1

MARKETING MANAGEMENT
PROJECT REPORT:
TELECOM SECTOR IN INDIA

SUB M I T TE D B Y : G R OUP 1 1

AKHILESH BELWALKAR (H16004)

HARPREET SI NGH (H16019)

P R A SH A N TH I B A LA J I (H16034 )

SONAL KANODIA (H16049)

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INTRODUCTION

From 1951, when the first telephone got introduced in India, till the current fourth generation internet
age Indian telecom sector is growing at fast pace, contributing to Indias resurgent economic
growth. It is the second largest telecom network in the word in term of subscriber base. Rural market
is expected to be the key growth driver in coming years. Table below throws light on
the macroeconomic parameters of the Indian telecom sector.

Parameter Value
Market Size in terms of subscribers 1.058 billion as of March 2016
Growth CAGR of 19.96% during FY07-16
Revenues USD 41.68 billion in FY 15
Structure of Market Sector is divided into 3 segments
Mobile (wireless)
Fixed Line (wireline)
Internet Service

The growth can be captured by the

parameter of Teledensity (number of
telephone connections per hundred
individuals), which increased from 17.9
in FY07 to 83.36 in FY16. While Bharti
Airtel dominates wireless segment,
with 21.31% market share, BSNL
dominates fixed line segment with
58.52% market share. Other major
players in the industry include
Vodafone, Idea, Reliance, Aircel, Tata
and Telenor. The share of the non-
voice revenue is expected to grow
from current 10% to 30% in next five
to seven years.

(A) MACRO ENVIRONMENTAL FACTORS

1. Political

The sector has seen ease of doing business due to reduction in the licence fees and higher FDI
inflows. The investment holding in terms of FDI has been increased from 49% to 74%. This can help
private players in the industry who depend on the foreign capital. Indian telephone users are
charged the lowest in terms of call rate per second in the world. Strict licence policy adopted by TRAI
and spectrum allocation by auction are working as an entry barriers for the new entrants in the market.

2. Economic

Service sector contributes to 45% of the Indias GDP. There is a strong correlation between growth
of IT sector and telecom sector as it is one of the most important operational unit of IT industry. The

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affluent middle class population in India is growing rapidly leading to create consumer demand. Falling
mobile phone charges with reduced call rates are the key drivers for the market.

3. Social

Buying behaviour of Indian consumers is changing as telecom companies are enlarging their
portfolio of products and services. PCOs in the rural market are getting replaced by the
smartphones. Growing young population, high real income, changing lifestyles and technological
advancements playing critical role in determining the demand for these products.

4. Technological

Telecom sector involves high capital and technology investment. Technology in India is changing at
lightning fast pace. Hence all the players have to keep themselves updates to achieve the
competitive edge over others. Government is giving multiple tax benefits (section 80 IA) for companies
building infrastructure. 4G is still new to Indian market and has a great growth potential to cater the
current demographic of India.

(B) PORTERS FIVE FORCES MODEL

1. Less scope for 1. Economies of scale

forward integration 2. Spectrum availability
2. Heavy competition Threat of potential new 3. Service licensing
3. Medium switching entrants-Low 4. Technology
cost retaliation

Competitive rivalry:
Bargaining power of
Bargaining power of
1. Price wars buyers-high
suppliers-moderate
2. Fixed costs
3. Strategic stakes

Potential substitutes- 1. Switching costs

Threat of substitutes- 2. Maturing urban
1. VOIP
Moderate market
2. Online chat
3. Email
4. Satellite phones

This model is a framework which is widely used to gauge the potential and present threats
and opportunities in the industry. In other words, it is a measure of attractiveness of the industry.
Now we attempt to fit the telecom sector into this model to assess its attractiveness.

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Bargaining power of suppliers:

The typical suppliers in the industry consist of passive infrastructure providers, telecom
equipment manufacturers, network infrastructure providers and IT support service companies.
Although there is limited forward integration possibility for suppliers, the high switching cost in this
industry provides them adequate bargaining power. Owing to heavy competition amongst
manufacturers of chips, the bargaining power of supplier has been reduced. There is also a dearth
for skilled talent which leaves lesser scope for innovation and hence lesser bargaining power.

Bargaining power of buyers:

There are two segments of users: pre-paid and post-paid users. In both the segments, there is a
great degree of loyalty exhibited by customers because of high switching costs. The customers from
industries have now customised their offers that keep them bound. In addition, for the segment of
household customers, TRAI has made a recommendation to use MPN (Mobile Number Portability)
which has made companies offer better services besides providing lower tariffs for retail subscribers.
Market cannibalisation is the only way the service providers can use to increase their revenue with the
growth of urban tele-density well over 100%.

Rivalry among competing firms:

The top four firms in this industry contribute to around 66% of the market and the Hirschman-
Herfindahl Index (HHI) for this is 1421. 29 which also confirms a highly oligopolistic market. The
population being price sensitive, it adversely impacts the bottom line of the industry thus leading to
the market being commoditised and reducing individual market capitalisation and makes the
industry unattractive. It also incurs high fixed costs for procuring licenses and laying down network
infrastructure, network and operations centre and build a cellular network. The players in this
industry diversify into other potential markets and this increases their strategic stakes, adding on to
the first movers advantage in the new industry.

Threat of substitutes:

There has been a cannibalisation of revenues from internet services- GSM/CDMA. Regulatory road
blocks have led to limitation of internet voice services. Also, services and products from non- traditional
industries like satellite operators and Cable TV have laid down their own direct lines into homes, thus
offering internet broadband services. Energy utility companies and Railways utilize their vast
infrastructural installations for supporting their high-capacity telecom networks along with pipeline
networks, rail-tracks, and electricity transmission lines. Many ISPs (Internet Service Providers)
offer "internet telephony" at very low prices.

Barriers to entry:

The biggest barrier is the credit financing availability which is increasingly dependent upon
external factors. There are also high deployment costs and service providers have started resorting
to infrastructure sharing. There are issues regarding interoperability with fluctuating bandwidth
leading to problems with seamless integration of various services. Huge revenues are paid by
existing players for obtaining license and retaliation is faced by new entrants from incumbents with
respect to licensing which in turn increases the industry attractiveness. With competing platforms

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like GSM and CDMA segmenting players who lobby for them, new technology presents a difficult
proposition for the new players to decide on its offering.

(C) COMPETITOR ANALYSIS

The telecom Sector in India is at the moment burdened with a debt of over Rs 4 lakh Crore, and
therefore, the industry is likely to witness major restructuring which may be evidenced in the form
of consolidations and mergers.

Specifically, the situation in terms of competitor analysis may be analysed in terms of the two
segments into which the Indian Telecom Sector can be segmented, that is,

(1)The wireless segment:

A preliminary analysis of the wireless segment telecom market shows that the market is quite
fragmented, with the market leader commanding close to 5 times the market share of the smallest
player. It is seen that no leader individually commands more than (approximately) 25% of the
market. However, according to
industry experts, this industry is
likely to see major consolidation and
merger moves to take advantage of
the synergies which result from such
mergers. This can be further
supported by speculation of the
Aircel- Reliance Communication and
Idea- Vodafone merger which are
already in advanced talks. It is
anticipated that the Vodafone- Idea
merger will combine the current
number 2 and number 3 carriers of
the country to create the largest
telecom network in the country- a
position currently enjoyed by Bharti Airtel.

Currently, while this segment includes some 11 players in all, including Bharti Airtel, Vodafone, Idea,
Reliance, BSNL, TATA, Telenor, Sistema, Videocon and Quadrant. The top 5 players in the field
remained Bharti, Vodafone, Idea, Reliance and BSNL- comprising (approximately) 79% of the total
wireless segment smartphone subscribers in India

This segment is currently dominated by Bharti Airtel which commands approximately 24% of the
market share, followed by Vodafone, which has approximately 19% market share.

