STUDY OF POSTPAID CONSUMERS BUYING BEHAVIOR & COMPARATIVE STUDY OF BUSINESS MODELS OF TELECOM & TRADITIONAL RETAIL OUTLETS

SUMMER PROJECT BY

ACKNOWLEDGEMENT
This present piece of work owes its existence to many persons without whose help it would not have been possible to complete the project. First of all I would like to thank my project guides Mr Pallab Majumder and Mr. Manas Senapati of Vodafone- Essar Spacetel Ltd for their valuable guidance, suggestions and constructive criticism. I would specially like to thank Mr. Manas Senapati for his involvement and constant guidance in the project. It was a pleasurable experience for me to work under his able guidance in culling relevant information for preparation of this project and enriching my overall knowledge on telecom industry. I would like to thank all my respondents for sparing much of their valuable time for filling the questionnaire and sharing their views, without which this project would have never been completed. I express my sincere gratitude to my faculty guides Prof. Jogendra Nayak and Prof. Siddharth Rout for their valuable guidance and suggestions. I would also like to thank Prof. Raj Dash for his valuable guidance. Finally I would like to thank my friends and family members for the support during the project.

Date: Name of the candidate Place:

INTRODUCTION
Orissa, a state in the eastern region of INDIA with a population of 36,706,920 out of which more than 80% reside in the rural areas. It has posted steady growth figures for the last decade and has attracted different industries on the basis of the resources available in the state. The Indian telecom industry is not an exception from this. Recently there are six different telecom operators providing the mobile services in the state. Out of them four are GSM operators ( Airtel, BSNL, Smart GSM services, Aircel ) and two are CDMA operators (RIM, TATA tele services). All the six operators provide the two basic type of mobile services ie Prepaid & Postpaid. Vodafone is the next to enter into the Orissa telecom market as the 7th player and 5th GSM player. The prepaid services can be availed by the customers at various multi branded telecom outlets and different shops. The market of Orissa has been a prepaid driven market. But with the improvement in the economic and financial status of the people and the advent of different industries in to the state, the demand for the postpaid services is growing. The telecom operators generate higher ARPU ( Average Revenue Per User ) from the postpaid services as compared to the prepaid services. The postpaid subscriber is considered to be a long term customer as compared to the prepaid subscriber. So the telecom operators are also focusing to increase the postpaid subscriber base. The telecom operators are setting up their franchise outlets such as ARC ( Airtel Relationship Center ), Reliance Web world, True Value Hub and Cellcity as a part of their postpaid strategy. These outlets are called as Telecom Customer Touch points and they serve the purpose of taking a new postpaid connection to bill deposit by the subscribers. Vodafone will also come up with its retail outlets named VS ( Vodafone Store ) and VMS ( Vodafone Mini Store ) to promote the postpaid connection. The project comprises both consumer and retail study. The consumer study is concentrated upon the postpaid segment with the emphasis to understand the postpaid consumers buying behavior and their usage patterns. The consumer study will help to formulate the marketing strategy for Vodafone in the postpaid segment in order to acquire new customer. The retail study is carried out to understand the business models of the telecom retail outlets such as ARC & MBO (Multi Branded Outlet) and the exclusive traditional retail outlets such as The Titan World & Tanishq. The ROI models of these retail outlets are studied. From the retail study a proposed model for the VS ( Vodafone Store ) and VMS ( Vodafone Mini Store ) is made with showing the profit potential. The retail study will be helpful for Vodafone to formulate the strategy for the VS & VMS.

TABLE OF CONTENTS CONTENTS

1- AIMS & OBJECTIVES 2- RESEARCH METHODOLOGY 3- BACKGROUND 4- POST PAID CONSUMER STUDY (i) Demographics (ii) Brand recall (iii) Tariff plans availed (iv) Popular plans (v) Usage patterns (vi) Categorization of the plans (vii) Parameters for choosing postpaid (viii) Importance of offers (ix) Parameters for switching operator 5- RETAIL STUDY (i) Foot falls to sales ratio in telecom retail (ii) Footfalls to sales ratio in traditional retail (iii) Customer behavior in the retail outlets (iv) Features for low range handsets (v) Intention of people visiting retail outlets (vi) Parameters for buying in a retail outlet (vii) Parameters for retailers to promote telecom operator 6- COMPETITORS SWOT 7- BUSINESS MODEL OF TELECOM CUSTOMER TOUCH POINT 8- BUSINESS MODEL OF MBO 9- BUSINESS MODEL OF WATCH SHOP 36 37 39 40 41 43 45 46 51 53 56 16 18 19 20 21 27 31 33 34

PAGE NO
6 7 8

10- BUSINESS MODEL OF GOLD SHOP

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11- CONCLUSION (I) Consumer study (ii) Retail study 12- ANNEXTURES (i) Consumer questionnaire (ii) retail questionnaire 64 67 61 62

AIMS & OBJECTIVES

AIM OF THE STUDY :1- To study the postpaid consumers buying behavior. 2- A comparative study of the business models of the telecom
retail outlets and the exclusive traditional retail outlets.

OBJECTIVES OF THE STUDY :( A ) CONSUMER STUDY: 1- To understand the importance of different parameters for choosing a
postpaid connection.

2- To find out the usage patterns of the postpaid consumers. 3- To find out the importance of different offers provided by the telecom
operators.

4- To find out the important parameters for a customer for switching to a

new operator.

( B ) RETAIL STUDY: 1- To understand the business models of the telecom retail outlets and
the exclusive traditional retail outlets.

2- To find out the footfalls to sales conversion ratio in both telecom and
exclusive traditional retail outlets.

3- To find out the importance of the parameters for the dealer/franchisee

to promote the telecom operators products & services.

RESEARCH METHODOLOGY
SAMPLE SIZE:1- CONSUMER STUDY= 200, Area covered- Cuttack & Bhubaneswar 2- RETAIL STUDY: ( i ) Telecom retail outlets = 50
( ii ) ExclusiveTraditional retail outlets = 25 Area covered : ( i ) Cuttack- Badambadi, Dolmundai, College square Buxi bazaar ( ii ) Bhubaneswar- Sahid nagar, Kharabel nagar, Bapuji nagar, Cuttack road

SAMPLING METHOD:1- CONSUMER STUDY: Quota sampling based on the approx ratio
of the postpaid subscriber base of different operators. BSNL= 120 AIRTEL= 42 RIM= 20 SMART= 18

2- RETAIL STUDY: Random sampling

( i ) Telecom retail: MBO (Multi Branded Outlet)= 40 Telecom customer touch points=10 ( ii ) Exclusive traditional outlets: Gold shop= 10, Apparel shop= 10, watch shop= 5

RESEARCH METHODOLOGY:1- PRIMARY STUDY: Data collection through questionnaires

2- SECONDARY STUDY: Collection of postpaid plans 3- OBSERVATIONAL STUDY : To find out the footfalls to sales ratio & to study peoples behavior in the outlets.

QUESTIONNAIRE DESIGN:Closed ended questionnaires are made for 1- Consumer 2- telecom retail

3- Traditional retail TOOLS USED FOR ANALYSIS:1- MS- Excel

3- Pie charts, Bar graphs

2- SPSS- 10

INDIAN TELECOM INDUSTRY SCENARIO

The Indian telecom industry has posted significant growth for the last 5 years both in terms of subscriber base and revenue. The following graph shows the growth in the subscriber base of the mobile services in the last 5 years.

