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A
PROJECT REPORTON
Comparative analysis of Marketing Strategies of Vodafone & Airtel
UNDER GUIDANCE
Prof. Bharat Bhushan
(Submitted in fulfillment of the requirement for the degree)
MASTER OF BUSINESS ADMINISTRATION(Marketing)2008-2010
SUBMITTED BY
Raman Kumar MBA- 4
th
[Link] No.-80907317092
DR. IT BUSINESS SCHOOLBANUR
1
ACKNOWLEDGEMENT
I Raman Kumar sincerely thankful to all those people who have been giving
me any kind of assistance in the making of this projectreport.I express my gratitude
to Mr . Bhart Bhushan, w ho has through his
vastexperience and knowledge has been able to guide me, both ablyand successfully towards the
completion of the project..I would hereby, make most of the opportunity by expressing my
sincerestthanks to all my faculties w hose teachings gave me conceptualunderstanding
and clarity of comprehension, which ultimately madem y j o b m o r e
easy. Cr edit also goes to all my
f r i e n d s w h o s e encouragement kept me in good stead. Their continuous support hasgiven
me the strength and confidence to complete the project without anydifficulty
.Las t of all but not the least I would like to acknowledge mygratitude to the respondents without
whom this survey would have beenincomplete.I am also thankful to authority of Airtel &
Vodafone for providing me theinformation. (Raman kumar)
2
DECLARATION
I Raman Kumar, student of Dr. [Link] school Banur herebys
o l e m n l y a n d a f f i r m l y d e c l a r e t h a t t h e p r o j e c t o f c o m p a r a t i v e s t u d y between
Airtel and Vodafone has been prepared by me. The findings andanalysis made in the project
is exclusively the extensive study made in the form of data collected and its systematic
analysis to make the projecta comprehensive one. The data is not copied and will only
be used for academic purpose.
3
PREFACE
Education becomes more meaningful when its
theoreticala s p e c t s a r e c o m b i n e d w i t h p r a c t i c a l e x p e r i e n c e . T h e s e p r
o v i d e a n opportunity to the students to improve their understanding of the studies.M.B.A.
(Marketing) is a course, which combines both its theorya n d a p p l i c a t i o n a s i t s
c o n t e n t o f s t u d y i n t h e f i e l d o f M a r k e t i n g a n d commerce as a part of this
courseT h i s p r o j e c t i s t h e r e s u l t o f m y m a j o r p r o j e c t b a s e d o n s t r a t e g i
e s u s e d b y t w o c o m p a n y. M a j o r p r o j e c t i s a n i n t e g r a l p a r t o f Master of
Business Administrator (MBA) course & it aims at providing
af i r s t h a n d e x p e r i e n c e o f t h e i n d u s t r y t o t h e s t u d e n t s . T h i s p r a c t i c
a l experience helps the students to view the real business world
c l o s e l y which in turn widely influences their conceptions & perceptions.
4
CERTIFICATE
This is to certify that this project report titled
”Comparison Between Airtel & Vodafone Based on their StrategicPerforms.”
being submitted by Raman Kumar to Dr. IT Business School in partial fulfillment of the degree
of Master of Business Administrator (MBA) is a bonafide piece of work on major project report
by him under my guidance & supervision. This report has not been submitted to anyother unit or
institution for a degree and diploma. The assistant & helpreceived by the candidate during the
course of investigation have [Link]. Bhart BhushanLecturer Dr. IT Business
SchoolBanur Dated………………
5
CONTENTPAGE
[Link] OF STUDY……………………………………………………72. OBJECTIVE
OF STUDY ……………………………………….......83. A BRIEF HISTORY OF TELE SECTOR IN
INDIA ………………. 94. INTRODUCTION
OF TOPIC ………………………………………195. SWOT ANALIYSIS ………………………………
………………..346 . C O M P A R I S O N O F M A R K E T I N G S T R A T E G I E S
B E T W E E N AIRTEL & VODAFONE…..................................................................... 387. REASEARCH
METHODOLOGY
………………………………......438. LIMITATION …………………………………………………........
469. DATA ANALYSIS AND INTERPERTATION ……………………4810. CUSTEMOR RESPONSE
TOWARDS
QUESTIONNAIRE…........5511. CONCLUSION ……………………………………………………6012.
SUGGESTION ………………………………………………… …6113. BIBLOGRAPHY ……………
…………………………………….6214. QUESTIONNAIRE ……………………………………………
….63
6
Indian Cellular market immediately after the first round of licensingin 1994-
96 was beset by several problems for 3 - 4 years till the NewTelecom Policy1999
was announced. Some of these roadblocks / current position is tabulated below:
ROADBLOCKSCURRENT POSITION
High license fees
Migration to revenue sharing mode in 1999 mitigates high initial fund requirements for
payment of license [Link] funded businesses / weak and fragmented
[Link] that have since been adequately funded growing
ato v e r 6 0 % p e r a n n u m , w h i l e b u s i n e s s e s w i t h w e a k p r o m o t e r s continuing to
languish - spate of acquisitions / mergers, with 4/5 major groups emerging in the last
one/two years.
Regulatory authority not in place
Telecom Regulatory Authority of India (TRAI) firmly in place, and
itsr o l e b e i n g a c c e p t e d b y a l l o p e r a t o r s ;
D e p t t o f T e l e c o m m u n i c a t i o n s (DOT) restructured, with operations and
policy making roles vested indifferent [Link] relating to unfavorable interconnect
terms for private operators, pass through income, intra circle long distance, spectrum
availability andallocation and the like remained unresolved for long [Link]
terms since rationalized, risks on pass
throughincome to DOT / BHARTI Mahanagar Telecom Nigam Ltd.)r e s o l v e d
to the satisfaction of all parties
with changes inm e t h o d o l o g y / r e v e n u e s h a r i n g , i n t r a c i r c l e l o n g d i s
t a n c e a l l o w e d , spectrum availability cleared with vacation of frequencies for
usage byGSM operators.
