pritesh patkar
TRANSCRIPT
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INDEX
Executive Summary
Chapter 1 : Introduction to the study 2
Objective o the project
!ypothesis
"esearch methodo#o$y
Chapter 2 : Introduction o %irte# 1&' (odaone
Chapter ) : "evie* o the #iterature +,
Chapter - : %na#ysis o the project +2
Observations ' indin$s
.imitations
Chapter / : Conc#usions ' Su$$estions +&
%ppendix
0ib#io$raphy
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O0ECI(E O3 !E S4D5
)very organi%ation has to achieve its organi%ation goals. *or this it is
very essential for an organi%ation to know about the view of consumers and
their competitive products. This survey research may be also aimed as to
estimate potential buyer for the product. The objective of the study is as under(+
,. To identify the difference between market performance of $irtel industry and
Vodafone.
!. To study the market of $irtel Industry and Vodafone on big scale
telecommunication sector.
-. To compare various parameters of marketing strategies&
manufacturing process technology adopted production policy& advertising&
collaboration& eport scenario& future prospect f or the tw o companies and
government policies.
/. To study customer buying behavior and factors which influence
the purchase decision process.
0. To know how the company has been successful in encountering the
aggressive marketing strategies of competitors.
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!ypothesis
The *ollowing hypothesis were framed.
1ypothesis ,(Than ,!0 million telephones network is one of the
largest communication networks in world& which continues to grow at
a blistering pace.
1ypothesis !(. 2urrently more than -" lakh phones are being added
each month and it is targeted that by the end of !""3 the total number
of phones may reach a level of-0" million taking the tele+density to
more than -"4 which is currently at !/.5-4.
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6E!OD O3 CO..ECION
*ield procedure for gathering primary data included observation and
interview schedule in which the
questionnaires were filed by the personal interviews through self
administered survey was done to collect the data& market research
was undertaken& that was accomplished by performing various activities
designed.
"ESE%"C! INS"46EN
6uestionnaire
he 7uestionnaire *as ormu#ated by 8eep in mind the o##o*in$ points.
iving the respondents clear comprehension of the question.
Identifying the needs to be known.
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% brie history o e#e sector in India
In the early ,77"s& the Indian government adopted a new economic policy
aimed at improving India8s competitiveness in the global markets and the
rapid growth of eports. 9ey to achieving these goals was a world+class
telecom infrastructure.
In India& the telecom service areas are divided into four metros :;ew
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G;TPH ,777=. nder this new policy& the old fied+ licensing regime was to be
replaced by a revenue+ sharing scheme whereby between 3+,! percent
of cellular revenue were to be paid to the government.
INDIAN CELLULAR MARKET - EARLIER ROADBLOCKS AND THEIR
RESOLUTION
Indian 2ellular market immediately after the first round of licensing in
,77/+75 was beset by several problems for - + / years till the ;ew Telecom
Policy,777 was announced. Bome of these roadblocks J current position is
tabulated below(
"O%D0.OC9S
C4""EN OSIION
High license fees
Migration to revenue sharing mode in ,777 mitigates high initial fund
requirements for payment of license fees.
Inadequately funded businesses J weak and fragmented promoters.
?usinesses that have since been adequately funded growing at over
5"4 per annum& while businesses with weak promoters continuing to
languish + spate of acquisitions J mergers& with /J0 major groups emerging in
the last oneJtwo years.
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Regulatory authority not in place
Telecom Degulatory $uthority of India :TD$I= firmly in place& and its role being
accepted by all operatorsK
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Problems in Financial closres !e "o#
Eicensing tenure of ," years
Earge upfront cash requirements from promoters due to heavy license fee
burden in initial stages of deployment $sset based financing approach by
Indian *inancial Institutions.
Eicensing tenure increased from ," to !" years
Earge upfront cash requirements for license fee payments mitigated with
migration to sharing mode allowing promoters to deploy more capital for
capital ependitureK project financing being considered by most financial
institutions.
Forei$n o%ners&i' ( c&an$e o) 'ar"ner limi"a"ions
ownership norms clarified& and change of partners allowed as a matter of
routine allowin ease of entry J eit + paves the way for full control of businesses
by foreign companies.
Inadequate growth of market J subscribers
Doadblocks spelt out earlier resulted in low market J subscriber
growth& but with corrective measures taken& market J subscriber base
epected to %oom.
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*+* DE,ELOPMENTS IN THE CELLULAR INDUSTR
The interconnection regime between cellular operators and fied+line
operators is still biased against the former.
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)nterprises @ another major cellular player @ acquired.
2ommunications renamed ?harti Mobinet :$ugust !"""=. ?harti also acquired
the Punjab license of )ssar and started operations& giving competition
to the lone operator there& Bpice 2ommunications. oing forward&
?harti is likely to merge all its cellular companies into one entity.
