CHIMC

(CH INSTITUTE OF MANAGEMENT AND COMMUNICATION)

PGDM
Post Graduate Diploma in Management

Batch-2 Term VI Term paper

Comparison of evaluation of Marketing strategies of any two Telecom Sector Operators Subject Marketing Strategies Date 11 / 06 /2012

Guided by Submitted byProf. Grish Bhatia

Rajkamal Paroha

Airtel & Vodafone

INDEX

CHAPTER 1: INDUSTRY PROFILE

CHAPTER 2: COMPANY PROFILE OF AIRTEL & VODAFONE

CHAPTER 3: MARKETING STRATEGIES OF AIRTEL

CHAPTER 4: MARKETING STRATEGIES OF VODAFONE

CHAPTER 5:COMPARATIVE STUDY OF AIRTEL VODAFONE

INDUSTRY PROFILE

The stupendous growth of the telecommunication companies in India over the last fifteen years can be attributed to the liberal government of India, economic policy. The economic renaissance effected in the early 1990s brought around a paradigm shift on the overall business scenario of India. The telecommunication companies in India went through a huge make-over during the implementation of the open-market policy of India. The erstwhile closed market policy was replaced by a more liberal form of economic policy. A whole new form of Indian Telecommunication Policy was drafted to compliment the change effected in the economic policy of India. The amendment effected the new telecommunication policy of India made huge changes with respect to investments and entry of Foreign Direct Investments (FDI) and Foreign Institution Investors (FII) respectively, into the virgin Indian telecommunication market. This resulted entry of private, domestic and foreign telecommunication companies in India. The economic contribution made by these newly formed telecommunication companies of India is really mentioned worthy and this industry witnessed highest growth after the Indian Information Technology industry. The robust growth of Indian economy after the economic liberalization in the 1990s induced massive change in the telecom policy and new draft was framed and implemented by the 'Telecom Regulatory Authority of India' (TRAI) and 'Department of Telecommunication' (DOT), under the Ministry of Telecommunication government of India. The main aim of these telecommunication companies in India is to provide basic telephony services to each and every Indian. With the advent of private telecommunication companies in India, the industry witnessed introduction of mobile telephones into the Indian market and it became popular amongst the Indian masses in no time. Today two types of mobile phone service providers operates in the Indian market, like the following

Global System for Mobile Communications (GSM) Code Division Multiple Access (CDMA)

The main binding objective for all the telecommunication companies operating in India are as follows To facilitate telecommunication for all Ensuring quick availability of telephone connectivity Achieve universal service access at affordable price covering all Indian villages, as early as possible Providing world class telecommunication services Solving consumer complaints, resolve disputes, and special attention to be given to public interface To provide widest possible range of services at reasonable prices To emerges as a major manufacturing base and major exporter of telecommunication equipment

To protect the defense and security interests of the country

Chapter 2: Company profile

Airtel

History
Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market. In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing capacity elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar. In 2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began operating in Bangladesh and 16 African countries. Today, Airtel is the largest cellular service provider in India and fifth largest in the world. Bhartiairtel limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. bhartiairtel has been ranked among the six best performing technology companies in the world by business week. bhartiairtel had 200 million customers across its operations.

Vision & Promise

By 2015 airtel will be the most loved brand, enriching the lives of millions. " Enriching lives means putting the customer at the heart of everything we do. We will meet their needs based on our deep understanding of their ambitions, wherever they are. By having this focus we will enrich our own lives and those of our other key stakeholders. Only then will we be thought of as exciting, innovation, on their side and a truly world class company."

Brand
Airtel was born free, a force unleashed into the market with a relentless and unwavering determination to succeed. A spirit charged with energy, creativity and a team driven to seize the day with an ambition to become the most admired telecom service provider globally. airtel, in just ten years of operations, rose to the pinnacle of achievement and continues to lead. As India's leading telecommunications company, airtel brand has played the role of a major catalyst in India's reforms, contributing to its economic resurgence. Today we touch people's lives with our Mobile services, Telemedia services, to connecting India's leading 1000+ corporates. We also connect Indians living in USA, UK and Canada with our callhome service.