( GROWTH OF THE MOBILE SUBSCRIBER BASE )

The mobile services has the players in both the segments of GSM and CDMA technology. The following pie chart shows the technology wise market share in the mobile services.

( TECHNOLOGY WISE MARKET SHARE )

The following table shows the performance indicators of the telecom services up to the quarter end December 07.

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The mobile industry in India is predominantly prepaid driven market. The following graph shows the status of the different key indicators of the GSM services.

( KEY INDICATORS OF THE GSM SERVICES )

The CDMA services has mainly attracted the customer segments who want to avail mobile services at lower cost. The following graph shows the status of the key indicators of the CDMA services.

( KEY INDICATORS OF THE CDMA SERVICES )

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The different types of calls made by a mobile subscriber can be of following types. ( i ) intra circle to mobile ( ii ) intracircle to fixed lines (iii ) inter circle to mobile ( iv ) intercircle to fixed lines. The following graph shows the distribution of different traffics for the GSM services.

( GSM ORIGINATED TRAFFIC DISTRIBUTION BY TERMINATING NETWORK)

The following graph shows the traffic distribution pattern for the CDMA services.

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The following graph shows the operator wise market share of the GSM service providers.

( OPERATOR WISE MARKET SHARE OF GSM SERVICE PROVIDERS )

The following graph shows the operator wise market share of the CDMA service providers.

( OPERATOR WISE MARKET SHARE OF CDMA SERVICE PROVIDERS )

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ARPU (AVERAGE REVENUE PER USER) & MOU (MINUTES OF USAGE) :CIRCLE Circle-A Circle-B Circle-C Metro All India POSTPAID ARPU PREPAID ARPU BLENDED ARPU

618 208 249 532 213 232 569 244 269 714 248 346 628 219 261 ( ARPU PER MONTH ; FIGURES UPTO DEC-07 )

COMPOSITION OF REVENUE ( FIGURES UPTO DEC-07 )

ITEMS Rental revenue Revenue from call charges Revenue from roaming Revenue from SMS Other revenues ( VAS, installation etc ) SHARE 21.3% 56.1% 9.8% 4.6% 8.2%

USAGE PATTERN (MOU) { FIGURES UPTO DEC-07 }

MOU/ subscriber Incoming MOU Outgoing MOU Incoming : Outgoing MOU Postpaid MOU (incoming : outgoing) Prepaid MOU (incoming : outgoing) Outgoing SMS / subscriber 464mins 243mins 221mins 53:47 47:53 54:46 28

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15

DEMOGRAPHICS
AGE OF THE RESPONDENTS:AGE 20-30yrs 30-40yrs 40-50yrs >50yrs TOTAL FREQUENCY 17 79 89 15 200

15, 8%

17, 9%

20-30YRS 30-40YRS 79, 39% 40-50YRS >50YRS

89, 44%

OCCUPATION OF THE RESPONDENTS:OCCUPATION Banking Sales & marketing Business Health Education Technical Others INCOME 2-3lakhs 3-4lakhs 4-5lakhs TOTAL FREQUENCY 99 27 31 25 11 4 3

Occupat
ANNUAL INCOME OF THE RESPONDENTS:-

FREQUENCY 73 104 23 200

Annual incom
25 11 43

TELECOM OPERATORS SERVICE RESPONDENTS AVAILING:OPERATOR BSNL Airtel RIM Smart TOTAL FREQUENCY 120 42 20 18 200

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23, 12% 27

Operator's service u
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 AVERAGE MONTHLY EXPENDITURE BY THE RESPONDENTS ON MOBILE SERVICE:EXPENDITURE 450-600/600-750/750-1000/>1000/FREQUENCY 1 28 85 86 PERCENTAGE 0.5% 14% 42.5% 43%

Monthly expend

1, 1% 86, 43%
BRAND RECALL BY THE RESPONDENTS:OPERATOR BSNL Airtel Reliance Hutch Vodafone Idea BRAND-1 48% 44% 5.5% 1.5% 1% 0% BRAND-2 18.5% 39% 40.5% 0.5% 0.5% 1% BRAND-3 31.5% 16.5% 51.5% 0% 0% 0.5%

17

60% 50% 40% 30% 20% 10% 0% Brand-1 Brand-2 Brand-3 BSNL Airtel Reliance Hutch Vodafone Idea

SOURCE OF INFORMATION OF THE POSTPAID CONNECTION:OPERATOR BSNL Airtel Smart RIM

7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 BN SL A te ir l S at mr R I M T V of e u to e fic /c s m r to c p in uh o t Pin m d r t e ia

PRINT MEDIA 57 9 0 0

TV 0 11 0 0

TELECOM OFFICE/ CUSTOMER TOUCH POINT 63 22 18 20

TOTAL 120 42 18 20

DIFFERENT TARIFF PLANS AVAILED BY THE RESPONDENTS :During the survey 12 different postpaid plans of 4 different operators ( BSNL, Airtel, Smart, RIM ) were found to be used by the respondents. The following table shows the number and percentage of respondents availing the different postpaid plans. PLANS 1) BSNL-325 FREQUENCY 46 PERCENTAGE 23%

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2) BSNL ONE INDIA 3) BSNL-525 4) BSNL-725 5) AIRTEL-299 6) AIRTEL-600FV 7) AIRTEL IND HOME 299 8) SMART-JOY-249 9) SMART-JOY-149 10) SMART-450 11) RIM-NJ-249 12) RIM-STD-375 TOTAL

28 25 21 16 15 11 5 8 5 12 8 200

14% 12.5% 10.5% 8% 7.5% 5.5% 2.5% 4% 2.5% 6% 4% 100%

DIFFERENT TARIFF PLANS ACROSS VARIOUS OCCUPATIONS:The following table represents the number of respondents from different occupations availing each of the 12 postpaid plans. PLANS BSNL-325 BSNL ONEIND BSNL-525 BSNL-725 AIRTEL-299 AIRTEL-600FV AIRTL IND HOME-299 SMART-JOY249 SMART-JOY149 SMART- 450 RIM-NJ249 RIM-STD-375 TOTAL Banking 26 19 21 8 5 1 4 3 7 5 99 12 7 27 Sales & Marketing 2 3 1 2 Business 1 2 1 9 2 13 2 1 1 25 Health 10 4 2 3 3 Education 6 1 1 1 2 2 Technical 1 Others 2 1 2 1

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MOST POPULAR PLANS ACROSS VARIOUS OCCUPATION:The following tables show the top- 3 or top- 2 plans across different occupations, based on the percentage of respondents of corresponding occupation availing the postpaid plan.