10
and Bezeq exited from Fascel. In June 2001 British Telecom exitedfrom Bharti Cellula
r. Bell South International has also indicatedits intention to pull out from Skycell
Communications, and Hong Kong-
b a s e d D i s t a c o m i s s e e k i n g t o s e l l i t s s t a k e i n S p i c e Communicat
ions. First Pacific's (based in Hong Kong) continuedcommitment to Escotel is uncertain, and the
former is reviewing [Link] string of sell-
outs notwithstanding, there has been a merger andacquisition wave sweeping across the I
ndian cellular industry in recenty e a r s . H o n g K o n g -
b a s e d H u t c h i s o n W h a m p o a , v i a H u t c h i s o n Telecommunications
(HK), acquired major stakes in
SterlingCellular (December1999), Usha Martin Telecom (mid-
2000) andFascel (September 2000). Through a partnership
with local company,K o t a k M a h i n d r a F i n a n c e , H u t c h i s o n W h a m p o a p r a c t i c a l l
y c o n t r o l s Fascel and Usha Martin Telecom, thus circumventing the 49 percent
limiton foreign ownership in Indian cellular operators. Hutchison Whampoais also the controllin
g shareholder of Hutchison Max Telecom. Not to be outdone, Bharti Enterprises —
another major cellular player — acquired Telecom. Not to be outdone, Bharti Enterprises —
another major cellular player —
[Link] renamed Bharti Mobinet (August 2000). Bharti alsoacquired
the Punjab license of Essar and started operations, givingcompetition to the lone operator there,
Spice [Link] forward, Bharti is likely to merge all its cellular companiesinto one
[Link] companies together bid Rs16.3 billion to bag the licenses for the fourth
operator slots in four metros and 13 circles. Bharti emerged as the No. 1 bidder with eight
new licenses, followed by Escotel with four,Hutchison with three, and Vodafone
and Idea cellular with one [Link] and Hutchison
have already commenced operations in all
thecircles while Idea is set to launch in Delhi. Escotel and Vodafone havenot made any
headwayB H A R T I , t h e t h i r d c e l l u l a r o p e r a t o r f o r D e l h i a n d M u m b a i ,
s t a r t e d services in March 2001. BSNL as the third nationwide cellular
operator,l a u n c h e d s e r v i c e s i n K o l k a t t a a n d B i h a r i n J a n u a r y 2 0 0 2 . T h
is wasf o l l o w e d b y T a m i l N a d u i n J u l y 2 0 0 2 . A n a t i o n w i d e l a
u n c h w a s scheduled for 2 October2002. However, this has been postponed
untilafter mid October. Once BSNL rolls out its service,
most telecom circleswill have four cellular operators. There will be tremendouscompetit
ive pressure, which will result in lower tariffs. Future rate cuts are
12
expected, which will drive demand together with falling handset prices and the
introduction of prepaid [Link] the midst of declining interest in technology stocks,
Bharti came outwith its long-awaited initial public offering (IPO) in January [Link]
on the success of its cellular service, the company got avery good response from the
primary market. The total size of the
IPOw a s 1 8 5 m i l l i o n s h a r e s a t a f l o o r p r i c e o f R s 1 0 . T h e i s s u e w a s oversubsc
ribed by more than 2.5 timesnetting Rs8.3 billion. This will beused to fuel its investment in long-
distance, basic and cellular
[Link] of October 2002, only BPL Mobile has launched commercialgeneral pack
et radio service(GPRS) in Mumbai. However, large-
scaleuptake remains elusive. While both Bharti and Idea have GPRS-enablednetworks, there is
caution on their part to launch the service. With hardlyany applications, the success of GPRS
remains a [Link] 2005 Hutchison Essar an Indian and hongkong
telecommunicationalliance was taken over by the United Kingdom based
telecommunicationcompany name Vodafone telecomm services and comes with the name
of Vodafone
essar.V i r g i n m o b i l e c o m e s i n I n d i a n T e r r i t o r y w i t h t h e a l l i a n c e o f T A T A tele
communication Maharashtra in [Link] a Japanese telecomm services (MTS) company
comes in Indiain 2009 and take over
Building visibility and awareness
Deviating from competing on the price platform, cellular operators
areactively promoting their brand and service portfolio through high-
visibility advertising and promotional campaigns. Cellular operatorsl i k e B h a r t i , O r a n g e
a n d B P L M o b i l e h a v e b e e n a d v e r t i s i n g aggressively on hoardings and
kiosks. Public transport like the city rail system and cabs are used widely to carry
the message of [Link]-focused activities are gaining traction among cellular
operatorswith the establishment of longstanding consumer benefit [Link] i
n Mumbai offers "Orange Holidays" and"Orange MonsoonO f f e r s " a t v e r y a t t r a c t i
v e r a t e s a n d a d d e d b e n e f i t s l i k e d i s c o u n t s o n airfare, food and beverages, among
others. Others offer special privilegesin retail outlets, cinemas and music shops.
