How Vodafone bulled through the Indian telecom nexus?

Vodafone is the Indian subsidiary of UK-based Vodafone Group plc and was a provider of telecommunications services in India with its operational head office in Mumbai. It entered the Indian telecom market with the acquisition of Hutchison Essar Limited on May 8, 2007.

At the time, the telecom industry was ruled by domestic companies like Airtel, Idea, and BSNL. It was a daunting task for a foreign player like Vodafone to thrive in an oligopolistic and dynamic market given the advanced understanding of the domestic players of the Indian consumer behavior and laws. Oligopoly is a market structure that has unique features because it is characterized by a few sellers and mutual interdependence. The prime barriers to entry are government licenses, high investment requirements, strong consumer loyalty for existing brands, economies of scale, patents, access to expensive and complex technology, and strategic actions by incumbent firms designed to discourage or destroy nascent firms.

Vodafone’s parent Vodafone Group plc could pump in the required investment and also back it up for scaling its operation in India. The barrier of government licenses was taken care of by Vodafone’s acquisition of Hutchison Essar with the network and contacts it came with. But the hitch of existing companies having their stronghold over the majority of customers remained.

How could Vodafone sway the strong consumer loyalty of existing brands and establish itself as a major telecom player in India?

In an oligopolistic market Price, Quantity and Revenue are the main players. There are various ‘price wars’ (cutting down the price) as well as ‘non-price wars’ taking place. Price wars usually include the adoption of pricing strategies. Vodafone had to fight tooth and nail to win over these price wars. But it required another strategy to become a blockbuster.
This is where non-price wars come into play. Advertising is the non-price war where advertisements are the way to cut the chance of competitors by making use of various strategies. Vodafone eventually found a breakthrough when it aced the non-price war with its 2009 Zoozoo advertising campaign.

The following ingredients made the campaign a major hit
1) Perfect timing — In India cricket is religion. Vodafone decided to leverage this and launched the campaign during the Indian Premier Leagues 2 of 2009. This was a masterstroke as it gave Vodafone massive viewership of 90 million people

2) Viral marketing -
It had all the six factors that drive virality

• Social Currency — People loved to share, and join the Zoozoo cult to look hip
• Triggers — The campaign rode on the popular wave of IPL and caught the attention of the entire cricket savvy nation
• Emotion — The characters were adorable, funny, glum, envious, brave, and humanlike.
• Public — The simplicity of the ads, characterization, relatability, catchy tunes, and the name itself (Zoozoo) made them easy to replicate and share
• Practical Value — The ads were short and had succinct messages regarding the service being promoted
• Stories — Every 30-sec ad had micro-stories with a clear offering/ conclusion at the end

Zoozoos were hugely popular and dominated social media sites such as Twitter, Facebook (18 million likes, 2.6 million views, 2 million members on an official page; 200 pages with over 250000 fans), Youtube (3 million views in 3 weeks), Orkut, etc.

Apart from the rampant social media presence, the campaign was heavily publicized by microsites, blogs, sharing wallpapers, emoticons, ringtones, video content, screensavers, pictures, stories, contests, live events with mascots, Facebook communities, youtube ad downloads, and the launch of Zoozoo merchandise

As a result, the campaign led to (in Q1FY10)

• An increase of 30.30% in data revenue and 205.26% in other services revenue
• 7.68 million more subscribers
• The customer base increased by 3.8%
• 85% more brand visibility

This was the impact of a well-designed campaign. These commercials went viral and made Vodafone India’s 3rd largest telecom company within a short period (in 2009). As of March 2018, Vodafone India had a market share of 21% and with its merger with Idea, the collective Vodafone Idea network has approximately 375 million subscribers and is the second-largest mobile telecommunications network in India.