Part 1: Marketing myopia e– Conglomerate/SBU.

I. Which marketing management philosophy does your Conglomerate/SBU follow?

Conglomerate: Aditya Birla Group

Introduction

Concentrating on the company's demands instead of the consumers' needs and desires is a
short-sighted and inward-looking strategy to marketing. They miss out on the quick
developments in their markets because of this. Harvard Business School emeritus professor of
marketing Theodore C. Levitt (1925-2006) wrote a piece (titled "Marketing Myopia" in the July-
August 1960 issue of the Harvard Business Review) in which he claims this happens because
businesses don't ask the critical question, "What business are we in?" They then get stuck in
this situation.

A marketing strategy that only considers short-term objectives or solely focuses on a single
marketing quality is a narrow-minded approach. Marketing myopia is an ineffective strategy
because of its short-sightedness.

By claiming that a company's short-term perspective and delusion that it is in a 'growth industry,'
Levitt argued that the Myopic culture will lead to its demise. Complacency sets in and you lose
track of the needs of your clients.

As the sector evolves, there is a wider range of possibilities. It teaches managers to think
"beyond the box" and look beyond their existing company operations.

What causes Marketing Myopia?

There really is no such thing as a growth industry. It's only businesses that are set up and
managed to produce and take advantage of new growth prospects that exist. The following are
three indicators that you may be more myopic than you realize:

• Firm’s annual marketing plan has comprehensive coverage of your objectives and very
little notice of client needs.

• Firm’s routine findings showcase modifications in programme performance and overlook

• Firm’s managerial conversations are all about increasing sales and not about trying to
attract more clients

Marketing myopia

Marketing myopia refers to a specific circumstance in which a business unwittingly adopts a

Overview of conglomerate - Aditya Birla Group

An Indian conglomerate called the Aditya Birla Group was founded in the picturesque
Rajasthani town of Pilani in the Shekhawati district in 1857. The third-largest private sector
conglomerate in India and a company that has significantly influenced Indian history is the
Aditya Birla Group. Ghanshyam Das Birla was the person who put the firm on the risk of
growing into an industrial empire by starting the GM Birla Company in 1911 and later achieving
success in the manufacture of jute, cotton, and sugar mills.

BCG Portfolio Matrix

Conglomerate sbu intro which you have chosen - Vodafone Idea Limited

Aditya Birla Company is a diversified conglomerate that functions in 14 distinct economic

The Strategic Business Unit that we have chosen to highlight in the study is the Telecom Sector
and we have laid specific focus on idea cellular limited (currently Vodafone idea Limited)
An alliance between the Vodafone Group and the Aditya Birla Group established Vodafone Idea
Limited. It is the top provider of telecom services in India. The company is offering voice and
data services over 2G, 3G, and 4G platforms throughout India.

The business is constructing the infrastructure necessary to roll out newly developed programs
and initiatives, equipping retail and enterprise customers for the years ahead with cutting-edge
offerings that are readily available through a wide range of channels and have a sizable physical
presence.

Answer of the questions

Which marketing management philosophy does your Conglomerate/SBU follow?

Idea Cellular Limited follows a Marketing Orientation philosophy. A lot of research has been
done by the company to understand its clients, and the company's renowned taglines like "No
Ullu Banaoing" were founded on the notion of not scamming customers, which was a typical
complaint for other telecom services providers.

Idea Cellular's marketing strategy emphasizes aggressive advertising. Almost all of Idea
Cellular's profits go into advertising and other forms of public relations. Since there are so many
services to market, this is deemed enough. Typically, the most significant advertising campaigns
for Idea Cellular are centered on television commercials.

Is your Conglomerate/SBU myopic in following the management philosophy?

