Professional Documents
Culture Documents
consumers access internet at faster speed and high quality internet browsing on mobile
handsets.
History
Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, 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. By the
early 1990s, Sunil Mittal had also launched the country's first fax machines and its first
cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In
1995, 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 Sky cell 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. This expansion allowed it to
offer voice services all across India. In 2009, Airtel launched its first international mobile
network in Sri Lanka. In 2010, Airtel acquired the African operations of the Kuwait
based Zain Telecom.In March 2012; Airtel launched a mobile operation in Rwanda.
Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004
becoming to the first operator in India to do so. The Airtel theme song, composed by A.R.
Rahman, was the most popular tune on that year. On 26 February 2013, Airtel announced that
it had deployed Ericssons Mobile Broadband Charging (MBC) solution and completely
modernized its prepaid services for its subscribers in India. As a part of the deal, Ericssons
multi service MBC suite allows prepaid customers to have personalized profile based data
charging plans. Prepaid customers will be able to customize their data plans across mobility,
fixed line and broadband by cross bundling across multiple domains (2G, 3G, 4G/LTE & WiFi). It will also offer flexible multi service charging in geographical redundant mode, making
2
Airtel the first operator to implement geographical redundancy at such a large scale. In May
2013, Bharti Infotel paid Rs 50,000 as compensation to a customer "for unfair trade
practices". The customer alleged that the company continued to aggressively demand
payment despite customer requests for disconnection of service.
Vision
By 2020 Airtel will be the most admired brand in India:
Mission
We will meet global standards for telecom services that delight customers through:
Customer Service Focus
Empowered Employees
Cost Efficiency
Unified Messaging Solutions
Innovative products and services
3
ACHIEVEMENTS
First to launch Cellular service on November 1995.
First operator to revolutionaries the concept of retailing with the inauguration of Airtel
Connect (exclusive showrooms) in 1995.
First to introduce push button phone in India.
First to expand its network with the installation for second mobile switching center in
April, 1997 and the first to introduce the Intelligent Network Platform First to provide
Roaming to its subscribers by forming an association called World 1 Network.
First to provide roaming facility in USA. Enjoy the mobile roaming across 38 partner
networks & above 700 cities Moreover roam across international destinations in 119
countries including USA, Canada, and UK etc. with 284 partner networks.
BHARTI announces agreement with VODAFONE marking the entry of the World's
Largest Telecom Operator into India
Bharti Enterprises and AXA Asia Pacific Holdings Limited announce partnership for
a life insurance joint venture in India
REVENUE ANALYSIS
Mobile/Cellular services
Cellular mobile service providers (CMSP) derive revenues by way of tariff charges
for outgoing calls made by subscribers on its network. So basically, the revenue for a CMSP
is simply a multiple of average revenue per subscriber per month (ARPU) and number
of subscribers.
Subscribers: Growth in a CMSP's subscriber base is dependent on several factors, the key
amongst them being:
Economic growth: With growth in the economy, and the consequent increase in
activity, it requires people to be in constant touch. Thus, with the tremendous growth
in economic activity in India there are more and more people subscribing to telecom
services, thus leading to growth in subscriber base for CMSPs.
Rising income level: As the real income levels in a society rise, more and more
people are able to afford usage of cellular phone and so the consumer does not feel the
pinch of rising telephone bill, thus having the propensity to talk more, thus leading to
higher MOUs for telecom services providers.
Affordability: The affordability is interplay of lower tariff charges and availability of
cheaper handsets. While lower handset costs make mobile more affordable at the
entry level thus allowing more people to be a part of the mobile community, lower
tariffs allow for an increased usage of telecom services, while not having such an
overbearing impact on telephone bills.
fundamental business of a fixed line operator is almost similar to that of a CMSP, in terms of
ARPU and Subscriber base.
Internet/Broadband
The Internet services are provided either by telecom service providers or independent Internet
service providers (ISP) who deal exclusively in providing this service. There are two forms
of Internet that are currently popular - the dial-up connections and the broadband
connections. Apart from the usual - economic growth and rising income levels - the growth of
the Internet business is dependent upon:
Enterprise services
These services are used by large and medium corporate for data transfer between their offices
and their suppliers' offices, which may be spread in a city, or a country, or even across
continents. Considering that this business takes care of data transfer needs of corporate, who
are not as 'affordability' conscious as the individuals, companies generally earn
higher margins on Enterprise services than they earn on any of the other three business lines.
