Issue 1 : Introduction
Vecima NetworksInc. (Vecima) is a Canadian company headquartered in Victoria, British Columbia with ISO 9001 certified manufacturing operations in Saskatoon, Saskatchewan and an Asia-Pacific Regional Sales Headquarters in Parramatta, Australia.
Vecima Networks designs, manufactures and sells products in telecommunication industry that enable broadband access to cable, wireless and telephony networks. Multi System Operations, Cable TV Providers, Internet Service Providers (Service providers) use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services.
Vecima's products are directed at two principal markets: Converged Wired Solutions (Broadband Data over Cable "Wired") and Broadband Wireless. Data over Cable products include a family of upconverters and modulators that process data from routers and convert it to higher frequencies for transmission over cable to subscribers. Broadband Wireless products include transmitters and transceivers that process data from routers, switches and modems and transmit it to subscribers over wireless infrastructure.
Get your grade
or your money back
using our Essay Writing Service!
Value Proposition : Vecima Networks Vision is “to be the leading Last Mile Solution® provider for broadband wired and wireless networks through Customer centric, Innovative products” (www.Vecima.com) clearly depicts that Vecima has adopted a blend of product & marketing orientation (Marketing Management 2010 p.1-16) towards its marketing strategy.
The emphasis on “Customer Centric” depicts marketing orientation whereby it differentiates itself from its customers by developing products as required by the customer. At Vecima emphasis is laid on developing a product after understanding the needs of the ever changing telecommunication industry rather than coming up with a product which the RnD department can develop.
The emphasis on “Innovative Products” shows a product orientation by delivering high quality, cutting edge products as per evolving needs of the telecommunication industry which is very much influenced by regional telecommunication regulatory body.
Issue 2 : 5Cs Analysis
Company : Vecima Network is a $165 Million company listed on the Toronto Stock Exchange (TSX : VCM). With annual year-on-year growth of 22% and 21 consecutive years of proftability (Fiscal Year Ending 2009 Earnings: $17.2 million) with a 12,000 square foot dedicated state of the art R&D lab with 37% (450+) employees in R&D department has helped it to position itself as a leading supplier of cutting-edge telecommunications equipment. Table 1.1 below depicts a SWOT (Marketing Management 2010 p. 1- 25) analysis for Vecima
Customers : Vecima Products are used by service providers to bridge the final network, commonly referred to as “the last mile” to provide services to End users. Vecima is a B2B product company which has adopted a Concentrated marketing mix towards it diverse customers base around the world whose requirements (technical specifications) are governed by local communication authority. Purchasing decision by Vecima's Customers is very much influenced by Product Specification, Quality and customer services.
Competitors : Telecommunications industry is highly competitive and regulated by the government. Using Porters ‘Five Forces' (Marketing Management 2010 p. 1- 26) framework to analyze the competition we see that Vecima faces threats from new entrants as the barriers to entry is very low and the risk from substitute products are high once the patent on the key product line expires. Vecima also faces threats from its buyers (Cisco – 60% of revenue) who might backward integrate to produce the products in house. Thus to mitigate these risks Vecima keeps itself abreast of the industry & competitors advancement through market research.
Collaborators : Vecima's collaborators (both upstream & downstream) play an important role in Vecima's Marketing strategy to position itself as the leading last mile solution provider by associating itself with companies which shares its vision of innovative products (suppliers e.g. Intel) and those who provide exceptional Pre & Post sales service support (resellers/OEM partners – Cisco, Motorola)
Context : The impact of current enviorment Vecima Networks is operating in can be summarized by a PESTLE (Marketing Management 2010 p. 1-29) analysis summarized in table below
Issue 3 : Market Research
Vecima's primary source of collecting information is through customer feedback as its customers require highly customized telecommunications equipment whose specification are influenced by two factors primarily
Always on Time
Marked to Standard
– Telecom regulator's specification &
– End user's requirements.
The customer feedback data is collected by different departments for the same customer through the various stages of customer's buying process as the Sale cycle can vary from 6-8 months based on specification of the project. This collection of data at multiple levels helps in qualifying the consistency of information and provides constant feedback if moving in the right direction. Information collected by pre-sales department is fed to the R&D team which customizes the solution, the information collected by Post-Sales team is fed to the Support department to facilitate the implementation of the project.
This collection of customer information also helps to adapt Vecima marketing strategy moving forward along with its customers.
The second source of market information is through market research (Marketing Management 2010 p. 4-16). Vecima takes part in various Trade shows & conferences to promote & keep abreast to the latest technological advancement. Trade shows also helps to gather information about competitors strategy and how we should adapt our strategy to mitigate any threats from them. Geographically its hard to attend all the trade shows due to high costs and conflicting timings, thus some trade shows are attended through collaboators (Suppliers – WaveSat) or even OEM partners (eg Motorola).