(b)The Fixed line segment:

In Stark contrast to the Wireless segment, this segment enjoys a clear majority share of 60.28%,
which is more than 60 times that of the smallest player in the segment (without even considering
minor players owning as low as 0.23% of the market share). Even the distribution of market share

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between the biggest and second

biggest players shows a difference
of (approximately) 46 percentage
points, further illustrating the
extent to which market power is
skewed in the industry

There are, currently, 8 odd players

in the market, including BSNL,
Bharti, MTNL, TATA and others.
BSNL commands (approximately)
60% market share, followed by
MTNL (approximately) 14% and
Bharti (approximately) 13%. These 3
top players together account for
87.5% of the market share in themselves.

(D) Relevant events in Indian telecom space in the month ending FEB 15 2017

Idea files a petition with TDSAT against Reliance Jio's promotional offer | Jan 18

Idea, for allowing Reliance Jio to go on with its free promotional offer which extends beyond the
90 day stipulated period, had approached Telecom Disputes Settlement & Appellate Tribunal
(TDSAT) against TRAI, the telecom regulator.

TRAI report | Feb 02

As per a report by TRAI, telecom subscriber base grew by 21.02 million to cross 1.12 billion at end-
November 2016 on account of large number of additions by Reliance Jio. Top five service providers
constituted 82.39 per cent market share of the total broadband subscribers at the end of November
2016. These service providers were Reliance Jio, Bharti Airtel, Vodafone, Idea Cellular & BSNL.

TRAI imposes hefty fines on telecom companies; Jio gets clean chit | Feb05

TRAI, has imposed a penalty of over Rs 11 crore for poor service quality and call drops on service
providers. RCom has been fined Rs. 1.64 crore, Aircel had over Rs 3 crores,; Tata Teleservices had
around Rs 89 lakh; Rs. 40 lakh from Bharti Airtel; Rs.13.5 lakh from Telenor; Rs.1.5 lakh on MTNL;
Sistema had Rs. 3 lakh and Rs 84 lakh from Vodafone; Rs 3 lakh on Sistema; Jio had clean chit from TRAI
on the grounds that there was no violation found regarding the companys tariffs.

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Reliance Jio slams Airtel for "malicious and misleading" media statements regarding interconnect points | Feb 08

The statement has been released by a new telecom entrant which had blamed Airtel for its act of misleading media
with regard to the provisioning where adequate POI capacity was provided to RJIL. In a press statement, Reliance Jio
alleged that Airtel engaged in a motivated and mischievous campaign for diverting the attention from its own anti-
consumer and anti-competitive acts or license conditions violations which the authorities are currently investigating.
Based on the facts, it has been found that over 2.6 crore of the NLD calls still fail daily adding up to 53.4% of the call
failures (as on
31-Jan-2017) as compared to the norms set by TRAI which is 0.5%.

Possible Merger between Vodafone and Idea Cellular to Create Telecom Giant | Feb 10

Vodafone confirmed their Indian branch is going through negotiations to merge with Indian mobile operator Idea
Cellular, their rival in the telecom industry. The potential merged entity will take the markets lead by having double
the 258 million that the current leading company Airtel has.

Idea Cellular Reports First-Ever Loss as Telco Price War Rages | 13 Feb

Idea reported a consolidated net loss of Rs. 384 crores in the third quarter ended December 31, compared with a
net profit of Rs. 659 crores last year. Reliance Communications also reported a consolidated net loss of Rs. 531
crores.

Vodafone gives new 4G contract to Ericsson for UP West, Rajasthan, Odisha, North East and Assam
| Feb 15

Vodafone India, has given a large 4G contract worth Rs 2,040 crore to Ericsson in line with its network expansion
UP West, Rajasthan, Odisha, North East and Assam. This news comes against the backdrop of talks of a potential merger
with Idea Cellular.

Telecom consolidation in India will lead to massive layoffs: Report | Feb 15

As per an ET report, the consolidation drive will result in prodigious layoffs in the telecom industry with as many as a
third of over three lakh employees becoming redundant in the next 18 months.

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INTRODUCTION
Subscriber identification module (SIM) is an integrated circuit chip that is used to store the international
mobile subscriber identity (IMSI) number and is used to authenticate and identify subscribers who take the
telecommunication services. Our unit of
analysis is the telecommunication service
which is provided through SIM cards. In this
project report we attempt to examine the
consumer behaviour across various consumer
decision making process. We are using the 5S
model to structure our analysis for different
phases.

5S MODEL OF CONSUMER DECISION

MAKING PROCESS
The goal of every marketer is to get into the
consumers head and to discover the decision
making process and how to influence them to
be oriented towards your product and hence
choose yours in the end. The various steps
involved in the process are need recognition,
information search, evaluation of alternatives,
purchase and post-purchase decision.

PHASE I: NEED RECOGNITION

The first phase of most decision making processes begin with consumers dilemma. The need or want of the
consumer that has not been satisfied helps in the formulation of problem by the consumer. They realise that
they are missing out on something and believe that the need has to be addressed in order to get satisfied. As a
marketer, determining the needs or wants of your target demographics would tell you the ideal time to
advertise your products to them.
GRAPH ON OCCUPATION OF RESPONDENTS
Equal representation of population sample from government and
Government Service
20%
30%
private sector has been taken. There were a few home makers and
Private Service
students in addition. The purpose is to equalise the effect of
Business
20% differences in income levels of the two sectors also study their
Self-Employed
influence on purchase decisions. This becomes critical in the price
Student
10% 30% comparison phase of evaluation of alternatives. Price plays a critical
10% Homemaker
role in this market and consumers are increasingly price sensitive.

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 GRAPH ON THE AGE GROUP OF RESPONDENTS

0% Less Than 18 60% of the population is between the age group of 18-28. The
20% population covers the age group having the highest utility who will
30% 18-23 years
constitute college students and young working class. This is the
23-28 years market that the company has to penetrate into and developing
products that are specific to this segment would be increasingly
10% 28-45 years
40% profitable. The purpose of this data is to understand the
Greater Than 45 demographic characteristics of the market we are catering to and
which would be the most profitable choice.

GRAPH ON OTHER SERVICES USED BY CONSUMERS

Caller tunes
00% Wallpapers Missed call alerts and newspaper updates are the most used
Ringtones additional features of the network service provider. Features like
Cricket updates astrology, ringtones and caller tunes are not favoured much by
40%
Astrology
50% Missed call alerts
consumers. They prefer services that are of essential and daily use.
News updates Introduce more such features like location tracking and security
Jokes services rather than services like caller tunes which may not be
Gaming
00% 10% basic to everyday life and market your product based on these
Others (none)
features.

GRAPH ON SMS AND CALL RATES

20% 0-5 80% of the consumers make more than 10 calls per day and 70%
of the consumers send more than 15 SMS per day. Heavy usage
40% 5 to 10
segment-product to be differentiated based on suitability for high
10 to 15 usage-unlimited usage and the like. With the ever increasing usage
rates, the need to build up on features like network coverage
15+
0% 40% and usage rates that will make this an augmented product is high.

Phase II: Information search

A critical step in consumer decision making process is information search. Essentially, this step involves the
search of a solution to the perceived problem/lacunae the customer identified in the need recognition stage.
From a companys perspective, knowing exactly the various information
Preferred source of TV/newspaper company outlet posters at shops retailer

information

10%
10%

50%

30%

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sources available to and
preferred by a customer
gives insight into the
modes and methods
through which it can reach
the customer.
Internal research- Here the
consumer relies on the
information he/she already
has from memory. This
happens mostly in the
case of low involvement
products.
External research- In high
involvement products like
cars etc. Various sources
might include friends
opinions, web sites, shop
visits reviews etc.
Inference1: Print and
electronic media is the
most preferred source.
Thus the Airtel girl or
Abhishek Bachchan for
Idea leave an impact on
the customer. This is an
opportunity for
connecting to the
customer through a
theme or a campaign. It
also helps in positioning
and differentiating the
product. An example is
No Free G Idea 4G
campaign. Another
observation is customers

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disposition toward company outlets over local shops. This presents a case for opening wider network of Airtel
stores
WHOM TO CONSULT
Inference2: The credibility of acquaintances and the power of word-of-
10% 10% mouth publicity is reinforced by the responses. It should be noted that the
users who chose friends as the people they consult the most are referring to
friends who are either existing users or have used the network earlier. This
also valorises the importance of quality service and the post purchase
40% 40%
satisfaction it translates to. The respondents mentioned that they were
sceptical of switching to Reliance Jio even though it offered free services just
self friends existing users family
because the people they consulted had had a bad experience with the service
quality offered by Reliance in the past.