IT and BPO sectors, whose business is so data dependent, are the major users of Enterprise
services.
COST ANALYSIS
The cost heads can be broken up into regulated and non-regulated costs. Entry fee, access
deficit charge and license fee are regulated. On the other hand, sales, general and
administrative (SG&A) and employee expenses are non-regulated in nature.
Entry fee: The companies providing national and international long distance (NLD and
ILD) services are required to pay a flat entry fee of Rs 25 m each (from earlier fees of
Rs 1,000 m and Rs 250 m respectively). These fees are to be paid to the central
government for obtaining a license for providing these services.
Access deficit charge: The government also collects from the cellular operators an
access deficit charge. The charge payable is 1.5% per cent of non-rural annual gross
revenue of the telecom service providers and the amount collected is used to subsidise
the telecom service provided by BSNL in rural areas.
License fees: Telecom companies are required to pay an annual license fee of 6%
of their AGR to the Government of India. Licenses offered to the telecom players are
for a limited period of time and these are required to be renewed on expiry.
SG&A expenses: Telecom companies incur expenditure in the form of advertisement
costs for enhancing their visibility and also to make their brand more appealing to the
consumers. Expenses are also incurred on customer acquisition and on maintenance
of telecom equipment and network.
Personnel expenditure: These are costs incurred for maintaining the staff
for executing the telecom companies' marketing strategies, for general administrative
purposes,
for
maintenance
and
repair
of
telecom
infrastructure,
and
Airtel has its presence in all 23 circles of the Indian telecom industry. Some of its key success
factors are
Brand name
One Step Ahead
A market leader can stay as such only if it stays one step ahead of the rest. The
multidimensional expansion of Airtel through different theatres has made it a step ahead of its
nearest rival. This can only be executed through a stable and visionary management.
The
firm
outsources
many
of
its
most
fundamental
functions
andinfrastructures, including its information technology (IT) operations to IBM, Nortel andW
ipro; its communications networks to Ericsson and Nokia Siemens; and its contact centre
operations to Nortel and Wipro and recently with Cisco and Servion to provide hosted contact
centre services.
Innovations in VAS
Airtel has separate value added services for consumers, small business and businessenterprise
s. Airtels online desktop for airtel broadband users provides free online space for
storing , editing and sharing data and also free antivirus package, free software and updates
on rental basis for small businesses and this is one of the VAS which is not provided by other
service providers.
M-Commerce
Airtel has an idea of introducing m-commerce as one of its value added service. According to
its CEO Sanjay Kapoor there is an 80 to 85 per cent of the population which is still unbanked
and looking to do financial transactions using mobile technologies. By providing- commerce
Airtel plans to bring a revolution by making mobile phones work as ATM machines.
Network
Airtel packs a punch when it comes to network coverage. The aims of Sunil Bharti Mittal
were to create a network which is clear even when in the basement. Airtel has done just that
and beyond.
Declining ARPU
With more than 10 million subscriber additions a month, the Telecom Sector continues to
maintain its growth momentum. Due to the entry of new players in the market a high level
of competition prevails and this has lead to a decrease in the Average Revenue per User.
E-mail,
download
computer files from other systems and remotely log on to another computer and surf the
Internet.
4. Cash Card
The cash card is a pre-paid and pre-activated card which allows the buyers to buy air time in
advance. All it requires is the payment of an initial amount. This is a useful service for people
who travel to Delhi often and those who want to control the expenses on their calls.
5. Caller ID
Displays calling person's number.
6. Outgoing call restriction
To
prevent
or
limit
outgoing
calls,
for
example,
in
peak
10
Incoming calls can be forwarded to another fixed or mobilephone.Besides these some other
services provided by Airtel are - Call conferencing, Call broadcast et cetera.
It is in the operators -Interest that they not only get manysubscribers but also get them to use t
he mobile facilityfrequently. In the early stages getting increases to subscribe may be easier
than getting them to talk since they will find it costlier to use the mobile phone as compared
to a conventional phone [if is believed that initially cell phones would be used buy]
8. Roaming Facility
Roaming facility is available while the subscriber is travelling. The billing is done in the
home network (Delhi). Roaming facility is available manually
* As well as semi-automatically. Once subscriber is In any other city or country, where a
GSM networks available, simply insert the SIM card of the local operator Into your handset
and start talking.