Services

Voice Mobility Solutions

Data and IP Internet access Data Transport Solutions

Conferencing Audio Conference Service Video Conference Service

Data Center Network IT Digital Media Product Vision Integrated Service Offerings Network Integration Advertisement Ecosystem

Fixed Line and Satellite Broadband Services Enterprise MPLS VAS Solutions Online Desktop Website Builder

Professional Cinema Services Delivery Digital Signage News Gathering Post Production Teleport

Business Infrastructure Ready and Footprint Branch Products

Hosted Mail Business Ready Branch Security Solutions

SWOT ANALYSIS

STRENGTH:
Largest Operator PAN India presence Having global presence First mover advantage Innovations Strategic alliance

WEEKNESS:

Not having plan like Free local calls and Minutes as their competitors have Losing ground among teens and youth against their competitor like Reliance.

OPPORTUNITY:
Only 41.8% Teledensity in India. Possible Expansion in nearest countries.

THREATS:
Potential entry of global competitor. Competition from domestic Players.

Vodafone

Introduction
Previous Brands, Initially, around 1995, the company services were branded Max Touch renamed to Orange in 2000. In December 2006, Hutchison Essar re-launched the "Hutch" brand nationwide, consolidating its services under a single identity. The company used to be named Hutchison Essar, reflecting the name of its previous owner, Hutchison. However, the brand was marketed as Hutch. After getting the necessary government approvals with regards to the acquisition of a majority by the Vodafone Group, the company was rebranded as Vodafone Essar. The marketing brand was officially changed toVodafone on 20 September 2007. On September 20, 2007 Hutch became Vodafone. Vodafone Essar spent somewhere in the region of Rs. 250 crores on this high-profile brand transition. Cheap cell phones were also launched simultaneously in the Indian market under the Vodafone brand. The company planned to launch co-branded handsets sourced from global vendors. A popular dailyquoted a Vodafone Essar directors saying that "the objective is to leverage Vodafone Group's global scale in bringing millions of low-cost handsets from across-theworld into India." Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Vodafone handsets in India. Earlier this year,Vodafone penned a global low-cost handset procurement deal with ZTE.

History Hutchison Essar (1992-2007)

In 1992, Hutchison Whampoa and its Indian business partner Max Group, established a company that in 1994 was awarded a licence to provide mobile telecommunications services in Bombay (now Mumbai) and launched commercial services as Hutchison Max in November 1995. In Delhi, Uttar Pradesh (East), Rajasthan and Haryana, Essar Group was the major partner. But later Hutch took the majority stake.

By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL Mobile that number increased to 16. In 2006, it announced the acquisition of a company

(EssarSpacetel A subsidiary of Essar Group) that held licence applications for the seven remaining licence areas. Initially, the company grew its business in the largest wireless markets in India in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well known brand and large distribution network all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User (ARPU) than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide. In February 2007, Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and interests) of approximately $11.1 billion. Hutch was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message Hello stands out visibly though it uses only white letters on red background. Another successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, Wherever you go, our network follows. The simple yet powerful advertisement campaigns won it many admirers. Ads featuring the pug were continued by Vodafone even after rebranding.

Vodafone Group plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers (behind China Mobile), with around 341 million proportionate subscribers as of November 2010. It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the second largest mobile telecommunications company in the United States measured by subscribers.

The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones".