1) BANKING:-

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PLAN-1 PLAN-2 PLAN-3

BSNL-325 BSNL-525 BSNL ONE IND

26% 21% 19%

2) SALES & MARKETING:PLAN-1 PLAN-2 PLAN-3 RIM-NJ-249 RIM-STD-375 AIRTEL-299 44% 26% 11%

3) BUSINESS:PLAN-1 PLAN-2 AIRTEL-600FV BSNL-725 42% 29%

4) HEALTH:PLAN-1 PLAN-2 PLAN-3 BSNL-325 BSNL ONE INDIA AIRTEL-299 40% 16% 12%

5) EDUCATION:PLAN-1 PLAN-2 BSNL-325 AIRTEL ONE INDIA 54% 18%

USAGE PATTERNS USAGE PATTERN OF THE RESPONDENTS AVAILING BSNL-325 PLAN:Least Important 0% 0% 15% Not much important 50% 0% 35% Moderately important 41% 0% 48% Very important 7% 15% 2% Extremely important 2% 85% 0%

No of STD calls No of local calls No of SMS

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90% 80% 70% 60% 50% 40% 30% 20% 10% 0% No of STD calls No of local calls No of SMS Least important Not much important Moderately important Very important Extremely important

USAGE PATTERN OF THE RESPONDENTS AVAILING BSNL ONE INDIA PLAN:Least Important 0% 0% 11% Not much important 0% 0% 25% Moderately important 4% 0% 54% Very important 28% 0% 10% Extremely important 68% 100% 0%

No of STD calls No of local calls No of SMS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important Not much important Moderately important Very important Extremely important No of STD calls No of local calls No of SMS

USAGE PATERN OF THE RESPONDENTS AVAILING BSNL-525 PLAN:Least Important 0% 0% 12% Not much important 12% 0% 36% Moderately important 56% 0% 52% Very important 16% 4% 0% Extremely important 16% 96% 0%

No of STD calls No of local calls No of SMS

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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important Not much important Moderately important Very important Extremely important No of STD calls No of local calls No of SMS

USAGE PATTERN OF THE RESPONDENTS AVAILING BSNL-725 PLAN:Least Important 0% 0% 14% Not much important 5% 0% 33% Moderately important 28% 0% 33% Very important 24% 0% 20% Extremely important 43% 100% 0%

No of STD calls No of local calls No of SMS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important Not much important Moderately important Very important Extremely important No of STD calls No of local calls No of SMS

USAGE PATTERN OF THE RESPONDENTS AVAILING AIRTEL-299 PLAN:Least Important 0% 0% 6% Not much important 13% 0% 31% Moderately important 50% 0% 44% Very important 31% 25% 19% Extremely important 6% 75% 0%

No of STD calls No of local calls No of SMS

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80% 70% 60% 50% 40% 30% 20% 10% 0% No of STD calls No of local calls No of SMS Least important Not much important Moderately important Very important Extremely important

USAGE PATTERN OF THE RESPONDENTS AVAILING AIRTEL-600FV PLAN:Least Important 0% 0% 13% Not much important 0% 0% 20% Moderately important 33% 0% 60% Very important 14% 0% 7% Extremely important 53% 100% 0%

No of STD calls No of local calls No of SMS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important Not much important Moderately important Very important Extremely important No of STD calls No of local calls No of SMS

USAGE PATTERN OF THE RESPONDENTS AVAILING AIRTEL INDIA HOME -299 :Least Important 0% 0% 18% Not much important 0% 0% 9% Moderately important 0% 10% 18% Very important 45% 0% 45% Extremely important 55% 90% 10%

No of STD calls No of local calls No of SMS

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90% 80% 70% 60% 50% 40% 30% 20% 10% 0% No of STD calls No of local calls No of SMS Least important Not much important Moderately important Very important Extremely important

USAGE PATTERN OF THE RESPONDENTS AVAILING SMART-JOY-249 PLAN:Least Important 0% 0% 20% Not much important 20% 0% 60% Moderately important 20% 0% 20% Very important 60% 60% 0% Extremely important 0% 40% 0%

No of STD calls No of local calls No of SMS

60% 50% 40% 30% 20% 10% 0% No of STD calls No of local calls No of SMS Least important Not much important Moderately important Very important Extremely important

USAGE PATTERN OF THE RESPONDENTS AVAILING SMART-JOY-149 PLAN:Least Important 0% 0% 0% Not much important 0% 0% 50% Moderately important 25% 12.5% 50% Very important 37.5% 0% 0% Extremely important 37.5% 87.5% 0%

No of STD calls No of local calls No of SMS

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90% 80% 70% 60% 50% 40% 30% 20% 10% 0% No of ST calls D No of local calls No of SMS Least important Not much important Moderately important Very important Extremely important

USAGE PATTERN OF THE RESPONDENTS AVAILING SMART-450 PLAN:Least Important 0% 0% 0% Not much important 0% 0% 40% Moderately important 100% 0% 60% Very important 0% 0% 0% Extremely important 0% 100% 0%

No of STD calls No of local calls No of SMS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important N m ot uch im portant M oderately im portant Very im portant Extrem ely im portant

N of o ST calls D

N of o local calls

N of o SM S

USAGE PATTERN OF THE RESPONDENTS AVAILING RIM-NJ-249 PLAN:Least Important 0% 0% 16% Not much important 58% 0% 16% Moderately important 25% 0% 58% Very important 17% 0% 10% Extremely important 0% 100% 0%

No of STD calls No of local calls No of SMS

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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important N m ot uch im portant M oderately im portant Very im portant Extrem ely im portant

N of o ST calls D

N of o local calls

N of o SM S

USAGE PATTERN OF THE RESPONDENTS AVAILING RIM-STD-375 PLAN:Least Important 0% 0% 0% Not much important 0% 0% 0% Moderately important 0% 0% 12% Very important 25% 0% 88% Extremely important 75% 100% 0%

No of STD calls No of local calls No of SMS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important N m ot uch im portant M oderately im portant Very im portant Extrem ely im portant

N of o ST calls D

N of o local calls

N of o SM S

INFERENCES DRAWN FROM THE USAGE PATTERNS OF THE DIFFERENT PLANS

The usage pattern includes the basic services availed by the respondents ( I ) Importance of the No of local calls made by the respondents ( ii ) Importance of the No of STD calls made by the respondents

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(iii ) Importance of the No of SMS made by the respondents The usage patterns for different plans described earlier, show that ( i) In all the plans the importance of the No. of local calls is on the higher side ie very important to extremely important. ( ii) The importance for the No. of STD calls varies across the plans greatly from Not much important to extremely important. ( iii) In all the plans the importance of No. of SMS is on the lower side ie least important to moderately important.

CATEGORIZATION OF THE PLANS

The table given below shows the categorization of the above 12 plans on the basis of the amount of the monthly rental. The plans are divided into three categories such as 1- Low rental 2- Medium rental 3- high rental LOW RENTAL 1- BSNL one India (299) 2- Airtel India home-299 3- Airtel 299 4- Smart joy 249 5- RIM-NJ-249 MEDIUM RENTAL 1- BSNL plan-325 2- RIM-STD-375 3- Smart- plan 450 4- BSNL plan-525 HIGH RENTAL 1- Airtel- 600FV 2- BSNL plan- 725

The key features and the weaknesses of these plans are described below

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LOW RENTAL PLANS

BSNL ONE INDIA PLAN :( i ) Key features ( USP ) : - All the STD call @ 1/- per minute - Lower charges on both local & national SMS ( ii ) Weakness : - No weakness was found in this plan as it specifically fits to the usage pattern of high no of STD calls.

AIRTEL INDIA HOME 299 :( i ) Key features ( USP ) : ( ii ) Weakness : - All calls @ 1/- per minute - Higher charges on local calls - Higher charges on local SMS

AIRTEL- 299 :( i ) Key features ( USP ) : - Free usage of 100/- for local calls - Lower charges (0.3) on local calls to the mobile on Same network

RIM - NJ 249 :( i ) Key features ( USP ) : - Free usage of 249/- for the local calls - Free usage of 75/- of local SMS - Cheaper local call charges ( ii ) Weakness : - Higher charges on STD calls - Higher charges on national SMS - CDMA handsets ( though it has very low local call charges, many people dont prefer the CDMA service ) SMART JOY- 249:( i ) Key features ( USP ) : - Low charges (0.19) on the local calls to the mobiles on the same network - All STD calls are @ 1/- per minute

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MEDIUM RENTAL PLANS

BSNL- PLAN -325 :( i ) Key features ( USP ) : - Free usage of 125/- for the local calls - Lowest pulse rate of 15 sec ( ii ) Weakness : - Comparatively higher charges on local calls - Most of the users dont understand the concept of pulse rate as a result the benefits of low pulse rate is not perceived by the users.