*Manual Roaming means a separate SIM card is provided for each city
**Semi-automatic roaming means one card has the facility for different cities.
11
only
15%. DoT
has
called
for
Private
telecom
operators
for
providing
wireless broadband in rural areas and the selected private telecom operator would be provide
dfinancial assistance through its Universal Service Obligation (USO) Fund.
Favourable Regulatory Environment:
The Governments Telecom Policy initiatives have been growth-oriented and forwardlooking.
Various incentives such as increase in foreign investment limits up to 74%, implementation of
the Unified Access Licensing Regime (UASL), availability of the Universal Service
Obligation (USO) fund for enabling expansion in rural areas and introduction of MNP have
led to the proliferation of mobile services in the country. TRAI has slashed the termination
fee paid by operators by 33%, which will help Telecom companies reduce their Local as well
as National Long Distance (NLD) tariffs by up to 20%.
Decreasing Cost of Subscription:
The fall in subscription costs and rising incomes has increased the affordability of mobile
services. The cost of life-time prepaid cards has fallen from Rs.999 to Rs. 99. The availability
of low denomination pre-paid vouchers, bundled offerings and other product innovations
have made mobile services affordable in semi-urban and rural markets
Technology and increasing subscriber base:
The Indian telecom industry with its intense competition is able to add minimum 10 million
customers every year. The 3G subscriber base is expected to reach 90 million by 2013 with
revenues touching Rs.80, 000 crs, and would account for 46% of the total wireless revenues.
Mobile Number Portability feature is to be provided very soon. Because of these factors the
industry appears to be in a growth stage
12
13
communications company, with over 100 million subscribers. It has established a pan-India, high-capacity,
integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services
spanning the entire infocomm value chain.Anil D Ambani is the chairman of the company.
BSNL
Bharat Sanchar Nigam Limited saw a drop in its revenue for the second consecutive year to post Rs
30,240crore (Rs 302.4 billion), a drop of 14 per cent, even though it retained the number two position among
telecom players. BSNL offers both fixed line and mobile services with broadband connections. With over
71.68 million subscribers, BSNL currently is the largest wireline service provider in India. The company has
reported around 6 crore (600 million) 2G connections and 9,73,378 3G connections since February 2010.
All major towns and cities are covered through BSNL network. Opal Das is the new chairman and
managing director of BSNL.
Idea Cellular
Idea Cellular is part of the Aditya Birla Group and has bagged fifth position with a revenue of Rs 11,390
crore(Rs 113.9 billion).It is a leading GSM mobile services operator in India with 67 million subscribers.
Idea offers both prepaid and post-paid services. It is a pan-India operator with services being made
available in all parts of the country. Idea was the first cellular service provider to launch General Packet Radio
Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) in the country. Kumar Mangalam
Birla is the chairman of the group.
Tata Communications
Tata Communications reported revenue of Rs 11,000 crore (Rs 110 billion).The company holds leadership
position in emerging markets. Tata Communications leverages its advanced solutions capabilities and domain
expertise
across
its
global
national enterprises, service providers and Indianconsumers.The Tata Global Network includes one
of the most advanced and largest submarine cable networks, a Tier-1 IPnetwork, with connectivity to more
than 200 countries across 400 PoPs, and nearly 1 million square feet of datacentre and collocation space
worldwide. Srinath Narasimhan is the managing director and CEO of Tata Communications.
Tata Teleservices
Tata Teleservices spearheads the Tata Group's presence in the telecom sector. It has posted revenue of Rs
6,900crore (Rs 69 billion).Established in 1996, Tata Teleservices, one of the 96 companies of Tata Group,
has its network in 20 circles. Itis the first company to launch CDMA mobile services in India
It launched mobile operations in January 2005 under the brand name Tata Indicom. It enjoys a panIndia presence through existing operations in all of India's 22 telecom circles. Tata Teleservices
operates under five different brands -- Tata Indicom (CDMA services), Tata DOCOMO(GSM services),
Virgin Mobile, Tata Walky (which is the brand for fixed wireless phones), Tata Photon (the companys brand
15
that provides a variety of options for wireless mobile broadband access) and T24.Tata Teleservices Ltd, along
with Tata Teleservices (Maharashtra) Ltd, serves nearly 70 million customers in more than 450,000 towns
and villages across the country.Anil Sardana is the managing director of Tata Teleservices.