13
1994 Telecom policy announcedSeptember 1994 Guidelines for private sector participation in
basicservices November 1994 Cellular licenses issued for metrosD e c e m b e r 1 9 9 4 T e n d e r s
for cellular licenses in 19 cities apart from
4 metrosJanuary 1995 Tenders for 2nd operator in basic services apart fromDOT on
circle basisAugust 1995 VSNL launches Internet servicesJanuary 1996 TRAI formed November
1998 Internet policy announcedThe National Telecom Policy of 1994 document, which
laid out broad policy guidelines rather than a series of action points. Like other policies,it
sought to achieve the impossible in finite time like improve quality of service and its availability,
wide coverage (a phone in every village), atreasonable rates, etc. The targets in quantifiable
terms were installation of 9.5mn additional lines, telephone on demand by 1997, and a PCO pop
of 500. The Eighth Plan had also allowed private operators in value
addeds e r v i c e s . T o f a c i l i t a t e l i c e n s i n g , t h e n a t i o n w a s d i v i d e d
i n t o 2 0 circles(akin to a state) for basic and 21 circles for cellular
t e l e p h o n y. Mumbai falls in Maharashtra circle and Delhi in itself a [Link] basic premise
on which competition has been introduced is that everycircle will have one private operator apart
from DoT/ BHARTI for basicand two operators for cellular. DoT/ BHARTI have the option to
becomethe third cellular operator in [Link] did not achieve most of its stated
targets. The basic theme,which was broadening the reach of telephony in India, has not been
met.E v e n l i b e r a l i z a t i o n p o l i c i e s w e r e n o t i m p l e m e n t e d p r o p e r l y . T h
e regulator TRAI was set up after delays and confusion and even after itscreation DoT
continued to fight with it in courts. It was also affected bythe res ource crunch, and
financing options like BOT, BOOT and BOLTwas not used at all. The major policy
direction it showed was to allow private sector entry in both basic and value added services.
The intention,
16
Teledensity:-
The gross subscriber base reached 206.83 million at the endof March 2007. The Teledensity is
24.63%at the end of January 2008 ascompared to 18.31% at the end of March 2007, registering
an increase of 6%.
Increasing Role of Private Sector:-
The private sector has played as i g n i f i c a n t r o l e i n t h e g r o w t h
o f t e l e c o m s e c t o r . T h e s h a r e o f p r i v a t e sector has risen to 85 per cent in
December2007 from 64.14 per cent in November 2006
Tariff Rebalancing Measures:-
There has been a dramatic fall inthe tariffs due to increased competition. The minimum effective
charges for local calls have fallen considerably in recent monthse s p e c i a l l y f o r c e l l u l a r s e
r v i c e . T h e l o n g d i s t a n c e d o m e s t i c a s w e l l a s international charges have also fallen
considerably.
Telecom Regulatory Authority of India (TRAI):
TR AI wasestablished under the Telecom Regulatory Authority of India Act, 1997enacted on
March 28,1997. The goals and objectives of TRAI arefocused towards providing a regula
tory framework that facilitatesachievement of the objectives of New Technology Policy (NTP) 1
[Link] has endeavored to encourage greater corporation in the
telecomsector together with better quality and affordable prices.
IntroductionOftheTopic
The project is an extensive report on how the Airtel Company
marketsits strategies and how the company has been able in tackling the presenttough
competition and how it is scooping up by the
allegations of thequality of its products. The report begins with the history of the pr oducts an
d the introduction of the Airtel Company. This reportalso contains the basic marketing strategies
that are used by theAirtel Company of manufacturing process, technology, production
policy, advertising, collaboration, export sce nario, future
prospect andgovernment policies. The report includes some of the key salientfeatures
of marketer end [Link] today’ s world of cutthroat fierce competition, it is very essential to
not
19
t h e c o u n t r y, f i r s t I n d i a n c o m p a n y t o p r o v i d e c o m p r e h e n s i v e t e l e c o m service
s outside India in Seychelles and first private sector service provider to launch National
Long Distance Services in India. Bharti hadapproximately 3.21 million total customers –
nearly2.88 million
mobileand 334,000 fixed line customers. Its services sector businessesinclude mobil
e operations in Andhra Pradesh, Chennai, Delhi,Gujarat, Haryana, Himachal Pradesh,
Karnataka, Kerala,
Kolkata,Madhya Pradesh circle Maharashtra circle, Mumbai, Punjab, Tamil Nadu and
Uttar Pradesh (West) circle. In addition, it also has fixed-lineoperations in the
states of Madhya Pradesh and Chhattisgarh, Haryana, D e l h i K a r n a t a k a a n d T a m i l
N a d u a n d n a t i o n w i d e b r o a d b a n d a n d l o n g distance [Link] has recently
launched national long distance services by
offeringdata transmission services and voice transmission services for callsoriginatin
g and terminating on most of India's mobile [Link] Company is also implementing a
submarine cable project connectingChennai- Singapore for providing international
[Link] Enterprises also manufactures and exports telephone terminals andcordless
phones. Apart from being the largest manufacturer of telephoneinstruments, it is also the first
telecom company to export its products tothe [Link] Tele-
Ventures' strategic objective is “to capitalize on thegrowth opportunities that the Compa
ny believes are available in theIndian telecommunications market and consolidate its position to
bet h e
l e a d i n g i n t e g r a t e d t e l e c o m m u n i c a t i o n s s e r v i c e s p r o v i d e r i n k e y markets in
India with a focus on providing mobile services”.
•
The Company has developed the following strategies to achieve itsstrategic objective
•
Focus on maximizing revenues and margins;
•
Capture maximum telecommunications revenue potential withminimum geographical coverage;
•
Offer multiple telecommunications services to provide customerswith a "one- stop shop"
solution;
21
•
Position itself to tap data transmission opportunities andoffer advanced mobile data services;
•
Focus on satisfying and retaining customers by ensuringhigh level of customer; satisfaction;
•
L e v e r a g e s t r e n g t h s o f i t s s t r a t e g i c a n d f i n a n c i a l p a r t n e r s ; an
d … . E m p h a s i z e o n h u m a n r e s o u r c e d e v e l o p m e n t t o a c h i e v e operational efficienci
es.
