PROJECT REPORT
On
MARKETING STRATEGIES OF VODAFONE
SUBMITTED TO: PROF. SWATI MITTAL
SUBMITTED BY: PULKIT PUNJ 9999962559
PREFACE
The project aims at understanding the Marketing strategies at Vodafone and its impact on the perception of Vodafone Cellular Services. Research has demonstrated conclusively that it is far more costly to win a new customer than it is to maintain an existing one. And there is no better way to retain a customer than to exceed his expectation. The focus of my research was to know the marketing strategies of Vodafone. Finally the results of the research verify the fact that that marke marketi ting ng play playss a majo majorr role role in fetch fetching ing new custo custome mers rs and reta retaini ining ng old old customers as well , but the marketing should be positive and not misleading. This also expands the business to new horizons.
ACKNOWLEDGEMENT
It is well-established fact that behind every achievement lies an unfathomable sea of gratitude to those who have extended their support and without whom the project would never have come into existence. I express my gratitude to AMITY, Noida for providing me an opportunity opportunity to work on this project. Also, I express my gratitude to Prof. Swati mittal for their kind cooperation.
CONTENT
Preface.................................................................................................................ii Acknowledgement...........................................................................................vii
Introduction......................................................................................................1 Company Profile – Vodafone............................................................................1 Service of Vodafone..........................................................................................9 Promotional Strategy.....................................................................................28 Market Situation.............................................................................................29 Competitive Situation.....................................................................................29 Market Segmentation.....................................................................................31 Target Market Segmentation........................................................................31 Positioning.......................................................................................................32 Product Policy and Planning.........................................................................32 Vodafone Marketing Orientation.................................................................35 Marketing Strategy Adopted by Vodafone..................................................36 Distribution.....................................................................................................38
LITERATURE REVIEW .............................................................................41 Telecommunication Market in India................................................................41 Indian Cellular Market.....................................................................................47 GSM Market in India.......................................................................................48 Methodology...................................................................................................55 Objective..........................................................................................................55 Research Methodology.....................................................................................55 Limitation ........................................................................................................55 Finding and Analysis......................................................................................56 SWOT Analysis .............................................................................................76
Conclusion........................................................................................................77 Recommendation............................................................................................79 Bibliography...................................................................................................81
INTRODUCTION
COMPANY PROFILE – VODAFONE
Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16 telecom circles in India. Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros.
Vodafone Essar provides 2G services based on 900Mhz and 1800Mhz digital GSM technology, offering voice and data services in 16 of the country's 23 licence areas Vodafone Essar is owned by Vodafone 52%, Essar Group 33%, and other Indian nationals, 15%.
On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion. [2] . The transaction closed on 8 May 2007.
Previous brands
In December 2006, Hutch Essar re-launched the "Hutch" brand nationwide, consolidating its services under a single identity. The Company entered into agreement with NTT DoCoMo to launch i-mode mobile Internet service in India during 2007.
The company used to be named Hutchison Essar, reflecting the name of its previous owner, Hutchison. However, the brand was marketed as Hutch. After getting the necessary government approvals with regards to the acquisition of a majority by the Vodafone Group, the company was rebranded as Vodafone Essar. The marketing brand was officially changed to Vodafone on 20 September 2007. In Mumbai, it was earlier known by the name Orange, a brand that used to be marketed by its former
owner, Hutchison. Still earlier it was known as Max Touch and AceTel even before that
On September 20, 2007 Hutch becomes Vodafone in one of the biggest brand transition exercises in recent times.
Vodafone Essar is spending somewhere in the region of Rs 250 crores on this highprofile transition being unveiled today. Along with the transition, cheap cell phones have been launched in the Indian market under the Vodafone brand. There are plans to launch co-branded handsets sourced from global vendors as well.
A popular daily quoted a Vodafone Essar director as saying that "the objective is to leverage Vodafone Group's global scale in bringing millions of low-cost handsets from across-the-world into India." While there is no revealing the prices of the lowcost Vodafone handsets, the industry is abuzz that prices might start at Rs 666, undercutting Reliance Communications' much-hyped 'Rang Barse' with cheap handsets beginning at Rs 777.
Meanwhile, Vodafone Essar sources said there would be no discounts or subsidized handset offers -- rather handset-bundled schemes for customers. Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Vodafone handsets in India. Earlier this year, Vodafone penned a global low-cost handset procurement deal with ZTE.
Growth of Hutchison Essar (1992-2005)
In 1992 Hutchison Whampoa and its Indian business partner established a company that in 1994 was awarded a licence to provide mobile telecommunications services in Mumbai (formerly Bombay) and launched commercial service as Hutchison Max in November 1995. Analjit Singh of Max still holds 12% in company.
By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the
acquisition of BPL that number increased to 16. In 2006, it announced the acquisition of a company that held licence applications for the seven remaining licence areas.
In a country growing as fast as India, a strategic and well managed business plan is critical to success. Initially, the company grew its business in the largest wireless markets in India - in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well known brand and large distribution network -all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User ("ARPU") than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide.
In February 2007, Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and interests) of approximately US$11.1 billion or HK$87 billion.
1992: Hutchison Whampoa and Max Group established Hutchison Max
2000: Acquisition of Delhi operations Entered Calcutta and Gujarat markets through ESSAR acquisition
2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai
2003: Acquired AirCel Digilink (ADIL - Essar Subsidiary) which operated in Rajastan, Uttar Pradesh East and Haryana telecom circles and renamed it under Hutch brand
2004: Launched in three additional telecom circles of India namely 'Punjab', 'Uttar Pradesh West' and 'West Bengal'
2005: Acquired BPL, another mobile service provider in India
Hutch was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message Hello stands out visibly though it uses only white letters on red background. Another recent successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, Wherever you go, our network follows. The simple yet powerful advertisement campaigns won it many admirers
Vodafone subscriber base
The Vodafone subscriber base according to COAI - Cellular Operator Association of India as of March 2008 was: Delhi - 3,216,769 Mumbai - 3,451,567 Chennai - 1,174,589 Kolkata - 1,974,177 Maharashtra & Goa - 2,610,389 Gujarat - 6,010,594 Andhra Pradesh - 2,601,458 Karnataka - 2,850,346 Tamil Nadu - 3,180,820 Kerala - 2,001,133 Punjab - 1,645,501 Haryana - 1,282,208 Uttar Pradesh (West) -2,858,429 Uttar Pradesh (East) -3,508,355 Rajasthan - 2,934,598 West Bengal & Andaman and Nicobar - 2,825,310
The total is 44,126,243 or 22.93% of the total 192,355,939 GSM mobile connections in India till March 2008. Vodafone does not operate in Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, Orissa and the North Eastern States
Vodafone Hutch Deal (Including Quote & unquote)
Britain's Vodafone announced on February 11 that it had decided to pay $11.1 billion in cash and assume $2 billion in debt to buy a 67% stake in Hutchison Essar, one of India's largest mobile operators with more than 22 million subscribers. Vodafone's purchase of the controlling interest in Hutchison Essar -- or Hutch, as it is commonly called -- from Hong Kong-based shipping and real estate baron Li Ka-Shing values the company at nearly $19 billion, which is twice as much as the first round of bidders in January thought it was worth.
Four days later, the Aditya Birla group's Idea Cellular -- another large mobile phone services provider with 12.4 million subscribers -- found more than $27 billion in investor money bidding for its stock during the company's initial public offering, which had intended to raise some $480 million. The IPO was oversubscribed by 57 times, according to media reports.
As both transactions show, India's mobile phone market is red hot -- which begs the question whether it is too hot. Are these enormous valuations justified by the market's growth potential? Their view is that while it might appear that these transactions are overvalued, the market has lots of growth potential. As such, a shakeout -- if it occurs -- is unlikely in the near future.
The growth numbers explain most of the market's fervor. India's cell phone user population doubled during the past year to 150 million at the end of 2006. More than 6 million new subscribers are signing up for mobile services each month, making India the world's fastest growing mobile market. Cell phones are not just a way to keep in touch with loved ones in a country that loves to talk, but in a booming economy they also become workstations for millions in India's unorganized sectors. Vodafone's India-born CEO Arun Sarin said in a speech in Barcelona recently that he expects the 150 million subscriber base -- which represents a penetration rate of just 13% -- to grow to 500 million in a few years. Much of this growth is expected to come from more than 600,000 Delhis where millions of Indians live. "We are really excited to move into the rural areas," Sarin said in his speech. "Whenever we get into
these rural areas, we find people love to talk. They light up our base stations immediately." Wharton marketing professor Jagmohan Raju says enterprise valuations at the level of Vodafone's payment for Hutchison Essar might not appear to be justified using conventional analysis tools, but he agrees with Sarin that most of the growth in the future will come from the lower end of the market in rural India. "The way to justify these valuations is not to base them on how many subscribers [the acquiring company plans] to have.” The numbers are justified based on a prediction of higher value-added services, and also some sense of how mobile phones can be used for marketing. Will the mobile handset be a device that will be used to send ads -- perhaps video ads -- to subscribers? Can you add more services and more value at the lower end, with somebody else subsidizing the cost of the phones?" He says these value-added services could go beyond ring tones and text messaging to bringing television and advertising to handsets.
A.T. Kearney's Indian operation, believes that Vodafone's Hutch deal is good for shareholders of both companies as well as consumers. "This is a deal priced to perfection," he says. "It is a good strategic fit all around." this transaction secures Vodafone's position as a major player in the global telecom industry and gives the company a strategic presence in Asia. Like other global telecom firms, Vodafone is looking for growth in Asia because markets like the U.S. -- which has an 80% penetration rate for cell phones -- offer little growth potential.
This deal is also a "huge windfall for the Hutch guys,". "They could not have wished for anything more." He believes that Vodafone will now go about trying to increase its market share from 15% at present to at least 25% in the next few years. In the process, Vodafone will face strong competition from Indian mobile firms such as Reliance Communications. Price wars are likely as the battle heats up, and these will ultimately benefit Indian consumers. "They will get a better global franchise and access to technology and features as India becomes the tech battleground,.
Significantly, Vodafone has signed a deal with India's biggest mobile operator, Bharti Airtel, to share the costs of infrastructure development in rural areas. "In the developed world, you have guaranteed power supply, but [in India] the power supply
to your base station battery is uncertain, and that adds to the cost,". "The fact that Vodafone and Bharti Airtel are going to share base stations in rural areas is a good sign, because it has a multiplier effect." He sees the same underlying fundamentals driving the record subscriptions for Idea Cellular's IPO. "These are highly correlated," he says. "Those are mind-boggling numbers, and further validate the growth story for mobile phone services in India."
