Escolar Documentos
Profissional Documentos
Cultura Documentos
on
“IMPROVING THE EFFICIENCY OF RETAIL CHANNEL FOR POSTPAID AT
IDEA CELLULAR”
At
Submitted To
Pune University
Submitted By
Prashant Jain
PGDM
2008-10
SIOM
Pune
ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting the final project report.
This project has been a platform in my learning about the adhesive market and gave the
platform to acquire knowledge in this area. I am deeply indebted to my institution
SIMCA, Pune to provide me an opportunity to undergo such a project, which gave me
thorough insights and experience of the corporate culture that will always milestone in
the path of my successful career.
The last 2 month with IDEA Cellular Limited has been full of learning and sense of
contribution toward the organization. I would like to thank IDEA Cellular Limited
(postpaid) for giving me an opportunity of learning and contributing through this project.
I also take this opportunity to thank all those people that made this experience a
memorable one.
I also wish to express my thanks to Ms. Anshul Srivastava and Ms. Ruchika Khurana
to help me in collecting the responses from the market and give me the practical
knowledge about postpaid market.
A successful project can never be prepared by the single effort of the person to whom
project is assigned, but it also demand the help and guardianship of some conversant
person who helped the undersigned actively or passively in the completion of successful
project.
In this context as a student of SIOM, Pune I would first of all like to express my gratitude
to. Ms. Anshul Srivastava and Ms. Ruchika Khurana (Project Guide) for assigning me
The project couldn’t have been completed without timely and vital help of other office
staff. Special thanks to Dr. Denil Penkar and Ravi Kowadkr for there invaluable
guidance, keen interest cooperation inspiration, and of course moral support through my
project session.
Prashant Jain
1. EXECUTIVE SUMMARY……………………………………………….
……….4
2. INTRODUCTION………………………………………………………………...
7
3. METHODOLOGY…………………………………………………………… ….9
4. LITERATURE
REVIEWED……………………………………………………..11
5. EXPLORATORY STUDY-RETAIL CHANNEL POSTPAID…………………18
6. QUANTITATIVE ANALYSIS AND VALIDATION OF DATA………... …...
23
a. INTENSITY OF DISTRIBUTION……………………………….……
23
b. ROLE OF DEALER……………………………………………………..34
c. WHAT DOES THE DEALER RECOMMEND…………………………37
d. WHY THE DEALER RECOMMENDS A CATEGORY……………….39
e. ANALYSING SALES FIGURES-POSTPAID………………………….47
f. NETWORK PERFORMANCE………………………………………….51
g. CUSTOMER CARE A FUNDAMENTAL OF SERVICE DELIVERY..54
h. EFFECT OF BRAND PULL…………………………………………….58
i. SALES COUNTER
VISIBILITY………………………………………..60
j. DEALER SERVICE……………………………………………………..63
k. BRAND RECOMMENDATION………………………………………..70
l. REASONS FOR RECOMMENDATION……………………………….72
7. CONCLUSION………………………………………………………………… 77
8. RECOMMENDATIONS………………………………………………………..79
EXECUTIVE SUMMARY
Retail seems to be the buzzword for the Telecom Companies, the reasons are many right
from the legal threat to the alternative channels like Direct Sales to the zeal to make the
product available to the potential user who is expected to be of comparatively lower SEC
and largely includes first time users, all in all there exists a well defined logic for the
newly found Retail Focus amongst the Telecom Companies.
IDEA cellular wishes to strengthen the presence of its Postpaid Connections in the Retail
Channel which currently contributes only 12% to 14% of the total sales of Postpaid, for
this a comprehensive market research was conducted with the following objectives
1. To find out reasons and solution to address to lesser contribution to Postpaid Sales
from the Retail Channel across the industry.
2. To compare IDEA with Airtel and Hutch with an objective of finding solution to
match and exceed the performance of its retail channel over a period of time.
Since the research project was allotted to a Management Summer Trainee there was a
need for an exploratory study to understand the working of the Retail Channel and to
identify the factors which need to be validated though a quantitative study to be carried
out across nine regions in which postpaid market of Delhi Circle is divided with sample
sizes adequate to fulfill minimum requirement for data of a particular region to be called
Normal.
It was found that for Postpaid intensity of the channel is “selective” as only around 60%
of the retailers dealing in Mobile connections dealt in the Postpaid Variety, however only
29% of the Non-Telecom shops dealt in Postpaid which clearly implies that Telecom
Shops present a larger potential for the Postpaid connections and hence defines the focus
area, the logic to this lies in the fact that Postpaid is a much more complex product
than Prepaid, and is a product that needs to be pushed as the demand for it is
constantly decreasing.
The product is very dynamic in nature the number of plans for individuals has gone up
from 20 in 2004-05 to 150 in 2006-07, for Retail itself plans keep on changing tin order
to meet the need of customization from the users, in such situation Dealer has to be
supported by providing him solutions to explain the product to the customer, small cards
indicating the key benefits and the customer segment addressed would provide logistical
ease to the distributor and a solution to dealers problem of keeping plan update another
alternative is to initiate a service called “Dealer Helpline” wherein dealer can
immediately enquire Plan Details as and when a customer walks in . In such
circumstances it becomes essential to maintain close knit relation with the dealer as he
usually recommends a brand for which he remembers the Tariff Plans.