Businesses
•
Bharti Tele-Ventures current businesses include
•
Mobile services
•
Fixed-line
•
National and international long distance services
•
VSAT, Internet services and network solutions
•
Broadband services with DSL and Wi-Fi network
Competitive Strengths
Bharti Tele-Ventures believes that the following elements will contributeto the Company's
success as an integrated telecommunication services provider in India and will provide
the Company with a solid foundation toexecute its business strategy a solid foundation to
execute its businessstrategy
•
Nationwide Footprint - approximately 92% of India's total
mobilesubscribers resided in the Company's fifteen mobile [Link] 15 circles collectively a
ccounted for approximately56% of India's land mass.
•
Focus on telecommunications to enable the Company to better a n t i c i p a t e i n d
u s t r y t r e n d s a n d c a p i t a l i z e o n n e w
22
Operations)Distance)
Airtel -
The flagship brand for cellular operations all across theIndian country.
Touchtel-
The brand earmarked for basic service operations.
India One-
The brand for national long distance (NLD) telephonyThough the costs of creating new brands
are heavy but the group wants tocreate
“distinct independent brands to address different customersand profiles”. Brand Strategy
23
To understand the brand strategy, let’s first look at the brand building e x e r c i s e
associated with Airtel — a brand that had to be
repositionedr e c e n t l y t o a d d r e s s n e w n e e d s i n t h e m a r k e t . W h e n t h e
b r a n d w a s launched seven years ago, cellular telephony wasn’t a mass market bya n y
means. For the average consumer, owning a cellular phone
w a s expensive as tariff rates (at Rs 8 a minute) as well as instrument priceswere steep —
sometimes as much as buying a second-hand [Link] could have addressed the customer by
rationally explaining to himthe economic advantage of using a mobile phone. But Sachdev
says thatsuch a strategy would not have worked for the simple reason that the valuefrom using
the phone at the time was not commensurate with the cost.“ I n s t e a d o f t h e v a l u e -
p r o p o s i t i o n m o d e l , w e d e c i d e d t o a d d r e s s t h e sensory benefit it gave to the
customer as the main selling tack. The ideaw a s t o b e c o m e a b a d g e v a l u e b r a n d , ”
he explains.
S o t h e A i r t e l “leadership series” campaign was launched showing successful menwith their
laptops and in their deluxe cars using the mobile phone. Insimple terms,
it meant Airtel was positioned as an inspirational brandthat was meant for leaders, for
customers who stood out in a [Link] it work? Repeated surveys following the launch
showed that therewere three core benefits that were clearly associated with the
brand — leadership, dynamism and [Link] were valuable qualities, but they
only took Airtel far enough toestablish its presence in the market. As tariffs started
dropping, it becamenecessary for Airtel to appeal to a wider audience. And the various brand-
tracking exercises showed that despite all these good things, there was noemotional dimension to
the brand — it was perceived as cold, distant
andefficient.S a c h d e v a n d h i s t e a m r e a l i z e d t h a t i n a b u s i n e s s i n w h i c h
c u s t o m e r relationships were the core this could be a major weakness. The
reasonwith tariffs identical to competitor Vodafone telecomm and
roughly thesame level of service and schemes, it had now become importantfor Bharti to“hum
anize” Airtel and use that relationship as a major [Link] brand had become
something like Lufthansa — cold and [Link] they needed was to become
Singapore Airlines, efficient but alsohuman. A change in tack was important because this
was a time when the
24
cellular market was changingThe leadership series was okay when you were wooing the
crème de lacrème of society. Once you reached them you had to expand the market sot h e r e
w a s n e e d t o a d d r e s s t o n e w c u s t o m e r s B y t h a t t i m e , B h a r t i w a s already the
leading cellular subscriber in Delhi with a base of 3.77
lakh (itn o w h a s 1 . 8 m i l l i o n c u s t o m e r s ) . A n d w i t h t a r i f f s b e c o m i n g m
o r e affordable — as cell companies tasrted cutting pric es — it was time toexpand the
[Link] could Bharti leverage this leadership position down the value chain?Surveys
showed that the concept of leadership in the customer’s mindswas also changing. Leadership did
not mean directing subordinatesto execute orders but to work along with a team to
achievecommon objectives — it was, again, a relationship game that needed to bereflected in
the Airtel [Link], a survey showed that 50 per cent of the new customers choose
amobile phone brand mostly word-of-mouth endorsements from
friends,family or colleagues. Thus, existing customers were an important toolfor market
expansion and Bharti now focused on buildingcloser relationships with
them.T h a t i s p r e c i s e l y w h a t t h e b r a n d t r i e d t o a c h i e v e t h r o u g h i t s n e w positi
oning under the Airtel
“Touch Tomorrow”
brand campaign. Thisset of campaigns portrayed mobile users surrounded by
caring familymembers. Says Sachdev: “The new campaign and positioning wasdesigned to
highlight the relationship angle and make the brand softer andmore sensitive.”A s i t l o o k s t o
e x p a n d i t s c e l l u l a r s e r v i c e s n a t i o n w i d e — t o e i g h t n e w circles apart from the
seven in which it already operates — Bharti is nowrealizing that there are new compulsions
to rework
the Airtel brand, anda n e w e x e r c i s e i s b e i n g l a u n c h e d t o t h i s e f f e c t . R i g h t n o w ,
thec o m p a n y i s u n w i l l i n g t o d i s c u s s t h e n e w p o s i t i o n i n g i n d e t a i l .
But broadly, the focus is on positioning Airtel as a power brand w
i t h numerous regional sub-brands reflecting customer needs in various partsof the [Link]
Airtel is becoming more humane and more sensitive as a brand, Bhartihas also understood
that one common brand for all cellular operations
25
might not always work in urban markets that are now getting increasinglysaturated.T o
bring in new customers, the company decided that
it needed tos e g m e n t t h e m a r k e t . O n e s u c h e x p e r i m e n t , l a u n c h
e d l a s t y e a r , i s Youtopia, a brand aimed at the youth in the 14 to 19 age
bracket and
for those who are “young at heart”. With its earlier positioning, Airtel was p e r c e i v e d a s a
b r a n d f o r t h e w e l l - h e e l e d o l d e r c u s t o m e r ; t h e r e w a s nothing for younger people.