Hardly anyone questions Vodafone's optimism about the growth potential of mobile telephony in rural India. In fact, Sarin has expressed a desire to also acquire the 33% stake held by Mumbai's Essar group, and if that doesn't pan out, he is keen on forging a successful partnership with the Ruia family that runs the group. "Given that technological uncertainty, rapid change and disruptive innovation are a way of life in the mobile industry, it is almost certain that companies such as Vodafone are making big ICT (information, communications and technology) investments factor in the intangibles. He the real option value" for Vodafone to gain a presence "in the world's hottest market" cannot be underestimated. "Investors are placing a premium on being there," he says. "ICT investments tend to pay off in new and unexpected ways over time for those who make the initial investments and have the ability to respond in an agile fashion."
According to Boston Consulting Group in New Delhi says that in the M&A world, "like beauty, value lies in the eyes of the acquirer," and the valuation arithmetic plays out differently for each bidder. "That is why it is often difficult to say that there is a premium paid on the discounted cash flows of the acquired entity. The premium is typically based on two things: One is the synergies you can extract and the second is the option value or the strategic value you place on the business." He adds that it is inconceivable for a global player to be locked out of the Indian market. "At the end of the day -- not now, but three years from now as per CEO of the Vodafone
Customer Service
Clearly, Vodafone will face me-too competitors as it attempts to increase revenue and profitability with value-added services in the face of the lower ARPUs (average revenue per user) that industry analysts predict. ARPUs for Indian mobile phone service providers range from $10 to $20 a month, and Hutchison Essar currently occupies the top slot. So where does its competitive edge lie? Britain, Vodafone sets itself apart from the competition with "above-average customer service." He describes Indian customer service levels as "abysmal" and notes that Vodafone could use its strengths in that department to increase ARPUs from higher-end customers and reduce customer churn. "It's about training your work force as you manage growth, and Vodafone has that capability, "Any player capable of doing that in the current Indian scenario will have to attract and retain a fickle and under-trained workforce. If it is executed well, this strategy can lead to significant rents." Vodafone's edge here, he says, could be that its service levels will be "hard to replicate" for Indian mobile service providers as "it may not be part of their DNA."
One of the key issues in valuations is the reliability of revenue recognition, and that will come with more post-paid subscribers than prepaid," he says. "The U.S. market has more post-paid subscribers than prepaid ones." Market estimates put prepaid mobile phone users in India at about 80% of the total. The gains are manifold for providers that are able to win over more post-paid users. "Post-paid services are easier to manage, and have fewer intermediaries," he says. "Right now, companies have to pay huge margins to retailers in India who sell these prepaid cards."
Vodafone will face with its acquisition is ensuring synergies and integration across the two companies. "This is where the rubber meets the road. The high-growth, highvolume and low-margin Indian market is significantly different from the rest of Vodafone's acquisitions. Vodafone will do well to emulate the lean model of [Bharti] Airtel, but it also has the opportunity to segment the consumer base and exercise price and service quality differentiation."
The Vodafone deal is a precursor of more big-ticket transnational deals in the Indian marketplace. "With Indian firms becoming aggressive and attacking the incumbents in their home markets, the leaders in those markets will also try to make big moves. We
have seen that happen in the business process outsourcing industry (such as Citigroup, IBM and GE expanding their Indian presence), and we will see it happening in IT too." Who moves first in these strategic wars before the other guy blinks will be decisive, Bhattacharya adds. "One option is to wait and get attacked. Or they [foreign companies] will look at defending themselves by launching their own attack."
As competition for India's mobile market heats up, a shakeout -- and possibly mergers -- is likely, but A.T. Kearney's believes this will not happen anytime soon. "The market is still in its early stages," he says. "Penetration is still low, and the cell phone has become accessible technology for everyone. It is perhaps the one device that has broken the caste/economic barrier with ease." predicts that eventually India's penetration rates could rise as high as those in the U.S., though it is hard to predict how long that might take. "The market will grow and rural penetration will continue for the next three or four years," he says. Once that market is saturated, "a shakeout is natural, but that will happen a few years out." Until then, though, there should be enough room for India's mobile services operators to grow without stepping on one another's toes.
SERVICES OF VODAFONE
Vodafone Prepaid Cell phone connection
Go mobile with a Vodafone Prepaid cell mobile phone and control how much you spend with the best Prepaid cell phone tariff plan. Buy a special Prepaid mobile handset for your Vodafone Prepaid cellphone connection with our Prepaid mobile handset offers. To keep talking without any talktime or validity hassles make use of our flexible recharging options for your Vodafone Prepaid SIM cards: Prepaid recharge cards, eTopUp and Direct Top-Up. It’s easy to find a Prepaid recharge top up too: we’ve got Prepaid outlets everywhere, so that you can stay connected wherever you are. And that’s not all – you can also subscribe to our unique Prepaid cellphone services and Prepaid mobilephone offers and make the most of your Vodafone Prepaid SIM cards in India.
Prepaid mobile phone tariff plan
Reach out to the world with a Vodafone Prepaid SIM card without worrying about mobile Prepaid recharge minutes and Prepaid phone rates. Select a Prepaid mobile phone tariff plan that works for you. Choose your Prepaid mobile phone tariff plan
Prepaid phone services
Subscribe to Vodafone’s unique Prepaid cellphone services and make the most of your Vodafone mobile phone. For our Prepaid cellular services. Bonus Cards
Charge your Prepaid phone and enjoy slashed Prepaid phone rates with Bonus Cards for your Vodafone Prepaid cellphone tariff plans.
Vodafone Postpaid
Go Vodafone with a new Vodafone Postpaid connection and talk without worrying about your bill. Become a Vodafone Postpaid user with a Postpaid mobile handset for your SIM by making use of Vodafone’s mobile handset offers. Make the most out of every penny you spend by choosing the right Vodafone Postpaid talkplan. And if you want to know which plan suits your usage best, ask us – we’ll be happy to help.
What’s more – you can also subscribe to our Vodafone Postpaid offers and reduce expenses even more. Take a look at the various services we have for you and use your phone for many more than just making calls. And when it comes to paying you bill that’s easy too! We’ve got a wide variety of Vodafone Postpaid bill payment options. Choose the payment option that works best for you.
World Calling Cards
Save up to 30% on your ISD & STD calls with World Calling Card from Vodafone for your Vodafone mobile phones. World Calling Card from Vodafone is a Prepaid long distance calling card that you can use with your Vodafone Prepaid and Postpaid mobile phones to make ISD & STD calls. That’s right – you don’t need individual ISD calling cards and STD calling cards anymore. With the help of this Prepaid World Calling Card, you can keep a tab on your long-distance call expenses. Plus no security deposit.
It’s easy to buy World Calling Cards in India. World Calling Cards are available at your nearest Vodafone Store, Vodafone Mini Store or at any shop that displays the “World Calling Card” sign.
World Calling Card rates
Make the most of your Vodafone mobile phone while making long distance calls with the special World Calling Card rates meant to help you save money. Check out World Calling Card rates
International Prepaid calling cards Scratch the silver foil on the
cell phone calling card for India to get your secret 12-digit PIN. Dial the toll free number on the back or 50118 / 50218 and enter the PIN from your Prepaid World Calling Card. To make an STD call with your Prepaid mobile phone card, dial ´0´ followed by the STD code and then the phone number.
Gulf Calling Card
Now you can call the Gulf at the lowest possible calling card rates with the best Prepaid phone card for the Gulf.
Vodafone Home Calling Card
Here’s a way you can save on your international roaming bill while calling home – use the Prepaid Home Calling Cards from Vodafone to call to India to anywhere else in the world while travelling abroad. Vodafone Home Calling Card is a Prepaid calling card that allows you to make calls from landlines, PCOs & mobile phones from over 100 countries. And helps you save up to 90% as compared to International Roaming charges! So talk more, spend less and always stay connected.
Home Calling Card rates
Make the most of your Vodafone Prepaid & Postpaid cellphone while making long distance calls with the unique Home Calling Card rates and save money. Check out the Home Calling Card rates Need help with your Vodafone Prepaid Home Calling Card for India?
Vodafone PCO
Want to start making some money? Install a Vodafone PCO in your house or shop, and start earning today with fixed cellular terminals. It´s easy to install, maintain and use – and provides uninterrupted service. It doesn´t even take up that much space!
Vodafone Handy phone
Introducing the landline that’s loaded with all the features of a cell phone - including low call rates. And Vodafone Handyphone aren’t that expensive either. You can make one yours for as little as Rs 1999.
Key features: Calls to any 3 Vodafone numbers @ 20p / min Calls to all local mobile phones @ 40p / min Free local & STD calls every month
Services of Vodafone Callertunes
Put a smile on your callers´ face even before you take the call. With Vodafone Callertunes service, you can play your favourite song for all your callers instead of the normal tring tring. Choose your mobile Callertune from a wide variety of genres. Set
Cricket Callertunes to play live cricket scores. If you’re busy with something, let the world know by setting a Busy Callertune. You can also copy a friend’s Callertune by pressing * while the song is playing. Find out more about Vodafone Caller tunes Go to Vodafone Callertune selection and Callertune activation song codes lists
Vodafone Music Station
Now your Vodafone mobile phone can replace your favourite FM Radio Station with Vodafone Music Station - your personal mobile music world! Find out more about Vodafone Music Station
Ringtones
Make your phone sing your favourite tunes for you every time it rings with Vodafone Ringtones for your mobile phone. Take your pick from monophonic Ringtones, mobile polyphonic Ringtones, latest Bollywood MP3 Ringtones, funny Ringtones, Hindi music Ringtones, true tones Ringtones, real tones Ringtones, devotional Ringtones and lots more.
Themes, Wallpapers & More
Create your own mobile wallpapers, just the way you want them. You can also download mobile wallpapers, themes and more by choosing from a wide range of categories.
Full Song Download
Your Vodafone mobile phone can also be used for cool music downloads. Just download full songs - from the latest chartbusters to your favourite golden oldies. Find out more about Vodafone mobile music downloads
SMS Tones
Ring in every message you get with a message alert tune of your choice. Find out more about SMS Ringtones for your mobile
Background Music
Make your conversations more interesting. Let music play in the background that suits the mood, the occasion or simply the person you are. Find out more
3D Wallpapers
Have fun in 3D. Download lifelike wallpapers for your phone. Find out more
Logos & Picture Messages
Jazz up your phone with some super cool logos and picture messages. Find out more about downloading logo icons & picture messages
Videotones
Don’t just hear your favourite song every time your phone rings; watch it too. Find out more about downloading Videotones
Astrology
Demanding, chilled out, auspicious or fun-filled? Your Vodafone mobile phone knows how your day is going to be. Find out more daily forecasts on your Vodafone mobile phone
Live astrology on your Vodafone mobile phone
Get in touch with the astrologer of the new age. Call him for an instant appointment through your Vodafone mobile phone.