All in all it is a market that has only two major pillars Dealer Service and
Fundamental Brand quality.
IDEA cellular is the fourth operator amongst the GSM operators in the Delhi Market, and
intends to focus on the retail market for the sales of Postpaid Connections, currently the
major chunk of the sales comes from the corporate sales channel and the Direct Sales
Channel which contribute around 30% and 55% of the sales respectively, while retail
has been contributing a meager 12% to 14% of the total sales of Post paid connections.
Retail is the upcoming trend in distribution of Telecom as researches show that new
customers will come from the lower SEC’s and the potential customers are those who
have not used mobiles or even telephones earlier Retail will be the best channel to
penetrate to this user group and apart from this reason to create value of availability for
potential user the legal threat hovering around the future of the Direct Sales Channel is
also a cause of concern for the telecom companies which has facilitated the retail focus.
Looking at it carefully there exist two key issues, primarily the retail channel’s
contribution to the sales of Postpaid is 15% to 20% across the industry and specific to
IDEA, it’s performance in retail is worse than the other two major players which
constitute a strong competition in the market, Doing a comparative analysis Hutch the
leader in retail reaps around 22% to 25% of the total Postpaid sales from this channel,
whereas Airtel is at a comparatively lesser 18% to 20% of the total Postpaid Sales from
retail.
IDENTITY:
Idea Cellular antecedents dates back to 1995, when the Aditya Birla Group and AT&T
(through Birla AT&T Communications – Maharashtra & Gujarat circle) and the Tata
Group (through Tata Cellular - Andhra Pradesh circle) set up cellular networks. Both the
above companies were amongst the first in India to commercially start operation in
circles other than metros and achieve financial closure in Indian Telecom industry.
In the year 2000, the historic path-breaking merger of Tata Cellular with Birla AT&T
Communications and the subsequent acquisition of RPG Cellular - (Madhya Pradesh
circle) in the year 2001 – helped the company to aim even further and led to the
formation of Birla Tata AT&T Limited. In year 2001, company won fourth cellular
license for Delhi circle and in year 2002 company introduced common brand “!DEA”
and changed the name to IDEA Cellular Limited.
Since then, there has been no looking back for IDEA Cellular. The company launched
Delhi operations in year 2002 and added a record 100,000 subscriber within one month of
launch.
In 2003, the company achieved the largest financial closure in Indian Telecom for its
entire circle. In 2004, the company entered into definitive agreement to acquire Escotel
Mobile Communications (existing operator in Haryana, Kerala and UP (W)) and Escorts
CORE BELIEFS:
The company continuously harnesses the power of wireless revolution to provide world-
class products and services. It aims at responding to customer needs proactively by
anticipating requirements and providing ready solutions.
Idea Cellular draws inspiration from the loyalty of its subscribers to keep raising the bar,
to shape the future, and to change and enrich the life of each and every member of its
ever-growing family of subscribers.
AWARDS:
Idea, owing to its innovation, excellent customer focus and superior quality of service has
been endorsed by various awards and recognitions. Some of them are as follows:
• Golden Peacock Innovative Product / Service award in the communication sector
from the government of India for implementation of the M-coupon product in the
Delhi circle in 2003.
• Madhya Pradesh circle was rated number one operator twice in two consecutive
surveys of Quality of Service (QoS) conducted by TRAI in August 2002 and
March 2003.
• Idea Cellular Limited was chosen as winner of the 'Indira Award for Marketing
Excellence' for being the highest recalled brand in 2003.
• Idea was ranked ‘Second’ in overall user satisfaction by the Voice & Data - IDC
Mobile User's Satisfaction Survey, consistently for two years, 2003 and 2004,
which was based on parameters like network availability and performance,
customer care, value added services, pre-sales and sales effort and billing.
SERVICES:
Idea offers a wide range of cellular services and products. Its post-paid and pre-paid
services are supported by a variety of package plans to suit the needs of different
customers:
M-coupon — these are electronic discount coupons that customers can get on their
mobiles which they can use is places such as restaurants and pubs.
Voice courier — Idea subscribers can send messages in their own voice to select GSM
subscribers all across the country and to any land line or cellular subscriber in the US and
Canada at a fraction of STD and ISD rates.
M-Chat — an instant-messaging service that enables subscribers to chat with their
friends in MSN, Yahoo and ICQ from Idea mobile (using the SMS feature). Idea's M-
chat enables subscribers to chat with all the three chat rooms, MSN, Yahoo and ISQ,
without having to tag along a laptop or computer with net connection.
SMS in 9 Indian languages — Apart from English Idea subscribers can send and receive
SMS in 9 Indian languages - Hindi, Gujarati, Marathi, Bengali, Telugu, Tamil,
Malayalam, Kannada and Punjabi.