With Youtopia Airtel hoped to reverse that Inorder to deliver the concept, Airtel offered
rock bottom tariff rates (25 paise for 30 seconds) at night to Youtopia customers — a time
when
theym a k e t h e m a x i m u m n u m b e r o f c a l l s . I t a l s o s e t u p m e r c h a
n d i s i n g exercises around the scheme — like a special portal for young people to buy things
or bid for
goods.T h e c o m p a n y i s n o w l o o k i n g a t o f f e r i n g o t h e r s e r v i c e s a t afforda
ble prices to this segment which include music downloads on themobile and bundling SMS rates
with normal calls to make it cheaper for young people to use. The other experiment that Bharti
has worked onis to go in for product segmentation through the Tango brand name. The brand
was created to offer mobile users Internet-interface services or whatis known as WAP (Wireless
Application Protocol).The idea was to bring Internet and mobile in perfect harmony.
“Thename was chosen from the popular movie title
It Takes
basically, youn e e d t h e t w o s e r v i c e s t o t a n g o t o o f f e r c u s t o m e r s a n e w
choice”,
s a ys Sachdev.T h i s , h o w e v e r , h a d l e s s t o d o w i t h t h e b r a n d i n g e x
e r c i s e a s w i t h inefficiency of service (accusingly slow download speeds) and
the limitedutility of WAP [Link], the ads were withdrawn, but the company re-
iteratedthat the branding exercise could be revived because Tango will be the brand to
offer GPRS services — or permanent Internet.
26
The Magic
P e r h a p s t h e m o r e a m b i t i o u s e x p e r i m e n t h a s b e e n w i t h — t h e p r e - p a i d card.
The idea was to make the brand affordable, accessible and, most importantly, feasible
as a means of expanding the market even faster.
PHASE I –
Magic was aimed at bringing in infrequent users of a mobile phone into the market
and assure him that he would have to pay only if he made acall. Such a customer used the phone
sparingly- mostly for emergencies — and was not willing to pick up a normal mobile
connection with itsrelatively high rentals (pre-paid cards do not include rental charges).To
achieve its objectives Bharti did three things.
•
One, the product was made available at prices ranging from Rs 300to Rs 3,000 with no strings
attached and was simple to operate.
•
Two, the product was made accessible and distributed throughsmall stores, telephone booths
and even kirana shops so that theoffering was well within arms reach.
•
Third, to make the product more “approachable” to the customer, the company came
with vernacular ad campaignsLike
“Magic Daalo Say Hello”
This apart, the company roped in Karisma Kapoor and Shah Rukh Khanfor a major ad campaign
all across Delhi, a ruse that saw the number of subscribers go up from 5.47 lakh to 1.2 million
today, overtaking Essar’s branded pre-paid card
Speed
, which was launched much ahead of Magic,w h i c h w a s l a u n c h e d m u c h a h e a d o f
M a g i c . T h e c o m p a n y i s n o w r e - working its Magic strategy even
[Link], the branding strategy was aimed at roping in only
27
new multi-media campaign. The campaign has been created by Percept Advertising
PHASE III -
Bharti used Airtel Magic to build a strong value proposition andaccelerate market expa
nsion through India’s first national pre-paid cardTV brand [Link] time ever in India -
any pre-paid card brand gives such freedom torecharge any
valueA c o m b i n a t i o n o f t h e f i l m g e n r e e x p o s e d t h r o u g h t h e T V m e d i
u m designed to connect with the masses of India.Y o u t h b a s e d -
r o m a n c e d r i v e n s t r a t e g y p l a t f o r m m a k e s t h e v a l u e proposition of
Airtel Magic - Aisi azaadi aur kahan?” come aliveSharukh Khan Makes ‘everything in life
possible’ Airtel today unveiledits strategy for market expansion with the launch of its new
Airtel Magic pre-paid card brand campaign – ‘Magic Hai to Mumkin Hai’. . The
value proposition is centered on a person’s desire to make all his / her dreams,ambitions &
aspirations instantly possible. The new campaign for AirtelMagic is all about empowering
millions of Indians to be on top of their [Link] brand is positioned to be relevant
to the mass-market who want tom a k e a l l t h e i r d r e a m s , h o p e s
& d e s i r e s c o m e a l i v e … i n s t a n t l y . A t a a m o u n t o f yo u r c h o i c e yo u c a n
r e c h a r g e yo u r a c c o u n t w i t h a v a i l a b l e validity time .Improving productivity, letting
you befriend the world andopening up new horizons. It gives you the freedom to control your life
ina way never possible before. Indeed, anything that you think is possible is possible with Airtel
Magic. The new brand slogan‘Aisi azadi aur kahan’has been specially created to capture this effectively.
Other Brand Building Initiatives
•
The main idea is to stay ahead of competition for at least
s i x m o n t h s . W o r k i n g o n t h e a b o v e g a m e p l a n B h a r t i i s c o n s t a n t l y coming up
with newer product offerings for the customers.
•
The focus, of course, is to offer better quality of service.
30
•
To make the service simpler for customers using roamingf a c i l i t i e s ,
A i r t e l h a s d e v i s e d c o m m o n n u m b e r s f o r s u b s c r i b e r s across the country for
services like customer care, food servicesand cinema amongst others.
•
I t w i l l a l s o l a u n c h a u n i f i e d b i l l i n g s y s t e m a c r o s s c i r c l e s s o , customers
moving from one place to another do not have to closeand then again open new accounts
at another place.