Wondering which way the door should face? Log on to m-Guru on Vodafone live! for vaastu and feng shui tips.
Rahukal & shubhkal
Find out if this very moment is auspicious or not, with your Vodafone mobile phone. Just SMS.
Panchang
Match your best times ahead of time according to ancient Vedic astrology with your Vodafone mobile phone.
Chogadia
Be successful in everything you do. And ensure you do it at the right time, with your phone.
Bill info
You can get your Vodafone bill in your inbox. Or hear it on your phone. You can even choose the language it comes in. And do a lot more, all through your phone.
EBill
Get your Vodafone bill in your inbox, every month. Find out more about Vodafone EBill
Itemised billing
Keep an eye on your phone usage with a detailed billing statement. Find out more about itemised billing
My Vodafone bill
Got questions about your bill? Get the answers anytime you need.
Vernacular bills
Get your Vodafone bills in your language.
Duplicate bill
Log on to My Vodafone to request a Vodafone duplicate bill.
Payment centres
Find out which Vodafone payment centre is closest to you.
Devotional Bible in mobile
Read the Bible on your Vodafone mobile phone whenever you like. Just send an SMS and get to read inspiring verses right on your phone screen Find out more about Bible in your Vodafone mobile phone.
Gurbaani
Turn your mobile phone into a virtual Gurdwara. Just dial 390 and listen to the Gurbani live anytime, anywhere.
Devotional - Pope
Get the daily quotes from His Holiness Pope Benedict XVI´s on your mobile phone.
Bhaktisagar
Chasing materialistic dreams in this fast-paced world? Snatch a moment of peace – dial 389 for Bhaktisagar on your Vodafone mobile phone.
Osho
Know more about Osho’s life and teachings on your Vodafone mobile phone.
Vodafone Devotional Alerts
Log on to Vodafone live! and click on the ‘Spiritual ´link from the Vodafone live menu to access a host of services.
Dial-in services
Everything you need is just a call away, when you have Dial-in services from Vodafone by your side.
Live Counseling
Get counseling on studies, business & more. Find out more about personal counselling on your Vodafone mobile phone
Dial-a-bouquet
There´s no better way to say you care than with flowers. And no easier way to do it, than through Vodafone. Find out more about dial-a-bouquet
Live astrology
Hear it first hand from an astrologer. Find out more live astrology on your Vodafone mobile phone
Dial-a-pizza services
Forget those lengthy pizzeria numbers. All you need is your Vodafone mobile phone. Find out more about Dial-a-pizza services
Music Card
A new way to dedicate a song to your friends.
Ask me
Got a question? Ask us.
Airlines
Travelling by air? Get all your flight information on flight scheduling on your Vodafone mobile phone.
Entertainment Movies
Catch the latest blockbuster in town with friends. Get latest movie reviews, movie tickets and showtimes on your Vodafone mobile phone. Music
This one is for all us music lovers. Get the latest music videos, right from movies to rock, mobile karaoke and much more, all on Vodafone live!
Humour
Get rib-tickling jokes on your mobile and SMS joke messages to your friends to brighten up their day. Read more about jokes on your mobile
Dating
"Do you know what’d look good on you? Me." Forget those lame pick-up lines. SMS Chat to 52428. Register your nickname and enter the chat room of your choice and make new friends.
Chat Service
Find a friend with Chat Service on your Vodafone mobile phone.
EDGE on Vodafone
Experience the next level of technology on your Vodafone mobile phone with Vodafone EDGE services. Get ready for rich videos, clear and crisp audio and faster downloads. Find out more about
Games
Challenge yourself with over 400 Java games for mobiles phone on Vodafone live!
Television
Staying home on a lazy day? Get the latest TV listings on your Vodafone mobile phone. Or watch your favourite programs right on your phone.
Vodafone Contests
Play mega-size mobile contests or easy SMS-based fun mobile contests and win loads of prizes! Only on Contest Zone.
Find out more about Vodafone Contests Visual Radio
Tune into Visual Radio for a completely new radio experience.
Vodafone Alerts - Entertainment
Get all the masala from Bollywood, interesting facts, beauty and health tips, latest updates on music and lots more.
Finance Stock, forex & bullion
Keep a tab on the ups and downs of the markets with stock quotes, market news on your Vodafone mobile phone.
Vodafone mobile banking
Need to visit your bank? Switch on your Vodafone mobile phone.
Mail Messaging BlackBerry from Vodafone
Get your hands on the BlackBerry smartphone – the world’s most desired integrated communication device with the Vodafone advantage. Subscribe to the BlackBerry Enterprise solution and move your work out of your office. Use the BlackBerry Internet Service and stay in touch with colleagues, family and friends – from anywhere, anytime.
Vodafone Mail
Want to check your mails on mobile from wherever you are? Vodafone will make it possible for you.
Yahoo! Mail & Messenger on mobile
Never lose touch with your Yahoo! buddies even while you’re on the move.
MSN @ Vodafone
Stay connected with MSN 24/7, only with MSN Messenger on your Vodafone mobile phone. Rediff & Indiatimes
Check your Rediff & Indiatimes mail on your Vodafone mobile phone.
SMS
Send short and sweet SMS text messages from your Vodafone mobile phone to your friends.
SMS Chat
Chat non-stop with your friends on your Vodafone mobile phone.
Vernacular SMS
Reach out to your friends and loved ones with an SMS in your language.
Group messaging on mobile
Want to send festival greetings to all your friends at one go? Find out more about group messaging on your
Miscellaneous Help
To get a list of services available on 56789, SMS HELP to 56789 (Rs 3 / SMS)
Dictionary services on your Vodafone mobile phone
SMS DICT < your word> to 56789 (Rs 3 / SMS) Or log on to Vodafone live! on your Vodafone GPRS mobile phone, go to Info services section and click on ‘Dictionary´.
STD / ISD codes on your Vodafone mobile phone
To find an STD code, SMS STD < place in India > to 56789, Eg: STD Mumbai To find an ISD code, SMS ISD < country > to 56789, Eg: ISD Singapore Charges: Rs 3 / SMS
News and updates News
How did Sachin do in his latest match? Is the market bullish? What´s the weather update for your city? Stay up-to-date with your Vodafone mobile phone.
Finance
Keep up with the fast changing world of finance with business and finance news while you’re on the move.
Vodafone FLASH!
Have non-stop fun with news, live cricket score, Bollywood quizzes, trivia and lots more. All live on your Vodafone mobile phone.
Vodafone Alerts
Get live breaking news, business news, stocks, astro alerts, sports news, tech news & lots more on your Vodafone mobile phone.
Sports
Get the latest sports scores, match schedules, sports updates, player profiles, videos, pictures, Ringtones and much more - all on your Vodafone GPRS mobile phone.
Sports Cricket Alerts on your Vodafone mobile phone
News from the cricket arena – Live cricket updates on your Vodafone mobile phone
Trivia
Little known facts about people and places that makes cricket your sport of choice
Games
Strike a six in your personal cricket stadium. Download cricket games and play a gentleman’s game or two
Ask the Expert
Browse through fascinating Q&A sessions on the message board or tack up a few queries and comments yourself. Go on, prove you’re an expert yourself to the world.
Football
Get all the football news on your Vodafone mobile phone – from both, on and off the football field. Stay informed about the most popular sport in the world.
TARIFF STRUCTURE
Prepaid Tariffs Airtel Prepaid Ready Cellular Card and Recharge Cards are available, all over the city at over retail outlets including 24-hour outlets. Airtel Prepaid Ready Cellular Card
and Recharge Cards are available, all over the city at over retail outlets including 24hour outlets. Vodafone Prepaid Regular 449 SUK Pulse Rate
60 sec
Price of Pack (Rs.)
Rs.449
Free Airtime on Pack (Rs.)
Nil
Incoming Calls (Rs.)
Free while in home network Vodafone
GSM / CDMA
Landline / WLL
(10 Digit) LOCAL RATES (Rs./min)
Rs.1.20
Rs.2.00
Rs.2.40
STD RATES (Rs./min)
Rs.2.75
Rs.2.75
Rs.2.75
ISD (Rs./min)
USA,
Canada,
Europe
(Fixed Rs.6.40
Line), Australia, Singapore, Hong Kong,
Thailand,
Malaysia,
Indonesia, New Zealand. Gulf, Europe (Mobile), SAARC Rs.9.20 countries, Africa & Rest of the world Cuba, Sao Tome & Principe, Rs.40.00 Guinea Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS (Rs.)
Local
Rs.1.20
National
Rs.2.00
International
Rs.5.00
Other Details
*Rs 50 Local Vodafone-Vodafone Mobile talk time per month for 6 months * First month Vodafone-Vodafone credit within 72hrs of activation & balance credit
by 1st week of every month) *The SMS charge as applicable is per 160 characters * Validity- 24 months.
POSTPAID
Vodafone Postpaid allows you to choose from a variety of affordable talk plans, convenient payment options and host of rich features. So get set to enjoy a world of limitless possibilities! Reference Tarif Packages (RTP)
ON TIME CHARGES Activation Charges Membership Fee Security Deposit MONTHLY CHARGES (FIXED) Bill plan Charge Monthly Rental Clip MONTHLY CHARGES (OPTIONAL) Clip
Local Rates STD RATES 50 – 200 Km 200 – 500 Km 500 + Km
Rs. 600 NA Rs. 1000 Rs. 524 Rs. 425 Rs. 99 NA Rs. 99 Vodafone
Rs. 1.99
GSM /
Landline /
CDMA (10
WLL
Digit) Rs 1.99
Rs 1.99
ISD USA,
Canda,
Europe
(Fixed
Line), Rs. 7.20
Austalia, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, new Zealand Gulf, Europe (Mobile), SAARC Countries, Rs 9.99 Africa & Rest of the world Cuba, Sao tome & Principle, Guinea Rs. 40.00 Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Island, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local National International Value Added Services (Rs.)
Rs. 1.50 Rs. 2.00 Rs. 5.00 Rs. 3.00
Vodafone One Standard 150 ONE TIME CHARGES Activation Charges Membership Fee
Rs 250 Rs 250 (Converts into security after 24 months) NA Rs. 150 Rs. 51 Rs. 99 NA
Security Deposit MONTHLY CHARGES (FIXED) Bill Plan Charge Monthly Rental Clip MONTHLY CHARGES (OPTIONAL) Clip Rs. 50 Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local National Intentional VAS
Rs 1.50 Rs 2.00 Rs. 5.00 Rs. 3.00
This Bill Plan is also available under Advance Rental of Rs. 900 for 2 years.