Aircel
Aircel recorded the highest growth of 37.2 per cent among operators in 2009-10. The
company posted revenue of Rs 4,700 crore (Rs 47 billion) to move to the number eight slot. It is a joint
venture between Maxis Communications Berhad of Malaysia and Sindya Securities Investments Private
Limited, whose current shareholders are the Reddy family of Apollo Hospitals Group of India. Aircel
commenced operations in 1999 and became the leading mobile operator in Tamil Nadu. It emerged amarket
leader in Assam and in the North Eastern provinces within 18 months of operations. Today, the company has a
foothold in 21 circles including Chennai, Tamil Nadu, Assam, North East, Orissa, Bihar, Jammu & Kashmir,
Himachal Pradesh, West Bengal, Kolkata, Kerala, Andhra Pradesh, Karnataka, Delhi, UP(West), UP(East),
Maharashtra & Goa , Mumbai, Madhya Pradesh and Punjab. It has over 43 million customers in the
country.
MTNL
Mahanagar Telephone Nigam Limited (MTNL)'s revenue dropped nearly by a fifth highest among the top
10 players -- to Rs 3,650 crore (Rs 36.5 billion) .The companies has achieved a customer base of
8.06 million in the two metro cities of Delhi and Mumbai. The government currently holds 56.25 per cent
stake in the company. Today it has more than 9,00,000 GSM mobile connections. The company was in the
forefront of technology induction by converting 100 per cent of its telephone exchange network into the stateof-the-art digital mode.
16
Analysis
We have analyzed the performance of Bharti Airtel by considering Porter five forces model.
1. Intensity of Competition Among Rivals
Bharti Airtel has strong rivals in telecommunication sector of India like BSNL and Vodafone. Initially, it had
only two competitors but now this figure has jumped to more than ten. All these companies are providing
similar services with the same capabilities. Although it has enhanced its investment in last few years and
working hard to expand its network yet the presence of strong competitors is a major threat for its successful
survival. The detail data are available in the first section.
2. Bargaining Power of Buyer
Although subscribers are not concentrated, not purchase in bulk but still can easily switch for better quality,
coverage and rates. In this context subscribers position is strong. Bharti is the leading operator in Access
segment in terms of number of subscribers. However, in term of net additions during the quarter, Idea recorded
the highest growth of 7.66 million, followed by Bharti (6.29 million) and Vodafone (4.88 million).
3. Threats from Substitutes
17
Presence and easy availability of substituted products is a great threat for the successful
survival of any organization since it can enforce the company to cut the price of its product. The growth rate
of reliance is more than Bharti and that of Vodafone is almost comparable to Bharti as shown in table 1.
4. Potential Entry of New Competitors
Since current telecom technologies involve heavy capital investment so chances of success for new entrants
are very limited. Still it is seen that few new entrant like Idea is growing very rapidly and the growth rate is
much higher than the top service providers.
5. Bargaining Power of Suppliers
As far as the suppliers are concerned, the pros and cons to all service providers are equal that may be in
human resource or products.
So far very little analysis is done on telecom sector using Porter five forces model. Analysis indicates that
although to meet competition the top service provider is struggling hard but the presence of strong rivals has
put a challenge. From above discussion, we may conclude that the presence of rivals is the main area that
needs companys management serious attention. Company may follow the strategy of horizontal integration
by taking the decision of merger or acquisition with any of its one or two rivals. The leader
should offer special packages for students / education sector since they are the main service users.
18
19
Airtel was among the first operators to start infrastructure sharing in India which has helped it
to sustain a low cost tariff business model. Hence, they should follow somewhat similar
strategy for Africa.
The idea is to engage with Tier two operators and form a new company and share Radio
Access Network (RAN) and related cost burdens. This move will help at achieving some
leverage against MTN the market leader in some of these geographies.
Airtel has proven that it will do whatever it takes to make Africa a success and will not
necessarily just replicate its Indian models but use innovation and leverage
20
The status of the product in terms of its life cycle has justreached the maturity stage in
India. It is still on the rising part of the product life cycle curve in the maturity stage. The
diagram on the left hand side shows the percentage of the users classified into heavy, medium
and low categories. The right hand side shows the revenue share earned from the three types
of users. Airtel, keeping in mind the importance of the customer
retention,values its heavy users the most and constantly indulges inservice innovation. But,
21
since heavy users comprise only 15 -20% of the population the other segment cannot be
neglected. The population which has just realised the importance of cellular phones has to be
roped in. It is for this reason that the service provider offers a plethora of incentives and
discounts. Concerts like the "Freedom concert" are being organised by Airtel in order to
promote sales. The media channel is chosen with economy in mind. The target segment is not
very concrete but, there is
anattempt to focus on those who can afford. The printadvertisements and hoarding are placed
in those strategic areas which most likely to catch the attention of those who need a cellular
phone. The product promise (which might cost different1 higher)
is an important variable in determining the target audience.