PHASE III: EVALUATION OF ALTERNATIVES

During this stage, we observed that consumers process Post Evaluation
different product information from various companies and
make a final value judgment. The multi attribute model Price Change
plays a key role for summarizing how customers use this
information Unavailabilty
Multi Attribution
about alternative 0% 20% 40% 60% 80% 100%
Model for Evaluation brands of SIM Loyal Switch
cards and
Network

10% network services. From our consumer behaviour analysis we have

Coverage
Call Rates found out that on this stage customer evaluate network provider on
40%
its several attributes like network coverage, call rates and price. The
50%
Price multi attribute model shows that how a consumer provides weights
to the various attributes and goes through trade off to achieve
maximum utility. A multi
attribute model which has Reliabilty of
been captured from one of Evaluation
our questionnaire shown that how a consumer gives importance to
different product attributes of data card. 10%
Another question asked to assess the reliability and source of the
20%
parameters for evaluation. We received responses like newspapers,
hoardings, call rate charts, retailers and company outlets. We observed 70%
that consumers feel call rate charts most reliable and they personally
view and compare the service based on these tariffs. For reliability call
rates are followed by information given by retail store and company Call rate chart Retailer shops

outlets. This information can be Company Outlet

Price paid in rupees

leveraged by marketers to
for sim card provide competitive price charts and establishing strong relationship with
200-
100- 0-100 500
200 20% 20%
30%

free

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30% reta retail or company outlet. It is also possible that evaluation performed by
il consumer has some error and product specification and prices are
stor
e to different than what are assumed. Based on
pus our analysis it is found that price has higher implication than availability
h
thei
r
pro
duc
t.
An
oth
er
que
stio
n
was
ask
ed
to
asse
ss
post
eval
uati
on
pha
se
of
the
con
sum
er.
So
met
ime
the
pro
duc
t
con
sum
er
cho
ose
s is
not
avai
lein
nea
r
12
200-500 free 0-100 100-200 on the decision choice. It can be infered that, if the desired sim card is

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not available in the customers reach then 70% customers will go to another outlet to get the chosen brand.
However if the prices are different in market place nealy 90% customers switch to other brands which for their
price criteria. Rate charts and services should be standardized and consistent so that price sensitive customers
do not enconter with information mismatchAvailability is important parameter for 30% of the customers,
hence product should be made easily available.
It is observed that time and options for evaluation is more in age group less than 28. Customers whose age is
more than 28 have higher value for network coverage. Young customers place more value on call rates. In the
preffered brands after evaluation, 60% of the customer would like to use Airtel followed by Vodaphone and
Jio. This phase is critical to drive the actual purchase of the product.

Phase IV: Purchase

By the time the customer reaches this stage, he/she has garnered at least some information and has evaluated
the various options available before him/her. However this process is dynamic and a customer might skip back
and forth in the process if new information comes to light at the time of the purchase. The customer might
have decided what to buy already but the following decisions still remain to be made-
Quantity- How much of a product to buy depending on need, availability, price etc.
Timing- Personal capacity, seasonal discounts etc. affect the decision of when to buy.
Location- Mall or small store or e-commerce websites based on availability, pricing etc.
Payment- Plastic currency, cash, EMIs etc.
The above decisions are influenced by factors some of which are inside the control of a company and some
not. A firm should make the former as favourable for itself as possible.
Among the 10 people who comprised our sample space, the distribution of telecom service providers used was
as follows
Clearly, Airtel is the market leader with 50% market share, followed closely by Vodafone. Further, it appears
that most consumers are inclined towards prepaid services compared to post-paid ones. As a matter of fact, 9
out of our 10 respondents are prepaid users. Such information holds huge importance for the company to
understand its market segments on the basis of customers in a better manner- Assuming that the results for
these 10 respondents may be extrapolated to the market in general, the prepaid market is more important for
Airtel in the Indian Market from the perspective of number of customers
Since purchase decisions are often guided by the price of the product, the price Telecom Services:
of the sim card could be a relevant factor affecting purchase. However, there existing users
seems to be wide diversity between the prices at which purchase of a sim card BSNL
vodafo
20%
was made. This may be understood from the following pie chart: ne
30%
Additionally, it may be worthwhile to remember that in a product or service
offering like telecom network services, it is not an initial one-time payment that
consumers commit themselves to. Hence, the price of the sim card may not be
as important as the overall cost- effectiveness of all services provided by the
airtel
service provider 50%
vodafone airtel BSNL

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Phase V: Post purchase
Especially in a product like mobile network, that a consumer will use day in and day out and which has the
freedom of shifting from one product to another, this stage is of utmost importance. Here the customer

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 compares the expectations he/she had with the actual satisfaction he/she
DURATION WITH THE derives from the product. A SIM card once sold is a source of continuous
PRODUCT revenue for the firm. To gain maximum customer lifetime value any network
10% operator must put a significant amount of effort here. In this stage, monitoring
more than
10% 1 year
the satisfaction levels and pro-active measures are required. Delivering the
2 to 6
bare minimum promised /expected along with surprising the customer with
months something extra is always welcome. The key is to develop a
6 to 12 relationship with the customer that goes beyond the mere exchange of value.
80% months
Inference: This gives us an insight into the nature of customer loyalty in the
industry. It was evident from the conversations we had and the 80% figure of
people sticking with the same operator for over a year that customers prefer not to change network operators
until prompted by external factors or poor service quality. Documentation hassles, dual SIM devices are some
barriers. This exhorts operators to extract most out of the customer lifetime value. In fact customer attrition
without external stimuli should be seen as operators gross failure in maintaining healthy relationship with the
customer.
Inference: Almost 60% respondents choose to call
Importance of Each parameter customer care. This percentage was much higher
in retaining customers in the days before the advent of smartphones as
customers mentioned that most
activations/redressals are automated now. Also
50
customers in higher age group were the ones which
40
43 chose this method the plausible reason being the
30 34
33 lack of tech-savvy in this group. All these
30
20

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respondents mentioned the frequency of such
0 contacts to be occasional at most. Also 100% of
better customer network low call rates Better value such contacts were solely for the purpose of
support coverage added services complaints. Thus impeccable service can save the
cost of outsourced BPOs.
In the telecom industry, retaining customers is a major requirement for telecom operators. As such, we asked
the customers what was it which made them
stick to their service provider. We did this by
AIRTEL users' satisfaction level for asking the respondents to rate a given set of
each parameter parameters from 1 to 5, with 1 being least and
21.5 5 being most important. The results clearly
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20.5 21 21 21 show that the extent of network coverage is
20
19.5 20 20 20 the most important factor. Low call rates
19
18.5 19 reflects low scores, but upon further

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questioning it was ascertained that it is more
17.5 18
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16.5 in the nature of an expected product and not
an augmented product, hence while lack of
cheap call rates may prove harmful, their
presence does not guarantee retention.

