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To cite this Article Temesgen, Zelalem , Negi, Rakshit and Ketema, Eyob(2010) 'An Assessment of the Marketing Strategy
for Mobile Services of Ethiopian Telecommunication Corporation', Services Marketing Quarterly, 31: 1, 50 — 71
To link to this Article: DOI: 10.1080/15332960903408443
URL: http://dx.doi.org/10.1080/15332960903408443
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Services Marketing Quarterly, 31:50–71, 2010
Copyright # Taylor & Francis Group, LLC
ISSN: 1533-2969 print=1533-2977 online
DOI: 10.1080/15332960903408443
ZELALEM TEMESGEN
Ethiopian Telecommunication Corporation, Addis Ababa, Ethiopia
RAKSHIT NEGI
Department of Business Education, Addis Ababa University, Addis Ababa, Ethiopia
EYOB KETEMA
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50
Marketing Strategy for ETC’s Mobile Services 51
INTRODUCTION
METHODOLOGY
The basic objective of this study was to evaluate the existing marketing
strategy of ETC for mobile business. Considered suitable to address a large
number of samples with the limited time and budget, the survey approach
was used. Both quantitative and qualitative procedures were planned to
obtain desired results and to overcome limitations of resources.
Marketing Strategy for ETC’s Mobile Services 55
In order to gather the data from relevant sources, two instruments were
developed: one each to be responded to by mobile users and employees or
managers who are actively engaged with marketing and customer service
operations at ETC. Items related to the measurement of customer satisfaction,
service quality, approach to market segmentation and strategy development,
service provisions, marketing mixes, awareness, and perception of existing
and upcoming value added mobile services were prepared and structured
to frame the questionnaires.
Pilot testing of the instruments was carried out to ensure the validity of
the data to be collected from both the groups, and it was observed that a sig-
nificant number of respondents (mobile users) felt it difficult to understand
adequately the English version of the questionnaire provided, therefore, an
Amharic (local language) version was prepared for such cases, reserving
the English version for corporate employees and managers. Stratified random
sampling technique was used to select the mobile users from six zones of the
capital city (Addis Ababa), and the marketing managers with concerned staffs
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(26–40), followed by little over one-third (35.2%) as young (15–25), and the
remaining distributed over senior age group (above 40 years). On education,
less than half (47.5%) of the respondents claimed to have a degree, followed
by over one-fourth (28.3) who had completed secondary school, and about
one-fifth (20.8%) who had their first degree or higher. With respect to their
monthly income, over one-third (37.5%) reported to be between ETB 501
and ETB 1,500, followed by less than one-third (29.5%) who claimed ETB
500 or less, and the remaining scattered almost equally within the range
ETB 1,500 and ETB 3,000 (Table 1).
On the other hand, the profile of the other group of respondents
(employees) found to be similar to that of customers with a male majority
(67%). While a great majority (73%) reported to be within the age 26 to 40
years, less than one-fifth (16%) found to be below 26 years, and the remain-
ing scattered somewhere above 40 years. With respect to work experience,
above half (51%) of the respondents reported with 5 or less years, followed
by over one-third (38%) who maintained it between 6 and 10 years, and
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remaining with more than 10 years. Furthermore, over half (53%) of them
claimed to have their first degree or above, followed by less than half
(43%) who reported having a degree. Also, the majority of the respondents
(62%) are working at customer service and related areas while the remaining
(38%) engaged in marketing and planning activities (Table 2).
Opinions of Customers
About all (95.4%) the respondents claimed to be the users of ETC mobile
service with the remaining 4.6% who do not have this service, reported as
nonusers. A majority (60%) of nonusers reported the service as expensive,
followed by less than one-third (30%) who did not receive the service
when asked, and the remaining attributed it to lack of awareness (7%)
and unwillingness to avail the service (3%). A great majority (76.5%) of
the respondents reported to be as dissatisfied with the existing mobile
communication and value added services provided by ETC (Table 3).
The reasons as forwarded include poor service quality (68%), followed
by high service charges (18%), few services (12%), and poor after-sales
services (10%).