GPRS / MMS — Idea Delhi was the first mobile phone operator to launch GPRS
services in Delhi. It's 3G-compatible network supports General Packet Radio Service
(GPRS), which allows subscribers to access Internet websites and information portals on
Idea mobile.
Idea was the first company in the country to launch GPRS in November 2002. It
showcased EDGE (Enhanced Data Rates for GSM Evolution) in Delhi, in July 2004.
With EDGE, subscribers can enjoy live television with a data download rate of over 160
kbps. Idea subscribers also have a richer experience while watching movie previews,
multimedia messages with video attachments, web-infotainment, high-speed video
Ring-Tone – With this facility subscribers can download ring tones on their handsets.
They just have to select the Ring-Tone out of the available ones and it will be sent to
them. Idea also offers the facility of sending the Ring-Tone as a gift to a friend of yours.
Cricket commentary – Idea also provides the facility of cricket commentary to its
customers. Now you don’t require a TV set or a radio to listen to the commentary, you
just need a handset and an idea card and you listen to the cricket commentary.
Caller-Tunes- Idea provides its customers the access of this facility and let the caller
listen to the exciting songs instead of the boring tring-tring.
Railway Reservation- The subscribers of Idea can make ticket reservation and other
enquiries related to railways by just dialing 456.
Star interview- By dialing 456 one can listen to the interviews of various movie stars on
his/her mobile phone.
News- Idea subscribers can keep themselves updated with the recent developments going
around the world using this service.
Jokes- Subscribers listen to funny jokes by just dialing 456. This service can also be used
to send jokes to friends and relatives.
Astrology- IDEA also recently launched Ganesha Speaks by Bejan Daruwalla, a LIVE
astrology service that can be accessed by dialing 181.
Commodity market- Idea subscribers can keep themselves updated with the prices
prevailing in the commodity market by just dialing 456.
1. To find out reasons and solution to the lesser contribution from the Retail Channel
across the industry.
2. To compare IDEA with Airtel and Hutch with an objective of finding solution to
match and exceed the contribution of retail to the sales of Postpaid for the
competition over time.
Phase 1: Exploratory study to find out various factors that determine efficient
functioning of Retail Channel.
Sampling Plan:
One Distributor was Randomly Selected in each of the nine regions across Delhi
and NCR.
Various Markets were identified in the area controlled by the Distributor.
Dealers were selected as per their visible prominence from each of the markets
and number of dealers selected was decided as per the Dealer Population of the
Market.
Total 30 Dealers were got to fill the Questionnaire in a Particular region
1. The Factors that could be identified through the interviews with the Area Sales
Managers.
• Players in the market are trying to increase the penetration of sales and customer
service through exclusive outlets, while IDEA has been slow in adopting the
concept.
Commission and regular contact are hygiene factors, which are just the bare
minimum that the dealer deserves.
In North Delhi Hutch has 800 Drop Boxes while IDEA has 32
Lack of Commitment and ownership of Dealer sales on the end of the SEFO
(Senior Executive Franchise Officer) leading to delayed activations and there by
dissatisfied dealers.
Customer Care availability and product knowledge of the customer care
executives.
Timelines for activation of services like VAS.
• Lack of Brand Pull (most dealers said “customer nai mangta to hum kya kar sakte
hain”)
Brand Shops:
INTENSITY OF DISTRIBUTION
We now look at various existing scenarios in the Retail Channel with an objective of
finding out a solution to improve the efficiency of the channel and thereby, increase its
contribution to the total pie of sales of postpaid connections
The first question that comes to the mind is who are the dealers and is every shop dealing
in mobile connections will also be dealing in the post paid variety; the following analysis
will give an answer
40%
60%
Figure 1
Postpaid as a product is thinly spread as compared to prepaid as visible from the fact that
only 60% of the dealers who deal in telecom connections deal in the Postpaid variety, this
generates a need for identifying the potential dealers for a focused retail expansion plan.
The following analysis is an indicative of the scenario in both telecom and non telecom
shops for postpaid connections.
29%
71%
Figure 2
34%
66%
Figure 3
We get a clear indication that the Telecom Shops present a much better potential for
Postpaid Connection as a product, we will understand the reasons for this as we go
through this analysis as there are many more comparisons of performance of Telecom
and Non-Telecom shops.
Another important aspect we need to know is about the reasons, why postpaid is
comparatively thinner in its presence in the market compared to prepaid; we get a
few answers when we look at the reasons for which the dealers were not dealing in
postpaid.
56%
60%
50%
35% 37%
40%
30% 24%
20% 15% 15% 13%
8%
10%
0%
demand
Lack of
trust on
Distributor
Lack of
exclusives
sells from
billing
contact
Prepaid
Figure 4
The top three reasons which the dealers recalled without prompting were:
1. Lack of Demand - 56% of the dealers mentioned this as a reason for not dealing
in postpaid.
2. Lack of Trust on Billing – 35% of the dealers mentioned this as a reason for not
dealing in postpaid.