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 With a view to understand the satisfaction of
our respondents with respect to service providers by their respective telecom operator on each of these
parameters, we asked them to rate each of these individually on a 5 point scale. The results show that while
customers are most highly satisfied with services, network coverage and recharge options for Airtel, the

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difference in rating is not substantial, which leads us to infer that the customers are fairly well satisfied for
all of the service offerings of Airtel
For other telecom operators which have some representation in our sample, that is, Vodafone and BSNL,
we see highest satisfaction in network, followed closely by recharge options

AIRTELS VAL UE P RO POSITION:

Value proposition is basically the net worth derived by a consumer out of the product. A consumer purchases
a product only when the benefits he expects to obtain from the product are more than the expected monetary
cost incurred in buying the product, that is, positive consumer surplus. Following are the attributes Airtel can
leverage to provide competitive value proposition:
1. Network coverage
Airtel is investing approximately 60000 Cr and adding 2600 new sites to improve the network
quality and efficiency.
2. Value for money
Airtel segments its products for various categories on basis of family size, demographics, call and
data requirement. It also captures the flexibility by allowing consumers to switch between the plans.
3. Customer service
Having dedicated customer representatives and prompt response of queries help Airtel to
improve quality of customer service. Computer bots are also getting used in the customer service
processes.
4. Value added services
Varity of value added services at lower costs helps the company to attract new clients.
5. New recharge options
Availability of recharge options on website, online wallet services like PayTm makes it convenient
for the customers.
We observe that network coverage has been the key differentiating factor for Airtel telecom services. This, if
studied in accordance with the VRIO framework, which comprises 4 main parameters, may be described as
under:
Value: Here, network coverage in the Value offered, aids product differentiation and helps sustain the product
in the dynamic Telecom Sector Market
Resource: In order to capitalise on the value of Network Services, Airtel uses the resources of appropriate
bandwidth, Spectrum and Network Towers which comprise the whole bundle of Network Infrastructure.
Inimitable: Multiple factors make such resource and value possible. Some of these are:
1. Caps on the number of towers that may be installed in a particular area hinder other players from
entering markets in which Airtel already has a stronghold. Even if other players want to enter, they
must utilise Airtels network and pay Airtel for the same.
2. First mover advantage in value added services of 4G networks
Opportunity: It seems that the customer preference is shifting to value added and internet services, compared
to the traditionally more important services like calling. This is an opportunity for Airtel because it is already
the first mover in these markets towards which the customers are now leaning. Additionally, its resources and
infrastructure allow it to tap this opportunity.
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 MICRO ENVIRONMENT ANALYSIS OF AIRTEL
The micro environment of any organisation influences it directly. This can also be termed as Stakeholder
Analysis. This analysis composes of suppliers who deal indirectly or directly, customers, local stakeholders
and the greater public. Micro essentially means small, but most of the time it ican be misleading. According to
this context, the relationship between driving forces that influence the relationship and firms constitute this
model. The relationship is localised and the firm has a significantly high degree of influence. This term used to
describe the micro-environment explains the elements which the marketing firm exercises decent control over
or that which has to be used so as to gain information that would better equip it to take on with its operations
regarding marketing. In other words, the elements mentioned as part of this model can be manipulated, glean
information which would enable us to provide an all rounded satisfaction to the companys customers. One
major objective of the marketing philosophy used by each firm is to generate profits through satisfied and loyal
customers. This can be accomplished by means of manipulating variables over which the organisation has
control in a way that helps optimise objectives of all stakeholders.
PROPOSED MODEL FOR MICRO-ENVIRONMENT ANALYSIS

CUSTOMER EMPLOYEES
S
SUPPLIERS ORGANISATIO COMPETITO
SHAREHOLD N RS
MEDIA
SUPPLIERS ERS
Suppliers for Airtel are the most critical factors that affect this company directly. The suppliers may
compose of labor suppliers, who would have their individual specific demands in addition to internal factors of
the likes of labour quality, labour quantity, workforce turnover rate etc. In this context of Airtel, its major
business location is in India. This is because, in India there is available a huge supply of skilled as well as
unskilled labour so that Airtel can get access to high labour quality which in turn becomes a pre requisite for
market share and organisational growth in the world today. So far is Airtel concerned, it is one of the major
players amongst the entire gamut of players in telecom industry thus attracting a large pool of human resource
that is extremely talented. Also, the employee retention rate is very high as compared to the industry average
of 20% - 25%. The expectation of employees with respect to compensation is in direct accordance with the
standards for the industry which boild down to 15000- 20000 for an entry level employee.

STAKEHOLDERS
Stakeholders form one of the most critical factors that would affect a company at its micro level or at
the level of its organization. These stakeholders compose of shareholders, lobbyists, partners and employees.
For the case of Airtel, being a huge private company that has to deal with and encounter lobbyists, sometimes
lobbying against and sometimes in favour of them. The owners or shareholders of the organisation also
internally affect the company. The companys managers might have to take into account the expectations and
the motive of wealth maximisation of the shareholders. In a firm of the kind of Airtel, the shareholders interests
are taken into consideration as well and their satisfaction is ensured. The most important stakeholder of the
company is its workforce or employees since they form the human resource which the company can claim to
be its source of competitive advantage. As far as Airtel is concerned, its diverse and rich human resource is
extremely satisfied and hence retention rate is significantly high compared to its competitors hence rendering
the attrition rate to be low.
CUSTOMERS
19
 One of the most significant parties that affect the internal environment of an organization is its
customers. These customers could be classified as individuals, businesses, households, retailers, government
and international clients. For the case of Airtel, we might say that the consumers of their products are most vital
since they have the capability to switch to the other competitors in case they are unsatisfied with the provided
services. Airtel, with a customer base of the scale of billions will find it extremely difficult in order to maintain
and satisfy its huge customer base. It has corporate clients which are large enough in addition to the millions of
individual consumers who use its connections. The wholesalers and retailers who sell the products of the
company are in turn the companys customers. Airtel, as an organisation has ventured into international
businesses and hence there is an added responsibility of maintaining its international clientele as well.
COMPETITORS
For Airtel, the firm has been operating in the highly competitive telecom industry and for the sake of
surviving and maintaining its market share, the company has to go for an environment scanning where the
competitors are analysed extensively in terms of their strategy. In the telecom sector, the players have a huge
potential hence competitors like Reliance Communications, Vodafone essar, Idea and Tata Docomo pose a huge
threat to Airtel. The price wars has been taking place between the major players and the fact that many of the
other operators are coming up with their new schemes in order to attract customers has heated up this market.

PUBLIC
The image which is possessed by every company has to be maintained because a lot more depends upon
its image in the eyes of the audience which includes the public. Each information regarding the company which
might not be as good is definitely not healthy when seen from the point of view of the company. Our definition
of public includes financial public as well as media public. Financial public mainly concerns with the
companys finances since they are potential investors or existing investors in the firm. By media public we also
include any news about the firm which may be either negative or positive and which affects the company as
well as the market significantly. For the case of Airtel we could say that the investors are the financial public
and the potential investors of the company would also be affected by the financial activities that would take
place. The common public is the media public and any action that may trigger their positive or negative actions
from them. This is the main reason as to why the company would go for various publicity and corporate social
responsibility so as to maintain a public-friendly image.
MARKET INTERMEDIARIES
Market intermediaries have a direct impact on the company since they are the direct contact points with
the firm and hence can affect its performance either in a positive or a negative way. These market intermediaries
might be of different types such as distributors or middlemen, financial intermediaries or marketing research
firms. In this context where Airtel is the chosen player, it needs to maintain cordial relationships with a lot of
distributors and middlemen who would sell or endorse their products. Their added responsibility is to maintain
decent relationships with the marketing research firms which would gather information about each of their
products and hence do market research for their product offerings. The other marketing consultancies and
advertising agencies play a crucial role in the actions of the company. Airtel has a need to maintain stable
relations with financial intermediaries like credit institutions, banks as well as insurance companies in order
to fulfil their financial and other requirements.
BCG MATRIX FOR AIRTEL
BCG Matrix is a framework which is used to find out the product limes relative growth prospects. Within the
product line of Airtel, product line leased, private, circuit are in the star bang. Airtel is planning to have a
submarine cable spanning between Chennai and Singapore in collaboration with singtel. This would help Airtel
to maintain its position in IPLC market. But currently, we have only VSNL cables.