Vodafone is the worlds largest mobile telecommunications community, employing over 65,000 staff and with over 130 million customers. The business operates in 26 countries worldwide.Vodafone is a public limited company with listings on the London and New York stock exchanges. Global recognition of the Vodafone brand is growing as the company rolls out its identity into new markets. However, it retains local names and imagery in markets where this is essential to maintaining the trust of customers. To help promote its image worldwide, Vodafone uses leading sports stars from high profile global sports, including David Beckham and Michael Schumacher. This Case Study concentrates on how such promotion can help to keep a leading brand at the forefront of public awareness. Timeline
1992: Hutchison Whampoa and Max Group establish Hutchison Max 2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets through Essar acquisition 2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai 2003: Acquired AirCel Dig link (ADIL ESSAR Subsidiary) which operated in Rajastan, Uttar Pradesh East and Haryana telecom circles and rebranded it 'Hutch'. 2004: Launched in three additional telecom circles of India namely Punjab, Uttar Pradesh (West) and West Bengal. 2005: Acquired BPL Mobile operations in 3 circles. This left BPL with operations only in Mumbai, where it still operates under the brand 'Loop Mobile'. 2007: Vodafone acquires a 67% stake in Hutchison Essar for $10.7 billion. The company is renamed Vodafone Essar. 'Hutch' is rebranded to 'Vodafone'. 2008: Vodafone acquires the licences in remaining 7 circles and has starts its pending operations in Madhya Pradesh circle, as well as in Orissa, Assam, North East and Bihar.

VISION

Our Vision is to be the worlds mobile communication leader enriching customers lives, helping individuals, businesses and communities be more connected in a mobile world.

MISSION
Driving in a wireless world Vodafone is primarily a user of technology rather than a developer of it, and this fact is reflected in theemphasis of our work programme on enabling newapplications of mobile communications, using newtechnology for new services, research for improvingoperational efficiency and quality of our networks,and providing technology vision and leadership thatcan contribute directly to business decisions.

SWOT ANALYSIS Strengths:

The kind of subscriber bas it has in the indian market. It has the 2nd highest market share in India . It has a 2nd highest subscriber base in India 1st being airtel Its strong advertising strategies and impact on people Its Indians 3rd biggest mobile carrier The brand name it has in the Indian market

Weaknesses:

Low R&D Ubiquitiouegory, products, services High customer churn (33.33%) Rural India unable to relate to the brand Poor network coverage

Opportunities:

Emerging markets and expansion abroad Innovation Product and services expansion Growing data business and 3G auctioning VAS as a means to increase ARPU (big boss, Zoo Zoo) Growing Enterprise solution market Large capital can be raised by listing Vodafone on Indian Stock Exchange(IPO) Tower sharing business with Indus Towers

Threats:
Highly competitive

Still lags behind Extremely high

MARKETING STRATEGIES OF AIRTEL

MARKETING STRATEGIES

Market
Airtel has targeted th bottom of the pyramid- VK Prahalad Concept

Market segmentation:
Geographical segmentation metropolitan & cities India Demographic segmentation- low& middle income group People age group of 20 to28

Target market:
People living in cities and towns Poor and middle income groups Youngsters in big cities Businessmen

Positioning:
Creating brands Ads and promotion

Marketing mix:
Price-low price strategy Place-maximum outlets and service centres Productvarieties available for various group Promotionvarious schemes for prepaid and post-paid

Marketing Strategy:
Airtel strategy is to be leader in: Innovations Network Offers and Services

Strategy of making customers educated about the services like:-

1. 2. 3.

Whatisroaming? Whatiscoveragearea? Howto makeinternationalcalls?

Airtel adopted the product driven communication to make their products successful in the market and also emotional communication to target younger people.

Strategies Marketing objectives

Introduction Create product awareness and trial

Growth Maximise market share

Maturity Maximise profits whole defending market share

Product

Offer a basic product/ service. Charge cost-plus

Offer value added services Price to penetrate market Build Intensive distribution. Build awareness and interest in the mass market Increase to build and maintain relationships with customers.

Increase in number of value added services. Price to match or best competitors Build more intensive distribution. Stress brand differences and benefits.

Price

Distribution

Build selective distribution Build product awareness among early adopters and dealers. Use heavy sales promotion to entice people to subscribe.