3. To keep update of plan is tough – 37% of the dealers for not dealing in postpaid.
Lack of Demand means that the particular dealer does not have the clientele for
postpaid or if we link it up with the other two reasons it may also be the case where
because of poor product knowledge he does not want to create customers for postpaid or
because of threat of imprudent bill he does not want to sell the postpaid connections.
Telecom market is a sort of market where the role of the distribution channel is extremely
significant not only for availability but also for spread of information and various
Table 1
(CPV is the process of verification which is to check if the details furnished by the
customer at the time of applying for a postpaid connection are genuine done with the
intention of ascertaining the customer identity and payment security)
This regional analysis will help in understanding the performance of the existing
Distribution channel in terms of expanding the market, by convincing more dealers to
deal in postpaid the dominant factors may vary across the nine regions, this is of critical
importance for determining the focus of effort in a particular region
WEST DELHI:
In this region the problem of Updating Plan Knowledge is Very Significant.
Lack of demand is not the top reason for not dealing in postpaid but it is still a
significant concern as 50% of the dealers said this while the average percentage
across Delhi and NCR is 56%
Schemes like Lifetime are also much more significant in this region as a much
higher 29% of the dealers mentioned this as a reason to avoid postpaid while
average percentage across Delhi and NCR is only 8%.
CENTRAL DELHI:
Lack of Demand was mentioned by 66% Dealers in this region which is inline
with the overall scenario.
Belief that Postpaid sells through Exclusives is quite significant in this region.
Lack of Trust n Bill and Updation of Product Knowledge are not as significant in
this region which is a deviation from overall averages.
EAST DELHI
Lack of Trust on Bill the reason mentioned by the maximum 75% Dealers while
overall average stands at 35%.
SOUTH DELHI:
Lack of Demand is the reason recalled by a maximum of 50% dealers in line with
the overall trend.
Schemes like lifetime was recalled by 29% of Dealers in this region compared to
8% across Delhi and NCR.
GURGAON:
A maximum of 60% dealers said that they do not deal in postpaid because of lack
of demand which is inline with the overall averages.
No serious deviations were found in the region.
FARIDABAD:
Lack of Demand was the reason identified by a maximum of 50% of the dealers
as identified as a reason for there decision of not dealing in postpaid , however
CPV Problem and the believe that postpaid takes ore time for activation in
comparison to prepaid were equally dominant in this region
GHAZIABAD:
Lack of Demand is the reason that 75% of the dealers recalled for not dealing on
postpaid which is the maximum.
The concern of Lack of Trust on Bill is significantly higher in this region
compared to the overall scenario as a huge 63% of the dealers’ said that they do
not deal in postpaid because of the reason.
To dig further into the dealers mind the dealer was asked to rate the significance of a
particular factor to his decision of not dealing in postpaid on a scale of 1 to 5
F a c t o r s a s r a t e d in t h e ir im p o r t a n c e b y t h
3 .7 3 .5 9 3 .3 1
4 3 .13 2 .9 6
2 .2 9
3 1.7 1 1.5 1
2
1
0
L a c k o f d e Cm oa nn tdi n oF ue sa r o f c o t ma kp el as i tn i tms e F t eo a sre ol lf C P MV o r e M o n e t a r y l Ga ca ki n o nf oc t o n t a
f o r p o s t p au ipd d a t i o lni ko ef w r o n g bp iol lsi tn pg a i d n e g a t i vd eo c u m e n Pt ar to i po on ri tn i o wn iat lh t po o s t p a i d
P roduc t P o s t p a i de x t r a e f f oD r i ts t r i b u t o r
R a t e d Im p o r t a n c e
Figure 5
The revelation made through the aided testing was that although none of the
dealers mentioned that it takes time to sell postpaid is a reason why he does not deal
in the product however it was found significant when dealer was prompted.
Table 2
1. The Results of factor rating are largely in line with the Results for Unaided
Questions
2. Fear of CPV negative is a concern in North and Faridabad
3. Lack of proper documents amongst customers is significantly more important in
North Delhi as the belt covered is a one dominated by students (Area near Delhi
University)
4. Problem of updating with continuously changing plans is very important in West
Delhi as indicated by a healthy rating of 4.5 on a 5 point scale.
Fa c t o r R a t in g s T e le c o m V s N o n T e le c o m
negative
takes time
distributor
complaints
postpaid
like wrong
updating to
fear of
everchangi
documentat
CPV
proportiona
demand for
contact
lack of
Gain not
to sell
ng plans
postpaid
l to effort
Lack of
billing
postpaid
with
more
ion in
N o n - te le c o mte le c o m
Figure 6
The Non-Telecom shops are significantly more concerned about time it takes to
Sell Postpaid, again that is because it takes time out of their main business
33%
67%
22%
53%
25%
This Implies that dealers are playing the role of Advisors, it will not be wrong to say that
dealers are becoming consultants
This further enhances the role of providing better information support to the dealers
and it will be beneficial to provide visual presentation material (like planners and plan
detailers).