20
 STAR QUESTION
MARK
HIG LEASED PRIVATE ISP CELLULAR
H
CIRCUIT SERVICE

GROWT
H%

COWS ANSOFF MATRIX FOR AIRTEL DOGS

In order to portray several alternative options of corporate growth strategies, Mr. Igor Ansoff had
LOW BASIC
conceptualized a matrix which has its focus on the present and potential products or markets or consumers of
TELEPHONE
the firm. He had given four terms for the four product-market strategic alternatives as used in the matrix.
Market penetration [existing product + existing market]
(FIXED LINE)
Market development [new market + existing product]
Product development [new product + existing market] and
Diversification [new market + new product]

HIG RELATIV
H E LOW
MARKET
SHARE

MARKET
PENETRATION PRODUCT
ENTERED INTO DEVELOPMENT
BROADBAND AND IPLC PRODUCTS
FIXED LINE MARKET
MARKET
DEVELOPMENT DIVERSIFICATION
The organisation needs to follow all the four strategies depending upon the product and the demand as has
LOOKING FOR OUTSOURCING TO IBM
been indicated in the matrix. Perhaps, the company needs to shift its focus more towards an area which has
been comparativelyOVERSEAS MARKETS
neglected area which is diversification.
Market Penetration: Airtel has entered into the fixed phone line and broadband market.
Product Development: IPLC products
Market Development: Airtel is currently looking for the overseas market. The company has already made its
presence visible in Seychelles and Nigeria.

21
 Diversification: Airtel is currently outsourcing some of its services such as customer services to players like
IBM.
SWOT ANALYSIS FOR AIRTEL

STRENGT WEAKNESS
HS and focused
Highly oriented ES
towards telecom
Market leadership in fastest Price competition from
growing cellular market MTNL and BSNL
Pan-India footprint Untapped rural market
OPPORTUNIT
Only Indian operator - made THREAT

IEScable IPLC
a sub-marine
The fast-expanding S
Basic telephony service
market might reach a saturation
Huge market point
Latest technology and low Increased competition
cost advantage from other mobile and
cellular operators
BRAND POSITIONING BULLSEYE FOR AIRTEL

Competitive product set: Jio for Brand mantra: Express

price competition, Vodafone and yourself
other major players for benefits.

POP: free voice calling plans

and same validity periods,
capped SMS permits per day-
approx 100
POD: Best deal for prime
Consumer takeaway: service
Though Airtel is not
positioned as the cheapest
network service provider, Substantiators/ RTB: Well
t offers quality services established network service
value) for money. provider, excellent
infrastructure to ensure 24*7
connectivity, latest
technology and low cost
advantage
Consumer insight and
need: Call connectivity
and rates are the two most
mportant factors used to
choose a network service
provider Values/personality/character/visual identity:
empowering, being flexible, openness and
transparency,creating a positive impact, making
it happen, changing status quo
Consumer target: Age group of 18-
35 for new connections and above 35
for coverage and reasonable rates
.

SEGMENTATION
22
Based on Geographic variables:-

East Region (West Bengal, Assam, Arunachal Pradesh etc.)

West Region (Gujarat, Rajasthan, Maharashtra etc.)
South Region (Andhra Pradesh, Karnataka, Kerala etc.)
North Region (Punjab, Haryana, Himachal Pradesh etc.)
Central Region (Madhya Pradesh, Chhattisgarh, Jharkhand etc.)

Density of area

Urban (Cities Such As Mumbai, Delhi, Pune, Jaipur etc.)

Semi-urban (Nasik, Aurangabad, Ahemadnagar etc.)
Rural (Baramati, Khed, Saswad etc.)

Based on Demographic variables:-

Age
From age group 18 to 35
As most of the people get their first mobile from the age of 18 so segment is made of age group 18 to 35 to
target students and young professionals. They need data plans for chatting and they also need cheap calling
rates.
35 and above
This group of working professionals doesnt use mobile for SMS and chatting. So they need good coverage and calling
facility at a reasonable rate.

Income: PREPAID & POSTPAID

Mobile service providers design their marketing agenda according to the prepaid customer market and postpaid
customer market. It has a direct correlation with income of the consumer. Consumers in low income group tend
to choose prepaid and consumers in high income group tend to choose postpaid.

TARGETING

Airtel has targeted the high income premium and upper middle class consumers. The aim behind this is to target
those who value the service and have the capacity to pay for that service. In the initial business growth phase
there was a competitive pressure to get consumers across to get attracted to the brand, because switching from
the brand loyalty of the earlier service provider was challenging. Marketers of Airtel are now successful in
creating basic viable volumes and prices have reduced to a certain extent.

Professionals Free calls in postpaid plan

Entrepreneur Internal free calls
Youth FRIENDZ scheme
Students Postpaid plan with zero rentals

POSITIONING

Airtel positions itself as a brand which provides a product which can be used as a day to day commodity and is
no more a symbol of status. Airtel has used melodious, sweet music of its composed by A.R.Rehman to bank
upon the calling experience. The music attracts consumers in various forms. The latest advertisements portfolio
of Airtel Jo Tera Hai Wo Mera Hai and Har ek Friend Jaruri Hota Hai have created a brand image in
students and youngsters.

23
 Airtel Brand Elements
Memorability / Easily recognized / Meaningfulness / Descriptive / Persuasive Likability / Fun and interesting
/Rich visual and verbal imagery / Aesthetically pleasing / Transferability / Transferability within and across
product category /
Transferability across geographic boundaries and cultures / Adaptability / Flexible / Updatable

BRAND POSITIONING FOR VODAFONE

SEGMENTATION
Demographics is the most common variable of market segmentation for Vodafone. Segmentation in terms of
age, gender, income, geography and buying behaviour.
1. Demographics
Age: Bands between13 to 65
Income: Small, Middle and High level Markets (Both B2B and B2C markets)
Urban, Semi-urban and rural areas
2. Psychographics
Youth and People in the Urban and Semi-urban areas
People willing to pay more for premium service

TARGETING

1. B2C Market:
Vodafone provides recharge plans for customers starting from as low as INR 10 and up to INR 500. It also
provides data plans from INR 44 to INR 250
2. B2B Market:
Vodafone had recently launched multiple plans and packages for various SMEs and large scale businesses
which can be customized as per their needs
3. Vodafone gives many value added services to target home-makers, students & professionals. Discounts plays
key role in attracting this segment.

POSITIONING

Vodafone positions its product in both premium and basic category (Voice, data and SMS services as well as
IT solutions for businesses). Premium products are priced higher as compared to service utility. Company
charges differentiated prices for small, middle and high level markets depending on the requirements. To
facilitate the positioning strategy, Vodafone channels distribution through exclusive retail stores as well as
small retail shops to reach large customer base. Vodafone used pug dog to position itself as Happy to Help
service brand. From IPL season2 Vodafone launched zoo zoo campaign to advertise value added services.

BRAND POSITIONING BULLSEYE FOR RELIANCE JIO

Competitive product set: Airtel Brand mantra: Bringing
for price competition and free technology to life
Airtel to Airtel calls, Vodafone and
other major players for additional
benefits. POP: free voice calling
plans and same validity
periods.
POD: Lowest calling plan
Consumer takeaway:
with message and calling
Though Jio is known for 24
benefits and highest MB of
its predatory pricing, it
data (750 MB)
positions its products
based on its low cost and
high connectivity and
 Substantiators/ RTB: Well
established network service
provider, has JioCom where
customers can directly procure Jio
mobile connections from, mass
scale of operation, latest
technology and low cost
advantage, provides free internet
without blackout
Consumer insight and
need: Call connectivity
and rates are the two
most important factors
used to choose a
network service
provider Values/personality/character/visual
identity: digital life, empowering, being
flexible, making it happen

SEGMENTATION

Jio believes that the 4G network in India has great growth potential
and profitability. It is currently in the budding phase and hence there are
chances of making most out of it. Use of smartphones in the India has
seen a tremendous increase, which indicates great benefits in
telecom sector. Indias 4G market is new and with little competition.
Most of the companies focuses on release of their product or
service in a few regions to try out and expand later. Jio believed in a
national rollout not creating a geographic segment. The operations
however is similar to that of Airtel and Vodafone as per government and
TRAI regulation. People between ages 18 to 35 are more
technologically aware and currently contribute to maximum usage
of smartphones. Jio is using this demographic segmentation to
provide its free 4G data services.