RIM MY STD 375 :( i ) Key features ( USP ) : - Free usage of 375/- for both local & STD calls - Lower charges on local calls ( ii ) Weaknesses : - Comparatively higher charges on STD calls in comparison to the one-India plans of BSNL & Airtel, which are meant for heavy STD callers. - Higher charges on local SMS - Very high charges on national SMS

BSNL PLAN 525 :( i ) Key features ( USP ) : - Free usage of 300/- for the local calls - Lowest pulse rate @ 15sec - All STD call charges @ 1/- per minute ( ii ) Weakness : - Higher monthly rental

SMART PLAN 450 :( i ) Key features ( USP ) : ( ii ) Weakness : - Free local calls to the mobile phones on the same network - Higher local call charges to the fixed lines - Higher monthly rental in comparison to other two plans

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HIGH RENTAL PLANS

BSNL PLAN 725 :( i ) Key features ( USP ) : - Free local calls on the same network - Free local SMS on the same network - Very low STD call charges on the same network - Lower charges on national SMS ( ii ) Weakness : - Very high monthly rental

AIRTEL 600 FV :( i ) Key features ( USP ) : - Free usage of 600/- for local calls - Cheaper local call tariffs to the mobile on same network - Lower charges on local SMS ( ii ) Weakness : - High charges(1/-) on the local calls to the fixed lines - Higher charges on national SMS(1/-) in comparison to BSNL-725

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IMPORTANCE OF DIFFERENT PARAMETERS FOR CHOOSING POSTPAID CONNECTION

PARAMETERS :( i ) Tariffs ( ii ) No of STD calls you make ( iii ) No of local calls you make ( iv) No of SMS you make ( v ) Usage of VAS ( vi ) Roaming charges ( vii ) Network coverage & connectivity ( viii ) Customer service ( ix ) Easy availability of the connection ( x ) Ease of bill deposit

The following table shows the percentage of the respondents giving weight age for the above parameters. Least Not much important 0% 18.5% 0% 29.5% 39.5% 23% 0% 1% 0% 0% Moderate important 0% 32% 1% 45.5% 49.5% 34% 0% 19.5% 19% 10% Very important 6.5% 21% 7.5% 12.5% 3.5% 27.5% 10.5% 41% 51% 67.5% Extremely important 93.5% 28.5% 91.5% 0.5% 0% 10.5% 89.5% 38.5% 29.5% 22.5%

PARAMETERS Tariffs No of STD calls No of local calls No of SMS Usage of VAS Roaming Network coverage Customer service Easy availability connection Ease of bill deposit

important 0% 0% 0% 12% 7.5% 5% 0% 0% 0.5% 0%

The above table is represented in the next two Bar- graphs

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The first graph shows the weight-age for the first 5 parameters mentioned above

weightage

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least important Not much imp moderately imp very important extremely imp Tariff STD calls Local calls SMS VAS

parameters

The second graph shows the weight-age for the next 5 parameters mentioned above

90% 80% 70% 60% 50% w eightage 40% 30% 20% 10% 0%

Least important Not much imp moderately imp very important extremely imp Roaming charges Network Customer Easy Easy bill service Availability deposit pa ram eters

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IMPORTANCE OF VARIOUS OFFERS PROVIDED BY THE OPERATORS PARAMETERS:( i ) Less security deposit ( ii ) Less tariffs ( iii ) Free calls ( iv ) Less charges on VAS ( v ) SMS packs

The following table shows the percentage of the respondents giving weightage to the above mentioned parameters. Least valuable 2.5% 0% 0% 9% 9% Not much valuable 21.5% 0% 1% 32.5% 32.5% Moderately valuable 35% 0% 2.5% 56% 56% Very valuable 38.5% 7.5% 32% 2% 2% Extremely valuable 2.5% 92.5% 64.5% 0.5% 0.5%

PARAMETERS Less security deposit Less tariffs Free calls Less charges on VAS SMS packs

The graph below represents the above table

100.00% 90.00% 80.00% 70.00% 60.00% w e ighta ge 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Least valuable Not much valuable Moderately valuable Very valuable Less Less tariff ree calls F Less VAS SMS security charges packs deposit Offe rs Ex tremely valuable

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IMPORTANCE OF THE PARAMETERS FOR SWITCHING TO A NEW OPERATOR PARAMETERS:( i ) Better tariffs ( ii ) Better network ( iv ) Better VAS ( v ) More entertainment facility

( iii ) Better customer service ( vi ) National presence The following table shows the percentage of the respondents giving weightage to the above mentioned parameters. Least important 0% 0% 0% 20.5% 12% 0.5% Not much important 1.5% 1.5% 3% 57.5% 39% 20% Moderately important 3% 2.5% 20.5% 21% 45.5% 26.5% Very important 17% 12% 31% 1% 3.5% 37.5% Extremely important 78.5% 84% 45.5% 0% 0% 15.5%

PARAMETERS Better tariffs Better network Better service More entertainment facility Better VAS National presence

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

The following graph represents the above table

le as t im po rt an t no t m u c h im po rt an t m o d e rat e ly im po rt a n t ve ry im p orta nt ex trem e ly im p orta n t

b e tte r ta riffs tte r ne tw o rkbe tte r E n te rta in m ene tt e r V A S n a tio n a l be bt c u s t om e r fa c ility p re s e n c e s e rvic e

The above graph shows that better network and better tariffs are the most important parameters, the customers look in an operator to switch. These are followed by better customer service, then national presence. The lowest importance is given to better VAS and more entertainment facility.

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35

OBSERVATION OF FOOTFALLS TO SALES RATIO IN TELECOM RETAIL OUTLETS : PARAMETERS : ( i ) No of footfalls/hr on peak hours ( 6:00pm to 9:00pm ) ( ii ) No of footfalls/hr on off-peak hours ( 12:00noon to 3:00pm ) ( iii ) No of people making a purchase on peak hours ( 6:00pm to 9:00pm ) ( iv ) No of people making a purchase on off-peak hours( 12:00noon to 4:00pm ) The purchase includes any of the following items ( i ) Handset ( ii ) Accessory ( iii ) GSK & RCV ( iv ) Postpaid connection & sim replacement ( ARC, Reliance Webworld ) PEAK HOUR NO OF NO OF NAME OF THE OUTLET a) CHAIN STORES : The Mobile store, CTC The Mobile store, BBSR M- Bazaar, CTC M- Bazaar, BBSR b) INDIVIDUAL MBO : Electronics World, CTC Life Style, BBSR c) FRANCHISE OUTLETS ARC, CTC ARC, BBSR Reliance Web-world, BBSR Reliance Web-world, BBSR FOOTFALLS PER HOUR 12 10 20 22 15 12 10 8 10 6 PURCHASES PER HOUR 5 4 7 8 5 5 6 5 5 3 42% 40% 35% 36% 33% 42% 60% 62% 50% 50% OFF-PEAK HOUR NO OF NO OF FOOTFALLS PER HOUR 8 7 12 15 8 6 8 5 9 7 PURCHASES PER HOUR 4 3 4 6 3 3 5 3 5 4 50% 43% 33% 40% 37% 50% 62% 60% 55% 57%

RATIO

RATIO

The above table shows that, in the franchise outlets of the telecom operators such as ARC & Reliance Web-world, the foot falls are less, but the sales conversion percentage is higher. The reason for this is that the most of the customers come to these outlets with pre-decided mindset to buy a specific product such as a new postpaid or a prepaid connection, some persons come for the SIM replacement process and some come for the easy recharge. In case of the SIM replacement and Easy recharge the sales conversion is 100%. In case of M-Bazaar the footfalls are highest, but the sales conversion percentage is very low. The reason for this is, as this store is located in a shopping mall, the

36

people coming to the mall for shopping just visit the store to see the available products and also for gathering information about some products.