Besides this, other promotional strategies that Airtel has adopted are .
(i)People who have booked Airtel services have been treated to exclusive premiers of
blockbuster movies. Airtel has tie-up with Lufthansa to offer customer bonus miles on the
German airlines frequent flier's programs.
(ii) There have been educational campaigns, imagecampaigns, pre launch advertisements, lau
nch advertisements, congratulatory advertisements,
promotional advertisements, attacking advertisements and tactical advertisements
22
PROMOTIONAL STRATEGY
Airtel to Touch Tomorrow with a new brand vision
The Bharti Mobile promoted Airtel cellular service will go in for positioning of
its brand image.
The new brand ethos isportrayed in two distinct fashions - the tag line "Touch Tomorrow",
which underscores the leading theme for the new brand vision, followed by "The Good Life",
which underscores a more caring, more customer centric organization. Aimed at reengineering its image as just simply a cellular service provider to an all-out information
communications services provider, Touch Tomorrow is meant to embrace the new generation
of mobilecommunication services and the changing scope of customerneeds and aspirations
that come along with it The new communication is about a new dimension in the cellular
category that goes beyond the Internet, SMS, roaming, IVRS, etc. but which engulfs the
whole gamut of wireless digital broadband services that will constitute tomorrows cellular
services.
The new campaign is in two phases - the first of which will communicate overall brand
philosophy and the second products and services.
According to Mr. Jagdish Kini, Chief Operating Officer, BhartiMobile Limited, Karnataka "
We are adopting a new brand-platform - Touch Tomorrow - not only to reflect our corporate
ethos but also business strategy". The new identity will have the logo in Red, Black and
White colours along with lower case typography to convey warmth.
AirTelwill incorporate the latest branding in all of itscommunication and will soon be going i
n for an enhancedpromotional drive to establish the brand's presence.
23
will also get full talk time for their charge coupon they purchase and also have the option to
buy Taiwanese manufactured Bird mobile handsets for as low as
Rs.1, 399.
The move is aimed at stopping the churn in the pre-paidsubscriber base. Once a subscriber
takes this plan, he will always be an Airtel subscriber whether the mobile is being used or not.
these Innovative Business Model three pan-Asia awards in the last two years including the
MIS Asia IT Excellence Award for Best Change Management in2005, the MIS Asia
IT Excellence Award for Best Bottom Line IT in 2006 and the MIS Asia IT Excellence Award
for Best Knowledge Management in 2006.
IBM assumed responsibility for all of Bhartis IT systems, Applications, infrastructure,
operations and people with the agreement coming into force. The agreement entailed Bharti
paying IBM a percentage of its revenues, which directly linked IT cost to
business
performance. The agreement construct was innovative not only from the Perspective of the
remuneration model for IBM, but also in terms of the Scope of the delivery, which was
comprehensive and included practically all of ITcurrent and future. It made innovation all
pervasive
as IBM
introduced
changes
in the
area
of
processes;
people
24
MARKET SITUATION
At the time of launch
The first mover in the market was Airtel which launched itsservices in Delhi in Aug 1995
(Informal launch). Essar Cell phone followed by launching its services informally in Oct
95. At this point of time, the market was at a nascent stage, awareness level was low and both
operators independently tried to spread awareness and educate the
peopleOnce the networks were commercially launched, it became anumber game with a
multitude of schemes being offered to
woocustomers Initially the cellphone was perceived as a statussymbol and utility took a back
seat The target segment in Delhi were corporate and the high income group. The average
capacity installed was for 1.5 lakh subscribers. This coupled with the steep license fee paid to
DOT put pressure on the operators to break-even by rapidly expanding their markets. In the
first two years, this led to a number of schemes being offered and prices crashing.
COMPETITIVE SITUATION
Airtel launched its services before Essar and skimmed the market picking up the bulk of the
high usage premium clients. This is
a very competitive industry with the two companiesdifferentiating either on value-added
services or price. Airtel is perceived as the high quality provider and has a premium image.