In 1995, Idea Cellular was established under the name Birla Communications Limited after
winning GSM licenses in the Gujarat and Maharashtra circles. After a series of name changes
as a result of mergers and joint ventures with Grasim Industries, AT&T Corporation, and Tata
Group, the firm was renamed to Idea Cellular in 2002, and the Idea brand was also launched at
that time. Idea Cellular joined the Aditya Birla Group after AT&T Corporation and Tata Group
withdrew from the joint venture in 2004 and 2006, respectively.

The brand has historically established its positioning by emphasizing the consumer experience.
From its original motto, "An Idea Can Change Your Life," to its present motto, "Stay Connected,"
it has developed a reputation as a business that fosters interpersonal connections.

Things started to alter as a result of Mukesh Ambani's Reliance Industries' foray into the
telecom industry. Since 1.5GB of mobile data for a month cost roughly Rs. 350 before Jio joined
the market, customers used their mobile data sparingly. Jio has revolutionized data by lowering
the cost of data. As part of the Welcome Deal and Happy New Year promotion, Reliance Jio
customers were given access to unlimited 4G internet, national voice calls, video streaming, and
messaging services, as well as national roaming, until December 31, 2016. This deal was then
extended till March 31, 2017.

Idea Cellular significantly cut its price without expanding investment after the price war started.
As a result, quality control of the data suffered. In the fourth quarter, Idea's data revenue fell by
more than 19 percent, or by over 6.4 million users.

The primary reason Reliance Jio was able to seize the Indian market so rapidly was that they
regarded the entire Indian population as their customer, as opposed to Idea, who was only
concentrating on their prior customers who occasionally used the Internet and paid for phone
calls. Idea was unable to research the rapidly evolving Indian market since it was moving rapidly
toward a digital India and because consumers there were wanting a more affordable internet
connection because prior data packages were too expensive for them to purchase. Idea didn't
research this growing need, so when Reliance Jio introduced a more affordable plan for Indian
consumers, Idea was unable to match the cost because it was such a rapid move. Idea
neglected to research this growing need, therefore when Reliance Jio introduced a more
affordable plan for Indian consumers, Idea was unable to match the cost because it was such a
rapid move, and as a result, Idea saw a significant decline in its customer base.
Is your Conglomerate/SBU adaptable to the shifting paradigm?

In short, Idea cellular limited is not adaptable to the shifting paradigm out there because of the
following reasaons. There have been a lot of successful mergers in the recent years, which
have disturbed the notion of leading within an industry sector. Notable instances are Exxon
Mobil, Disney and Pixar, and AOL and Time Warner. But mergers may go south too - and the
Vodafone Idea merger has stayed in the latter group thus far.

Vodafone and Idea have been two of the major participants in the India telecom business. As of
2016, Vodafone and Idea were in reality, the leading telecom firms by their subscriber count,
only slipping behind Airtel, which had a 24 percent Plus market share at that moment. After the
combination in 2018, Vodafone-Idea led in terms of market share, grabbing almost 38 percent of
the subscriber base. However, following the advent of Reliance-backed Jio, things altered
radically. Reliance Jio currently leads the market with a 35 percent market share - followed by
Airtel at 29 percent , and Vodafone-Idea at a measly 25 percent .

Over the course of two years, Vodafone-Idea lost over 130 million users - and this change was
coincident with the release of the 4G spectrum and fast connection in India. What transpired in
the background, though, was not that straightforward. In reality, this radical change in the
telecom sector may be linked to well-researched business models at play, in addition to what
competitive advantage implies in the telecom industry.

When Reliance-Jio joined the telecom business, it was the first company to provide voice over
LTE technology - something that harnesses internet access to improve and enable voice calling
to other people. On the forefront, this technology allowed greater voice communication and 4G
promised extremely fast internet connections across mobile devices. But in the background, this
technology also allowed Reliance-Jio to create unified plans where members could enjoy
unlimited calling for free, across any network inside the nation. For Vodafone Idea, it took
significantly longer to deliver VoLTE and 4G options to the market - and in the interim, it lost a
large part of its customers to Reliance-Jio.