Vecima also conducts market research about any regulatory technical specification changes through RFI or white papers published by the regulator. Telecom regulations varies from country to country. Information collected from regulatory body drives the product specifications to be developed. For eg Change from Analog to Digital TV signals in Australia by ACMA means analog products by Vecima cant be used after 2013. Thus changes in the Australian market (context) has influenced the marketing strategy of Vecima for Australia. Therefore development of new digital products for Australian Service providers (eg Foxtel)
Vecima also publishes white papers and collects feedback on them from Regulatory authorities and Industries key players which helps the marketing department to outline product development strategy in the long term (3-4 years).
Issue 4 : STP
Vecima's has adopted a concentrated marketing (Marketing Management 2010 p. 5-10) mix towards it customers base which is ‘heterogeneous between'. Vecima basically segments its customers based on the technical specifications which are governed by the local regulator thus Vecima uses Geographic segmentation (Marketing Management 2010 p. 5-15) in defining its marketing strategy. Though Geographic segmentation is the umbrella under which further segmentations can be done for example some of the standards used by different segments (countries) are the same. A good example here of the segmentation process is that both America & Canada uses the same TV standards i.e. NTSC but different flavor of the same. USA uses NTSC M but Canada uses NTSC I.
Using Ansoff's growth matrix (Marketing Management 2010 p. 6-12) Vecima's growth strategy can be identified as Product development. Vecima has been focusing mainly on its existing customer base through enhanced feature development or new product development for the existing market segments as per the changes in the regulatory specifications. The reasons for this targeting approach are :- a) the customers finds its easier to migrate from one product to another product from the same manufacturer b) core expertise in development means the turn around time for any product enhancement is very less ( generally 4-8 weeks) and thus more profitable due to higher margins as compared to feature development by our competitors.
Vecima has been successfully able to position its self as a provider of cutting edge telecommunication equipment to provide the last mile solutions through a number of positioning methods like by developing enhanced product features as required by the changing demand of the industry. Another approach has been through its association with the industry leading service providers like Cisco, Motorola, Comcast, Warner Cable etc.
Vecima's investment into R&D has also helped it to position itself in the market by low turn around times on development and protection on new features as required by the industry through patents.
The table below highlights the marketing mix for Vecima Networks
High End with Enhanced feature set
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
Cost Based Approach
Direct & Sales
Through local channel partners
Issue 5 : Findings & Recommendations
Vecima marketing strategy though a mix of both product & marketing orientation but is more tipped towards product. Vecima strategy is still very much influenced and driven by what happens in R&D department than focusing on industry demands. The growth strategy is very much focused on what a particular customer might want rather Vecima networks should adopt more of a marketing approach where it tries to find out what does the industry (Segment) as a whole need. A need for a particular feature by the market segment (End Users – Derived Demand) can be identified differently by different service providers in the same market segments. Vecima networks should invest more into collecting information through market research and market intelligence.
Vecima's OEM Customers (the customers who have private labeled the products) are competitors in certain market segments (Thomson private labels Vecima products and sells them in Taiwan as a competition product to Vecima) and poses a big threat in form of loss of business either directly (loss of a key customer account) or indirectly (Loss of potential market segment to competition in that segment). Thus Vecima should adopt differentiated marketing strategy instead of a concentrated and should adopt a marketing mix based on a more finer segmentation approach. Vecima should profile them accordingly rather than just based on geographic segmentation.
Though Vecima segments its markets based on the geographic segmentation but some of the key features presented by those segments reflect the same attributes. Thus Vecima can and should segments its customers base also based on ‘Standards'.
As highlighted in table above the similar segments are grouped in same color based on the standard.
Vecima's primary focus of product development has meant that other key departments specially Sales have been short staffed. So only a handful of Sales people are given the mammoth task of covering the customer bases which are spread across 18 time zones around the world are not always to collect the relevant information first hand i.e. from the customer but have to rely on 3rd party resellers for that information whose interests many a times biased by the profit margins. Thus the information collected by Sales department which is fed to the marketing manager is not always correct which is reflected in the marketing strategy of the company to focus more on product development and neglect the other high growth opportunity – Market development.
Vecima's 70% revenue comes from North American market, 24 percent from the Asia Pacific and the 4% from Africa & 2% from Europe which reflects a huge potential of growth specially in European market after the unification of standards under the European Union. Using Quester product life cycle – sales & profit model highlights some of they key products are in the existing market have surpassed their growth stage.
The same products if introduced into new markets will have more potential of growth with little or no cost towards product/feature development. This is can achieved by opening an office in Europe or by staffing more sales people who only target new markets and are able to feed correct information to the marketing department in devising the market strategy both for a segment and a company as a whole.
The entry into the new market might mean initial outlay of funds and results might take longer to come as compared to a product development. These risks can be mitigated by doing initial market research either through a third party or attending trade shows in Europe.
Vecima's should also implement IMC both for its exiting markets as well for the new markets to position itself as a leading last mile solution provider. This can be achieved by showcasing products during industry seminars, publishing white papers for new product features, working more closely with industry regulator in developing Technical specification (eg IEEE).
Marketing Management (Intensive) 2010, AGSM, Executive MBA program, Graduate Diploma in Management.
About Vecima, Vecima Networks < http://www.vecima.com/about.php> (Accessed 26th April 2010)