Essar, on the other hand, is perceived as the lower end service provider. Airtel positions itself
as the market leader on the basis of the number of subscribers. Essar is trying to counter this
by emphasising on the reach of its network and the quality of its service. However, Essar is
somewhat not been very successful largely due to the inconsistency in advertising To promote
themselves, both the players have been dependent on tactical advertising However, they have
restrained from sing comparative advertising Hoardings have been a very popular medium
for carrying the advertisements Airtel has also been advertising on television using the Bharti
Telecom name.
25
Market share
Private operators hold 88.02% of the wireless market share (based on subscriber base)
whereas BSNL and MTNL, the two PSU operators, hold only 11.98% market share.
The graphical representations of market shares and shares in net additions of all the service
providers during the month of April.
As per the TRAI data, by the end of April 2013, about 91.73 million subscribers have
submitted their requests to different service providers for porting their mobile number. In
MNP Zone-I (Northern & Western India) maximum number of requests have been received in
Rajasthan (8.80 million) followed by Gujarat (7.85 million) whereas in MNP Zone-II
26
(Southern & Eastern) maximum number of requests have been received in Karnataka (10.90
million) followed by Andhra Pradesh Service area (8.30 million).
27
What is STP?
STP or segmentation targeting positioning is a marketing tool with the help of which
marketers differentiate, attract, retain and grow customer base for their respective products.
SEGMENTATION
Segmentation is the procedure that an organisation goes through to segregate the market into
different groups according to the different characteristics which might need different
products. The Marketer, groups various people into segments on the basis of
similar characteristics, tastes, perception etc. so that they will have a similar view/response to
a particular product launched specifically for each segment.
Market segmentation is a two-step process of: naming broad product markets, and
segmenting those markets in order to select target markets. Most segmentation efforts fail
because inexperienced marketers attempt to find one or two demographic characteristics to
segment a mass market. Generally, customer needs and behaviours do not fit nicely into one
or two demographic characteristics. This section of the report will outline Best Practices
related to segmenting our various product markets.
28
2.
3.
4.
29
Types of segmentation
1) Geographic variables:
A.
B.
C.
D.
Region of the world or country: East, West, South, North, Central, coastal, hilly, etc.
Country size/country size: Metropolitan Cities, small cities, towns.
Density of area: Urban, Semi-urban and Rural.
Climate: Hot, Cold, Humid, Rainy.
2) Demographic variables:A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
Age
Gender
Family size
Education
Income
Occupation
Education
Socioeconomic status
Religion
Nationality
Language
3) Psychographic variables
A.
B.
C.
D.
Personality
Life style
Value
Attitude
4) Behavioural:
A. Website Visits
B. Responses to Marketing
C. Purchasing Methods
30
D.
E.
F.
G.
Association Memberships
Internet Usage
Social Media Groups
Collateral Views/Downloads
31
2.
3.
4.
It is essential that market segments are operational. The whole point of segmenting is to assist
with better targeting, positioning, and decision-making; be sure that our segment dimensions
are extremely relevant.
Once we have established distinct market segments based on various dimensions, we are
ready to start targeting our potential customers. The next section of the report provides advice
pertaining the effective target marketing techniques.
32
Segmentation of Airtel
Segmentation is very important because of the better predictability of the target consumer
group and to design the proper marketing mix strategy.
Density of area
35 and above
As most of this group will be working and dont use mobile for
SMS and chatting. So this group needs only the calling facility at reasonable rate. This Group
may continue using the general plan.
Income
Generally the mobile service providers plan their marketing strategies according to the
prepaid market and post-paid market. So it is basically depends upon the income of the
consumer that whether he selects the prepaid or post-paid. Generally the consumers with low
income choose prepaid and consumers with high income choose post-paid.
Brand Loyalty
We can also segment it on the basis of the loyal customers and on loyal customers of the
brand. We can provide various schemes and offers to the loyal customers to retain him with
our product.
Good use of marketing strategy is well represented by the example of Airtel in India. India is
the worlds fastest growing telecom market, and has one of the largest mobile phone
subscribers in the world. A slew of mobile services companies have cropped up, but Airtel
continues to remain a dominant player in the market with the maximum market share.
34
Airtel meticulously segments its market. Apart from the geographic segmentation, which
divides the Indian market into east, west, south, north and central regions, the market is also
segmented in each region on the basis of age and income. The different geographic regions
are handled independently and different campaigns are run according to the tastes and
preferences of people in each region. Under each region, age and income play an important
role in determining the extent of mobile usage.