Considering the fact postpaid is a product which requires push and customers generally
do not come with a determined intention to buy postpaid, dealers recommendation
becomes very significant in figure 6 we observed that only 25% of the dealers across
Delhi and NCR recommend postpaid lets analyze the dealers recommendations in detail
w ha t do the de a le rs re c om m e nd
100.00%
80.00% 36.36%
26.67%
60.00% 66.67%
63.64%66.67% 71.43% 54.55%
42.11%
40.00% 54.55%
54.55%53.33%
20.00%
18.18%13.33% 9.09% 25% 14.29%21.05% 18.18%
0.00%
North W es t Central Eas t South Gurgon Fbad Gbad Noida
An exceptionally low 9% and 13% of the dealers in Central Delhi and West Delhi
respectively recommend postpaid this is way below the overall mean percentage
of dealers recommending postpaid.
Doing further analysis on this there exist a comparison between Delhi and NCR market
which is visible from figure 8.
Com parison betw een Delhi & NCR, Category Recomm ended by the
dealers
100
39.29 64.86
50
35.71
16.22
0
NCR Delhi
Postpaid Prepaid
Figure 10
It is clear from figure 8 that NCR market is more favorable to postpaid than the Delhi
Market as we go further we will be able to relate it to the sales of postpaid in the
respective markets, and also the reasons for this wide gap will flow in from various
analyses.
Now having understood what the dealers are recommending in this market lets try to
understand why the dealers are generally recommending prepaid over postpaid, figure 6
65%
70%
60%
50% 41%
40% 30% 27%
30% 24% 23% 21%
20%
10%
0%
Lack of Trust Keeping customer w ill Quick Problem of Postpaid Local usage
bill update w ith have control activation CPV takes time to
plans is on Usage sell
tough
Figure 11
The top three reasons for recommending prepaid over postpaid as recalled by the dealers
across Delhi and NCR are
The strange thing that comes out of this is that the top two of the top three reasons for
recommending prepaid indicate problems of promoting postpaid more than intent to push
prepaid the main reason for this is the fact that postpaid is a more lucrative product to sell
in terms of monetary benefits and also the fact that prepaid will anyways sell and does
not need much of a push from the dealers side.
Table 3
Largely the trends are in line with the overall averages but there are a few deviations
which give an opportunity to make a targeted action plan to resolve the core issue in a
particular region.
Highlights:
This is a result to a question where the dealer was aided with the ten factors identified
through an exploratory study of the industry, the results were as follows
Documentation
Return on time
Control on
long term
customer
schemes
No link with
risk of billing
lesser time for
Lesser time
and effort to
complaints
Postpaid
Better
usage
activation
Invested
Involves
Lesser
sel
Figure 12
The dealers never mentioned that the prepaid customers keep visiting the shop for
recharge as a reason for which they recommended prepaid but when prompted they rated
the factor that selling prepaid gives them a long term customer who is a potential
candidate for cross selling it was found to be the second most important after the need of
control on usage.
80%
69%
70%
60% 50%
50%
40% 33% 34%
30% 23%
20% 11%
10%
0%
High usage Better Easy to use Flexible Better call STD usage
customer commission (packages) rates
Highlights
Better Commissions is a Reason for most who recommend Postpaid.
Despite various low rental plans still postpaid is a product for higher usage
customers for Dealer.
Only 11% Customers preferred postpaid for Flexibility, which actually is a major
benefit of the Product.
Dealers believe that postpaid may help cutting down cost for customers having
excessive STD usage.
The rating of the factors identified as relevant indicated that there is a belief that the call
rates of postpaid are not matched by prepaid, however the key reason for recommending
postpaid is to earn better commission however dealer does ascertain that a customer is a
high usage one which restricts the user group.
20
5.64
15
Airtel
10 7.35
Hutch
5 4.57 Idea
0
1
Sales across Delhi & NCR
Figure 15
Hutch is the leader with mean sales of 7.35 connections a month from a dealer
dealing in postpaid across Delhi and NCR.
35
30
8.87
25
Highlights
Hutch is the Leader in dealer sales across the regions except for Ghaziabad
In North, East, Faridabad, Noida IDEA leads Airtel in Dealer Sales.
The margin of lead is very insignificant and indicates only a scope to get 2nd
position amongst GSM Players (excluding MTNL)
Airtel is Stronger in South Delhi, Faridabad and Ghaziabad.
Airtel is much stronger in NCR which will become clear in the following
construct
Table 4
We find here that both Airtel and IDEA are performing much better in NCR than
in Delhi, however Hutch has maintained the position of leader through consistency,
another problem specially with IDEA is that it seems to be thinly spread across
Delhi which is indicated by a dismal median sales value of zero connections across
Delhi while the mean number of connections sold per month is 3.55.
Network Performance is an essential pillar of service delivery and quality it is one of the
main elements of Brand Quality and this research shows that criticality of Network
Performance to sales is still at a handsome 7.77 on a scale of ten where 1 means not at all
important and 10 means absolutely critical.
This implies even when the telecom industry has grown in leaps and bounds and focus is
continuously shifting towards Value Added Services basic Network Quality is still a
point of differentiation amongst the players.