In contrast, almost all (94%) of the respondents claimed to have
additional mobile services such as Internet and data (59%), video (53%),
and voice mail (30%), if introduced in the near future by the ETC (Table 4).
However, the majority (60%) of them do not have a mobile phone that
supports the services they claimed to have, and over half (57%) of them
do not know how long will it take to replace their mobile handsets, while
one-fifth (20%) confirmed that they do not have any budget for this upgrade.
Moreover, about one-fourth (23%) reported with a strong willingness to get
the handsets replaced within a year time.
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Monthly income
Sex % Age % Education % Occupation % (in ETB) %
Male 65 15–25 35.2 Primary or less 2.8 Student 14.5 <500 29.5
Female 35 26–40 54.5 Secondary 28.5 Business 19.9 501–1,500 37.5
57
41–55 8.2 Diploma 47.8 Civil servant 48.1 1,501–2,000 9.4
>55 2.2 First degree and above 20.9 Private sector employee 11.4 2,001–2,500 10.8
Daily laborer 2.0 2,501–3,000 4.0
Other 4.0 >3,000 8.8
Total 100 100 Total 100 100
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Male 67 15–25 16.0 Secondary 3.7 Customer Service 61.7 501–1,500 9.9
58
Female 33 26–40 72.8 Diploma 43.2 Marketing and planning 38.3 1,501–2,000 29.6
41–55 9.9 First degree and above 53.1 2,001–2,500 16.0
>55 1.2 2,501–3,000 30.9
>3,000 13.6
Total 100 100 Total 100 100
Marketing Strategy for ETC’s Mobile Services 59
Services to be added %
Voicemail 30.0
Internet and data 59.3
Video conferencing 52.8
Who wants at least one of the above services 93.8
60 Z. Temesgen et al.
Item M SD
has created with them (M ¼ 2.08), network quality (M ¼ 1.77), and loyalty
(M ¼ 2.86).
TABLE 6 Opinion on Promotional Influence and Price of Mobile Phone Service Components
Items Response %
Average 38.1
Cheap 16.8
SIM replacement fee (for prepaid) Expensive 29.0
Average 34.8
Cheap 36.2
Customer service 33 10 20 50 24 23 19 65
Marketing and 19 10 9 38 19 5 11 35
business planning
Total 51 20 29 100 43 28 30 100
62 Z. Temesgen et al.
Over half (55%) of the respondents believe that when a new service is
deployed or upgraded, it is not supported by the studies related to market
opportunity and market size. Moreover, a majority (64%) of the respondents
stated that mobile services are not segmented in logical groupings (Table 8).
Regarding the eight service marketing mixes (8Ps), respondents were
asked to report the importance of elements that should be incorporated by
the ETC when it comes to framing the marketing startegy. FDE (89%), price
(74%), service=product (61%), promotion (56%), productivity and service
quality (50%), service distribution (36%), service delivery process (30%),
and physical evidence (13%) were identified as important and to be consid-
ered in providing mobile services, hence must be included while developing
the marketing mix (Table 9).
Unlike customers, about one-third (34%), little above one-fourth (26%),
and one-fifth (20%) of the respondents believed that sales representatives,
advertisement, and word-of-mouth, respectively, are important elements of
promotional mix helping customers in buying the mobile services. Related
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to the setting of tariff for mobile services, employees and managers provided
their views on the basis of 13 options as listed in the questionnaire. Additional
information was obtained through interviews with senior managers and
secondary (published) sources to identify the ways tariffs being set. It was
found that a ‘‘cost-plus’’ approach and benchmarking the neighboring countries
are considered in determining tariffs, and usually after the services in place.
When asked about charges associated with the current mobile services,
a great majority (76%) of respondents stated that the charge as set by ETC for
postpaid SIM card replacement is expensive, while about one-sixth (16%)
reported it as average (Table 10). However, for prepaid SIM card replace-
ment, they found it to be expensive (10%), average (45%), and cheap
(45%). With regard to the service charge (call per minute), over half (56%)
reported it as expensive, with about two-fifth (38%) who stated it as average.