•
To assist customer care personnel to deal with
subscriber queries,a s t o r e h o u s e o f 4 0 , 0 0 0 f r e q u e n t l y a s k e d q u e s t i o n s a n
d t h e i r answers have been stored on the computers.
•
Bharti expects that most of its new customers (one estimate is thati t w o u l d b e 6 0 t o
70 per cent of the total new subscriber base)would come from the pre -paid
c a r d s e g m e n t . S o , t h e y m u s t b e given value-added products and services which
competitors don’t provide.
•
Bharti, for the first time for a cellular operator, has decided to offer roaming services even to
its pre-paid customers, but the facilityw o u l d b e l i m i t e d t o t h e r e g i o n i n w h i c h
t h e y b u y t h e c a r d . T o ensure that customers don’t migrate to other competing
services(which is known as churn and ranges from 10 to 15 per cent of thec u s t o m e r b a s e
e v e r y m o n t h ) , t h e c o m p a n y i s a l s o w o r k i n g o n a loyalty program. This
will offer subscribers tangible cash benefitsdepending upon their usage of the phone.
•
The loyalty program will not be only for a ‘badge value’, it will provide real
benefits to customers. The idea is to create an Airtel community.
•
Another key area which Bharti is concentrating its attention upon isa new roaming service
launched in Delhi under which calls of aroaming subscriber who is visiting the city will be
routed directlyto his mobile instead of traveling via his home network.
•
The company also offers multi-media messaging systems under which customers
having a specialized phone with a in-built cameracan take pictures and e-mail it to friends
or store it in the [Link] cost per picture is between Rs 5 to Rs 7.
31
T h e p o s i t i v e s p i n t o t h i s a r g u m e n t i s t h a t b y f i r s t a d d r e s s i n g t h e fu
ndamentals, the enterprise itself becomes more competitive. This can be the beginning of a
virtuous cycle wherein brand equity continues toincrease as the enterprise sustains
delivery of an appropriate product or service at an ever increasing [Link] is, however,
crucial to note that in the years to come, not only will thecost of building a regional or a
national (or an international) brand willcontinue to rise but also the time taken to do
so will be longer and willneed sustained and focused efforts.
SWOT ANALYSIS
Strengths
•
Being one of the largest companies in India the company hasachieved a degree of focus
in its core business of its products
•
It has a strong brand name, super ior quality products and anenviable distribution network.
•
It has a clear and well-defined organization structure andlimits of financial authority.
•
Increase in advertisement spends affect the company’ s margins .
•
The company‘s bottom line f alls victim to the bloated
andhighly paid workforce, which affects its mar gins.
Weakness
•
Little efforts over the Advertising of products.
•
Distribution channel is not accurately categorized.
•
P r e m i u m p r i c e d p r o d u c t s , h e n c e c a n ’ t c o m p e t e i n l o w p r i c e segment.
•
No separate strategy for rural market.
Opportunities
34
•
The company's financial performance can receive a
major b o o s t f r o m T h e r e i s a l o t o f s c o p e o f p r o d u c t a n d m a r k e t diversifi
cation.
•
Exports of products will also have huge chances in the comingyears
•
Airtel’s business has ample scope for gaining market
sharefrom the unorganized sector . Rural penetration too holds vas t potential to bring
about growth.
Threats
The slowdown in the economy has restricted top line growth of
mostFMCG major s and for Airtel also it will be difficult to maintainhistorical growth
rates in such a depressed scenario.
•
Company’s major raw materials are influenced by government p o l i c i e s / c o n t r o l s a s
w e l l a s v a g a r i e s o f t h e m o n s o o n s . Fluctuations in the prices of raw
materials would have significantimpact on costs and mar gins of the company.
•
M o r e o v e r , i n o r d i n a t e h i k e i n B r o a d B a n d I n t e r n e t products would also incre
ases company’s production anddistribution cost.
35
VODAFONE ESSAR
Vodafone Essar
, previously is a Hutchhison Essar in cellular operator India that covers 16 telecom
circles in [Link] the official name being Vodafone Essar, its products are simply branded
Vodafone.
It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is
especially strong in the major metros.2G services
based on 900 MHz and 1800 MHz digital GSMt e c h n o l o g y, o f f e r i n g v o i c e a n d
d a t a s e r v i c e s i n 1 6 o f t h e c o u n t r y ' s 2 3 licens
Vodafone Essar
, previously is a Hutchhison Essar in cellular operator India that covers 16 telecom
circles in IndiaDespite the official name being Vodafone Essar, its products are simply branded
Vodafone.
It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is
especially strong in the major metros.
36
Vodafone
Purpose of comparison
The sub main purpose of this report is
t o c o m p a r e t h e m a r k e t i n g Strategies adopted by Bharti Airtel and its rival
VodafoneThe comparison shows how both of the companies have been challengingeach other to
gain market shares.
Why comparison with vodafone
Bharti Airtel is the leader in telecommunication sector Bharti Airtel holds the lion share of market of
communication [Link], Vodafone has been giving tough competition to Bharti
[Link] is the second largest player and share holder
in Communicationsector.S i n c e i t s l a u n c h V o d a f o n e h a s b e e n a d o p t i n g a g g
r e s s i v e m a r k e t i n g [Link] comparison shows how Hutchison Essar
Telecom. Captured 22%market share in one month of its first launch of postpaid
subscription [Link] a different technology Vodafone creates its own marketVodafone
today deals in every business of communication sector.V o d a f o n e m a k i n g a n d c h a n g i n g t h e
s t r a t e g i e s t o c a p t u r e t h e m a r k e t shares
38
Place: maximum outlets and service centersProduct: verities available for various groupsPromoti
on: various schemes for pre-paid and post-paid
Marketing strategies
of VODAFONE
Vodafone
•
VSAT, Internet services and network solutions
•
Broadband services
Services provided by Vodafone
mobile services with GSM technologyfixed- line telephone
servicesUniversal InternetworkingVoIP (Voice over Internet Protocol)Interactive
TelevisionVisual CommunicationBroadband Portal
42
RESEARCH METHODOLOGY
Achieving accuracy in any research requires a deep study
regardingthe subject. The prime objective of the project is to compare Airtel withthe existing
competitor (Vodafone) in the market and the impact of WLLo n A i r t e l . T h e
r e s e a r c h m e t h o d o l o g y a d o p t e d i s b a s i c a l l y b a s e d o n primary data via which
the most recent and accurate piece of first handinformation could be collected. Secondary
data has been used to support primary data wherever needed.
