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Brm term paper final
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  • 1. A STUDY ONPROMOTIONAL PRICING VS BRAND SWITCHING WITH RESPECT TO 1P/SEC SCHEME OF TATA DOCOMO PROJECT Done By BHANUCHANDER REDDY .P (09MBA010) SAMPATH .V (09MBA117) SHIVANI KUMARI (09MIB054) VINUSHA .K (09MBA059) UNDER THE GUIDANCE OF Dr.P.GANESAN PROFESSOR JANUARY 2010 Page | 1
  • 2. CONTENTS S.NO TITLE PAGE NO 1. INTRODUCTION 05 12 2. LITERATURE REVIEW 23 3. METHODOLOGY 27 4. DATA ANALYSIS 55 5. FINDINGS 59 6. CONCLUSION TABLESS.NO TITLE OF THE TABLE PAGE. NO1 AGE OF THE RESPONDANT2 GENDER OF THE RESPONDENT Page | 2
  • 3. 3 OCCUPATION OF THE RESPONDENT4 MOBILE SERVICE THE RESPONDENT USES5 PURPOSE OF USING THE MOBILE SERVICE6 SPENDING PER MONTH7 AIRTIME PER DAY8 FACTOR CONSIDERED MOST WHILE SWITCHIG BRAND DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER9 SERVICES (LOCAL RATES) DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER10 SERVICES (STD RATES)11 USAGE OF 1 P/SEC PLAN12 WHICH SERVICE –IF USING 1 P/SEC SCHEME13 INTERESTED IN 1 P/SEC SCHEME14 IF INTERESTED – WHICH SERVICE15 DOCOMO’S1P/SEC -BENEFICIARY IN TERMS OF TARIFFS TATA DOCOMO’S 1P/SEC PLAN- AS A TACTIC TO16 ATTRACT CUSTOMERS17 PRICING POLICY OF AIRTEL18 PRICING POLICY OF DOCOMO19 PRICING POLICY OF AIRCEL20 PRICING POLICY OF UNINOR PRICE IS CONSIDERED AS AN IMPORTANT FACTOR WHILE21 SWITCHINGBRAND CONSIDERATION OF CALL TARIFFS WHILE SWITCHING22 BRAND Page | 3
  • 4. CONSIDERATION OF SMS CHARGES WHILE SWITCHING23 BRAND CONSIDERATION OF SIM RATES WHILE SWITCHING24 BRAND25 USAGE OF 1P/SEC PLAN- CONSIDERATION OF TARIFFS WHILE SWITCHING BRANDS USAGE OF 1 P/SEC PLAN- CONSIDERATION OF PRICE AS26 AN IMPORTANT FACTOR WHILE SWITCHING BRAND PURPOSE OF USAGE OF MOBILE SERVICE-RANKING OF27 DOCOMO Page | 4
  • 5. INTRODUCTIONIndustry profile:The Indian telecommunication industry, with about 506.04 million mobilephone connections (Nov 2009), is the third largest telecommunication network inthe world and the second largest in terms of number of wireless connections. TheIndian telecom industry is one of the fastest growing in the world and is projectedthat India will have ‘billion plus’ mobile users by 2015. Projection by severalleading global consultancies is that India’s telecom network will overtake China’sin the next 10 years. For the past decade or so, telecommunication activities havegained momentum in India. Efforts have been made from both governmental andnon-governmental platforms to enhance the infrastructure. The idea is to helpmodern telecommunication technologies to serve all segments of India’s culturallydiverse society, and to transform it into a country of technologically aware people.Modern growth: Page | 5
  • 6. A large population, low telephony penetration levels, and a rise in consumers’income and spending owing to strong economic growth have helped make Indiathe fastest-growing telecom market in the world. The first and largest operator isthe state-owned incumbent BSNL, which is also the 7th largest telecom company inthe world in terms of its number of subscribers. BSNL was created bycorporatization of the erstwhile DTS (Department of TelecommunicationServices), a government unit responsible for provision of telephony services.Subsequently, after the telecommunication policies were revised to allow privateoperators, companies such as Vodafone, Bharti Airtel, Tata Indicom, Ideacellular, Aircel and Loop Mobile have entered the space. In 2008-09, rural Indiaoutpaced urban India in mobile growth rate.India’s mobile phone market is the fastest growing in the world, with companiesadding some 16.67 million new customers a month.The total number of telephones in the country crossed the 543 million mark on Oct2009. The overall tele-density has increased to 44.85% in Oct 2009. In the wirelesssegment, 17.65 million subscribers have been added in Nov 2009. The totalwireless subscribers (GSM, CDMA & WLL (F)) base is more than 