In case of other MBOs ( Multi Brand Outlet ) The Mobile store has higher sales conversion percentage. Because people coming over here feel that The Mobile store is a bigger brand so the quality and reliability of the products will be higher than any general outlet. So people prefer buying products of higher price ranges in The Mobile Store.

OBSERVATION OF FOOTFALLS TO SALES CONVERSION RATIO IN EXCLUSIVE TRADITIONLA RETAIL OUTLETS : The exclusive traditional retail outlets includes ( i ) Gold shops like Tanishq ( ii ) Watch Shop like The Titan World ( iii ) Apparel shop like Adidas PEAK HOURS NO OF NO OF FOOTFALLS 10 12 12 14 8 9 PURCHASES 7 9 8 10 3 4 OFF-PEAK HOURS NO OF NO OF FOOTFALLS 6 9 9 10 6 6 PURCHASE 4 6 5 7 3 2

NAME OF THE OUTLET The TITAN World, CTC The TITAN World, BBSR Tanishq, CTC Tanishq, BBSR Adidas, CTC Adidas, BBSR

RATIO 70% 75% 66% 71% 37% 44%

RATIO 66% 66% 55% 70% 50% 33%

The sales conversion percentage in the gold shop like Tanishq is higher because when people were asked in the shop it was found that they are brand loyal of the shop. Those people who didnt make purchase found the price to be higher.

The sales conversion percentage in The TITAN World is higher because people find it to be the only branded watch show room in the city with better service.

The lower sales conversion percentage in the apparel shop like Adidas is due to the higher price range of the products.

37

The above two tables show that the sales conversion percentage is higher in the shops with greater brand image. The reason is that people associate the brand image of the shop with the quality, originality, reliability of the products and they also expect better customer service in these shops.

The mall associated shops have higher footfalls but lesser sales conversion percentage as people coming for other shopping just visit the store either to look at the products or to have information about some products.

OBSERVATION OF THE CUSTOMERS BEHAVIOR IN THE TELECOM RETAIL OUTLETS : PARAMETERS: ( i ) The Requests made by the customers ( ii ) The Enquiries made by the customers ( iii ) The Complains made by the customers

38

MBO REQUESTS 1- Product demonstration 2- Price negotiation 3- Request for free accessories 4- RCV & Easy recharge

ARC 1- To explain the postpaid plans 2- To do the activation as soon as possible 3- To get a good number of choice 4- Deactivation of VAS 5- Easy recharge 6- SIM replacement 7- To collect documents from home 1- Suitability of postpaid plans according to the usage pattern 2- Tariffs of the postpaid plans 3- Time needed for the SIM activation 4- Documentation for new connection 5- The bill amount 6- Special offers by the telecom operator

RELIANCE WEB WORLD 1- Product demonstration 2- VAS deactivation 3- Quick activation

ENQUIRIES

1- Price of the products 2- Product features 3- Product demerits 4- Extent of availability of repair services 5- About the products to be launched to the market 6- Comparison between Different products 7- Tariffs of new connection 8- Offers provided by the telecom operators 9- Warranty / guaranty of the products 1- Technical problems in the hand sets 2- Problems in the accessories 3- Delay in SIM activation 4- Delay in easy recharge 5- Price to be higher in comparison to other shops

1- Price of the hand sets 2- Functions of the handsets 3- Reliability of the hand sets 4- Tariff plans 5- Membership fee for broadband surfing & games 6- Special offers/schemes

COMPLAINS

1- Fault in postpaid bill 2- Bill not received 3- SIM blocks 4- Problems in GPRS 5- Wrong hello-tunes got activated 6- Installation problem of PCO

1- Technical problems in the handsets 2- Problem in connectivity of Data cards & USB 3- Fault in bill 4- Different call charges as compared to the tariff plan 5- Higher charges for internet & games

IMPORTANCE OF THE FEATURES, PEOPLE LOOK FOR LOW RANGE HANDSETS FEATURES :
( i ) Colour display ( ii ) Battery talk-time ( iii ) Battery standby time ( iv ) Polyphonic ring tones ( v ) MP3 ( vi ) FM Radio ( vii ) Inbuilt loudspeaker ( viii ) GPRS compatibility

39

The following table shows the weightage given by the respondents for the above parameters. FEATURES Colour display Battery talk-time Battery standby time Polyphonic ring tones MP3 FM-radio Inbuilt Loud speaker GPRS compatibility LEAST IMPORTANT AVERAGE IMPORTANT 20% 47% 5% 2% 44% 15% MOST IMPORTANT 80% 100% 100% 17% 95% 98% 33%

36% 23% 85%

Now a days the HBO ( Handset Bundle Offer ) are on high demand. These HBOs
are usually coming with the low range hand sets below Rs 5,000/- . For example Airtel has the HBO with NOKIA-1200 @ Rs 1300/-, NOKIA-1208 @ Rs 1600/-, NOKIA1650 @ Rs 2000/-, NOKIA-2626 @ Rs 2200/-, NOKIA-2600 @ Rs 3200/- . These handsets constitute around 30% to 40% of the total sales in a MBO ( Multi Brand Outlet ).

Vodafone will also come with its HBOs called Vodafone magic box ( black & white @ 1199/- and colour @ 1599/- ). The magic box has the above features shown in the table and it also gives some added benefits such as free talk-time of 50/- , local calling bonus card worth Rs 55/- , night calling bonus card worth RS 22/- , free caller tune worth Rs 45/- and free Vodafone alerts worth Rs 30/- .

The basic and the added features will have good market share in the HBO segment.

40

INTENTIONS OF PEOPLE VISITING TO A TELECOM RETAIL OUTLET

PARAMETERS: ( i ) Window shopping ( ii ) Information gathering about the products ( iii ) Checking of new arrivals ( iv ) Comparing different shops ( v ) Serious buying intention The following table shows the weightage given by the respondents to the above parameters. LEAST PARAMETERS Window shopping Information gathering Checking new arrivals Comparing the shops Serious buying intention LIKELY 20% 2% 5% 70% LIKELY 30% 50% 54% 25% 15% MOST LIKELY 50% 50% 44% 70% 15%

The above table is represented in the following graph.

70% 60% 50% w e ightage 40% 30% 20% 10% 0% widow infor check compare serious shopping mation new shops buying gathering arrivals intention intentions least likely likely most likely

41

Window shopping happens more in the MBOs ( Multi Branded Outlets ) as compared to the franchise outlets of the telecom operators.

In the MBOs people come for gathering information about the hand sets , accessories, GSK etc such as price, features, reliability of the products. In the telecom operators franchise outlets people come to gather information about the new postpaid connection, the services available etc.