Local Pack Vodafone to other local mobiles (non Vodafone) At Rs 1 / min
Monthly rental Rs 25 per months/-
STD Pack
Airtel to other mobiles (non Vodafone) & fixed lines nos. at Rs 2 / min.
Monthly rental Rs 75 per month/-
Special offer for Vodafone Telephone service customers for availing
Vodafone Mobile services
If you already have Vodafone Telephone service, you can buy a new Airtel Mobile connection under Vodafone One Standard 150 Plan.
Benefits:
Non security deposit.
No membership / activation fee
Enjoy calls to your Airtel fixed line no. at just 60 P / min.
Monthly rent of Rs 25 for reduced call rates to your Airtel fixed line has been
waived off for 1 year.
For details, call us 516-12345 Advance Rental benefits (1year scheme)
Pay an advance rent of Rs 999 and enjoy Vodafone One Standard 150 plan at Zero monthly rental for one year. Advance rental of Rs 999 gives you a rental discount of Rs 150 every month for the next 2 months. All other options and charges are as per the existing Vodafone One Standard 150 Plan. Vodafone one Standard 249 ONE TIME CHARGES Activation Charges Membership Fee
Rs 250 Rs 250 (Converts into security after 24
Security Deposit MONTHLY CHARGES (FIXED) Bill Plan Charge Monthly Rental
months) NA Rs. 249 Rs. 150 Rs. 99
Clip MONTHLY CHARGES (OPTIONAL) Clip
NA Rs. 50 Vodafone
GSM
/ Landline
CDMA (10 WLL
LOCAL RATES STD RATES 50-200Km 200 – 500 Km 500 + Km ISD USA,
Canda,
Europe
(Fixed
Re. 1.00
Digit) Rs. 1.25
Rs. 1.25
Rs. 2.00 Rs. 2.00 Rs. 2.00
Rs. 2.40 Rs. 2.40 Rs. 2.40
Rs. 2.40 Rs. 2.40 Rs. 2.40
Line), Rs. 7.20
Austalia, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, new Zealand Gulf, Europe (Mobile), SAARC Countries, Rs 9.99 Africa & Rest of the world Cuba, Sao tome & Principle, Guinea Rs. 40.00 Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Island, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local National International Value Added Services (Rs.)
Rs. 1.50 Rs. 2.00 Rs. 5.00 Rs. 3.00
You also enjoy 25 FREE local mobile to mobile SMS
/
Senior Citizen Plan ONE TIME CHARGES Activation Charges Membership Fee Security Deposit MONTHLY CHARGES (FIXED) Bill Plan Charge
Rs. 250 Rs. 250 (Concerts into security deposit after 24 months) NA Rs. 150 Rs. 51 Rs. 99
Monthly Rental Clip NA Cuba, Sao Tome & Principle, Guinea
Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local National International VAS With Senior Citizen Plan
Rs. 1.50 Rs. 2.00 Rs. 5.00 Rs. 3.00
You can take 3 Friends and Family numbers:
Vodafone to Vodafone (1local no.) – Rs. 0.5 / min.
Vodafone to Vodafone (1 STD no.) – Rs 1.5 / min
ISD calls to US / Canada / South East Asia / Australia / New Zealand) – Rs.
9.99 / min You also get FREE alert subscription worth Rs 30 / alert or 3 months on:
News
Astrology
Health Tips
The SMS charges as applicable is per 160 Characters
PROMOTIONAL STRATEGY
Vodafone to “Touch Tomorrow” with a new brand vision
The Hutch Mobile promoted Vodafone cellular service will go in for repositioning of its brand image. The new brand ethos is portrayed in two distinct fashions - the tag line "Touch Tomorrow", which underscores the leading theme for the new brand visio vision, n, follo followe wed d by "The "The Good Good Life Life", ", which which und under ersco score ress a more more carin caring, g, more more customer centric organization. Aimed at re-engineering its image as just simply a cellular service provider to an all out information communications communications services provider, Touch Tomorrow is meant to embrace the new generation of mobile communication services and the changing scope of customer needs 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, 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, Hutch Mobile Limited, 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. warmth. Vodafone will incorporate the latest branding in all of its communication communication and will soon be going in for an enhanced promotional drive to establish the brand's presence.
LIFE TIME PLAN
PRE-PAID PRE-PAID card users need not worry anymore about recharging their coupons every month. Company has launched a plan that allows users to take a pre-paid connection with with lifet lifetim imee valid validit ity y for a one time time payme payment nt of Rs. Rs. 999 999.. Subsc Subscri riber berss avail availin ing g themselves of this scheme will also get full talk time for the recharge coupon they purchase purchase and also have the option to buy Taiwanese Taiwanese manufactur manufactured ed Bird Bird mobile mobile handsets for as low as Rs. 1,399.
The move is aimed at stopping the churn in the pre-paid subscriber base. Once a subscriber takes this plan, he will always be an Vodafone subscriber whether the mobile is being used or not.
MARKET SITUATION
At the time of launch
The first mover in the market was Vodafone which launched its services in Delhi in Aug 1995 (Informal (Informal launch). launch). Essar Essar Cellphone Cellphone followed followed by launchin launching g its services services infor informa mall lly y in Oct 95. At this this point point of time time,, the the marke markett was was at a nasce nascent nt stage, stage, awareness level was low and both operators independently tried to spread awareness and educate the people Once the networks were commercially launched, it became a number game with a multitude of schemes being offered to woo customers Initially the cellphone was perceived as a status symbol 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
Vodafone launched its services before Essar and skimmed the market picking up the bulk of the high usage usage premium premium clients. clients. This is a very competitive competitive industry with the two companies companies differentiating differentiating either either on value-added services services or price. Vodafone is perceived perceived as the high quality provider and has a premium image. image. Essar, on the other hand, is perceived perceived as the lower end service provider. provider. Vodafone positions positions itself as the market leader on the basis of the number of subscribers. Essar is trying to counter this by emphasising emphasising on the reach of its network and the quality quality of its service. However, However, Essar Essar is somew somewhat hat not been been very very succe successf ssful ul large largely ly due to the the incons inconsis isten tency cy in advertising To promote themselves, both the players have been dependent on tactical advertising However, they have restrained from using comparative advertising Hoardings have been a very popular medium for carrying the advertisements advertisements Vodafone has also been advertising on television using the Hutch Telecom name. SALES DEPARTMENT AND STRATEGY A.
Major Major Accounts Accounts (Direct (Direct Channel) Channel) •
Handles corporate (named and famed) accounts
•
Forecasting of sales
•
Mapping the accounts
•
Providing after sales support to the subscribers.
•
Maintaining call reports for records.
•
Providing Providing Feedback to the marketing department department regarding the requirement requirement of the market.
B. IDC (indirect (indirect Channel) Channel) •
Handling distribution
•
Maintaining records and level check of the channel partner
•
Liaisoning between the channel partner and the company.
•
Target achievement
•
Training the executives of the channel
C.
Distr Distribu ibutio tion n Sup Suppor portt 1.
Logistics
•
Monitor handset and SIM card requirements of channel partners and co-ordinate with stores
•
2.
Settle areas of concerns such as incentive claims of channel partners
Rental •
Provide cellular services (SIM cards) on rent.
•
Provide cellular phones on rent
•
Useful for people visiting Delhi for a short interval.
3
Telesales •
Call customers and generate sales lead.
•
Follow up with the customers, if they need any assistance
•
Pass on the sales lead to the channel department.
4
Audit •
Consultant to the Vodafone showrooms.
•
Monitor the operations at the Vodafone distribution outlets Organize training.
5.
Retail •
Locate shops to open retail counters.
•
Monitor the retail counters.
MARKET SEGMENTATION
Segmentation is beneficial because of better predictability of the target consumer group, minimization of risk exposure, better ability to fine-tune a product / service to the requirement of target buyer and the resultant ease in designing a proper designing marketing mix strategy In this case segmentation is on the bade of income. In evaluating different market segments the company looks at two factors The overall attractiveness of the segments and the company's objectives & resources The present market for Cellular phones, pagers and conventional phones is as follows Premium Upper Cellular Phones X Pager X Conventional Phones X X Market Segment Targeted
Lower X X X
Middle Upper X X X
Lower X X
Economy Upper X
Lower -
TARGET MARKET SEGMENT
Vodafone has targeted the premium and upper middle class. The rationale behind it is that only those segments should be targeted who value time and have the paying capacity. It Is also planning to target the business tourists during their stay in the capital About 60% of the clientele are top executives of corporate houses. About 15% are foreign organisations and the rest are professionals and small businessmen. During the introduction stage there was intense pressure to get consumers across to hook up with their brand, because getting them to switch brand loyalty later would be hard So far Vodafone marketers have been concentrating totally on the business executive class but now that the basic viable volumes has beer) built up and prices have declined to a certain extent they are planning to venture further a field.
POSITIONING
The product is sought to be positioned as a business efficiency tool. a lifestyle revolution and a status symbol The emphasis is to remove misconception that the cellphone is an expensive means of communication and drive home the point that the cellphone is actually a day-to-day utility
PRODUCT POLICY AND PLANNING
The product or service is the heart of the marketing mix. Without a product or a service customers' needs cannot be satisfied.
The basic product promise by Vodafone is mobility. Vodafone's main marketing strategy is to be a first mover all the time. It has recognised the significance of making the first move-- because in the field of Communication & Information Technology changes occur at a tremendous pace.
Effective product segmentation has to be carried on continuously because basic services can be and will be copied and in time become expected component of the product. Vodafone seeks to carry out this segmentation through provision of new information services and making new facilities available. The product policy and planning depends on the stage of the product life cycle. At present the cellular phone market has reached the maturity stage.
Since, the premium segment is nearing
saturation the company targeting the upper middle and middle-middle class. In order to do so Vodafone is trying to optimise the price performance package by offering suitable "product bundling".
This involves the selection of the suitable hardware (handset) and its software (its services.) with reasonable price in order to deliver maximum price performance to its customers. In addition, it offers free Airtime services and other concessions to make the prices and thus the product more attractive.
It has also opened a 24 hours
customer service.
Only price doesn't serve as an effective differentiator, value added services become the effective differentiator.
The "Value Added Services" provided from Vodafone are:i) Voice Mail service
This system is similar to the answering machine - if the user is not able to answer a call for some reason the caller can leave messages in the voice mail box which can be later retrieved by the user
ii) Short Message Service
The short message service is like a two-way pager. It gives an option of sending and receiving text messages directly from one mobile phone to another without the intervention of an operator.
iii) Mobile Fax 1 Data Service
This service helps the subscriber to send and receive Faxes, access E-mail, download computer files from other systems and remotely log on to another computer and surf the Internet.
iv) 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.
v) Caller ID
Displays calling person's number.
vi) Outgoing call restriction
To prevent or limit outgoing calls, for example, in peak hours. Also possible to exclude one or several countries, or any geographical region, to permit only local calls, or to limit the outgoing calls to a listed number.
viii) Call forward
Incoming calls can be forwarded to another fixed or mobile phone. Besides these some other services provided by Vodafone are - Call conferencing, Call Broadcast et cetera. It is in the operators -Interest that they not only get many subscribers but also get them to use the mobile facility frequently. 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 cellphones would be used buy]
viii) 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 semiautomatically. Once a subscriber is In any other city or country, where a GSM network is 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.
