Marketing Management Lecture 1: Case Study of Airtel by Mahesh kumar 1405024

Telecommunication

The Indian Telecom sector:

India's telecommunication network is the third largest in the world on the basis of its customer base.
Major sectors of the Indian telecommunication industry are telephony, internet and broadcasting. The Telephonic network in the country , employs an extensive system of network elements such as digital telephone exchanges, mobile switching centers, interconnected by a wide variety of transmission systems such as optical fiber or Microwave radio relay.
The Indian telecom industry underwent significant market liberalization in the 1990s, and it has now become one of the most competitive telecom markets in the world. India has the world's second- largest mobile phone user base with over 929.37 million users as of May 2012. It has the world's third-largest Internet user-base with over 121 million as of December 2011

Figure 1 - Market share of major operators in India

Bharti Airtel Ltd.

Bharti Airtel Ltd., commonly known as Airtel, was incorporated on the 7th of July, 1995 as a

Public Limited Company and one of the first companies to enter the Telecom Services business

in India. It is the largest Indian telecommunications company and it operates in more than 20

countries across South Asia and Africa offering 2G, 3G and 4G services. It is the largest cellular

service provider in India, with 200 million subscribers as of 9th August 2012.

Airtel now offers a variety of services to its consumers including 4G services in select cities,

Airtel Money, Telemedia, Mobile data services, enterprise business solutions, etc. Airtel globally

rebranded itself in 2010 and it now follows the ‘One Network’ strategy across all Airtel

operating countries.

Performance Highlight

Figure 2 - Total revenue in Rs million of five consecutive financial year

Figure 3- Customers increment in five consecutive financial years

Marketing Strategy

Airtel offers a variety of services to its consumers including 4G services in select cities, Airtel Money, Telemedia, Mobile data services, enterprise business solutions, etc. Airtel globally rebranded itself in 2010 and it now follows the ‘One Network’ strategy across all Airtel operating countries.

Bharti has spent a considerable amount on advertising its mobile phone service, Airtel. Besides print advertising, the company had put up large no of hoardings in many places.

The objective behind designing a promotion campaign for the ‘Airtel’ services is to promote the brand awareness and to build brand preferences.

It is trying to set up a thematic campaign to build stronger brand equity for Airtel. 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.

Concept/ Principle used by Airtel

Value: It is the marketing concept of combination of quality, service and price. Value perception increases with quality and services but decrease with price.

In case of Airtel, following basic concepts make Airtel VALUABLE-

1) Value Chain:

2) Value Exploration :

Airtel explore superior technology, develop innovative services and provide enhanced customer service.

3) Value creation, communication, delivery and capturing:

They provide better services at low cost. New connections are coming up with attractive schemes. specific plans- this has become very popular e.g. SMS plan, STD plans, night calling, ISD, etc. They always put customers first, and respect them.

Customer Attraction, Retention, Growth, Survival:

For customer attraction towards himself they give many offers:

Besides this,

(i) Airtel joint venture with IFFCO, they provide agriculture knowledge to the farmers.

(ii) Airtel Money is India’s first mobile wallet service by a mobile operator. An alternative to other payment options including cash, customers can use Airtel Money for an extensive range of services across merchants to pay for remote transactions like instant money transfers, booking railway and movie tickets, paying for utility bills, insurance premiums, recharging phones, DTH and for physical transactions like shopping

Customer Satisfaction, Dis-satisfaction, Delight:

a) Due to some value added services provided by Airtel, customers get satisfied. These value added services are- Instant Balance Enquiry, Caller line identification, MMS, Airtel Live Portal etc.

b) In a random survey most prominent mobile connection used is Airtel with an approximately 56% market share.

The factors considered were network availability, customer service, tariff plans etc. Majority of the customers rated the services of Airtel as good giving it a rating of 3 on the scale of 5.

73% of the users prefer prepaid to a postpaid connection of Airtel.

7P’s

Product : Airtel Pre-paid: Airtel prepaid, the ready cellular card from Airtel, includes everything that customer dream and believed, possible. Its simple to use and comes with a host of great features like total cost control, instant balance enquiry, easy recharge .

Airtel Post-paid: Airtel post-paid gives subscribers unlimited freedom to reach out to their special ones, in their special way.It offers services like National & International Roaming, easy billing.

VOICE SERVICES Bharti Airtel became the first private fixed-line service provider in India. It is now promoted under the Airtel brand. Airtel Enterprise Services believes that these circles have high telecommunications potential, especially for carrying Voice & Data traffic.

Managed Data & Internet Services

Managed data & internet services include:

MPLS

ATM

Internet

IPLC

Leased Lines

Customized Solutions

International Managed Services

Metro Ethernet

Price

Two separate trends are evident for pricing which are in terms of the kind of usage by the subscriber.

1) Local or STD phone calls

The biggest driver of its growth is the development of pricing plans catering to individual needs and requirements of the people at the prices they are willing to pay.

2) Calls to a phone on same network or to a different network

Combining these two trends, four different usage patterns emerge according to which a user can select the pricing plans:

a) Local calls to same network cell phone

b) Local calls to different network/landline

c) STD calls to same network

d) STD calls to different network/landline

Place

It has wide and extensive presence even in the remotest areas

Airtel Customer Care Touch Points

Distributors like Paan shops, grocery stores, chemists, outlet etc.