Hence Airtel caters to two different categories each in age and income. It targets younger
population by providing them cheap call/msg rates at night and also cheap SMS plans, while
the elder population is targeted by plans for calls at reasonable rates. In the income
categories, the lower income people are targeted by offering them cheap and affordable
lifetime validity prepaid cards, that can be used for incoming calls; while the higher income
35
groups are targeted by offering them premium services like VAS(value added services),
GPRS plans and 3G technology.
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TARGETING
Targeting evaluates the attractiveness of each segment of its buying power, size, growth of
the market, competitiveness etc. Defending a target market requires market segmentation,
the process of pulling apart the entire market as a whole and separating it into manageable,
disparate units based on demographics. We then choose or come up with a particular
strategy or a product itself for each targeted segment.
Target marketing makes the promotion, pricing and distribution of the products or services in
a particular segment. Target marketing provides a focus to all marketing activities. Market
targeting means to choose ones target market.
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Distinguishable.
Measurable
Sizable.
Accessible.
Growing.
Profitable
Compatible with the firms resources
Checking out if the firm has the differential advantage.
Distinctive capability for serving the selected segments.
At the end choose those segments which the most appropriate for the company.
After evaluating different segments, the company can consider five patterns of
target market selection. They are:Single Segment concentration
We have brands in the market which concentrate only on one segment. For example, Zodiac
brand concentrates on formal wear for executives and professionals. Farm Equipment
Division
of
M&M
concentrates
on
tractors.
Through concentrated marketing, the firm gains a strong knowledge of the segment
needs and achieves a strong market presence. But, a particular market's growth can
deteriorate or a competitor may invade the segment. For example, when Digital camera
technology took off, Kodak's market share started to fall gradually and they could not regain
their dominance as new competitors like Sony and Nikon had arrived.
Selective Specialization
A firm selects the number of segments, each objectively attractive and appropriate. There
may be little or no synergy among them but each promises to be a money-maker. For
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example, Cadbury's advertising targets audience of a wide range with one select ad for each
segment.
Product Specialization: A microscope manufacturer makes different microscopes for different
customer groups such as University, Govt., Hospitals and commercial laboratories and builds
a strong reputation in that product area. The risk is that the product may be replaced by newer
technologies.
Market Specialization
A firm gains strong reputation in serving a customer group and becomes a channel for
additional products the customer group can use. For example, ITC first concentrated only on
tobacco related products, and later they moved into the field of FMCG and IT services. The
downside is that the customer group suffers budget cuts or shrink in size.
Full Market Coverage: The firm attempts to all customer groups will all the products that
might be needed. Only very less firms like Microsoft(Software), General Motors(Vehicle),
Dell(Electronics)
etc.
can
undertake
full
market
coverage
strategy.
They can cover the whole market via Undifferentiated Marketing, where the firm
ignores segment differences and Differentiated marketing, where the firm offers different
products for different segment.
Targeting of Airtel
Airtel has targeted the premium and upper middle class. The motto behind this this only those
segments should be targeted who value time and have the paying capacity. During the
introduction stage there was a huge pressure to get consumers across to hook up with their
brand, because getting them to Airtel by their earlier brand and switching their brand loyalty
was too tough. Airtel marketers have been concentrating totally on the business executive
class but now that the basic viable volumes has been built up and prices have declined to a
certain extent they are planning to venture further field.
TARGETING AREAS
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POSITIONING
Positioning has come to mean the process by which marketers try to create an image or
identity or value in the minds of their target market for its product, brand, or organization.
Positioning involves on affecting the target. The example can be Apple Computer has chosen
itself as user-friendly computers. Thus, Apple advertising itself as a computer for non-gigs.
Positioning of a product is a sum of the attributes which are normally described by the
customers. Describe its standing, target market, quality, strengths, weaknesses, prices and
any other values the product represents.
Functional position
Solve problems.
Provide benefits to customers.
Get favourable perception by investors (stock profile) and lenders.
Symbolic positions
Self-image enhancement.
Ego identification.
Belongingness and social meaningfulness.
Affective fulfilment.
Experiential positions
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Defining the market in which the product or brand will compete (who the relevant
buyers are)
Identifying the attributes (also called dimensions) that define the product 'space'\
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Approaches of positioning
The main approaches to positioning are
The product class approach.