People come to the MBOs to compare the prices and the discounts or additional benefits along with the hand sets across various shops before buying. Most of the people come to the franchise outlets of the telecom operators with serious buying intention as they have pre-decided to use the products and services of that telecom operator.

42

IMPORTANCE OF THE PARAMETERS FOR THE CUSTOMERS BEFORE BUYING IN A TELECOM RETAIL OUTLET
PARAMETERS: ( i ) Brand image of the shop ( ii ) Good location of the shop ( iii ) Distance traveled to the shop ( iv ) Availability of products of different price ranges ( v ) Availability of products of multiple brands ( vi ) Customer handling ( vii ) Post-sales customer service ( viii ) Look of the shop ( ix ) Assortment style ( x ) Special offers / schemes provided by the shop The following table shows the weight-age given by the respondents to the above parameters. PARAMETERS Brand image of the shop Good location of the shop Distance traveled to the shop Availability of products of different Price ranges Availability of product of multiple brands Customer handling Post-sales customer service Look of the shop Assortment style Special offers provided by the shop LEAST IMPORTANT 16% 20% AVERAGE IMPORTANT 8% 6% 56% 2% 30% 2% 26% 22% 32% MOST IMPORTANT 92% 94% 28% 98% 50% 100% 98% 74% 78% 68%

The above table is represented in the following two graphs

GRAPH-1 shows the importance of the first five parameters

43

1 0.9 0.8 0.7 0.6 weight-age 0.5 0.4 0.3 0.2 0.1 0

92%

94%

98%

56% 28% 8% brand image 16% 6% 2% good distance price location travelled ranges parameters

50% least important 30% 20% average important most important

multiple brand

GRAPH-2 shows the importance of the next five parameters in the table

1 0 .8 0 .6 w e ig h ta g e 0 .4 0 .2 0

100%

98% 74% 78% 68% le a s t im p o rta n t a ve ra g e im p o rta n t m o s t im p o rta n t

26% 2%

22%

32%

c u s to m e c u s to m e lo o k o f thaes s o rtm e nst p e c ia l r r h a n d lin g s e rvic e s h o p s tyle o ffe rs p a r a m e te r s

IMPORTANCE OF THE PARAMETERS FOR THE RETAILER TO PROMOTE THE PRODUCTS OF THE TELECOM OPERATORS
PARAMETERS:

44

( i ) Brand image of the operator ( ii ) Customer demand for the operators products ( iii ) Profit margin for the retailer ( iv ) Effective distribution channel of the operator ( v ) Regular offers for the customers ( vi ) Special trade offers for the retailer ( vii ) Relationship with the sales people of the operator The following table and the graph representing it show the weight-age given to the above parameters by the respondents. PARAMETERS Brand image of the operator Customer demand for the operators products Profit margin for the retailer Effective distribution channel of the operator Regular offers for the customers Special trade offers for the retailer Relationship with the operators sales people LEAST IMPORTANT 32% AVERAGE IMPORTANT 36% 16% 12% 30% 72% 42% 20% MOST IMPORTANT 32% 84% 88% 70% 8% 58% 80%

20%

9 0% 8 0% 7 0% 6 0% 5 0% w e ig h ta g e 4 0% 3 0% 2 0% 1 0% 0%

le a s t im po rtnt a ve ra g e im p ort a n t m o s t im po rta nt

b ra nd c u s to m er p ro fit d is trib u tioo ffe rs fotrad e o ffe rse la tio n n r r im ag e d e m a n d m arg in c ha n n elc u s t o m e rs w ith s a le s pe o ple p a ra m e te rs

COMPETITORS SWOT ANALYSIS SWOT AIRTEL

STRENGTHS - Strong network coverage - Immediate complain resolution - Easiest bill payment system WEAKNESSES - Higher charges on local calls - Large no of promotional SMS - Higher pulse rate( 60sec in all the plans )

45

- Very economical plan for the STD callers - Quickest activation - HBO with NOKIA - Frequent visits of the sales people to retailers - Very good relation ship of the sales people with the retailers - Quick CAF collection from the retailers - Constant distributors - Free demo sim to the dealers with 300/- free Talk-time and 2yrs validity OPPORTUNITIES - Untapped rural areas - Low tele- density of Orissa - To grab the low profile customers with low cost HBO - Large student / youth mass - High brand recalls by the people - Satisfaction of the retailers - Growing industries in Orissa

- Problem in easy recharge - Many of the ARC dont deal with HBO - Lack of promotional campaigns for ARC

THREATS - Entry of Vodafone in to the market - Recent increased promotional activity of BSNL such as 4.5% commission to the retailers on RCV

SWOT BSNL
STRENGTHS - Broad network spread - Cheaper tariffs for STD calls & to fixed lines WEAKNESSES - Longer documentation & activation process - Poor customer service

46

- No frequent changes in the tariff plans - No hidden parameters in the tariffs - Lesser pulse rate in some plans ( plan-325 & plan-525) - Plan-725 is one of the best plans for the heavy users such as business community - Accurate billing - High margin ( 4.5% ) on RCV to retailers - High return on sim activation - Free sim to the distributors OPPORTUNITIES - Very high brand recall by the people - High demand amongst the GOVT employees - Untapped rural areas - large youth mass - High brand reliability amongst subscribers - Large student / youth mass - Growing industries - Entry into the CDMA segment

- Very low frequency of offers for customers - Evening network congestion - Bill deposit only in the telecom office - Poor supply of products - Lack of aggressive marketing strategy - Lack of definite focus on youth mass

THREATS - Aggressive marketing strategy of other operators - Customer dissatisfaction with the complain resolution - Entry of Vodafone - Low demand among youth

SWOT SMART

47

STRENGTHS - Cheaper tariffs - Frequent offers for the customers - High margin for the retailers on life-time sim

WEAKNESSES - Poor network coverage - High evening congestion - Delayed response to complains - Poor billing accuracy - Poor activation process - Very frequent changes in the tariffs - Very less visits of the sales people to the dealers - Poor CAF collection - Frequent changes in the distributors - Lack of promotion for postpaid

OPPORTUNITIES - Higher demand among youth or the student mass - Regain the faith of the retailers by providing higher margin on life-time GSK - Untapped rural market

THREATS - Very high dissatisfaction amongst subscribers regarding network problem - Some customer segments think the operator cheating the people - High level of dissatisfaction amongst the retailers due to frequent policy changes - Entry of Vodafone

SWOT RIM
STRENGTHS WEAKNESSES

48

- Lowest investment to use mobile phone - Cheaper tariffs - Frequent offers for the customers

- Delayed response to complains - Very frequent changes in the tariffs - Poor billing accuracy - The handsets dont have sophisticated look - Poor performance of the classic handsets - Frequent changes in distributors - Poor activation - Poor CAF collection - Less visit of the sales people to the retailer

OPPORTUNITIES - Growing demand for the HBOs - The rural market with the potential for low range handsets - Large youth / student mass - Growing industries

THREATS - HBO introduction in the GSM segment - Growing demand for the new low cost GSM handsets like Olympia, Fly etc. - Declining faith of the customers - Dissatisfaction amongst the retailers - No preference of the retailers to sell the products - Entry of Vodafone magic box - Entry of BSNL into the CDMA segment

SWOT TTSL

49

STRENGTHS - Very low investment to avail mobile services.