We will now analyze the feedback of dealers across Delhi and NCR on the Network
Quality of the GSM Brands (Excluding MTNL)
5 4.48 4.29
4.5
4 3.48
3.5
3
2.5
2
1.5
1
0.5
0
1
Network quality of airtl in the area network quality of hutch network quality of idea
Figure 17
Airtel has a differential edge in terms of the confidence expressed on its Network
Quality by the dealers across Delhi and NCR.
0
North West Central East South Gurgon Fbad Gbad Noida
It is clear that Airtel is the clear and consistent leader in terms of Network Quality and
maintains its superior Network Tag across the nine regions; Hutch is a close second in
most areas and is a marginal leader in East Delhi, however, in terms of Network Quality
Idea’s performance is rated as the poorest amongst the three.
Telecom is a major element of a country’s infrastructure and as the economy is not only
growing and widening, so are the business’, the impact of this on the industry is that more
and more people demand better services in Roaming.
This in a ways implies a huge advantage to Airtel for its Pan India Presence and at the
same time it acts as a disadvantage for IDEA which operates in only 8 circles
5 4.1
3.8
4 3
3
0
1
Of the dealers who rated Idea’s network at a value of less than 3 which means that it is
available at only a few places 86% of them said that they think so because of the fact that
IDEA has presence across lesser circles.
13%
87%
yes no
Figure 20
Figure 18 gives an indication that it is a very wide spread perception that if the service
provider is present across lesser number of circles its performance in roaming while
the customer is in a circle where his service provider does not operate is not
satisfactory.
The very same perception is a boon for a company like Airtel it is a bane for a
company like IDEA.
Specially, talking about the retail market the dealer himself is largely involved in
Customer Care, the reason for this is that this market is about maintaining relationship
with the customer for cross selling, also the competition between the dealers has
increased so much that dealer has to attend the customers query otherwise he is liable to
lose the customer and for this the dealer should have some kind of support from the
operator’s side.
With this increased focus on customer care we are looking at a few major aspects
1. Current capacity and scalability of the customer care given directly by the
service provider to the customer.
2. Adding value through the channel
a. The showrooms, they are extensive customer care points, but the
issue is that of penetration as telecom is a wide spread market.
b. The Exclusives, they are unibrand retailers who can provide
customer care to an extent.(a few specified services can be
provided by these dealers like SIM Replacement, Checking Billed
Unbilled etc)
c. Dealer Helpline – this is a prioritized service that is given to the
dealers for the Prepaid and we studied f it can be a successful
proposition for the Postpaid
4 3.76
3.46
3.5 3.07
3
2.5
2
1.5
1
0.5
0
Rating CC Availability Rating CC Of availability Rating CC Availability Of
IDEA of AIRTEL HUTCH
The availability of the Customer Care is a serious issue that was faced by all the telecom
operators as customer is just not ready to wait, almost all the telecom operators have gone
in for a scale building exercise on this front and in the procedure have increased there
own capacity and even outsourced the Customer Care operation.
IDEA has also followed suit and has gone for a major ramp up in the capacity of the
Customer Care operations controlled by the company by setting up a new Call Canter at
Mathura Road and has even outsourced some part of the customer care operations, but
perhaps it has been a little slow in implementing these steps at least that is what the
feedback of the dealers across Delhi and NCR Suggests as they have ranked IDEA the
third on this parameter after Hutch and Airtel in that order and the score of 3.07 is barely
past Satisfactory Levels.
4.1 4.04
4.05
4
3.95 3.88
3.9 3.84
3.85
3.8
3.75
3.7
Product know ledge CCE Product know ledge of Product Know ledge of
of Hutch CCE of airtel CCE Of Idea
Figure 22
In terms of product knowledge of the customer care executives the dealers were not able
to distinguish the three brands and as visible from figure 21 it does not give any clear
answer probably a response of the customer himself is needed on this issue.
Coming to the aspect of Exclusive Outlets which apart from increasing penetration for
sales also increase availability of Customer Service IDEA is way behind both Airtel and
Hutch as an example in West Delhi Hutch has 55 Teleshops Airtel has around 15 FSO’s
there is only one IDEA ZONE which is an IDEA exclusive outlet, however as the
concept of exclusive is a new one in IDEA it has just started.
14%
86%
yes no
Figure 23
86% of the dealers said that dealer helpline is essential requirements, out of these 91%
people say they will use Dealer Helpline for Updating Plan Knowledge 58% said they
will use it for Making Queries regarding Customer Complaints.
This means that a Dealer helpline will have a two pronged advantage
1. It will lead to better Customer Care.
2. It may yield a solution to the dealers’ problem of updating with the ever
changing plans.
The effect of Brand will be more pronounced in prepaid as postpaid is a product which
the dealer has to push and so he can influence the purchase decision and also the level of
information about the products is low amongst the customers so dealer has to help in
choice and selection of both the brand and the SKU.