Primary data was collected using the following techniques
Questionnaire MethodDirect Interview Method andObservation
MethodT h e m a i n t o o l u s e d w a s , t h e q u e s t i o n n a i r e m e t h o d . F u r t h e r d i
r e c t interview method, where a face to-
face formal interview was [Link] observation method has been continuous with the qu
estionnairemethod, as one continuously observes the surrounding environment
heworks in.
DATA COLLECTION METHOD
There two type of method of data collection
•
PRIMARY DATA
43
•
SECONDARY DATA
PRIMARY DATA
Data used for the research work was primary in [Link] data is that which is the
collected for the first time and thushappen to be originated in character.
QUESTIONNAIRE SURVEY
In the studies a questionnaire is prepared. the questionnaireconsists of 15 questions.
SECONDARY DATA
Secondary data refer to the data that has beenalready collected .the secondary data, which has
been used to carry outthis study, are as follow
•
BOOKS, JOURNALS, MAGAZINES, NEWSPAPERS
•
INDUSTRY REPORTS
•
COMPANY’S INTERNET SITE
•
S O M E O T H E R R E L E V A N T S T U D Y M A T E R I A L A N D WEB
SITES
SAMPLE UNIT
The research process was done by interacting withnumber of customers during the
activities performed, which
included,markets cold calling, canopies, etc. sample design consists of random sampling.
44
SAMPLE SIZE:
200 PEOPLE
METHOD OF COLLECTION
Field procedure for gathering primary data included observationand interview schedule in which
theq u e s t i o n n a i r e s w e r e f i l e d b y t h e p e r s o n a l i n t e r v i e w s t h r o u g h s e l f adminis
tered survey was
done to collect the data, market researchwas undertaken, that was accomplished by perfor
ming variousactivities designed.
RESEARCH INSTRUMENT
Questionnaire
The questionnaire was formulated by keep in mind the followingpoints
.
•
Giving the respondents clear comprehension of the question.
•
Identifying the needs to be known.
45
LIMITATIONS
No project is without limitations and it becomes essential to figure out
thevarious constraints that we underwent during the study. The following points in this direction
would add to our total deliberations:-1. During the study, on many occasions the respondent
groups gave us acold
shoulder.2. The respondents from whom primary data was gathered anytimes displayed
completeignorance about the complete branded range, which was being studied.3. Lack of time is the
basic limitation in the project.4. Some retailers/whole sellers refuse to cooperate with
the queries.5 . S o m e r e t a i l e r s / w h o l e s a l e r s g a v e b i a s e d o r i n c o m p l e t e i n f o r m a t
i o n regarding the study.6. Money played a vital factor in the whole project duration.7. Lack of proper
information and experience due to short period of [Link] retailers did not give answer all
the question or do not have timeto answers.
46
Data analysisAndInterpretation
47
0510152025M g05M
u
A
h
etS
ark u
cIC
R
fn
od
lV
iA
09B
etsh
ark
From above the graph it show that in 2005 Vodafone has highest marketshare but in 2009 Airtel
gets highest share market comperesion to other company.
FINDINGS AND ANALYSISAge Group Graph
48
As we can see from the above graph, the people who are in the age groupof 21-
28 years are the ones who are the maximum users of mobile phones. This segment is the one
which gives maximum business tothe mobile operators. This segment constitutes
the young executives andother office going people. They are 65% of the total
people who wereinterviewed. The next age group are the people who are 28-35 years [Link]
are 20% of the total. They are those who are at home or have small business units etc. And the
next age group is the youngest generation whoare 15-21 years old. They are school and college
going students and carrymobile phones to flaunt. They are15% of the total interviewed people.
Occupation GraphOCCUPATION
15%55%15%10%S tudenE
xcivsH
ouehldO
ther
STUDENTS EXECUTIVES HOUSEHOLDS OTHER
As the above graph shows that 55% of the total people interviewed
areworking. So, these people are the ones who are the maximum usersof mobile phones. The
y are the young executives managers, Tele -
49
c a l l e r s e t c . w h o r e q u i r e m o b i l e f o r t h e i r o f f i c i a l p u r p o s e s . T h e n e x t category
is the households, who are either housewife, small units whicho p e r a t e f r o m t h e i r
homes etc. They are 20% of the whole. The nextsegment is the
s t u d e n t s . T h e y a r e 1 5 % o f t h e w h o l e . A n d 1 0 % o f t h e whole is categories who
are the professionals.
Service Provider Graph
These are the total market share of mobile user or peoplecaptured by the mobile provide
r company. There two major companyin mobile phone service sector Vodafone and Airtel who r
espectivelyhold the market share with other company as 17% and 20% of totalmarket
user segment of mobile customer.
Customer Service At Airtel GraphCUSTOMER SATISFACTION LEVEL
50
60%20%10%10%FulySatisfyPartialyDissatisfyFulyDissatisfy
As the above graph clearly shows that customer services at Airtel seemsg o o d . 6 0 % o f t h e
p e o p l e a r e s a t i s f i e d w i t h t h e c u s t o m e r s e r v i c e s provided by Airtel. They
are the ones who have the maximum share in themarket but they are lagging behind in the
customer services. 10% of the people were fully dissatisfied with the customer services
of Airtel. Thiscould leave an impact on the mind of the consumer. He can even
switchover his brand. 20% of the people seemed partially satisfied with thecustomer
services and only 60% seem to be fully satisfied with Airtel’scustomer services, which
is a very large amount.