VODAFONE'S MARKETING ORIENTATION Since this is a high-involvement expensive product, the service provider has to fully take care of the customers.
a)
They take personal responsibility to "get" the answer for any problem faced by the customer
b)
They anticipate customers' problems and take pro-active steps to prevent them
c)
They give answers to the questions & requests, quickly & efficiently.
d)
They have a positive tone & manner while interacting with customers.
e)
They end the interaction on a positive or a humorous note-making the last 30 seconds count.
Vodafone realises that attracting people 'Is easy but converting them into loyal customers is hard, hence emphasis is on maintaining a 'Smiling and a Friendly Atmosphere' to please and retain the customer.
PRICE AND PRICING POLICY
VODAFONE has realised that the Indian market is price sensitive. Therefore it care of the has come up with various innovative tariff schemes to take needs of different category of customers- Generally, the cellular services are more expensive than the land line based telephone services.
This is due to the reason that the operating
companies are required to pay a fee to the government for using airtime.
MARKETING STRATEGYADOPTED BY VODAFONE Hutch has spent a considerable amount on advertising its mobile phone service, Vodafone. Besides print advertising, the company had put up large no of hoardings and kiosks in and around Delhi.
The objective behind designing a promotion campaign for the ‘Vodafone’ services is to promote the brand awareness and to build brand preferences.
It is trying to set up a thematic campaign to build a stronger brand equity for Vodafone. Since the cellular phone category itself is too restricted, also the fact that a Cellular phone is a high involvement product, price doesn't qualify as an effective differentiator. The image of the service provider counts a great deal. Given the Cell phone category, it is the network efficiency and the quality of service that becomes important. What now the buyer is looking at is to get the optimum price-performance package. This also serves as an effective differentiator
Brand awareness is spread through the' campaigns and brand preference through brand stature. Vodafone's campaign in the capital began with a series of 'teaser' hoardings across the city,' bearing just the company's name and without explaining what Vodafone was.
In the next phase the campaign associated Vodafone with
Cellular only thereafter was the Hutch Cellular connection brought up. Vans with Vodafone logos roamed the city, handing out brochures about
the company and
its services to all consumers. About 50,000 direct callers were sent out. When the name was well entrenched in the Delhiites’s mind, the Vodafone campaign began to focus on the utility of Cellphone. In the first four months alone Airtei's advertisement spend exceeded Rs. 4 crores.
As of today the awareness level Is 60% unaided. This implies that if potential or knowledgeable consumers are asked to name a Cellular phone service provider that is on the top of his/her mind 60% of them would name Vodafone. As for aided it -is 100% (by giving clues and hints etc.).
Brand strength of a product or the health of a brand is measured by the percentage score of the brand on the above aided and the unaided tests. The figures show that Vodafone is a healthy and a thriving brand. Every company has a goal, which might comprise a sales target and a game plan with due regard to Its competitor. Vodafone 's campaign strategy is designed keeping in mind its marketing strategy. The tone, tenor and the stance of the visual ads are designed to convey the image of a market leader in terms of its market share. It tries to portray the image of being a "first mover every time" and that of a "market leader". The status of the product in terms of its life cycle has just reached 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. Vodafone, keeping in mind the importance of the customer retention, values its heavy users the most and constantly indulges in service innovation. But, 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 Vodafone in order to promote sales. The media channel is chosen with economy in mind. The target segment is not very concrete but, there is an attempt to focus on those who can afford. The print advertisements 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 different 1 higher) is an important variable in determining the target audience. Besides this, other promotional strategies that Vodafone has adopted are . (i)
People who have booked Vodafone services have been treated to exclusive
premiers of blockbuster movies.
Vodafone has tied up with Lufthansa to offer
customer bonus miles on the German airlines frequent flier's programs. (ii)
There have been educational campaigns, image campaigns, pre launch
advertisements, launch advertisements, congratulatory advertisements, promotional advertisements, attacking advertisements and tactical advertisements
DISTRIBUTION
Company
Franchisee
Dealer Customer
Distributor Dealers
Customer
The- company whose operations are concentrated in and around Delhi.
It 27
Franchisees and 15 Distributors- They also have 8 'instant access cash card countersEach franchises or distributor can have any number of dealers under him as long as the person is approved by the Vodafone authority. Each franchises has to invest Rupees Ten Lakhs. to obtain a franchise and should employ an officer recruited by Vodafone. This person acts as an 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 Vodafone has not been very successful in controlling territorial overlaps of dealers. The franchises can carry out his 1 her own promotional strategy. For this the. company contributes 75% of the money and the franchises contributes 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 Vodafone. The dealer has to invest Rupees. One Lakh as an initial investment. The dealer of Vodafone are 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 etc. The dealer provides service promptly. The consumer on providing the bill of purchase for the handset and proof of residence has only to wait an hour before getting connected. The staff of the dealers and the franchisees are provided training by the Vodafone 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 Vodafone office in Delhi.
WHAT DOES VODAFONE OFFER?
With Vodafone, the subscriber wouldn't just get a personal phone that lets him/her be in touch, always, but also gets a host of benefits that let him/her manage his/her time like never before. An Vodafone subscriber is provided with a Subscriber Identity Module Card (SIM card) - that is the key to operating his/her cellular phone. His card activates Vodafone cellular services and contains a complete micro-computer chip with memory to enable one to enjoy one's cellular phone thoroughly. Each SIM card contains a PIN code (Personal Identity Number) which may be entered by one. Just plug your SIM card into your cellular phone, enter the PIN code and it becomes 'your' personal phone'.
PRODUCT LIFE CYCLE
The pattern of cellphone subscriber growth observed elsewhere in the world reveals that the growth in the market is Initially slow followed by a sharp acceleration, but so far that has not happened in India. As far as the Product Life Cycle is concerned. Indians are at the beginning of the maturity stage.
Introduction
Growth
Maturity
marketing objectives
Create product awareness Maximise market share
Maximise
profits
whole
and trial
defending market share
Strategies Product
Offer
a
basic Offer value added Increase in number
product/ service.
services
of
value
added
services. Price
Charge cost- plus
Price to penetrate Price to match or market
Distribution
Build
best competitors
selective Build
distribution
Intensive Build
distribution.
more
intensive distribution.
Advertising
Build
product Build
awareness
awareness Stress
among and interest in the differences
early adopters and mass market
brand and
benefits.
dealers. Sales Promotion
Use
heavy
sales Increase to build Increase
promotion to entice and people to subscribe.
maintain encourage
relationships customers.
with switching.
to brand-
LITERATURE REVIEW TELECOMMUNICATION MARKET IN INDIA The telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.
History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control.
The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.
In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a
regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year.
Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and videoconferencing.
Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand.
Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers
The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up
with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments. Currently the Public Players have more than 60% of the market share
Market shares of public and Private Players
Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading themselves to provide 3G mobile services.
Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones, etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Camera's, etc. The value added services provided by the mobile service operators contribute more than 10% of the total revenue
The leading cellular service providers have the following number of subscribers:
Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share.
The 2008 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, and with slashing down the roaming rentals. This is likely to lead to even more people going for cellular services and more and more use of the value added services. However, landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, the largest landline service provider, has recently taken some bold initiatives to retain its market share and, if possible, expand it.
The cellular phone industry is one of India's rapidly growing industries. Since the industry came into being in the mid 1990s, its average per annum growth rate has been a phenomenal 85 percent. By the end of 2008, the Indian cellular phone industry had over 10 million subscribers. The industry has undergone a number of changes over the years. The National Telecom Policy 1999 was an important landmark in the development of the cellular telecom industry in India; the tariff rationalization and policy regulation introduced in the Policy helped the industry grow at the pace it did. The years 2007 and 2008 saw an increase in level of competition in the industry with
more operators being given licenses, and fixed line providers also entering the mobile market.
In 2003, Telecom Regulatory Authority of India (TRAI) announced regulation of interconnect user charges to resolve conflicts between cellular operators and fixed line operators. Keywords Cellular phone industry, 1990, per annum, growth rate, phenomenal, 85 percent, 2002, Indian cellular phone industry, 10 million, subscribers, National Telecom Policy, 1999, tariff rationalization, policy regulation, 2001, 2002, competition, operators, mobile market, 2003, Telecom Regulatory Authority of India, TRAI, interconnect user charges, conflicts, cellular operators, fixed line operators
The cellular phone industry is one of India's rapidly growing industries. Since the industry came into being in the mid 1990s, its average per annum growth rate has been a phenomenal 85 percent. By the end of 2008, the Indian cellular phone industry had over 10 million subscribers. The industry has undergone a number of changes over the years.
The National Telecom Policy 1999 was an important landmark in the development of the cellular telecom industry in India; the tariff rationalization and policy regulation introduced in the Policy helped the industry grow at the pace it did. The years 2007 and 2008 saw an increase in level of competition in the industry with more operators being given licenses, and fixed line providers also entering the mobile market. In 2007, Telecom Regulatory Authority of India (TRAI) announced regulation of interconnect user charges to resolve conflicts between cellular operators and fixed line operators
Economic theory suggests that there is a positive correlation between infrastructure and economic development. Telecommunications is one of the most important types of infrastructure. Communication is said to be the life-blood of economic activity. Systems of communication assume critical importance when globalization and contraction of geographic distances have become the order of the day.
International studies indicate that for every one percent increase in the tale density (penetration rate of telecommunications) of a country, there is a corresponding increase of three percent in the gross domestic product of the country...
The Indian telecommunications has been zooming up the growth curve at a feverish pace, emerging as one of the key sectors responsible for India's resurgent economic growth. India is set to surpass US to become the second largest wireless network in the world with a subscriber base of over 300 million by April, according to the the Telecom Regulatory Authority of India (Trai). The month of April 2008 will see India’ wireless subscriber base that currently stands at 250.93 million surpassing that of the US to become the second wireless network in the world.
The year 2007 saw India achieving significant distinctions: having the world's lowest call rates (2-3 US cents), the fastest growth in the number of subscribers (15.31 million in 4 months), the fastest sale of million mobile phones (in a week), the world's cheapest mobile handset (US$ 17.2) and the world's most affordable colour phone (US$ 27.42) and largest sale of mobile handsets (in the third quarter).