Advertising

SalesPromotion

Increase to encourage brand-switching.

Brand Ambassadors: Famous celebrities: Shah RukhKhan, Sachin Tendulkar , A RRehman, KareenaKapoor, SaifAli khan.

MARKETING STRATEGIES OF VODAFONE

MARKETING STRATEGIES
Market
Vodafone has also targeted th bottom of the pyramid- VK Prahalad Concept

Market segmentation:
Vodafone is adopting a multi-segmentapproach.

Geographical segmentation
Metropolitan & cities India Vodafone wants to expand into the Asian markets.

India has 2nd largest market f or mobile. It is growing at the rate of 6million

subscribers per month.

Demographic segmentation:
Low & middle income group

Target market:
Market from urban areas from middle and upper middle class families Youngsters in big cities Businessmen

Positioning:
Where you go the network follows you by Hutch now Vodafone Ads and promotion

Marketing mix:
Price-low price strategy

Place-maximum outlets and service centres

Product varieties Available for various group Promotion various schemes for Prepaid and Post-paid

Marketing Objectives
Vodafone says that they want to be the top mobile service provider of India by the end of the year 2013

Price Mix
Vodafone wants to make its services accessible to as many people as possible: from the young, through apprentices and high powered business executives, to the more mature users. It offers various pricing structures to suit different customer groups. Monthly price plans are available as well as prepay options. Phone users can top up their phone on line. Vodafone UK gives NECTAR reward points for every 1 spent on calls, text messages, picture messages and ring tones.

Marketing Strategy
Our strategic objective is Innovate and delivers on our customers total communications needs.

Vodafone, too needed to educate consumers about cellular telephony:Can I callSTD? CanI use myphone in alift? Whatisairtime? Vodafone also communicates regularly with its customers to keep them well informed of the benefits of allVodafoneproducts. Focuson freecash flowgenerationand execution Value enhancement Drive operational performance Costreduction Pursue growth opportunitiesin total communications Mobiledata Enterprise Broadband Progress Launchednewproductsinanumberofmarkets, which offer customers more value in return for increasedcommitment Accelerated1billioncostreductionprogramme; expecttoachieve65% in 2010 Expanded range of data devices with the BlackBerryStorm,iPhoneandnetbookswithbuiltinbroadband Revenue growth of 9% in Vodafone Global Enterprise 1millionnewfixedbroadbandcustomers;closing base of 4.6 million Nationwidefootprintin India Commencedoperationsin Qatar sinceyear end AcquiredGatewayinAfricatostrengthentotal communicationsportfolio Returned over 87% of free cash flow before license andspectrumpaymentstoshareholdersin the2009 financialyear In-market consolidation through merger of Vodafone Australia withHutchison3GAustralia

Executein emerging markets

Deliveryin existing markets Selective expansion/cautious approach Shareholderreturns Clearprioritiesfor surpluscapital

Strengthencapital discipline

Brand Ambassadors:
Hutch, as a brand, always tried to connect with consumers in a simple, honest and real manner, The The Hutch pug. and the actor Irfan Khan were retained for the brand promotions. While Vodafone- A younger and fun brand. Zoozoo enters market ZooZoo,smallpseudo-animatedcharacterwithbigegg-shapedhead,roundbellybut extremelythinarmsandlegs,thenewbrandambassadorofVodafone,hascreatedafurorintheadvertisi ngindustry.ZoozooshavebeensuccessfulingivingVodafoneamakeover andestablishingmaximumbrandpresence.

CHAPTER 3: COMPARATIVE STUDY OF AIRTEL VODAFONE

BHARTI AIRTEL VS VODAFONE ESSAR

Bharti Airtel Limited, a group company of Bharti Enterprises, is a leading emerging markets telcom with operations in 18 countries across Asia and Africa. The company has over 185 million customers across its operations. Bharti Airtel has been ranked among the six best performing technology companies in the world by Business Week. Vodafone Essar is the Indian subsidiary of Vodafone Group and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. The company now has operations across the country with over 100 million customers. Vodafone is the world's leading international mobile communications group with approximately 333 million proportionate customers as on 31 December 2009. Vodafone currently has equity interests in 31 countries across five continents and around 40 partner networks worldwide.