Promotion

Large scale print and video advertising.

Big celebrities like SRK and Sachin are roped in to endorse the product.

In 2002 Airtel got its Signature tune from A.R. Rehman, this signature tune is perhaps the most downloaded tune in India.

Provides innovations such as Bollywood movie premiers, music services such as ring back tones & many more.

"Friendz" pre-paid connection for youth," Ladies Special" plan, Seniors plan.

Executives corporate plan(First to give prepaid in this category).

Special discounts in calling rates & sms services.

Providing wallpapers and screensavers on website.

Airtel Magic announces a new offer of Rs. 10 crore talk time

Rs. 10 crore worth of talk time up for grabs by new AirTel Magic customers

One out of every 2 new connections can win additional talk time

Additional free talk time ranges between Rs.25 to Rs.100,000

AirTel, the first pan-India cellular operator to extend the largest promotional extravaganza in all its 15 circles

Top prize of Rs.1 lakh worth of talk time to be declared everyday

Guaranteed free talk time worth Rs.50 with every activation

The Rs.10 crore talk time offer is valid from 3rd May to 15th June,2003

People

The Board of Directors

The Employees

The Target Customers- Airtel has positioned itself as an aspirational and lifestyle brand, in a way that trivialities the price in the mind of the consumer. It pitches not merely as a mobile service provider, but as something that would give a customer certain badge value.

Physical Evidence

The physical environment plays an important role in shaping the service experience and delivering the customer satisfaction.

Bharti Airtel uses aqua-based ink for all its in-shop branding, in spite of its cost being three times the cost of ink which is normally used. The aqua-based ink is environment friendly and does not emit any fumes and hazard.

Sometimes flex materials are used for hoardings, but since they are not disposable these are donated to poor people so that they can use it as roof-material on their houses.

Process

Process innovations and continuous improvement through people involvement.

Problem investigation by Fact based – Root Cause Analysis.

Based on customer specifications, Airtel has many business processes on the following concepts:

1) Delivery time

2) Lead – time

3) Time to market

Result Oriented Approach- Each process has been designed by first planning the desired result. The targeted results are then arrived at through identification of the following:

1) The next-customer and end-customer expectations.

2) Past experience of “what went wrong and can go wrong”

USP and Differentiation

Reaching out to the masses with its strong network base.

The company has several Firsts to its credit which makes Airtel different from others-

To launch Cellular service in Delhi on November, 1995.

To launch full roaming service on pre-paid in the country.

To launch 32K SIM cards.

In Asia to deploy the multi band feature in a wireless network for efficient usage of spectrum.

To deploy Voice Quality Enhancers to improve voice quality and acoustics.

Telecom company in the world to receive the ISO 9001:2000 certification from British Standards Institute.

Operator to revolutionize the concept of retailing with the inauguration of AirTel Connect (exclusive showrooms)in 1995. Today AirTel has 120 Customer Care Touch Points and over 300 dealers in Delhi and NCR towns.

To expand it's network with the installation for second mobile switching center in April, 1997 and the first in Delhi to introduce the Intelligent Network Platform First to provide Roaming to its subscribers by forming an association called World 1 Network. First to provide roaming facility in USA. AirTel has the largest automatic roaming service "SMART ROAM"- National in 350 cities in India and "SMART ROAM" - International in over 60 countries and 95 networks all over the world.

STP

— DEMOGRAPHIC SEGMENTATION: Airtel has divided its market on the basis of following variables

Age: 18 to 40 years

Gender: Male and Female

Income: More than 60000 per annum

— GEOGRAPHIC SEGMENTATION:

Country: India

State: Delhi, Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu, Punjab,etc

District: Mumbai, Kolkata, Delhi, Ahmadabad, Chennai, etc.

— PSYCHOLOGICAL SEGMENTATION

Lifestyle: Based on people’s way of living.

Values: According to the values of an individual.

Targeting:

To provide internet connection in rural areas, it covers only 10% of the rural areas.

Provide carrier opportunity and exam preparation in sub-urban and rural areas

High corporate clients

Low income group people

Youth with youth club

Positioning

Bharti Airtel, in its mobile networks, initially during the mid-late 1990s positioned itself as a brand for the elite. The high government tariff and the low awareness about mobile phones among the masses, called for such a positioning. A mobile phone was a luxury

affordable only to the price insensitive customer in those days and Airtel rightly positioned themselves in this segment.

Branding:

By 2005, there were a total of 12 players in the market with the five major players being Bharti airtel, BSNL,Hutch, Idea and RIM. Due to severe competition, BHARTI AIRTEL had to take new initiatives to woo customers. Prominent among these were - celebrity endorsements, loyalty rewards, discount coupons,business solutions and talk time schemes. As of date, AIRTEL has used the maximum number of celebrities for advertisements. The list includes -Sachin, Shahrukh, Rehmaan, Saif Ali Khan, Kareena Kapoor, Zaheer Khan, etc. The Youth segment and the business class segment were considered most important by cellular industries of which the youth segment was largest and fastest growing.