Segment-wise growth
Wireless segment has emerged as the preferred mode of telephone service by the consumers, reflected in the rising share of mobile phone connections to total connections. The share of mobile phones has increased from 71.69 per cent at the end of March 2006 to 87.68 per cent at the end of May 2008. While total mobile subscriber base was 277.92 million, wire line subscriber base was 39.05 million. Consequently, overall tele-density has increased to 27.59 per cent at the end of May 2008. India is likely to be second largest mobile market in the BRIC nations, with 560 million mobile users representing the next great growth curve for both mobile and interactive marketing industries, according to a report by eMarketers.
Also, private sector has become the dominant player in the industry. While public sector companies added 53.6 million subscribers during 1998-2007, private companies have added a whopping 133.58 million subscribers during the same period. The dominance has been much more pronounced in the mobile market, where private
operators have added 124.68 million subscribers, while public sector operators added only 31.79 million subscribers.
Investment
The booming domestic telecom market has been attracting accelerating amount of investment. During April 2000 to March 2008, cumulative FDI inflows into the Indian telecommunications sector amounted to US$ 3.84 billion, accounting for 6.81 per cent of the total FDI inflows into the country. In fact, the surge in mobile services market is likely to see investment worth about US$ 24 billion by 2010, going by industry estimates. This is understandable, when seen that the number of mobile subscribers is estimated to increase to 600 million by 2012, according to Standard Chartered Bank, implying a mobile in the hands of every second person in the country
INDIAN CELLULAR MARKET
The Bharti Group, which operates in 23 circles, continues to be the country's largest cellular operator, with 50 lakh subscribers. BSNL, which operates in 22 circles, has a subscriber base of 37 lakh subscribers. Thus BSNL stands second largest cellular operator in terms of subscriber base at the end of the fiscal ending March 31, 2007, displacing Vodafone from the second position.
Vodafone, which operates in only eighteen circles, is the third largest operator with a subscriber base of 32 lakh. Unlike fellow public sector undertaking, MTNL, which operates in Mumbai and Delhi, BSNL has been a very aggressive player in the market. "Cellular operators who expected BSNL to go the MTNL way, were taken by surprise and did not take effective steps to counter it, till it was too late in the day," said a telecom analyst.
Belying fears of a slowdown in cellular subscriber acquisitions, the cell club has reported a 7.92% growth, the highest growth in any month so far, during March 2005. Year-on-year, the cellular subscriber base in the country has almost doubled in March 2005, and is expanding at the rate of 25% per year thereafter.
The cellular subscriber club expanded by 21.31 lakh last month. This is much higher than 5.9 lakh subscribers added in February 2005 and 2.13 lakh in January 2005. Idea, which operates in Seven circles, is the fourth largest operator with a subscriber base of 17.80 lakh, higher than BPL's 11.31 lakh subscribers across four circles. The subscriber numbers per operator drop sharply with the sixth largest operator, Spice Communications, having a subscriber base of 9.40 lakh, followed by Reliance Telecom's 8.9 lakh subscribers. MTNL is the ninth largest operator, with a base of 8.32 lakh subscribers. While the subscriber base-jumped by 3.38% to 44.39 lakh in the metros, subscriber base of category A circles of Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu jumped by 10.18 % to reach 43.64 lakh. Category B circles of Kerala, Punjab, Haryana, Uttar Pradesh (West), Uttar Pradesh (East), Rajasthan, Madhya Pradesh and West Bengal recorded a jump of 10.69%, with a total base of 33.74 lakh subscribers. Circle C has reported 12.74 % growth with subscriber numbers jumping to 5.08 lakh. Among the metros, while Mumbai added 1,63,180 subscribers, higher than the 1,58,646 added by Delhi, the Capital's cellular subscriber base of over 80 lakh is still higher than Mumbai's 66.89 lakh. While the cellular industry has been on roll for the first three quarters of the previous financial year with an average of 16.75 lakh monthly additions in the third quarter, the first two months of 2007 had seen the growth slowing down.
GSM MARKET IN INDIA
Regional Interest Groups - GSM India
With a population of around 1,139,964,932 growing at roughly 1.7 per cent a year, India is potentially one of the most exciting GSM markets in the world. After two rather difficult years, the past 12 months have seen the region's promise beginning to come to fruition. Much of this success can be attributed to the stabilisation of the licensing and regulatory environment.
India's telecommunications have undergone a steady liberalisation since 1994 when the Indian government first sought private investment in the sector. More significant liberalisation followed in 1996 with the licensing of new local fixed line and mobile service providers. However, it has been the government's New Telecom Policy (1999) that has had the most radical impact on the development of GSM services. 'The policy's mission statement is 'affordable communications for all', There is a genuine commitment to creating a modern and efficient communications infrastructure that takes account of the convergence of telecom, IT and media. In addition, the policy places significant emphasis on greater competition for both fixed and mobile services.' Competition in the mobile sector has already had a visible impact on prices with calls currently costing less than 9 cents per minute. This means that service costs have fallen by 60 per cent since the first GSM networks became live in 1995. It also helps explain why a recent Telecom Asia survey revealed that more than 70 per cent of Indian mobile subscribers felt that prices were now at a reasonable level. One of the challenges facing GSM operators in India is the diversity of the coverage regions -from remote rural regions to some of the most densely populated metropolitan areas in the world. India has more than 40 networks, which cover the seven largest cities, over 7000 towns and several Lacs Delhis. Such depth of coverage has required enormous investment from India's operators. It is estimated that more than Rs200 billion had been invested in India's GSM industry by mid-2000, a figure that is set to be supplemented by a further Rs. 300 billion over the next five years. The good news is that subscriber growth is beginning to look healthy. With India's low PC penetration and high average Internet usage -at 14-20 hours a month per user it is comparable to the US -the market for mobile data and m-commerce looks extremely promising. WAP services have already been launched in the subcontinent and the first GPRS networks are in the process of being rolled out. In the year ahead, GSM India will work with its members to realise the potential of early packet services in anticipation of the award of 3GSM licences.
India fastest growing GSM mart
India is expected to have 145 million GSM (global system for mobile communications) customers by 2007-08 compared to 26 million subscribers as on March 2005, according to the Global Mobile Suppliers Association. "For GSM, India is a success story. It is one of the fastest growing markets with its subscriber base doubling in 2005. At this pace, the target of 150 million subscribers by 2007-2008 is definitely achievable," Alan Hadden, president of GSA, said at a news conference in New Delhi. Globally, the GSM market reached 1 billion users in February 2005, he said, adding GSM accounted for 80 per cent of the new subscriber growth in 2005."Almost every Latin American operator has chosen GSM. In North America GSM growth is bigger than CDMA (code division multiple access)," he said. Commenting on the raging debate over GSM versus CDMA in mobile services arena, Hadden said: "GSM is the world's most successful mobile standard with over 1 billion users, and is an open mobile standard. It also supports automatic international roaming, which is a major contributor to business plans." India’s GSM mobile firms’ revenue up 30 pct
India’s private telecoms firms offering GSM-based mobile services reported a 24 percent rise in revenue in the year to March 2007 but said future growth rates could slow because of heavy taxes on the nascent industry. Although India’s mobile sector is the world’s fastest growing major wireless market, it is amongst the highest taxed industries in the country. Mobile carriers pay as much as 25 percent of their revenue as licence fee, spectrum charges and other taxes. The Cellular Operators Association of India (COAI) said revenue for fiscal 2003/04 stood at 83.08 billion rupees ($1.86 billion) compared with 64 billion rupees a year earlier. According to T.V. Ramachandran, director general at COAI, “These revenue growth rates cannot be maintained unless there is a concerted effort by the government to cut excessive levies and allow sharing of infrastructure” “But the potential to do much better exists as there is still huge demand in the sector.” Ramachandran said the sector was still losing money but declined to elaborate. Sales jumped because of a doubling of the GSM (Global System of Mobile
Communications) user base as more people entered the flourishing market thanks to one of the lowest call rates in the world. But the monthly average revenue per user, a key measure of profitability, declined 17.4 percent to 432 rupees in the fourth quarter compared with 523 rupees in the first quarter due to a cut in tariffs and excessive competition among companies. Growth slowing, demand untapped: The association has not included the financial performance and the GSM-user base of state-run firms Bharat Sanchar Nigam Ltd, the second-ranked player, and Mahanagar Telephone Nigam Ltd, Ramachandran said. There are 150 million GSM customers and more than 96 million users of the rival CDMA-based mobile services in the country. The pace of growth in monthly additions is slowing after just 1.25 million users took up the service in April compared with 1.9 million in the previous month and 1.63 million in February. Ramachandran blamed the slowdown on a majority of small GSM operators being unable to expand networks into rural swathes where demand remained largely untapped. “Our surpluses are not enough to cover costs of network expansion and financing charges on loans. We are making money only to cover operating expenses,” he said. Carriers are now subsidising handset costs to woo users into the underpenetrated industry forecast to have more than 250 million customers by 2007. Roughly three percent of Indians own a mobile phone compared with about 20 percent in China. About a dozen firms such as Bharti Airtel Ltd, 28 percent owned by Singapore Telecommunications, Reliance Infocomm Ltd and the Indian GSM-unit of Vodafone group battle in the hotly competitive sector.
DOES GSM HAVE THE EDGE?
GSM operators are not the only ones who are worried about the rapid strides made by CDMA mobile players Reliance Infocomm and Tata Indicom in the Indian cellular market? The GSM suppliers – both handset and equipment - who incidentally also have their other foot firmly placed in the CDMA pie, are beginning to lose some sleep over what was earlier termed as `niche’ and `minuscule’ data carriage market by the operators
Apart from the strong success of the two CDMA operators whose networks are based on code division multiple access (CDMA), the miserable showing of the four global standard for mobile (GSM) based networks that launched general packet radio service (GPRS) service for data connectivity in last three years, has the vendors worried. Global mobile Suppliers Association (GSA) now believes that even though India will primarily remain a voice traffic-led market in next two-three years, the data traffic component will grow by 25-30 per cent, an optimism that it’s trying to make GSM operators feel as well.