TARGETING

Jio has used a great strategy to target its selected segment. Between June-July Jio had offered unlimited high
speed internet data on 4G network and 4500 free minutes to customers who buy LYF Smart phones. In India,
there has been a major problem with downloads and other internet related functions majorly due to low speed
internet. This has created a major opportunities in this market. However, there is a limit to the number of
customers who can avail the benefit from this offer in trial period. Jio is giving free 4G data for new smartphone
buyers aiming at gaining prospective customers for long term.

POSITIONING

Jio has positioned itself initially as a market disrupter due to predatory pricing. Jio positioned its
smartphone products based on price and sales. The service of free voice calls minutes and high speed data
at lowest cost has made its identity as a value for money brand which is different from its competitors thus
25
it gained more popularity. Jio has already served approximately 500,000 customers and has become the
third most selling Smartphone product and service providers in India. Jio is looked as a best and future-
proof technology brand in telecommunication. It projects itself as a maximum coverage brand for internet.
Jio has used big scale of operation to cut down the cost. Jio aims at negotiations with fibre-optics laying
agencies and reduce the cost to a fraction of the prevailing rate. It is also aligning itself with Prime Minister
Narendra Modis flagship national program of digital India.

RECOMMENDATIONS
1. PRODUCT POSITIONING
From the positioning map, it is visible that Airtel is known for its easy availability and accessibility of
recharge packs indicating a well-
established distribution network and also
intermediaries.
None of the brands on the map have
fared well on factors like
deduction in talk time balance and billing
transparency. In fact, Airtel has been
positioned as diagonally opposite with
regard to these factors indicating the
product has been poorly perceived on these
lines. Airtel should come up with better
plans regarding talk time balance with
competitive rates that dynamically sends messages to the users periodically so as to ensure transparency
in billing and cheaper call rates which would increase the longevity of talk time balance.
MTNL Trump, Aircel and Docomo are perceived as brands with cheap tariff rates, but at the same time,
the customer service attributes are lacking in these. Airtel should strike a balance between tariff rates
and customer service by not offering the lowest tariffs in the market like JIO does, but at the same time
bolster its customer and value-added service attribute which would make it a leverage able competitive
advantage amidst its competitors.
Idea, Reliance and Vodafone are strongly known for their network quality and since Airtel has
positioned itself as a value for money brand and also from the findings of the consumer behaviour
exercise, the two main things that consumers perceive as highly important for purchase decisions are
tariff rates and network connectivity. Airtel, with its well established infrastructure and early mover
advantage can capitalise on it further by partnering with other players in the market for better bandwidths
and hence better connectivity.

26
1. PRICING

The growing competition is good for consumers, but

not for an industry which is built upon Rs 35,000
crore of debt. With fresh auctions of new spectrums
coming up, that investment cost burden is likely to
rise up further. A price war started by Jio at this time
will negatively hamper the recovery of the industry.
In this margin denting game following are the
recommendation for Airtel to tackle the threat posed
by JIO.
1.Ring Fencing of the 11% of Airtel customers who
contribute to the 15% of the revenue through data
usage. This is based on consumer insight that high-
paying consumers rarely switch unless service is
truly bad.
2. Airtel can cut prices in short term price by 60-80% for the 3G/4G data to remain competitive in early phase
of JIO.
3. The remaining 89% of Airtel's subscribers either have basic feature phones or use smartphones for calls and
not for data services. Hence, they aren't under immediate threat posed from Jio.
4. Airtel should identify high data consuming devices and their usage patterns, this will help to create a
segment which can be targeted through customised offers.
5. The high-end consumers who prefer service quality over price would unlikely move to Jio if they are
provided with a good-quality data network. Hence Airtel can continue investing on projects to provide
superior network coverage.

Airtels Market Mix

Products

27
Airtel has a diverse assortment of products to fulfil all the telecommunication needs of a new age tech savvy
customer. As the phones we use keep getting more powerful and smarter; the need for a product that provides
comprehensive communication services which are reliable and come at a competitive price arose. In line with
this, Airtel has tried to come up with products and services which successfully cater to the diverse customer
base in India with diverse needs. Here is a list of the products which Airtel offers-

Table
comparing
KPIs of
various
service
providers
in Delhi

Airtel Pre-paid services

SMS based information services
Airtel Post-paid services
Hello tunes, Ring tones
Easy post-pay bill payment solutions
Ringtones and hello tunes offers
Enterprise Solutions
VAS(Value added services)-
o Instant balance inquiry
o 24 hour recharge facility
o Multimedia messaging service
o Call wait
o Call hold
o Caller divert
Airtel Live portal
Voice mail services

Upon a close look at consumer perceptions and the branding done, it is evident that Airtel tries to differentiate
itself through superior quality and customer-friendliness of its products and services. The availability of
completely customizable plans stands testimonial to this.

Place

28
The level of penetration that Airtel enjoys in India is quite impressive. The availability of its services and
networks in even the harshest and the remotest of the regions in India is something that makes it stand apart
from the other similar service providers who mostly have to piggyback on its infrastructure to even survive.
Recently the gross subscriber base for Airtel surpassed 200 million. It is a fact that the customer base in India
for Airtel is one of the strongest in the world. It would be vital to note here that every year millions of new
network lines
keep on getting
added making
its coverage
even more
robust. Airtel
also banks
upon a very
comprehensive
and strong
distribution
network
throughout the
country. Even
businesses like
mom and pop
stores, chemist
shops and
groceries are a
part of its distribution network. Project
leap, one of the initiatives launched by
Airtel in the year 2015, aimed at expanding its coverage to more than 5 lakh villages which were previously
either facing poor or no network coverage. Airtel has vowed to spend 60 thousand crores over a period of 3
years under this project. Customers may also reach Airtel through the world-class, dedicated 24-hour customer
support services through telephone or online to resolve any customer query or issue. Throughout its period of
dominance, which continues in India and Africa, Airtel has always strived to and succeeded in becoming the
first mover with any upcoming technology.

Be it 3G or 4G it has managed to stay ahead of every competitor by leveraging deals like the acquisition of
Kuwaits Zain which also made it one of the worlds top 5 wireless carriers by subscription. Its presence in over
20 countries also gives it unique edge over local players in terms of scale and innovation.

Promotion

Airtel spends aggressively on marketing strategy which ranges from print and television media to social network
marketing too. Being the first mover in terms of any new technology, its promotion initiatives also have to sell
a new technology and not just the brand. This includes making people aware of a new technology that is
available like 4G and making them shift from cheaper but older technologies. The task is difficult but has its
own rewards as Airtel often becomes synonymous to the new technology it endorses. The company understands
the power of television and print media promotions in India. It also capitalises on our affinity to celebrity
endorsement, frequently using celebrities. Even the companys signature tune is composed by Oscar winning
musician A. R. Rahman which incidentally also became one of the most downloaded tunes in the country.
Amitabh Bachchan, Vidya Balan, Sachin Tendulkar and many more have served either as its brand ambassador
or campaigned for its services. Customer specific discounts and freebies like ringtones, wallpapers and even
free data prove to very effective when it comes to promoting telecom services.

29
When it comes to India, superior quality ensures good word of mouth publicity for Airtel. Recently when it
tried to target youngsters for 4G services, it took a deviation by not hiring any celebrity but making a celebrity
out of a young girl whom all youngsters could relate with, now popularly known as the Airtel girl. This shows
that Airtels promotion strategy is evolving with the evolving customer base.