WEAKNESSES - 8- 9 sec advanced metering - Poor performance of the handsets - Poor network coverage - Frequent changes in the distributors - Poor product supply - No visit of the sales people to the retailers - No definite policy for retailers

OPPORTUNITIES - Growing demand for the HBOs - The rural market with the potential for low range handsets - Large youth / student mass - Growing industries

THREATS - Declining faith of the customers - HBO introduction in the GSM segment - Growing demand for the new low cost GSM handsets like Olympia, Fly etc - No preference of the retailers to sell the products - Entry of Vodafone magic box - Entry of BSNL into the CDMA segment

50

EXISTING MODEL OF TELECOM CUSTOMER TOUCH POINT

PCO

1- Purchase of products 2- Remuneration of staffs 1- Franchise 3- House rent 2- Branding 4- Electricity 351 Promotional support 5- Telephone bill 4- Training support & staffs Store maintenance HBO & 6- CUSTOMER CUSTOMER Product supply PREPAID POSTPAID5ACCESSORIES SERVICE 7- Miscellaneous CUSTOMERS TOUCH POINT Store maintenance EXPENDITURES 6REVENUE COMPANY

MONTHLY FIGURES OF ARC, BAJRAKABATI CUTTACK

Approx commission from postpaid bill deposit = Approx commission from new postpaid connection = 80,000/37,500/-

52

Approx commission on customer retention = Approx profit from new PCO connection= Approx profit from SIM replacement= Approx profit from new prepaid connection= Approx profit from prepaid easy-recharge= Approx profit from PCO easy-recharge= TOTAL GROSS PROFIT ( - ) OTHER EXPENDITURES Remuneration of staffs ( 22 nos ) House rent Electricity Telephone bill Miscellaneous TOTAL = = = = = = =

30,000/1,17,000/50,000/1,800/12,000/6,000/3,34,300/-

1,00,000/10,000/5,000/5,000/10,000/1,30,000/2,04,300/22.38%

APPROX NET PROFIT ( MONTHLY ) = APPROX ROI ( MONTHLY ) =

BUSINESS MODEL OF MBO (MULTI BRAND OUTLET)

HANDSETS DISTRIBUTORS

53

ACCESSORIES DISTRIBUTORS 1- Hand sets 2- Show case 3- Staffs 4- Promotional offers

Accessories

OPERATORS DISTRIBUTORS

TELECOM OPRATORS

1- Display boards 2- Promotional offers MBO

1- GSK & RCV 2- CAF collection

PREPAID

RCVS

HANDSETS

ACCESSORY

DOWNLOADS

EXPENDITURES 1- Product purchase 2- Remuneration of staffs 3- House rent ( optional ) 4- Electricity 5- Telephone bill 6- Store maintenance 7- Miscellaneous

CUSTOMERS

MONTHLY FIGURES OF THE ELECTRONICS WORLD, CUTTACK

54

REVENUES:Approx profit from handsets Approx profit from accessories Approx profit from RCVs Approx profit from activations Approx profit from down-loadings APPOX TOTAL GROSS PROFIT ( - ) OTHER EXPENDITURES:House rent Electricity Telephone bill Remuneration of staff ( 1nos ) Store maintenance Miscellaneous TOTAL = = = = = = = 7,000/3,000/3,000/2,000/10,000/5,000/30,000/= = = = = = 36,000/24,000/10,000/14,000/5,000/89,000/-

APPROX TOTAL NET PROFIT APPROX ROI ( MONTHLY )

= =

59,000/24.08%

MONTHLY FIGURES OF SMART AGENCY, BBSR

55

REVENUES:Approx profit from handsets Approx profit from accessories Approx profit from RCVs Approx profit from activations APPROX TOTAL GROSS PROFIT ( - ) OTHER EXPENDITURES:House rent Staffs (1) Electricity Telephone bill Store maintenance Miscellaneous TOTAL APPROX MONTHLY NET PROFIT APPROX MONTHLY ROI = = = = = = = = = 6,000/2,000/2,500/2,500/5,000/2,000/20,000/35,500/22.46% = = = = = 20,000/18,000/7,500/10,000/55,500/-

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BUSINESS MODEL OF THE TITAN WORLD

COMPANY PRODUCTS 1- Franchise 2- Brand name 3- Promotional support 4- Store design guidelines 5- Special trade offers 6- Product pricing

C & F AGENCY REVENUE PRODUCTS

TITAN WORLD

REPAIR SERVICES

SUN GLASSES

WATCHES

ACCESSORIES

AFTER SALES SERVICE

EXPENDITURES

CUSTOMERS

1- Products purchase 2- Repair machineries 3- Staffs remuneration 4- Store maintenance 5- House rent 6- Electricity 7- Telephone bill 8- Miscellaneous

MONTHLY FIGURES OF THE TITAN WORLD,CUTTACK

57

REVENUES:Approx total sales Approx purchase in a lot Approx profit (20%) on a lot Approx gross profit in 5 lots APPROX TOTAL GROSS PROFIT ( - ) OTHER EXPENDITURES Remuneration of staffs House rent Store maintenance Electricity Telephone bill Miscellaneous TOTAL = = = = = = = 50,000/30,000/30,000/25,000/10,000/15,000/1,40,000/= = = = = 17,00,000/3,00,000/60,000/3,00,000/3,00,000/-

APPROX TOTAL NET PROFIT (MONTHLY) = APPROX MONTHLY ROI =

1,60,000/36.36%

BUSINESS MODEL OF TANISHQ 58

COMPANY

PRODUCTS 1- Franchise 2- Brand name 3- Promotional support 4- Store design guidelines 5- Special trade offers 6- Product pricing REVENUE PRODUCTS TANISHQ

C & F AGENCY

DIAMOND JEWELLARIES

GOLD JEWELLARIES

CUSTOMER SERVICE

EXPENDITURES CUSTOMERS

1- Products purchase 2- Staffs remuneration 3- Store maintenance 4- House rent 5- Electricity 6- Telephone bill 7- Miscellaneous

MONTHLY FIGURES OF TANISHQ, BBSR

59

REVENUES:Approx total sales Approx purchase in a lot Approx profit on a lot (10%) Approx profit on 6 lots APPROX TOTAL GROSS PROFIT ( - ) OTHER EXPENDITURES:House rent Remuneration of staffs Electricity Telephone bill Store maintenance & miscellaneous TOTAL = = = = = = = = 2,00,000/70,000/40,000/15,000/2,00,000/5,25,000/24,75,000/44.8% = = = = = 2,50,00,000/50,00,000/5,00,000/30,00,000/30,00,000/-

TOTAL APPROX NET PROFIT (MONTHLY ) APPROX MONTHLY ROI

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CONSUMER STUDY
Among the postpaid consumers the brand recall for BSNL was the highest followed by Airtel and then Reliance as brand-1. As brand-2 the recall for

61

Airtel & Reliance is higher. As brand-3 Reliance has the bigger pie than others.

The usage pattern shows that in all the postpaid plans people give highest importance to the No of local calls they make.

The plans with higher importance on No of STD calls are BSNL one India, Airtel India Home-299, BSNL plan-725, Airtel-600FV, Smart-joy 249 and RIM STD-375.

Before choosing a postpaid connection the customers give highest importance to the Tariffs & Network coverage / connectivity, followed by Ease of bill deposit, Easy availability of connection & Customer service respectively.

Customers rate Reduction in tariffs as the highest valuable offer provided by the telecom operators, followed by Free calls ( free usage min/Rs, night packs ). Other offers like Less security deposit, less charges on VAS & SMS packs are being given lower to moderate importance.

