa; Consolidating the existing assets; and Expanding into adjacent markets – also known as the ACE).

The 3x3x3 plan intends to make Zain a global mobile leader (top-10) of three main levels: regional, international and global, with each level achievement accomplished in three years. Zain aims of reaching a goal of a 70-million subscriber base. The company’s strategic management supports “aggressive expansion into new geographies”. The company’s growth strategy is truly impressive: five years ago it operated in Kuwait alone; now it is operating in 22 countries of Middle East and Africa.

MTC Group announced on September 8, 2007 that it has re-branded to Zain which became the Group’s corporate master brand.

The four main strategic elements of Zain’s activities on the mobile market include the mass market focus and segmented customer strategy (it targets to reach at least 70% of the market through adding under-penetrated segments with aggressive price offers).

The second element of Zain’s strategy is the competitive positioning and differentiation strategy: through the “price-only” focus and offering “value proposition” to different segments.

The high-value technology strategy also adds-up to the global leadership strategy and ambitions of Zain management. And the company management strategy provides additional opportunities in terms of “synergy realization” and “excellence” by assuming and promoting a “people-oriented culture”, the company’s CEO emphasized.

The company’s strengths may include strong brand recognition, financial superiority, and the economy on scale, offering unique technological, marketing and customer support strategies based on the Group Synergies. The high priorities for Zain company are the customer loyalty programs and a strong focus on data services.

Zain’s opportunities in marketing strategy are in the future development of the 3G market and other technologies, and the new growth and marketing opportunities based on future acquisitions on the new markets.

As a part of global new branding, a Zain Group new logo and theme “A Wonderful World” emerged on the global market. The world leading consulting firms and advertising agencies was developed the new identity of Zain. It now symbolizes the Group’s freshness, boldness and vitality, echoing growth, progression and diversity, the management has chosen as the key goals.

The company’s success depends greatly on the team of professional that tailor the mobile services for the evolving needs of the customers. The competition is getting tougher, as Zain has stated challenging goals for the following three years and the competitors try to keep up with the pace. New companies emerge, new acquisitions take place, new technologies occur – all this adds up as the challenge to Zain’s global marketing strategy, but the opportunities and rewards are so beneficial – they are worth fighting for.

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