Price

The latest developments in the telecommunication space (especially the advent of Reliance Jios free data and
calls) have
ensued a price
war among the
key players
which might
prove
detrimental to
all players in
the long run.
Although
Airtel has
always played
on the turf of
competitive
pricing, now it
is even more
strained to
offer
maximum
value for customers money so as to keep people from switching to Jio. The product quality differentiation need
to be much more pronounced and should be communicated across to all customers clearly and loudly. Another
important aspect which cannot be overlooked while analysing the pricing strategy of any telecommunications
provider are the regulations stipulated by Telecom Regulation Authority of India (TRAI), which is a
government body committed to ensure fair prices and resource sharing among operators. Ergo all decisions
related to pricing have to comply the various rules promulgated by the body. As the product is made of an
assortment of services, Airtel offers lot of flexibility to the customers so that they may be able to customize a
plan that fulfil their needs in the lowest possible prices without any wastage. The customers usage is also very
varied and may not be the same for two customers, this also gives Airtel an opportunity to price services
selectively to encourage or discourage certain consumer usage behaviours. The make my plan is an example
of how Airtel gives users the freedom to customize a plan that best caters to their needs. Corporate plans etc.
are also very popular and many companies choose Airtel for their office needs.

VODAFONE MARKETING MIX:

Vodafone is the second biggest player of telecommunication services in the Indian Market. Knowing about the marketing strategy
of Vodafone may be highly helpful for Airtel. In order to understand the marketing strategy and market presence of Vodafone, we
look into the marketing mix of Vodafone. We analyses it under the following heads
a. Product: In order to be competitive in the market, Vodafone has to offer a wide variety of products. The
product/ Service offerings which Vodafone caters to include Voice calling, text messaging, and internet data
services. Within each of these, there are multiple service offerings which are differentiated on a combination
of service attributes and tariffs at which they are available. Earlier, Vodafone was also into Vodafone branded
handsets but with the development of smartphones and stiff completion from the market, and inability of
Vodafone to capture market in it, the same has been discontinued, or, in any case, heavily reduced. These
wide range of services ensure that Vodafone is able to cater to the different segments of consumers it has,

30
 including highly price sensitive consumers and others who prioritize quality over price. A list of Vodafone
product/ service offerings is given hereafter:
i. Vodafone branded phones
ii. Smartphones
iii. Voice and messaging services
iv. Handsets
v. Internet services
vi. Value added services

b. Price: Vodafone has different kinds of pricing strategies for different kinds of segmentation for the
customers it wants to cater to. This segmentation is on the basis of:
i. Product offerings: Different products within Vodafone have different pricing strategies. While
call services are priced in a price competitive manner with value offerings, internet services
follow the premium pricing strategy
ii. Income group of target market within each offering: While broadly, the product offerings
may follow different strategies, within each product offering, the pricing strategy is
differentiated to cater to a wider range of consumers. The tariffs for both prepaid and
postpaid call services range from very low amounts to very big amounts to allow flexibility and
attract a huge customer base. Similarly, while internet and value added services are broadly
priced higher than other competitors like Jio, service line itself allows enough diversity to let
consumers choose daily, 3- day, fortnightly and other tariff plans which differ in terms of
service speed also, both of which dictate the price range of the product.
iii. Geographical segmentation: Not only is the pricing strategy differentiated on the basis of
service lines offered and target market income levels, they are also differentiated on the basis
of the geography to which they cater. Typically, the tariffs for Vodafone services differ on the
basis of the state in which the offering is made. Hence, different states within India an
different countries have different pricing schemes. This is mostly dictated by the differences in
consumer lifestyle and level of income which differs for different geographies

c. Place: Vodafone has very widespread presence throughout the country, with more than 1.8 million
recharging outlets, 9000 stores and 34 angel stores. Its wide presence across the country is also
substantiated by the number of sites it has across India: 127ooo sites and 30,000 3G Sites give an excellent
network experience. The distribution channel of Vodafone may be described as such:

31
 Vodafone distribution channels

i. The Indirect channel: The indirect channel of Vodafone is a 2- tiered channel, with
distributors and retailers. In order to ensure reach to a mass market, the distributors are
subdivided into associate distributors who ensure distribution to clusters of villages.
ii. Exclusive retail: Vodafone markets its products through different Vodafone and mini
Vodafone stores in the targeted geography.

iii. Direct Channels: Vodafone also markets through direct channels, including Direct sales
agents, tele- calling and super call centers.
Other distribution networks include, as mentioned, modern Trade and special distribution channels for the B2B business
model which looks into the requirements of the business customers of Vodafone.

d. Promotion: Vodafone uses multiple things as a part of its Promotion mix. It comprises TV commercials,
Magazine and newspaper advertisements, Billboard advertising and a myriad other forms. Among the
promotion campaigns of Vodafone, some of the most success ad campaigns that of the famous Vodafone zoo
zoo which has become instantly synonymous with the Vodafone brand and the Vodafone pug, with the
tagline wherever you go, our network follows

32
JIO Marketing Mix
a. Product:

The fact that Reliance Jio has taken the telecom industry by storm is attributable not just to its staggering low
prices. The unique features of some of its products is also backing up the rage. To begin with Jio supports 4G
and will be able to work on 5G, 6G. Jio calling is based on VoLTE technology this means that instead of the
usual technology used for voice calling, Jio voice calls are made through the data network. This is a huge step
forward as experts predict that data calling will be the only medium used in the future as more and more people
start using video calling. In fact Reliance Jio does not offer 2G or 3G services, moreover it is the only operator
providing VoLTE-only services till now which gives it a distinct edge going into the future. Reliance has also
been leveraging the eKYC identity verification technology that lets it register a new customer in less than 15
min (including sim activation) without even the use of Adhaar card. Reliance Jio boasts of a fibre-optic cable
network of 250,000 km. It also has partnerships with local cable operators to offer broader connectivity in
broadband to its customers. To provide ease of access and huge multimedia and other content to its customers
so that they can actually spend more and more time on their network, it launched multiple apps on google play
store in May 2016, some of them are-

Wireless router Jiofi

Transfer content JioSwitch
Wallet app JioMoney Wallet
Backup tool that is Cloud-based JioDrive
Magazine and news aggregator JioXpressNews
Magazine e-reader JioMags
VoLTE phone-stimulator Jio4GVoice
Music player JioMusic
Instant-Messaging app JioChat Messenger
HD online video library JioCinema
TV channel live service JioTV
Manage digital services and Jio account MyJio
From an overview, Reliance Jio being the late entrant into the market has tried to be disruptive through its
product. Although most other operators are also at various stages of development with the technologies that Jio
has introduced but it has tried to be ahead of the curve by introducing tech of the future today. How much of a
competitive advantage this proves to be still remains to be seen.

b. Place:

Reliance Jio is an Indian company with Pan-India presence. It has its headquarters base at Navi Mumbai in
Maharashtra. Reliance Jio has a strong and widespread distribution channel. It is the owner of 1,800 MHz and
800 MHZ bands in 6 and 10 circles respectively amongst the total 22 circles prevalent in India. It is also the

33
owner of 2,300 MHZ spectrum licensed for Pan-India usage till the year 2035. Reliance Jio entered into a deal
with Reliance Communications for sharing 800 MHz in seven other circles besides the ten already owned by
its company. It also made a deal with BSNL to use intra-circle roaming facilities in national roaming mode.
Before launching telephony services Reliance Jio offered free services for Wi-Fi hotspot in several Indian cities
like Ujjain, Dewas, Jabalpur and Indore in Madhya Pradesh, Visakhapatnam in Andhra Pradesh, Ahmedabad
and Surat in Gujarat, selected locations in cities of Kolkata, Mumbai, Mussoorie, Bhubaneswar, Meerut and
Lucknow. It is safe to say that the product distribution channels have been well planned by Reliance Jio. It has
a well thought out distribution strategy that has enabled it to have a wide reach to 18000 cities and more than 2
lac villages across the country despite its being a new entrant. It has an ambitious target of penetrating over 90
percent of India by April, 2017. Reliance Jio has already been targeting specific places like college hostels,
public places by selling its products at ad-hoc shops by setting up canopies etc. Reliance Jio also has a target of
creating around 1 million Wi-Fi hotspots throughout India till the August 2017 in order to provide extra data
usage to tariff users. Places aimed for Wi-Fi hotspots for network would be colleges, stadiums, school and other
public places which is part of the strategy to motivate more users to convert to Jio through free usage).