50
50
40 30
30 20
20
10
0
1
B ra n d p u l o f a irte Bl ra n d p u ll o f h u tchB ra n d p u ll o f Id e a
Figure 24
In this Market the communications and promotions done by the company should be
supported by strong service quality to create a strong Brand Pull, as is visible from the
example of IDEA Cellular as despite of promotional and advertisement efforts its brand
pull is the weakest and explained to an extent of 42.1% by the poor Network
Performance.
70
60
50
40
30
20
10
0
North West Central East South Gurgon Fbad Gbad Noida
The visibility on the dealers counter is an area where all the three operators under study
concentrate a lot the market has a slang for the importance of this factor which is
The dealers rated the criticality of on counter visibility at a healthy 6.96 on a scale of 10;
the general opinion was that visibility shifts the level of sales on the whole from the
counter as it is easily recognized by the customer to buy a connection.
The Dealers also believed that POP does influence customer’s purchase decision however
the dealer has to put in his effort to close the sales for Postpaid.
21%
79%
yes no
Figure 26
A good 79% of the dealers believe that good visibility does influence customer’s
purchase decision.
Now let’s analyze the comparative efforts of the three companies in the direction of
increasing their visibility at the Dealer’s Counter.
4.5 4.01
4 3.48
3.32
3.5
3
2.5
2
1.5
1
0.5
0
1
Across Delhi & NCR
Analysis
4.5 4.19
4
3.2 3.34
3.5
3
2.5
2
1.5
1
0.5
0
1
Across Delhi & NCR
Figure 28
Analysis
• Hutch is the leader across the nine regions of Delhi and NCR
• IDEA comes second, Airtel a close third
• Dealers unanimously agreed that POP was an essential dealer support as it
helps in explaining the plans.
Dealer service is a major aspect that is influencing the market strength of a particular
brand it was found that around 91% (figure 38) of the dealers are recommending a
particular brand for better dealer service and considering the role that dealers play in the
sales of postpaid connections it becomes all the more important
We identified five major factors of under dealer service they are as follows
Regular Visits – the regular visit of the sales person to dealers counter
Number Availability – Number Choice is a fundamental advantage in a postpaid
customer this factor studies how well the distribution is able to provide good
numbers to the dealers.
Timely Claim Settlement – the commission in postpaid is paid upfront so this
factor evaluates the extent to which commitment of schemes is fulfilled.
Quality and Complaint Handling – The dealers form the point of interaction
with the customer so they handle various complaints, this factor identifies the
quality of service given to the dealers.
Sales Person Quality – The sales persons are the actual channel through which
the information flows to the dealer so the quality of understanding of the product,
his enthusiasm and the quality of time he spends with the dealer constitute Sales
Person’s Quality
4 3.73
3.5 3.27
3 2.71 2.72 2.75
2.5
2
1.5
1
0.5
0
QCH Reg Visits Number Timely Claim Sales Person
availability Settlement Quality
Three factors which were ranked the most important were as follows
1. Quality and Complaint Handling
2. Regular Visits
3. Number Availability
First we will understand the scale on which the dealers were asked to rate the
performance of a particular brand on a particular factor
3.5 3.44
3.4 3.32
3.3
3.2 3.16
3.1
3
1
Regular Visits To Dealers Across Delhi & NCR
Figure 2
Analysis:
The long term relationship with the dealer is an advantage that Airtel benefits
from.
The fact that Airtel has a single distribution channel for prepaid and postpaid
influences this parameter
Considering the volume gap between Hutch and IDEA it is doing reasonably well.
Regular visits and quality time spent at the counter address to the problem of
updating with continuously changing plans.
IDEA is the Clear leader in providing good numbers across Delhi and NCR, this
also shows the level of integration in the distribution channel to deliver numbers
of choice in time
Hutch is second and Airtel is worst and just upto the satisfactory level.
Analysis
• IDEA and Hutch both are doing fine on this parameter but scores are below good
level so there is a need for improvement here.
• Airtel is doing poorly and is below satisfaction level
• This factor has been rated the highest in the level of importance and less than
satisfactory level of performance exemplifies the poor show by the company in
the field of dealer service.
3.7 3.63
3.6
3.48
3.5
3.4
3.3 3.23
3.2
3.1
3
HUTCH(SPQ) AIRTEL(SPQ) IDEA(SPQ)
Analysis
Hutch is the leader on this parameter, however this factor has not scored very
highly probably dealers were not clear of the importance under test.
IDEA is doing well and Airtel despite being the third is above satisfactory level.
15%
52%
33%
• Hutch is recommended by the highest %age of dealers which is inline with there
Performance in Retail Sales.
• IDEA enjoys good support by the Dealers but scores less on Fundamentals of
Service Delivery.
• Airtel Sells largely on Fundamentals of Service and dealers sell Airtel on the
pressure of losing a customer
100% 0 0
10 10 12
90% 19 18
27 31
36 40
80%
40 37 32 27
70%
36
60%
31
50%
33
40% 73
64 z
30% 50 53 56 55
45
20% 38
27
10%
0%
North Central South Fbad Noida
91.55%
100.00%
80.00%
60.00% 35%
40.00%
8.45% 11.27%
20.00%
0.00%
Dealer service Customer Better Economic
service Commission Plans
Dealer Service is the most prominent reason for a dealer to recommend a particular
brand, Customer Service actually represents dealers’ trust of the fundamental
quality of the brand
But it is still a distant second; economy hardly seems to be a criterion which proves
that it is very difficult to differentiate on economy same is the case with commission
as the competition hardly takes time to match the deal.