*ive companies together bid Ds,5.- billion to bag the licenses for the fourth
operator slots in four metros and ,- circles. ?harti emerged as the ;o. ,
bidder with eight new licenses& followed by )scotel with four& 1utchison with
three& and Vodafone and Idea cellular with one each. ?harti and 1utchison
have already commenced operations in all the circles while Idea is set to
launch in
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success of PDB remains a question.
In !""0 1utchison )ssar an Indian and hongkong telecommunication alliance
was taken over by the nited 9ingdom based telecommunication company
name Vodafone telecomm services and comes with the name of Vodafone
essar.
Virgin mobile comes in Indian Territory with the alliance of T$T$
telecommunication Maharashtra in !""3.
Mitsubishi a Capanese telecomm services :MTB= company comes in India in
!""7 and take over
Bil!in$ .isibili"/ an! a%areness
Arange 1olidays> and>Arange Monsoon Affers> at very
attractive rates and added benefits like discounts on airfare& food and
beverages& among others. Athers offer special privileges in retail outlets&
cinemas and music shops.
En"er'rise mobile a''lica"ions 0 'romisin$ re.ene s"ream
$ll along& customer acquisition and the top line have been the
focus. *ew operators have concentrated on offering differentiated services
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for businesses. 1owever& as operators reali%e that offering basic voice and
Bhort Message Bervice :BMB= will get them the numbers but not the
margins& some are now seriously looking at the enterprise segment for
provisioning superior services.
2ost+centered solutions like closed user group :2=& value+adds like
unified messaging and instant alerts are being offered.
$ variety of mobile applications are finding takers among the enterprise
segment. ?harti is in the process of introducing a facility to fleet
management companies so that they can improve the efficiency of trucks
or buses by tracking movement and ensuring higher+use& accurate
route planning. Premium automakers are also installing a global system for
mobile communications inside a vehicle to help trace lost vehicles and track
down stolen cars.
2orporations can choose enhanced services like user+defined call routing to
prevent misuse. 2alls can be barred& limiting access to select numbers
and diverting calls to one single number. ?roadcasting services are
also quite popular& especially among fast food centers that have a central
number. roup BMB is quite popular& especially among enterprises both in the
service as well as number. roup BMB is quite popular& especially among
enterprises both in the service as well as number. roup BMB is quite popular&
especially among enterprises both in the service as well as the fast+moving
consumer goods :*M2= segment that have a large field force and
need to provide regular updates on inventory status& discount schemes
and movement of goods from warehouse to the retail outlet. ?anks
too find bulk BMB service very useful to forward transactional alerts
to their customer
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*+1 FUTURE TRENDS AND DE,ELOPMENT
There will be more competition& forcing operators to constantly
focus on differentiations to maintain their lead.
The implementation of enhanced networks like !.0 will enable
operators to offer data services. This is an opportunity to customi%e
and differentiate better.
The entry of state+run operators like ?B;E and ?1$DTI means that
prices will no longer be controlled& thus there is less chance of a cartel
being formed.
;etwork coverage in terms of geographic spread and quality of
coverage is crucial especially for the business subscriber. The bigger
the service providerLs national presence& the better it is for businesses.
An the roaming front& signing up with a national operator is advantage
Eimited mobility wireless in local+loop services :by fied network service
providers= will be a disadvantage for cellular operators in the short term.
2onsequently& operators need to streamline their customer relation
activities and adopt aggressive subscriber acquisition and retention
strategies
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*+2 RE3ULATOR ISSUES
The operations of this sector are determined as under the Indian
Telegraph $ct of ,330. $ document buried in the sands of time. The net
major policy document& which was produced& was ;ational Telecom Policy of
,77/& a consequence of the on going process of liberali%ation.
5ear Event
,30, *irst telephones in India
,7/- ;ationali%ation of telephone companies
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$ugust ,770 VB;E launches Internet services
Canuary ,775 TD$I formed
;ovember ,773 Internet policy announced
The ;ational Telecom Policy of ,77/ document& which laid out broad policy
guidelines rather than a series of action points. Eike other policies& it sought to
achieve the impossible in finite time like improve quality of service and its
availability& wide coverage :a phone in every village=& at reasonable rates& etc.
The targets in quantifiable terms were installation of 7.0mn additional lines&
telephone on demand by ,77F& and a P2A pop of 0"". The )ighth Plan had
also allowed private operators in value added services. To facilitate licensing&
the nation was divided into !" circles:akin to a state= for basic and !, circles
for cellular telephony. Mumbai falls in Maharashtra circle and
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The telecom sector has witnessed some fundamental structural and
institutional reforms in the past decade. Telecom equipment manufacturing
was completely deregulated in ,77,. Value+added services :including
cellular services= were thrown open to private sector participation in ,77!.