Type Of Card Graph
15%85%T y p e s o f c a r d s s i m c a r d s c a s h c a r d s
Cash cards seemed quite popular among the people interviewed. 85% of the total mobile
users were having cash card connections . This meanst h a t t h e c a s h c a r d s s h o u l d
b e e a s i l y a n d r e a d i l y a v a i l a b l e i n t h e l o c a l markets. Airtel should make sure that
Magic is available in each
and everynook and corner of the market. 15% of the people were having simconnections which
is the regular bil.
51
Airtel,80%
odafne,20%%10%20%30%40%50%60%70%80% A i r t e l
V V o d a f o n e A V
odafneirtl
Vodafone was the brand which was popular amongst the interviewed people. As
Vodafone had done so much advertising and has it banners andhoarding spread all over
Delhi. So, this could be one the reasons of its popularity. Tata was hardly a known brand
in this new field. Possibly because of less promotions done by them as compared to
Vodafone Onthe basis of analysis of the questionnaire I have found that the maximumno. of
people who use mobile phones is in the age group of 20 to 28. Whoare the young executives and
other office goers?They spend a maximum of RS 500 as their mobile [Link] is more
no. of prepared cards than post paid cards. The mobile users want to spend money side
by side than to spend money at the end of the month on a big bill. Now when I compared Airtel with
its competitor from the point of viewo f t h e c o n s u m e r I f o u n d t h a t o n t h e b a s i s o f
Tariff plan, value
a d d e d services and billing accuracy Airtel is at par or ahead of its competitor but in the case of
customer care and availability they lag behind there competitors. As, Airtel has a hold in
the market because ithas the maximum no. of connections, so it must improve upon
it customer services. As far as WLL is concerned people are aware about it but
notm a n y p e o p l e a r e a w a r e a b o u t T a t a . T h e y o n l y k n o w m o r e
a b o u t Vodafone.
53
Customer ResponseTowardsQuestionnaire
54
A
irtel,50%
odafne,30%
V
O
thers,20%
A
irtelV
odafnO
hs
The graph clearly show that there is 50% people who are using Airtel andVodafone has only
30% customer in the market other is remaining 20%which include all other company. The graph
suggest that Airtel providing better service in present time. Q.3 Which Brand you, prefer
most?AirtelVodafoneRelianceTata DocomoIdeaCustomer preference using telecom service
56
42%28%14%10%06%[Link].[Link].40.45 A i r t e l V o d a f o n e R e l i a n c e T a t a I d
ea
Most of the customer like to use Airtel because it provide better serviceand networking. In this
graph Airtel customer is about 40% andVodafone has 28% and other are not in large no. so
Airtel has maximumcustomer compare to other.Q.4 How long you have been using this
Product?0-2 Years2-5 Years5-10 YearsMore than 10 years
0%20%40%60%80%
oylt
L
d
ran
B
eris16
S 5 % 2 0 % 1 0 % 5 %
0 - 2 2 - 5 5 - 1 0 M
orethan10y
T h i s g r a p h s h o w t h a t c u s t o m e r c h a n g e t h e i r b r a n d a c c o r d i n g t o n e w scheme
s launch by the different company. In this grap h there are 65%customers which are
loyal for only 0-2 years. And 20% people they usedthe product at least 2-5 .There are some
people who used the product atleast 5-10 years due to their satisfaction of the brand and 5%
people whoused the product for long time. Most of time businessmen don’t changetheir product
due to their business .Q.5 Are you using other product with Airtel?
57
Yes No
6 ESNO
O
N
,40%
S
E
irtelY
A
Here are the customer responses about the use of the Airtel product andother product rather than
Airtelin this segment of survey 60 % of customer are aspire with Airtel and 40% shown interest
in other telecom products in urban
areas.Q.6 Do you collect any information search before decision making purchase?
,8N
S
E
Y
15%
OESNO
In this graph it represent that every customers before purchase they gather the information
.85% people search information before purchasing and15%people they do not want
to search any information . They purchasewhich they like to want. The graph show
that people are more aware to purchase any product.
58
CONCLUSION
After analyzing the findings of the research, I can conclude thatAirtel lagged behind its com
petitors as far as customer service andavailability is [Link] maximum no. of people
who use the mobile isi n t h e a g e g r o u p o f 2 0 t o 2 8 . C a s h c a r d s a r e t h e m o s t
p o p u l a r t yp e o f m o b i l e c o n n e c t i o n s , a s t h e y a r e c o n s u m e r f r i e n d l y a n d
r e c h a r g i n g t h e connection is not a problem. Maximum no. of p eople spends RS 500
ontheir connections. As Airtel is the only company having the maximum noof mobile
connections so it must seriously look into the loop holes of theexisting customer
service [Link] we know that now Airtel has already launched its product with logo
“’Aisi azaadi aur kahan” has already became popular in market. So we cansay that in spite of so
many competitors in the market Airtel is having agood position just because every time, it
tries its best to understand theneed of its important customers. From the comparison and
deep analysisof every aspect of business of both the companies we can conclude
that bharti Airtel has to more work in every field of communication [Link] is the time not
only to survive but to sustain in the market for a longtime.F o r t h i s A i r t e l h a s t o w o r k o n
i t s a l l m a r k e t i n g s t r a t e g i e s , m a r k e t i n g , promotion, brand image [Link] has to take
Vodafone. Very seriously and update its own strategiesfrom time to time and when the need
[Link] aggressive marketing strategies Airtel has to target rural India as 70% of
population of India lives in these areas.
60
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