While a customer thinks of switching to a new operator Better network & Better tariffs are the two most important parameters which they look for in the new operator. This is followed by Better customer service & National presence of the operator.

RETAIL STUDY

62

The footfalls in the franchise outlets of the telecom operators such as ARC & Reliance Web-world are low but the conversion to sales percentage is higher in comparison to other MBOs. This is because the customers entering into the ARC or Web-world have pre-decided mindset to take a new postpaid/prepaid connection of the respective operator or a customer may be a subscriber of the operator, coming fro other services such as sim replacement, easy recharge etc.

In the shopping mall aided telecom retail outlets like M-Bazar the footfalls are higher in comparison to others but the sales conversion percentage is lower. This is because people coming for shopping to the mall just visit the store either for window shopping or for gathering some information about the products.

While buying a low range handset (<=3,000/-) people give high importance to the features such as colour display, battery talk-time, battery standby time, MP3, FMRadio.

Before buying in a telecom retail, customers give very high importance to the brand image of the shop, good location of the shop, availability of products of different price ranges, customer handling, post sales customer service.

In order to promote the telecom operators products, the retailers(MBO) give highest importance to the profit margin they get & the customer demand for the operators products / services.

63

ANNEXTURE-1

CONSUMER QUESTIONNAIRE
64

Age: Education: Occupation: Annual income:

Gender:

M/F

1) Which type of cellular service you are using? a) Prepaid b) postpaid 2) Name any three top telecom brands providing cellular services 1233) Which operators service you are using? a) BSNL b) Airtel c) Smart d) Aircel infocomm e) TATA indicom f) Reliance-

4) What features did make you choose the present telecom service over the other operator? a) Tariffs b) Family having the same operator connection c) Friends having the same operator connection d) Individual / personal choice 5) What was the source of information of the postpaid connection? a) Print media ( news paper, magazines ) b) TV c) Radio d) Hoardings e) If others specify. 6) What is your average monthly investment on mobile services? a) <300 b) 300- 450 c) 450-600 d) 600-750 e) 750-1000 f) >1000 7) Rate the following parameters on the 1-5 point scale according to the weightage you give while selecting a post paid connection. 1- least important 2-not much important 3- moderately important 4- very important 5- extremely important 1 2 3 4 5 a) Tariff b) Easy availability of connection c) No of STD calls you make d) No of local calls you make e) No of SMS you make f) Roaming charges g) Network coverage 65

h) Customer service i) Value added services j) Ease of bill deposit k) Your status 8) How do you prefer depositing your telephone bill? a) post office b) Telecom office c) internet d) Telecom customer touch points 9) Rate the operators on the 1-5 point scale on the following parameters on the basis of your knowledge. 1- very dissatisfactory 2- dissatisfactory 3- average 4- satisfactory 5- very satisfactory BSNL Airtel Smart Indicom Aircel RIM a) Brand image b) Reliability c) Tariffs (rate) d) Types of tariff plans e) Network coverage/ connectivity f) Customer service g) Dispute/ Complain resolution h) Easy availability of connection i) Value added services j) Offers(free calls, less security deposit, call rate k) Ease of bill deposit l) Simplicity(of tariff plans, offers) m) No of outlets/ distributors n) Overall satisfaction level 10) Rate the following offers in 1-5 point scale, where 1-lowest 5- highest 1 2 3 4 5 Less security deposit Less tariff Free calls (night pack) Less charges on value added services ( news, downloads etc) Sms packs Service bundled packs ( hand set with the connection ) More validity period

66

More talk time 11) If u choose to switch from your present telecom service provider, rate the following basic and added features (on 1-5 point scale) you would like to have in an operator. 1- least important 2- not much important 3- average 4- very important 5- extremely important 1 2 3 4 5 a- Better tariffs b- Better network c- Better service ( prompt response to complains) d- More entertainment facility e- Better value added services ( internet, receiving e-mail ) e- Personal experience f- National presence 12) Do you like promo sms? a) yes b) no If yes which type of sms do you like? a) Informative b) Occasion specific c) Regarding the available services 13) Whether the store from which you bought the hand set promoted the postpaid connection? a) yes B) No

ANNEXTURE-2 67

TELECOM RETAIL QUESTIONNAIRE 1) What is the average no of customers visiting on a weekday? Kindly tick against the appropriate numbers. Time slots No. of customers visiting to the shop 9 am-12 a) 0-25 b) 25-50 c) 50-75 d) 75-100 12-3 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100 3-6 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100 6-9 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100

2) What is the average no. of customers visiting on a weekend? Kindly tick against the appropriate numbers. Time slots No. of customers visiting to the shop 9 am-12 a) 0-25 b) 25-50 c) 50-75 d) 75-100 12-3 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100 3-6 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100 6-9 pm a) 0-25 b) 25-50 c) 50-75 d) 75-100

3) What is the average no of purchases made on a weekday? a) 0-10 b) 10-20 c) 20-30 d) 30-40 e) 40-50 f) >50 4) What is the average no of purchases made on a weekend? a) 0-10 b) 10-20 c) 20-30 d) 30-40 e) 40-50 f) >50 5) How many people ask for handset bundled offer in a month? a) 0-25 b) 25-50 c) 50-75 d) 75-100 e) >100 6) Rank the best three selling low ranges of handsets. a) 1000-1500 b) 1500-2000 c) 2000-2500 d) 2500-3000 e) 3000-3500 f) 3500-4000 g) 4000-4500 h) 4500-5000 7) Kindly rate the features ( on 1-3 point scale ) those people look for in a handset in the range of 1000-3000. 1- least important 2-average 3- most important 1 2 3 4 5 Colour display Battery talk time Battery Standby time Polyphonic ring tones MP3 FM radio 68

Inbuilt loudspeaker GPRS compatibility 8) While people visiting a shop rate their intentions on the 1-5 point scale where 1- least likely 2- likely 3- most likely 1 2 3 a) They come for window shopping b) They come for gathering information about the products, planning to buy c) They come to check the new arrivals d) They come to compare different shops e) They come with serious buying intention 9) Rate the following factors what customers think important before purchasing in a shop on the 1-3 point scale, where 1- least important 2- Average , 3- most important. 1 2 3 a) Brand image of the shop b) Good location of the shop c) Distance travelled to the shop d) Availability of good quality of products e) Availability of products of different price ranges f) Availability products of multiple brand g) Customer handling ( explaining to the customers) h) Post sales customer service i) Look of the shop ( exterior & interior of the shop ) j) Assortment style ( way of displaying the products) l) Special offers like discount provided by the shop 10) While promoting the products of a telecom operator, rate the following parameters according to your importance on the 1-3 point scale, where 1- least important 2- Average 3- Most important 1 2 3 a) Brand image of the operator b) Customer demand for the operators products c) Profit margin you get d) Commission provided to you e) Effective distribution channel f) Regular offers for customers ( life time, free calls, sms packs etc ) g) Special trade offers for you ( ex: target achievement bonus )

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h) Relationship with the sales people 11) Rate the different operators on the following parameters on 1-5 point scale, where 1- Very dissatisfactory 2- Dissatisfactory 3- Average 4- Satisfactory 5- Very satisfactory BSNL Airtel Smart Indicom Aircel RIM a) Brand image b) Reliability c) Availability of the products ( enough supply ) d) Customer demand for the products e) Profit margin you get f) Commission they provide g) Effective distribution channel ( gap between order & receive ) h) special trade offers for you ( eg- target achievement bonus) i) Relationship with the sales people j) Passing correct information about the products/ services

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