?asic services were opened to private participation in ,77/ by dividing
the country into !, telecom 2ircles and allowing one private operator
per 2ircle to compete with
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Sources o secondary data
Internet
Maga%ines
Cournals
?harti 2irculars Btore
Vodafone Btore
Vodafone Ministore
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2hapter !
Introduction Af the Topic
The project is an etensive report on how the $irtel 2ompany markets its
strategies and how the company has been able in tackling the present tough
competition and how it is scooping up by the allegations of the quality of its
products. The report begins with the history of the pr oducts and the
introduction of the $irtel 2ompany. This report also contains the
basic marketing strategies that are used by the $irtel 2ompany of
manufacturing process& technology& production policy& advertising&
collaboration& eport scenario& future prospect and government policies. The
report includes some of the key salient features of marketer end issues.
In today8 s world of cutthroat fierce competition& it is very essential to not only
eist but also to ecel in the market. Today8s market is enormously more
comple. 1ence forth to s ur vive in the market& the company not only
needs to maimi%e its profit but also needs to satisfy its customers and
should try to build upon from there.
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%I"E.
Company proi#e
%I"E. is a brand of telecommunication services in India operated by ?harti
$irtel. $irtel is the largest cellular service provider in India in terms of number
subscribers. ?harti $irtel owns the $irtel brand and provides the following
sevices under the brand name $irtel( Mobile Bervices :using BM
Technology=& ?roadbandN Telephone Bervices :*ied line& Internet
2onnectivity:
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in ,730& ?harti has been a pioneering force in the telecom sector. 'ith many
firsts and innovations to its credit& ranging from being the first mobile service
in
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The 2ompany has developed the following strategies to achieve its
strategic objective
*ocus on maimi%ing revenues and marginsK
2apture maimum telecommunications revenue potential with
minimum geographical coverageK
Affer multiple telecommunications services to provide customers with a
>one+ stop shop> solutionK
Position itself to tap data transmission opportunities and offer
advanced mobile data servicesK
*ocus on satisfying and retaining customers by ensuring high
level of customerK satisfactionK
Eeverage strengths of its strategic and financial partnersK
andS.)mphasi%e on human resource development to achieve
operational efficiencies.
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0usinesses
?harti Tele+Ventures current businesses include
Mobile services
*ied+line
;ational and international long distance services
VB$T& Internet services and network solutions
?roadband services with
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quality service to its customersK
6uality management team with vision and proven eecution skillsK
and
The 2ompanyLs strong relationships with international strategic and
financial investors such as BingTel& 'arburg Pincus& International
*inance 2orporation& $sian Infrastructure *und roup and ;ew Oork
Eife Insurance.
0rand %rchitecture:
?harti is working on a comple "o "&ree-la/ere! bran!in$ arc&i"ec"re
0!%"I %I"E. O4C!E. INDI% ONE
Air"el -The flagship brand for cellular operations all across the Indian
country.
Toc&"el-The brand earmarked for basic service operations.
In!ia One-The brand for national long distance :;E
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Bran! S"ra"e$/
To understand the brand strategy& let8s first look at the brand building eercise
associated with $irtel @ a brand that had to be repositioned recently to
address new needs in the market. 'hen the brand was launched seven years
ago& cellular telephony wasn8t a mass market by any means. *or the average
consumer& owning a cellular phone was epensive as tariff rates :at Ds 3 a
minute= as well as instrument prices were steep @ sometimes as much as
buying a second+hand car.
?harti could have addressed the customer by rationally eplaining to him the
economic advantage of using a mobile phone. ?ut Bachdev says that such a
strategy would not have worked for the simple reason that the value from using
the phone at the time was not commensurate with the cost.
QInstead of the value+proposition model& we decided to address the sensory
benefit it gave to the customer as the main selling tack. The idea was to
become a badge value brand&R he eplains. Bo the $irtel Qleadership seriesRcampaign was launched showing successful men with their laptops and in
their delue cars using the mobile phone. In simple terms& it meant $irtel
was positioned as an inspirational brand that was meant for leaders& for
customers who stood out in a crowd.
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Bachdev and his team reali%ed that in a business in which customer
relationships were the core this could be a major weakness. The reason with
tariffs identical to competitor Vodafone telecomm and roughly the same
level of service and schemes& it had now become important for
?harti toQhumani%eR $irtel and use that relationship as a major differentiation.
The brand had become something like Eufthansa @ cold and efficient. 'hat
they needed was to become Bingapore $irlines& efficient but also human. $
change in tack was important because this was a time when the cellular
market was changing
The leadership series was okay when you were wooing the crUme de la crUme
of society. Ance you reached them you had to epand the market so there was
need to address to new customers ?y that time& ?harti was already the leading
cellular subscriber in
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That is precisely what the brand tried to achieve through its new
positioning under the $irtel4Toc& Tomorro%5 brand campaign. This set of
campaigns portrayed mobile users surrounded by caring family members.