Now further we can analyze which brands were recommended for what reasons
120 100
92.5 91.55
100
80 57.14
60
40
20
0
HUTCH IDEA AIRTEL OVERALL
DEALER SERVICE
Figure 10
Analysis
92% of all the dealers selling postpaid recommended a particular brand for Dealer
Service.
Only 57% of dealers who recommended Airtel said they did so for better dealer
service.
80.00% 72%
70.00%
60.00%
50.00% 42.50%
40.00% 35.20% CUSTOMER SERVICE
30.00%
20.00% 12.50%
10.00%
0.00%
HUTCH IDEA AIRTEL OVERALL
Figure 11
Analysis
Out of the total number of dealers recommending postpaid only 35% did so for
better customer service
Only 12% of the dealers recommending IDEA said they did so for better customer
service suggests lack of confidence on customer service
Confidence on Airtel’s Customer Service is Exceptionally High as 72% of the
dealers recommending Airtel said they did so for good customer service.
1. Focus on Bill Clarity: The ROI for the retailer is a major attraction in postpaid,
but either he is not able to push Postpaid to the customer as customer is not sure
of the prudence level of the bill or the dealer himself does not want to push
Postpaid as he perceives a risk of complaints stating imprudent bill.
a. 36% dealers do not deal in Postpaid because of lack of confidence on Bill.
b. 65% of Dealers recommending Prepaid do so for Lack of Confidence on
Bill.
Under such circumstances it becomes absolutely essential to take steps to improve
the clarity of the bill.
3. Plan Updation: in last two years the number of operational individual plans have
gone up from about 20 to about 150, in such a situation it becomes very difficult
for the dealer to maintain updated knowledge of Tariff Plans which substitute of
the product, this can be lethal for the potential of a push based product.
a. 36% Dealers say they do not deal in Postpaid as they find it too difficult to
keep track of ever changing Plans
b. 33% of the customers do not know if they want prepaid or postpaid.
c. Only 25% of the Dealers across Delhi and NCR Recommend Postpaid.
d. 41% of the Dealers recommend prepaid because they are not able to stay
updated with changing plans.
Given the above stated findings the company will have to work in direction of providing
a solution to the dealer to keep updated with the changes in the plans or the new plans,
this will help in two ways, it will expand the pie of Retail in Postpaid and differentiate
IDEA
4. Dealer does not have a role after closing the sales: This is where Prepaid scores
over Postpaid as customers keeps visiting the dealers shop regularly for recharge
while in postpaid dealer is involved only till the sale is closed.
a. The Factor that “Prepaid Customers keeps revisiting the shop for
Recharge” was rated 3.68 on a scale of 5 and was second most dominant
factor.
b. The Prepaid Customer is a Potential for Cross Selling as most dealers
stock mobiles and average time in which customers change Handset is
declining. So we have to devise a way through which we can involve the
dealer in the product life cycle for a longer duration of time.
The perception that postpaid is for high usage customer is very widely spread in
dealers across Delhi and NCR, which needs to be rectified.
1.
6 Fundamentals of Service Delivery and Quality – IDEA has been rated inferior on
almost all the factors of Service Quality and therefore enjoys lesser Brand Pull than the
competition this is the reason which leads up to lag behind despite of a good performance
on Dealer Service criterion
RECOMMENDATIONS
Focus Fundamentals:
• Fundamentals like Customer Care and Network Performance have huge
relevance company is already into a phased expansion in both the service
delivery aspects, however that constitutes a long term investment and
change will be noticed over a period of time.
REFRENCES
1. www.ideacellular.com
QUESTIONNAIRE
Dealer Name
Address:
Shop Type
Yes No
Yes No
(Check one of the two)
Q1c. What are the reasons that prevent you from dealing in Postpaid Mobile
Connections?
Grand Total
Q3b.Which Category do you recommend to these customers who are not clear of the
category to buy?
Prepaid Postpaid
Yes No
Q4e. Under what conditions will a customer walking in with a choice switch?
Q5b.
1- Unavailable at most places
2- Unavailable at many Places
3- Generally available but problem in Basements and Congested areas.
4- Widely available and strong network but problem in basement only in few areas
5- Almost ubiquitous and very strong network.
Hutch 1. 2. 3. 4. 5.
Idea 1. 2. 3. 4. 5.
Airtel 1. 2. 3. 4. 5.
Q5c.How many Customers out of 10 are especially worried about N/W in Roaming?
____________
Yes No
Q6c. Rate the Service Providers on a 5 Point Scale with respect to the listed parameters.
Q7f.Do you feel that Plan Based POP helps in explaining plan to the Customer?
Yes No
Q7g.Do you feel plan based POP lends validity to your commitment as per Plans?
Yes No