It was only in the middle of 2016 that the entry of Reliance Jio Infocomm Limited changed the
way telecom businesses, such as Idea Cellular Limited, looked at the whole market as a
customer base and not just a small group of people. As a result of market research, Reliance
Jio Infocomm Limited discovered that every Indian has the potential to be an internet user, but
the cost barrier prevents them from doing so, and by introducing data connections at lower
costs, Reliance Jio easily captured the market that companies like Idea Cellular Limited were
unable to capture even after years in the market.

Even though Idea had been able to acclimate to this situation extremely quickly by combining
with Vodafone, Reliance Jio ended up taking the first mover advantage and thus Vodafone idea
were not able to match the pace.
The company's newer identity as V! still reflects all of this. The corporation paid attention to its
STP (Segmentation, Targeting, and Positioning) strategy, product mix, price mix, promotion mix
and distribution mix. However, a large number of customers abandoned Vodafone-Idea. In the
June 2019 quarter, the corporation lost 14 million subscribers, bringing the total loss over the
previous year to nearly 115 million customers. Only 320 million people were using Vodafone-
Idea at the end of June. Numerous outages have occurred, and customers have voiced
complaints regarding call quality, slow data transfers, and inadequate coverage. The price of the
quantum is relatively high when compared to all other companies based on its offers, which
causes the retailer and customers to go to another product. Due to its massive debt and lack of
operational cash, Vodafone India is now unable to invest in or even upgrade its service offering.
The group's total debt (including interest accrued but not yet payable) as of March 31, 2022,
was Rs 1,97,878.2 crore. Over the course of the next 12 months, the corporation owes roughly
Rs 8,160 crore in payments. Additionally, they are managing two significant brands under one
roof. These elements raise running costs, and efficiency is nonexistent.

Since its inception, the company has sought to distinguish itself by emphasizing the importance
of the client experience. From its initial slogan, "An Idea Can Change Your Life," to its most
recent motto, "Stay Connected," it has built a reputation as a brand that draws people together.
All of this is still reflected in the company's newest name, V! STP (Segmentation, Targeting, and
Positioning) strategy, product mix, pricing mix, promotion mix, and distribution mix were all
taken into consideration by the company. Customers, on the other hand, were flocking away
from Vodafone-Idea in droves. The company lost 14 million subscribers in the June 2019
quarter, increasing the year-over-year decline to roughly 115 million consumers. At the end of
June, just 320 million individuals were using Vodafone-Idea. Outages have happened often, and
users have complained about poor call quality, sluggish data transfers, and limited coverage.
When compared to other firms' offerings, the quantum's pricing is more than others. This
encourages the store and consumers to go elsewhere for a product. Vodafone India is presently
unable to invest in or even enhance its service offerings because of its large debt and lack of
operating income. As of March 31, 2022, the group owed Rs 1,97,878.2 crore in total (including
interest accumulated but not yet repaid). The company owes a total of Rs 8,160 crore over the
following year. Aside from that, they're in charge of two major brands, all under one roof.
Running expenses rise as a result of these factors, and efficiency is non-existent as a result.

The intensifying competition is good news for consumers, but not for an industry that is sitting
on about Rs 35,000 crore of debt. With fresh airwave auctions coming up, that burden is likely to
pile up further. A margin-denting price war at this time will hamper the recovery the industry has
been witnessing, a worry that analysts have been talking about ever since RIL announced its
plan to enter the telecom space with Jio.

Mukesh Ambani-controlled company to disrupt the market with cheap prices and its pan-India
network. They see this compelling the incumbents to announce tariff cuts over the next few
weeks to ring-fence customers in a market that is highly price sensitive.

Reference

https://choiceindia.com/blog/the-journey-of-idea-cellular-from-idea-to-vi/
https://www.livemint.com/Money/JjgQ9OdNQS6K5KXXMkBvCP/What-Idea-Cellular-took-17-
years-to-achieve-Reliance-Jio-di.html
https://en.wikipedia.org/wiki/Idea_Cellular