On the part of subscription fee, over half (53%) of the respondents found it to
be expensive, while about two-fifths (38%) reported it as average. Moreover,
one-third (33.8%) of the respondents claimed that the price of their mobile
handset is expensive with the majority (65%) reporting it as average, while
TABLE 8 Opinions about Market Research Use in Mobile Service and Segmentation
Customer service 30 31 61 25 36 61
Marketing and 14 24 39 11 28 39
business planning
Total 44 55 100 36 64 100
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Productivity Physical
Employees Service=product Front desk Service delivery Promotion Place and service evidence Price
(occupational) category (%) employee (%) process (%) (%) (%) quality (%) (%) (%)
63
Customer service 35 61 10 37 12 20 3 35
Marketing and business planning 26 28 20 19 24 30 10 26
Total 61 89 30 56 36 50 13 74
64 Z. Temesgen et al.
Items Response %
Cheap 10.0
Price of mobile handset Average 33.8
Cheap 65.0
Expensive 1.3
Total 100.0
Item M SD
information appropriately
Marketing and customer service units set standards to insure effective 2.52 1.239
customer care
Marketing and customer service units take action to ensure for every 2.32 1.172
customer is satisfied
Marketing and customer service units measure performance against 2.61 1.372
standard for customer care
Marketing and customer service units takes customer compliant very 2.59 1.080
seriously
Marketing and customer service units are attempting to win back lost 2.14 1.174
customers
Marketing and customer service units listen what customers say 2.86 1.071
Marketing and customer service units try to add value to ETC’s 3.03 1.206
services
Marketing and customer service units draw up a pricing strategy for 2.97 1.414
every new service
Marketing and customer service units measure the overall 2.65 1.321
effectiveness of a publicity
Marketing and customer service units keep updating non-marketing 2.44 1.059
functional units on marketing developments
The public would like to continue as ETC customers even if there are 1.90 0.914
other choices
Note. ETC ¼ Ethiopian Telecommunication Corporation.
(v2 ¼ 8.033, p < .01), thus they can be seen as a good opportunity for ETC.
However, this will be tested further through additional studies with a larger
sample size to devise the mechanism of attracting this market. Similarly, the rea-
sons given not to be a mobile user, as forwarded by nonusers of mobile service,
indicate a gap between the demand for service and its availability. A further
study, in this regard, might help ETC acquire some of them as customers.
A majority of the respondents expressed their dissatisfaction due to low
service quality, high charges, few services, and poor after-sales performance
and service. Such issues can be addressed by deploying the appropriate tools
and assigning the right manpower for each of these activities, and tariff
revision may be important for different service components while taking into
consideration customers’ affordability. Otherwise, it will be difficult to attract
millions of customers, as projected, for upcoming services. Also, it is being
reported that almost all customers want additional services and features.
However, due to their economic constraints, the majority will be far from
using the upcoming services in the near future. On the other hand, ETC is
running a huge project to upgrade its mobile service both in capacity as well
as features, without conducting detailed market research (to support the
decision based on market opportunity and relative market size), and without
identifying market segments for additional services and features. This may
leave ETC with too much idle capacity for years in some areas.
Furthermore, poorly utilized ideas of marketing-mix (8Ps) in service
planning have contributed significantly to both customer and employee
dissatisfaction, and promotional mixes were found to be so inefficient that
both the customers and employees became aware of Value Added Services
(VAS) and based their decisions on the information gathered through informal
sources (word-of-mouth). However, this may have positive results as long as
the source acquires the accurate information and disseminates the same
Marketing Strategy for ETC’s Mobile Services 67
without personal bias. Moreover, the marketing and customer service units of
the ETC are supported by employees lacking appropriate skills, knowledge,
and the attitude required to deal effectively with customers. As they are the
ambassadors to the corporation, any action by them can have a direct impact
on corporation’s image, as well as revenue. The present organizational struc-
ture associated to marketing and customer service units, as identified, results
in duplication of efforts and conflict of interests and causes problems in free
flow of information, and limiting the contribution of certain units in upgrading
or deployment of new services. On the other hand, due to the absence of
internal marketing, employees and managers hardly get the right information
at the right time. This will create difficulty in maintaining transparency among
different functional units, which intern contributes to the lower achievement
to ETC’s objectives.