c. Price: Reliance Jio is currently offering all its service offerings free of cost. This state of affairs is expected to
last till the end of March, 2017. Beyond that, it is expected to follow a pricing strategy wherein it will charge
its users a minimal amount for using all of the services offered by Jio in totality.

d. Promotion

Reliance Jio has an aggressive marketing promotion strategy and it makes use of multiple media, including the
television, radio, newspapers, magazines, billboards and social media platforms like Instagram, Facebook,
Twitter and YouTube. Reliance Jio also uses celebrity endorsements to catch the eye of its consumers. Some
of the celebrities who have endorsed the brand include:

As part of promotional activities Reliance, Jio offered free internet Wi-Fi services at six cricket stadiums during ICC
World Twenty20 and each and every one of its services free till the end of the financial year 2016.

34
Appendix:
The questionnaire we used as a guideline for our conversations with the respondents are as follows:
Background Questions 7. Through which source would you like to search
information about telecom service providers?
1. What is your age? T.V./Newspaper
Less Than 18 Hoardings
18-23 years Calls
23-28 years SMS
28-45 years Through your retailer
Greater Than 45 Company outlet
Posters at shops
2. What is your occupation?
Government Service 8. Who do you consult for selecting the sim card?
Private Service Friends
Business Family
Self-Employed Existing Users
Student Take decision yourself
Homemaker
Others (please specify) Evaluation of Alternatives

Need Recognition and Problem Awareness 9. Which medium provides reliable information to compare
telecom service providers?
3. Average no. of outgoing calls per day? T.V./Newspaper
0 Hoardings
0-5 Calls rate charts
5-10 Your retailer
10-15 Company outlets
15+ Posters at shops

4. Average no of sms sent per day?

0 10. If your FIRST preference is not available then what do
0-5 you do?
5-10 Purchase some other brand from the same shop/
10-15 store.
15+ Purchase the same brand from some other store.

5. Are you aware about the value added services such as

caller tunes, ringtones, wallpapers, crickets, astrology,
missed call alerts etc.? 11. If the price of your most preferred sim card increases
Yes tariff charges what would you do?
No Shift to another options or different brands of sim
card
Will be using the same brand
6. Do you use any of the following services?
Caller tunes 12. What are the factors you think are the most effective in
purchasing the Mobile service provider
Wallpapers
Call Rates
Ringtones
Network Coverage
Cricket updates
Value Added Services
Astrology
Consumer Care Services
Missed call alerts
Advertisement
News updates
Jokes
13. If you choose to shift then which Brand will you prefer?
Gaming
Reliance GSM
Others (Specify)
Vodafone
Reliance CDMA
Idea
Information search Airtel
Aircel

35
Tata Indicom

36
 Virgin Excellent
BSNL Very Good
Fairly good
Purchase Average
Poor

14. Which mobile connection do you use? 22. Rate the following services on the basis of your
Reliance GSM satisfaction.
Vodafone
Reliance CDMA Services
Idea
Airtel
Aircel
Tata Indicom
Virgin
BSNL

15. How much did you pay to purchase a sim card?

Free
0-100
100-200
200-500
More than 500

16. Which of the following services do you use of your

preferred brand?
Pre-paid
Post-paid

Post purchase evaluation

17. Why do you use this connection? (Rate each on a scale

of 1-5)
Network coverage
Low call rates/tariff
Better value added services
Better customer support

18. Since how long you are using their services?

Less than 1 month
2-6 months
6-12 months
More than 1 year

19. Do you call at customer care?

Yes
No
20. If yes, how often you call at customer care?
Daily
Once a week
Once a month
Occasionally

21. for what reason you call at customer care?

Value added services
Information regarding new schemes
Other queries
Complaining

37
 Network
Excellent
Very Good
Fairly good
Average
Poor

Call Rates
Excellent
Very Good
Fairly good
Average
Poor

New schemes
Excellent
Very Good
Fairly good
Average
Poor

Customer Care
Excellent
Very Good
Fairly good
Average
Poor

Recharge
Options
Excellent
Very Good
Fairly good
Average
Poor

Value Added
Services
Excellent
Very Good
Fairly good
Average
Poor

Overall
Excellent
Very Good
Fairly good
Average
Poor

23. What makes you unaware about your network

service provider?
Less
Advertisements
Less
Publicity
Others(If others then
mention
)
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References:

1. http://www.warse.org/pdfs/2013/icacsesp93.pdf
2. https://www.scribd.com/doc/17106259/Questionnaire-for-Customer

39
Res
pon Q1. Q2. Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
ses/
Private News TV/new existing call rate network
1 >45 15+ 0 to 5 Yes switch switch
service updates spaper users charts coverage
call rates
missed TV/new call rate and
2 18-23 student 15+ 0 to 5 yes friends same switch
called alerts spaper charts network
coverage
compa
company network
3 18-23 student 0 to 5 15+ Yes none ny friends same switch
outlet coverage
outlet
call rates
missed
Private TV/new call rate and
4 23-28 15+ 0 to 5 Yes call/news friends same switch
service spaper charts network
updates
coverage
call rates
govt TV/new call rate and
5 >45 15+ 0 to 5 yes none family same switch
service spaper charts network
coverage
call rates
Private 5 to existing call rate and
6 28-45 0 to 5 Yes none retailer same switch
service 10 users charts network
coverage
home compa existing call rate network
7 >45 0 to 5 15+ no none same same
maker ny users charts coverage
posters
home 5 to existing call rate network
8 23-28 15+ no none at same same
maker 10 users charts coverage
shops
call rates
govt 5 to missed call TV/new tv/newspa and
9 23-28 0 to 5 yes friends same same
service 10 alert spaper per network
coverage
compa
govt 5 to missed call call rate network
10 23-28 0 to 5 yes ny self same same
service 10 alert charts coverage
outlet

40
 8

References

1. http://www.indiainfoline.com/article/news-top-story/trai-trai-imposes-hefty-fines-on-telecom-
companies-jio-gets-clean-chit-117020400326_1.html

2. http://economictimes.indiatimes.com/articleshow/56941895.cms?utm_source=contentofintere
st&utm_medium=text&utm_campaign=cppst

3. https://telecomtalk.info/telecom-consolidation-in-india-will-lead-to-massive-layoffs-
report/160687/

4. http://www.digit.in/telecom/reliance-jio-slams-airtel-for-malicious-and-misleading-media-
statements-regarding-interconnect-point-33636.html

5. http://www.leadersleague.com/en/news/possible-merger-between-vodafone-and-idea-cellular-
to-create-telecom-giant-in-india

6. https://telecomtalk.info/vodafone-4g-contract-to-ericsson-for-up-west-rajasthan-odisha-north-
east-and-assam/160684/

7. http://gadgets.ndtv.com/telecom/news/idea-cellular-reports-first-ever-loss-as-telco-price-war-
rages-1658865

8. http://ideasmakemarket.com/2013/08/aug-entry6-analysis-of-the-indian-telecommunication-
industry-the-changing-forces.html

9. http://www.researchandmarkets.com/reports/544680/telecommunications_industry_in_india_
porters

10. http://www.ibef.org/industry/telecommunications.aspx

11. https://www.equitymaster.com/research-it/sector-info/telecom/Telecom-Sector-Analysis-
Report.asp

12. http://www.ibef.org/download/Telecommunication_-_February_20171.pdf

13. http://www.thehindubusinessline.com/info-tech/telecom-sector-in-for-major-
consolidation/article9545254.ece

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