Bharti Airtel

1.

Market segmentation Geographical segment (metropolitans & cities India) Demographic segment - middle income groups People age group of 20 to 28 year

2. Target marketing People who living in cities and towns. Poor or middle income group people. Youngsters in big cities. Businessmen

3. Positioning Creating brands (Sharukh khan & Sachin Tendulker) Ads and promotions Promotion for study of poor childrens

4. Marketing mix Price: low price strategy Place: maximum outlets and service centers Product: verities available for various groups Promotion: various schemes for pre-paid and post-paid.

Vodafone
Vodafone target the rural India. The main targeted customers of Vodafone are from rural India. By offering cheap and light mobile sets Vodafone attracts most of the customers of small villages and towns. Offering cheap handsets Vodafone offers cheap and free connections to all customers. The cost for these sets was Rs-799-849-1099 per set and onward. In every district and big towns Vodafone opens its service centers to provide better support and services Strong logistics and supply chain Vodafone has a strong logistic and supply all over India. In every small town the potential customers can easily purchase the Vodafone SIM & Sets. Targeting youngsters in metropolitans Vodafone attracts youngsters by offering colorful handset at very low prices.

BRAND POSITIONING BY VODAFONE 1. Market segmentation

Geographical segment (rural India)

Demographic segment - middle income groups

2. Target marketing
People living in small towns and villages. Poor and middle income groups. Youngsters in big cities. Businessmen

3. Positioning
Creating brands Ads and promotions

4. Marketing mix

Price : low price strategy Place : maximum outlets and service centers Product : verities available for various groups

Promotion: various schemes for pre-paid and post-paid

LIMITATION

The market of Tele communication is too vast and it is not possible to cover each and every service provider.

SUGGESTION

Following are the few suggestions to Airtel and Vodafone for improving the market share and image of the products concerned.

The brands must be made available easily in, PCO & general stores. Company must undertake extensive promotional activities like advertisements must be released in different Medias to create brand awareness. Sales promotion tools like gifts, contests and coupons must be given to retailers as well as customers and prospects. Catalogues should be distributed among customers. Price should be as competitive as other company maintains. Distribution of new connection should be in reach of customer pocket.

CONCLUSION

After doing that all study we can conclude that yes the Gap exist there in

telecommunicationindustry.Consumershavealotofexpectationsfromtheirserviceprovide rthat arenotperformedordeliverbytheircompanies.Asweknowthat consumerexpectfrom Vodafonetoimproveitscustomercareservicethatcanbe foundbusymostofthetimes.

NowusersofAirtelhaverateditasabestcompanyforvalueofmoneybutstilltheyaren

otsatisfiedwithsomeofcompanysstrategies. So this is the Gap between Airtel users and company performance.

Then we have example of Vodafone. Users of Vodafone are not satisfied with

company customer care service as it is a difficult process because one has to wait a lot or call again and again to talk with a customercarerepresentative.

Airtel performance is good but Gapex is not just with Airtel, but with all the

companies in the industry. Various VAS (Value Added Services) provided by companydoesnotseemstobesatisfyingtheirusers.CustomersarenotsatisfiedwithSMS pack that is perceived costlier as compare to others companies SMS packs by Airtel users.

Airtel is to be found the best service provider of network service and customer

care service as well. This is one company in the industry that can be found delivering as per their customer expectations. Thats why customers have rated it not as satisfactory butex cellent. But one has to pay more for superior service and Airtel is

one example of such service. Users of Airtel paying more for value added services. And they expect from company to offers one of the VASats ome of the competitiveprices.

Price is the only Gapex is ts in Airtel between company and users.

THANK YOU