The cultural symbol approach. - It is based on showing the cultural symbol which
helps stand out from other competitors. The example of this can be the MALBORO
brand.
Customer benefit approach- involves putting the brand behind the competitors. It can
be a single product which can solve many problems e.g. Procter & Gambles Head &
shoulder shampoo functions as anti-dandruff and anti-hair fall shampoo.
The price-quality approach- some brands have higher price to cover the cost of the
product and to give the customer message that this product is on a high level and
quality.
Targeting of Airtel
Airtel has targeted the premium and upper middle class. The motto behind this this only those
segments should be targeted who value time and have the paying capacity. During the
introduction stage there was a huge pressure to get consumers across to hook up with their
brand, because getting them to Airtel by their earlier brand and switching their brand loyalty
was too tough. Airtel marketers have been concentrating totally on the business executive
class but now that the basic viable volumes has been built up and prices have declined to a
certain extent they are planning to venture further field.
TARGETING AREAS
:Professionals by giving free calls in postpaid connections. Entrepreneur by giving various
plan in which they may get internal calling free. Youth with
the FRIENDZ Scheme.
Targeting Students by introducing postpaid connection only for students and with zero
rentals.
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DISTRIBUTION
The company whose operations are concentrated in and around Delhi. It 27 Franchisees and
15 Distributors- They also have 8'instant access cash card counters- Each franchises or
distributor can have any number of dealers under him as long as the personas approved by the
Airtel authority.
Each franchise has to invest Rupees Ten Lakhs. To obtain a franchise and should employ an
officer recruited by Airtel. This person acts as a liaison between the company and the
franchises. The franchises can it any number of dealers as long as their territories do not
overlap. But unfortunately Airtel has not been very successful in controlling territorial
overlaps of dealers. The franchises can carry out his 1her own promotional strategy. For
this the Company contributes
Company
Franchisee
Distributor
Dealer
Dealer
Customer
Customer
75% of the money and the franchises contribute 25% of the money. The dealers under the
franchisee receive the same commission. The franchises and the dealer obtain the feedback
from the customers and they are sent through the liaison officer on a day-to-day basis to
Airtel. The dealer has to invest Rupees. One Lakh as an initial investment. The dealer of
Airtel is not allowed to provide any other operators' service. Target set for distributors and the
dealers is 100 -150 activations per month. Hence the dealers can also go for their own
promotions like banners and discounts on festivals
promptly. The consumer on providing the bill of purchase for the handset and proof of
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residence has only to wait an hour before getting connected. The staffs of the dealers and the
franchisees are provided training by the Airtel personnel. The complaints encountered by the
franchisees and dealers are either handset being non-functional or the SIM Card not getting
activated. Anything more complicated is referred to the main Airtel office in Delhi.
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SWOT ANALYSIS
STRENGTHS
Cost advantage
Current leaders in quality service
Largest distribution network
Ability to constantly innovate
Highly skilled workforce
Entrepreneurial zeal
Airtels increased equity and market cap.
WEAKNESSES
To prove credibility
Price pressures
Need for Government support
Awareness
Sales and Marketing
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OPPORTUNITIES
THREATS
Foreign investment
Global trends moving from GPS to WLL.
Lack of global parity in telecom tariff
Other competition
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CONCLUSION
From above the details I conclude that 70% Airtel users preferred to remain with Airtel. Also
good no. of users who werewilling to switch from their respective subscribers showed
interest in Airtel. Hence, these statistics imply a bright future for the company. Also the
company
is
now
providing
more
services
like the door to door services which is you dial the Airtel customer care and would like to
send someone flowers the Airtel Company delivers those flowers to the person concerned.
Also
Airtel
is
providing
free
text
messaging
service
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and
free
BIBLIOGRAPHY
http://www.ibef.org/industry/telecommunications.aspx
http://business.mapsofindia.com/india-industry/telecom.html
http://www.thehindubusinessline.com/2010/05/13/stories/2010051352981000.htm
http://www.equitymaster.com/research-it/sector-info/telecom
http://www.thinkdigit.com/Mobiles-PDAs/Telephone-subscriber-base-in-India-slipsto_15272.html
http://www.scribd.com/doc/49246309/Marketing-Segmentation-Targeting-And-Positioningpf-AirTel
http://www.dnaindia.com/money/report_mukesh-cleans-out-bharti-s-fieldfresh-hires-almost70-people_104154
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