Bays Bachdev( QThe new campaign and positioning was designed to
highlight the relationship angle and make the brand softer and more sensitive.R
$s it looks to epand its cellular services nationwide @to eight new circles
apart from the seven in which it already operates @ ?harti is now reali%ing that
there are new compulsions to rework the $irtel brand& and a new eercise
is being launched to this effect. Dight now& the company is unwilling to
discuss the new positioning in detail. ?ut broadly& the focus is on positioning
$irtel as a power brand with numerous regional sub+brands reflecting customer
needs in various parts of the country.
If $irtel is becoming more humane and more sensitive as a brand& ?harti has
also understood that one common brand for all cellular operations might not
always work in urban markets that are now getting increasingly saturated.
To bring in new customers& the company decided that it needed to segment
the market. Ane such eperiment& launched last year& is Ooutopia& a brand
aimed at the youth in the ,/ to ,7 age bracket and for those who are Qyoung
at heartR. 'ith its earlier positioning& $irtel was perceived as a brand for
the well+heeled older customerK there was nothing for younger people. 'ith
Ooutopia $irtel hoped to reverse that In order to deliver the concept& $irtel
offered rock bottom tariff rates :!0 paise for -" seconds= at night to Ooutopia
customers @ a time when they make the maimum number of calls. It also set
up merchandising eercises around the scheme @ like a special portal for
young people to buy things or bid for goods.
The company is now looking at offering other services at affordable prices to
this segment which include music downloads on the mobile and bundling
BMB rates with normal calls to make it cheaper for young people to use.
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The other eperiment that ?harti has worked on is to go in for product
segmentation through the Tango brand name. The brand was created to offer
mobile users Internet+interface services or what is known as '$P :'ireless
$pplication Protocol=.
The idea was to bring Internet and mobile in perfect harmony. QThe name
was chosen from the popular movie titleI" Ta6es basically& you need the two
services to tango to offer customers a new choiceR& says Bachdev.
This& however& had less to do with the branding eercise as with inefficiency of
service :accusingly slow download speeds= and the limited utility of '$P
services.
Bubsequently& the ads were withdrawn& but the company re+iterated that
the branding eercise could be revived because Tango will be the brand to
offer PDB services @ or permanent Internet.
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he 6a$ic
Perhaps the more ambitious eperiment has been with@ the pre+paid card.
The idea was to make the brand affordable& accessible and& most importantly&
feasible as a means of epanding the market even faster.
PHASE I 7
Magic was aimed at bringing in infrequent users of a mobile phone into the
market and assure him that he would have to pay only if he made a call. Buch
a customer used the phone sparingly+ mostly for emergencies @ and was not
willing to pick up a normal mobile connection with its relatively high rentals
:pre+paid cards do not include rental charges=.
To achieve its objectives ?harti did three things.
Ane& the product was made available at prices ranging from Ds -"" to
Ds -&""" with no strings attached and was simple to operate.
Two& the product was made accessible and distributed throughsmall stores& telephone booths and even kirana shops so that the
offering was well within arms reach.
Third& to make the product more QapproachableR to the customer& the
company came with vernacular ad campaigns
Eike4Ma$ic Daalo Sa/ Hello5
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$ll elements + user imagery& contet& tone N language created to
connect the category to the lives of the B)2 ? N B)2 2 segment the
middle class non+mobile user. $irtel Magic positions itself on the platform of being ecellent for
emergency situations increasing productivity as a part of everyday life.
Bharukh 9han makes everything in life possible8 while romancing
pretty 9areena 9apoor with $irtel Magic& India8s leading pre+ paid
mobile card.
.
It gives you the freedom to control your life in a way never possible
before. Indeed& anything that think is possible is possible with $irtel Magic.
The new brand slogan Magic hai to Mumkin 1ai.
This strategy is designed to help us talk to this segment directly in the tone&
manner N language of the masses. The QMumkin haiR value proposition will
help us epand the market and gain a higher percentage of market shares in
the process.
?rand ambassadors Bhahrukh 9han and 9areena 9apoor embody this can
do8 or QMumkin 1aiR spirit :infact that is the reason they were selected as brandambassadors=. Bharukh rose from a TV actor to become India8s top film star
and national heartthrob. 9areena8s success is due to her attitude8& talent& hard
work and the sheer ability to make a mark in such a short time. ?oth these
stars have said Mumkin hai8 and made it happen for themselves
The genre of this new strategy N campaign is 1indi cinema led. This genre
connects millions across India. The spirit of romance& dancingS theIndian cinema& well known to most as ?ollywood& holds millions of Indians
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!%SE III