THE CDMA CHALLENGE
CDMA players had launched their services with CDMA 2000 1X-based networks, which can give hi-speed, always-on connectivity to the Internet, and other data services. GSM operators, on the other hand, have had to migrate from the frustrating experience of WAP (wireless application protocol) to GPRS, which has not significantly improved the subscriber’s experience of surfing the Net on/from mobile. The top brass of GSA, an organisation comprising Nokia, Siemens, Ericsson, Alcatel and Lucent Technologies - met on Tuesday in the capital to persuade the operators to adopt EDGE (Enhanced Data rates for GSM Evolution) and leave GPRS behind as a dream gone sour. Only Airtel, Vodafone, BPL Mobile and Idea Cellular had launched GPRS, but the data transfer speeds of GPRS have been abysmal. The field trials gave a speed of around 54 kbps, but the actual speeds have not exceeded 14-18 kbps, a major reason why GPRS growth has been so slow. As against the total GSM cellular base of 5.61 crore, the country has between 2,80,000 lakh GPRS users only. In comparison, the two CDMA operators have about 120 lakh connections. All these sets are data compliant. Though no figures are available as to how many use these for data services, the figure is believed to be respectable as a percentage ratio for CDMA. But first, the EDGE! Bharti Cellular is close to commercially launching its EDGE service in Delhi and Mumbai by end May or early June, sources said. The company was the first to conduct field trials in November with its equipment supplier Ericsson. Idea too held EDGE field trials in February this year with its vendor Nokia. Vodafone
and BPL are yet to hold the trials. The two companies would eventually migrate to EDGE, but perhaps after seeing the response to Bharti’s service. EDGE holds the promise of delivering data speeds of around 170-180 kbps (as against the theoretical speed of around 380 kbps) which, if achieved, promises the launch of many data applications. The scalable cost of migrating from GPRS to EDGE is not too high and mainly comprises software upgrades in case of a modern network such as Bharti and Hutch, claimed chairman of GSA India chapter Rakesh Malik.
Will GSM maintain its headstart?
At the GSM Evolution Forum held in New Delhi, GSA president Alan Hadden predicted that GSM growth will far outstrip CDMA as was happening globally. He felt India could have as many as 200 million GSM subscribers by 2007-2008, up from nine million in December 2004. According to GSA, there are over 1.1 billion GSM subscribers worldwide as against 250 million CDMA customers. The revenue of top 25 global operators from data averages 18 per cent and 22 of these operators run GSM networks. Overall, there are 76 operators in 50 countries that have committed to deploy EDGE. Almost every country has a GSM-based network and even those US operators, which operated on now-defunct TDMA technology, were migrating gradually to GSM, not CDMA, pointed out Hadden at the GSM Evolution Forum. The Forum is a global GSA program to assist the operators for evolution to third generation (3G) technologies. “People are using their phones for much more than voice. Fifteen networks have commercially launched EDGE as it can run 3G like services in the existing spectrum for the operators without needing a 3G license. Even the migration to a full-fledged 3G level of Wideband CDMA (WCDMA) will be smooth with EDGE,” said Hadden. “Besides, the automatic roaming provided by GSM networks in almost 200 countries is a power that CDMA doesn’t give you. We know for sure that almost 20-25 per cent of the revenue for some GSM operators comes from roaming customers,” he added. But CDMA is no pushover with Korea and Philippines as the shining jewels in its crown. The first CDMA 2000 1X was commercially deployed in October 2000.
Already, 81 operators have launched 77 CDMA 2000 1X networks whereas nine have launched services based on 1xEV-DO platform across Asia, the Americas and Europe. At least, 16 new 1X and six 1xEV-DO networks are scheduled to be deployed in 2004, according to CDMA Development Group. EV-DO and EV-DV are the next level of evolution on the CDMA 2000 1X platform, capable of delivering services comparable to 3G WCDMA. Where are the models?
What will matter a lot in this war will be the availability of EDGE compliant handsets at affordable rates. While the two CDMA operators have been giving out handsets that can give hi-speed data transfer, same has not been the case with GSM. Even now, GPRS handsets have not become commonplace and GPRS feature is found only in mid and high-end segment handsets. End sum game
When the networks deploy EDGE, subscribers can expect the delivery of advanced mobile services such as easy downloading of video and music clips, full multimedia messaging, besides high-speed Internet and e-mail access, provided their handset supports all this. But the real cruncher will be the migration at a later stage to 3G technologies such as WCDMA, EV-DO or EV-DA as and when the government decides what to do with the 3G licences. WCDMA for example promises delivery of a phenomenal 2 megabytes per second (mbps), equivalent to what a leased line in many middle level corporates gives. More importantly, WCDMA will spawn a whole new range of full motion audiovideo applications, including video telephony. GSM lobby may continue to remain gung ho over the future of their technologies over that boosted by the American firms Qualcomm and Motorola, but Indian market could well throw an interesting scenario that industry experts will do well to watch. In the coming months, Reliance plans to offer its CDMA subscribers much more than what GSM players intend to deliver through their EDGE for their subscribers.
Who succeeds in this battle for mobile customer’s eyeballs is most difficult to predict. A Korea and Japan may not be waiting to happen in India, but India will probably be more like the Chinese market with both standards co-existing. For now, GSM rules!
RESEARCH METHODOLOGY
RESEARCH OBJECTIVE
To understand the various Marketing Strategies which Vodafone has
adopted to survive in highly competitive cell phone industry.
To make a comparative study of the major players in Indian Service Provider.
To study the marketing strategies of Vodafone.
To analyse the trends in Indian Telecom Industry with the entry of Vodafone.
RESEARCH METHODOLOGY Primary Data •
Questionnaire Survey of Customers
Secondary Data •
Internal Reports Vodafone.
•
Reports on Indian Telecom Industry.
•
Internet
Data Collection Tools •
Interview
LIMITATIONS
Every attempt will be taken to obtain the error free and meaningful result but as nothing in this world is 100% perfect I believe that there will still the chance for error on account of following limitations(1)
Respondent’s unavailability.
(2)
Time pressure and fatigue on the part of respondents and interviewer.
(3)
Courtesy bias.
FINDINGS AND ANALYSIS 1.
The age of the respondents can be shown under the following heads. The
respondents can be divided into the following categories
Age of the respondents 16%
0-15
6%
15-30 30-40
31%
47% 40-60
It is known from the graph that the main respondents are belonging to 20 - 30 agegroup i.e. 47% people out of surveyed sample size i.e. 300 are under 30 years of age it showing that good business for the Vodafone because young want to have a mobile devices with him/her at any circumstances.
2.
The gender of the various respondents are as follows:
Gend er of respond
3 2% m ale fem al 68%
According to the survey conducted the female were 32% and male were 68%. Also because not having too many female as decision maker to buy Vodafone plan in Delhi region. And it is clearly shown to our graph male are dominated to purchase of any plan of mobile services.
3.
Income per month of the respondents are calculated as follows:
In c o m e o f th e r e s p o n d 2% 6%
0-5000 4%
20 %
5000-10000 10000-1500
24 %
15000- 2000 20000-2500 16 %
2 8%
25000-3000 >30000
The income of the respondents is very much fluctuating. This is done so as to gain more knowledge about the different strata of the society. Also from the survey 28 % are earning in between 10000-150000 per Year salary which inc while 24 % earning in between of 5000-10000 per year while this data we cannot say is not biased because Salary is a part everybody is not very comfortable with telling you. While 20 % people responded that his/her salary in between of 20000-250000 rupees.
Availability
Q4. Is Vodafone recharge /new connection available in your near area? (1) Strongly Agree
(2) Agree
(3) Disagree
(4) Strongly Disagree
(5) Neutral
Strongly Agree Agree Disagree Strongly Disagree Neutral
90 79 50 48 23
Availabilityof Vodafone Strongly Disagree 17%
Neutral 8%
Strongly Agree 31%
Disagree 17% Agree 27%
From the sample size 300 here are the question would gives the insight Study on buying behaviour of consumer indicates that the Delhi retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the Delhi supply chain through a network of Delhi sub-stockists, who are based only.
Form our survey result it is showing that 31% of says that Vodafone connection or recharges are easily available in their respective area and they are strongly agree with this.
Now the segment of people where they not strongly agree with the statement that Vodafone product reached their respective area 27% respondent said yes some time they will get and some time not also they suggested that some time new connection is not available. Also 34% respondent responded that they either strongly disagree or disagree with the statement that Vodafone not reached their respective area so far. Only 8% respondent says that they have neutral opinion on this.
Recommendation for Vodafone would be company can target first 34% people those who are disagree and not satisfied with the product availability of the Vodafone so at least Vodafone have more than 60% market share of those people who at least knew the product is available near store so they can easily bought them.
Affordability
Q 5. Is Vodafone recharge more affordable than the other recharge available on your nearest telecom shop? (1) Strongly Agree
(2) Agree
(3) Disagree
(4) Strongly Disagree
(5) Neutral
Strongly Agree Agree Disagree Strongly Disagree Neutral
76 97 38 46 43
Affordability Neutral 14%
Strongly Disagree 15%
Disagree 13%
Strongly Agree 25%
Agree 33%
This question gives us insight of the affordability of the product or service. With low disposable incomes, products need to be affordable to the Delhi consumer, most of who are on daily wages. Now we check what Delhi customer want from the company in terms of their product prices.
Out of 300 sample size we consider to choose first strongly agree respondent who believes that Vodafone product is affordable for him/her 25% respondent out of 300 says Vodafone product is affordable in comparative of other competitor. While 33%
are only agree with this statement that Vodafone has much affordable price of their respective product. Now moving ahead 28% respondent are still not agree or strongly disagree with this question they thought Vodafone products are much costlier than the other mobile service provider companies product.
14% respondent said they have mixed view about the affordability these people are those who are richer in Delhi region.
Recommendation for Vodafone would be target 28% people also to provide much more scheme and plan so they comes under the pie of affordable range.
Acceptability
Q6. Is Vodafone giving you same service as compare to Hutch? (1) Strongly Agree
(2) Agree
(3) Disagree
(4) Strongly Disagree
(5) Neutral
Strongly Agree Agree Disagree Strongly Disagree Neutral
45 134 121 46 43
Acceptability Strongly Agree 12% Neutral 11%
Strongly Disagree 12%
Agree 34% Disagree 31%
This question gives us insight of the acceptability of the product or service. Gain acceptability for the product or service. Therefore, there is a need to offer products that suit the Delhi market. One company, which has reaped rich dividends by doing
Out of 300 sample size we consider to choose first strongly agree respondent who believes that Vodafone and Hutch are the same and there service is also same for him/her only 12% respondent out of 300. While 34% are only agree with this statement that Vodafone has and Hutch giving him/her same service experience their respective product. Now moving ahead 43% respondent are still not agree or strongly
disagree with this question they thought Vodafone service is not same like Hutch they perceive that Hutch has a better service than the Vodafone and 11% respondent said they have mixed view about the acceptability of Vodafone and Hutch at the same criteria.
Recommendation for Vodafone would be target those people first i.e. 43% who believe that Hutch has better service than the Vodafone while considering this fact there is huge chance that Vodafone will lose their business in Delhi region.