Additionally, some employees claimed that they do not have an idea
about what strategy is, i.e., the corporate strategy which is used as a source
for annual plans of each lower level unit is not, as such, a shared document
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between the managers and employees. Only selected managers are involved
in the process of formulating the corporate strategy. Therefore, it appears
that the employees, some middle and lower level managers, and supervisors
do not get an opportunity to participate in the process of designing the strat-
egy. Moreover, some of the problems related to the evaluation of the annual
achievements, as against plans, fail to realize the cause; instead they describe
the symptom as a problem (e.g., lack of service demand or lack of awareness
about value added services by customers, etc.), and unrealistic solutions (not
feasible in given time) and which should be studied through research or
other methods are being proposed (e.g., change the work culture) for the
sake of reporting. In effect, a lack of strategic thinking, which is expressed
as proper analysis of own strengths and weaknesses, as well as outside
opportunities and threats, in developing plans and their implementation
resulted in poor performance of the marketing and customer service units.
This can further be seen through the data from Table 12. Moreover, evalua-
tions made at the end of each fiscal year indicates that how much emphasis is
given to short-term annual plans instead of focusing on long-term strategic
thinking about marketing and customer service activities.
Being a monopoly-based government-owned organization, ETC has
both a social and business mission. This resulted in developing multiple
corporate strategies as those are needed to be executed simultaneously.
However, due to the lack of competency, adopting mixed corporate strate-
gies will lead to a failure in the market. Therefore, the following recommen-
dations are suggested:
1. The marketing unit should be restructured with due attention so that it will
perform its activities without leading to the duplication of efforts and
conflicts of interest.
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1995 (2002=2003) 1996 (2003=2004) 1997 (2004=2005) 1998 (2005=2006) 1999 (2006=2007) 2000 (2007=2008)
Service Planned Achieved Planned Achieved Planned Achieved Planned Achieved Planned Achieved Planned Achieved
Fixed tele 450,061 426,282 693,199 523,150 633,408 600,522 739,674 670,894 1,049,470 910,489 1,618,370 801,928
68
Mobile 169,208 156,896 358,270 239,894 496,178 412,681 1,336,000 877,213 1,501,575 1,096,835 2,138,030 1,696,578
Internet and data 69,556 28,390 45,808 38,956 141,820 70,005 197,117 72,734 157,678 130,696 210,500 109,059
VAS 25,000 9,574 30,877 6,543 45,000 1,435
Others 305,741 288,997 291,589 381,051 547,861 550,644 513,888 523,196 570,400 595,437 638,100 629,700
Total 994,566 900,565 1,388,866 1,183,051 1,819,267 1,633,852 2,811,679 2,153,611 3,310,000 2,740,000 4,650,000 3,238,700
Source: ETC Planning Services.
Marketing Strategy for ETC’s Mobile Services 69
pared in a way that better support the investment with returns. In addi-
tion, utilizing modern technologies such as intranets, internet, and
extranets as much as possible, to ensure an increased flow of information
both internally and externally, and to reduce errors committed due to
frequent manual interventions.
. Utilizing modern technologies such as intranets, internet, and extranets
as much as possible, to ensure an increased flow of information both
internally and externally, and to reduce errors committed due to
frequent manual interventions.
6. There should be a series of public demonstrations to attract customers by
showing them the appropriate tools for the kind of service and feature in use.
7. In order to improve the quality of service and achieve the expected
customer satisfaction, marketing strategies should be developed based
on market research and should include:
a. Market segmentation, positioning, and targeting of both internal and
external customers. However, the initial target should be those who
are well acquainted with technology exposure, and also who have
the budget, so that the result will be better, as it requires new invest-
ment to buy new apparatus to support the new services and features;
b. The appropriate marketing mixes; and
c. Market monitoring and control system (setting performance standards
and evaluation system) should be in place and practical in their design.
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