Awareness
7. Have the respondents heard about the Vodafone?
Know about Vodafone
It
is
quite
evident
4%
that the 96 % respondents aware
are
of Yes
Vodafone. only
No
4%
respondent they
didn’t
about
And
said that 96%
know
the
Vodafone
while
they are using mobile phone. With large parts of Delhi India inaccessible to conventional advertising media - only 41 per cent Delhi households have access to TV - building awareness is another challenge. Fortunately, however, the Delhi consumer has the same likes as the urban consumer - movies and music - and for both the urban and Delhi consumer, the family is the key unit of identity. However, the Delhi consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence
8. Frequency of the purchase of the Vodafone product
Frequency of the purchase of the Vodafone product
23%
14%
>1 months 1 - 3 months 29%
34%
3-6 months More than a year
The frequency of the purchase of the Vodafone Product recharges depends upon the work a person does and the purchasing power of the people. Form our survey clearly states that 14% respondent buy recharge i.e. may only monthly recharge of monthly basis and 34 % people buy Vodafone prepaid recharge 3-4 moths because most of them are using life time prepaid.
9.
How the consumers come to know about the Vodafone?
Here we come to know that 35% of the consumers came to know about the Vodafone recharge in Delhi region through self research which includes the kind of low pay and high gain customer want from recharge, and following of this 30% people get to know about Vodafone trough advertisement i.e. quite effective advertisement point of view. Rest of 20% are influenced though their friend and colleagues or by friends and a small number i.e. 10% by the Hoardings and 5% by or any other means includes radio and magazine news paper article.
10.
Will the consumers recommend the Vodafone to other persons?
Recommendation of the Vodafone to
Others 9% 0%
yes no Can't say
91%
Large numbers of consumers i.e. 91% are ready to recommend the Vodafone product to their friends but a small number i.e. 9% is not able to decide whether to recommend or not they are bit hesitate but they can be converted into potential consumers but none of the consumer are saying no. it is also states that Vodafone has good image over the customers.
11. Do you believe that India is potentially one of the most exciting mobile service providers in the world? Company Airtel Vodafone Idea MTNL
Yes 4 4 4 4
No 1 1 1 1
As according to the above table 16 (80%) out of the total 20 interviewed people in all the above four specified Indian mobile service providers are of belief that India is potentially one of the most exciting mobile service providers in the world, whereas some 4 (20%) of them do not agree to this view.
12. Do you find that the government’s telecom policy has had the most radical impact on the development of mobile service providers? Company Airtel Vodafone Idea MTNL
Yes 4 3 3 5
No 1 2 2 --
As according to the above table 15 (75%) out of the total 20 interviewed people in all the above four specified Indian mobile service providers find that the government’s telecom policy has had the most radical impact on the development of mobile service providers, whereas some 5 (25%) of them deny this.
13. Do you believe that one of the challenges facing mobile operators in India is the
diversity of the coverage regions? Company Airtel Vodafone Idea MTNL
Yes 2 3 3 2
No 3 2 2 3
As according to the above table 10 (50%) out of the total 20 interviewed people in the mobile service providers are of belief that one of the challenges facing mobile operations in India is the diversify of the coverage regions, whereas interestingly another 10 (50%) of them deny this.
14. To what extent, does you find that mobile service providers is a very complex standard? Company
To some extent
Airtel Vodafone Idea MTNL
(1-5) 3 2 2 3
To great extent (6-10) 2 3 3 2
As according to the above table 10 (50%) out of the total 20 interviewed people in all the above four major the mobile service providers in Indian Cellular industry find only to some extent that GSM is a very complex standard, whereas the another 10 (50%) respondents find to great extent that mobile service providers is a very complex standard.
CONSUMER LEVEL
15. Do you believe that mobile service providers comes close to fulfilling the requirements for a personal communication system? Company Airtel Vodafone Idea MTNL
Yes 9 8 8 5
No 1 2 2 5
As the above shows 30 (75%) out of total 40 respondents are of the belief that mobile service providers comes close to fulfilling the requirements for a personal communication system, whereas 10 (25%) of them are in no way to this belief.
16. Do you find that mobile service providers as the most exciting and satisfying mobile standard? Company Airtel Vodafone Idea MTNL
Yes 9 7 8 8
No 1 3 2 2
As the above shows 32 (80%) out of total 40 respondents find that mobile service providers as the most exciting and satisfying mobile standard, whereas the remaining 8 (10%) respondents deny this.
17. Do you believe that your service provider has a genuine commitment to creating a modern and efficient communications? Company Airtel Vodafone Idea MTNL
Yes 10 8 10 8
No -2 -2
As the above shows 36 (90%) out of total 40 respondents are of the belief that their service providers have a genuine commitment to creating a modern and efficient communications whereas the remaining 4 (10%) respondents deny this.
SWOT ANALYSIS STRENGTHS •
Cost advantage
•
Current leaders in quality service
•
Largest distribution network
•
Ability to constantly innovate
•
Highly skilled workforce
•
Entrepreneurial zeal
WEAKNESSES •
To prove credibility
•
Price pressures
•
Need for Government support
•
Awareness
OPPORTUNITIES •
To sustain passion and commitment
•
Vodafone market share increasing at other service provider expense. Thus opportunity to wipe it out.
•
Attain higher value services
•
Collaborative business needs to be explored
•
Vertical repeatable solutions.
•
Low penetration level in rural markets.
THREATS •
Foreign investment
•
Global trends moving from GPS to WLL.
•
Lack of global parity in telecom tariff
•
Other competition
CONCLUSION India that has a lot of population with it definitely offers a great potential for the companies where the chances of outnumbering the urban areas in all aspects are very high. But only those companies would survive at these places and win over the Delhi consumers who can spend time and money on understanding the needs of them and come up with innovative ideas.
The companies should also strive to give more focus to the Delhi market in order to make it a market leader. This can happen only with the firm commitment of the top management and extension of full support to the marketing personnel by each and every department of the organization. In most of the Delhi areas of Delhi in different parts of the country, there is considerable awareness on various latest products that are available in the market. This has been possible due to the penetration of cable and satellite channels that have brought down the world at the finger tips of the common man. The media influenced the mindset of the Delhi consumer to such an extent that people who had money started purchasing the products unmindful of the costs, just to satisfy their needs as well as their ego. But, the growth of Delhi market could be attributed to many other reasons that in one way increased the sales as well as the profits of the companies. Some of the important causes for the growth of Delhi as a Delhi markets are –
* The rise in disposable income of the Delhi families * The economic boom * Timely rains * Delhi population involved themselves in business other than agriculture * Increase white-collar jobs in nearby towns * Commercialization of agriculture * Saturation of the urban markets * Media penetration in Delhi areas (particularly satellite channels) * Globalization * Economic liberalization
* Revolution in the Information Technology * Women empowerment * Improving infrastructure
However, there was a significant role of the corporate enterprises simultaneously in the development of Vodafone market in Delhi. Their timely intervention into the Delhi areas, their appropriate planning, their perception and identification about the growth of Delhi markets and the use of marketing strategies all have equally contributed for the progress of Delhi markets. Even though corporate houses were hedged with so many problems in the Delhi areas, they saw a galore of opportunities in the Delhi market and converted all the pessimistic characteristics of the Delhi market into affirmative attributes. They satisfied themselves with the availability of limited infrastructure, saw a sign of prosperity rather than fear during the entry of competitors into the Delhi markets, showed excitement at the availability of satellite channels in the Delhi households, visualized their cash bells ringing with the increase in purchasing power of the Delhi masses that came equivalent to their urban counterparts. They traced a constant rise in the demand for those products that were once confined mostly to the urban houses. But, blame it on the kind of awareness created by the companies – people started using the products for other purposes as seen earlier.
Out of 300 sample size we consider to choose first strongly agree respondent who believes that Vodafone product is affordable for him/her 25% respondent out of 300 says Vodafone product is affordable in comparative of other competitor. While 33% are only agree with this statement that Vodafone has much affordable price of their respective product. Now moving ahead 28% respondent are still not agree or strongly disagree with this question they thought Vodafone products are much costlier than the other mobile service provider companies product.
14% respondent said they have mixed view about the affordability these people are those who are richer in Delhi region.
Recommendation for Vodafone would be target 28% people also to provide much more scheme and plan so they comes under the pie of affordable range
RECOMMENDATION Today the marketer truly understands the needs of the Delhi consumers, he should strive to provide them with those products and services that would meet their requirements. The marketer has to focus on his core competencies like the technological expertise to design the products for the Delhi masses. Companies like Cavin Care who launched their shampoo in sachets, Britannia who conveniently packaged its Tiger brand biscuits with low price tag are the best examples of understanding the Delhi customer's needs and providing them with the desired products.
The marketer's basic need is to understand the pulse of the Delhi masses and serve them accordingly. The companies need to make proper assessment while marketing for the Delhi India. This could most probably happen in one way by changing the profile of their managers. As most of them are management graduates bred in urban areas and are taught marketing principles and strategies applicable for the western countries, there is a mismatch in their thinking and the requirements of the Delhi consumers. Hence, hiring professionals who have expertise in Delhi marketing would go a long way to improve the situation as they can truly understand the Delhi traditions and cultures, understand the feelings of Delhi people before designing and actually launching the product. It is very essential for the Delhi marketer to understand the psychology of their consumers in terms of their usage habits and shopping behavior along with their emotions and value systems. The integration of both technological and managerial knowledge would help them to develop the various marketing strategies for the Delhi Indian markets. This will further lead to technologically superior, robust and low cost products that would be in resemblance with the Indian tradition and culture.
The marketers may also consider depending more on traditional media when marketing for Delhi consumers. This unconventional method acts as an effective way to create awareness as mass media is unreliable as it is too glamorous and interpersonal for the Delhi market. Uses of skits, magic shows, and education by
NGOs are some of the most preferred traditional media which the marketers can usually use as it goes well with the tastes of the Delhi consumers.
According to our sample size 300 here are the question would gives the insight Study on buying behaviour of Delhi consumer indicates that the Delhi retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the Delhi supply chain through a network of Delhi sub-stockists, who are based in the Delhis only.
Form our survey result it is showing that 31% of says that Vodafone connection or recharges are easily available in their respective area and they are strongly agree with this.
Now the segment of people where they not strongly agree with the statement that Vodafone product reached their respective area 27% respondent said yes some time they will get and some time not also they suggested that some time new connection is not available. Also 34% respondent responded that they either strongly disagree or disagree with the statement that Vodafone not reached their respective area so far. Only 8% respondent says that they have neutral opinion on this.
Recommendation for Vodafone would be company can target first 34% people those who are disagree and not satisfied with the product availability of the Vodafone so at least Vodafone have more than 60% market share of those people who at least knew the product is available near store so they can easily bought them.