543.20 millionnow. The wire line segment subscriber base stood at 37.16 million with a declineof 0.13 million in Nov 2009.The Mobile telecommunications system in India is the second largest in the worldand it was thrown open to private players in the 1990s. The country is divided intomultiple zones, called circles (roughly along state boundaries). Government andseveral private players run local and long distance telephone services. Competitionhas caused prices to drop and calls across India are one of the cheapest in theworld. The rates are supposed to go down further with new measures to be takenby the Information Ministry. The mobile service has seen phenomenal growthsince 2000. In September 2004, the number of mobile phone connections hascrossed fixed-line connections. India primarily follows the GSM mobile system, inthe 900 MHz band. Recent operators also operate in the 1800 MHz band. Thedominant players are Airtel, Reliance, Vodafone, Idea cellular and BSNL/MTNL.There are many smaller players, with operations in only a few states.International roaming agreements exist between most operators and many foreigncarriers. Page | 6
  • 7. Introduction of TATA DOCOMO:Tata Teleservices Provides mobile services under 3 Brand names: Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator) Virgin Mobile (CDMA Mobile operator)Tata DoCoMo was formed in November 2008 as an alliance between TataTeleservices and NTT DoCoMoCurrently, Tata Docomo Mobile service is available Bihar & Jharkhand, TamilNadu, Orissa, Andhra Pradesh, Karnataka, Kerala, Kolkata, Mumbai,Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Haryana, Chennai,Eastern Uttar Pradesh, Western Uttar Pradesh, Punjab, Rajasthan, West Bengal.NTT DoCoMo holds 26 % stake in the jointly formed company. It has alsoemerged as the first mobile operator in India to have re-introduced ‘per second’pulse, after Loop Mobile (formerly BPL Mobile) discontinued their pay persecond service which was introduced in 2004.From October 2009 TRAIannounced that TATA tele service is Indias no.1 tele service brand. Page | 7
  • 8. STUDY OBJECTIVES • Statement of the problem: Today, with the increase in number of mobile users, the competition betweenmobile network service providers is also increasing drastically. Companies areintroducing many promotional pricing schemes to attract the customers andincrease their market share. Tata docomo came into the market with itsintroductory pricing scheme of 1paise billing- 1p/sec both for local and STD. Thisoffer was a huge success and captured considerable amount of market share. Page | 8
  • 9. The study deals with whether this scheme (promotional pricing) made thecustomers switch their usage of their brand.MANAGEMENT QUESTIONManagement question is a useful way to approach the research process is to statethe basic dilemma that prompts the research and helps to develop it more specific. • MANAGEMENT QUESTION OF OUR STUDY: How do consumers evaluate and respond (switch or stick) to promotionalincentives with reference to Tata Docomo’s 1p/sec plan? RESEARCH QUESTION A Research Question is the hypothesis of choice that best states the objective of the research study. The research question is one of the first methodological steps the investigator has to take when undertaking research. The research question must be accurately and clearly defined. • RESEARCH QUESTION OF OUR STUDY: Page | 9
  • 10. • What is the effect of TATA DOCOMO’s promotional pricing on different customer segments? INVESTIGATIVE QUESTIONSInvestigative questions are questions the researcher must answer to satisfactorilyarrived at a conclusion about the research question. To formulate them theresearcher takes a general research question and breaks it into more specificquestions about which to gather data. Investigative questions should be included inthe research proposal as they guide the development of the research design. Theyare the foundation for creating the research data collection instrument. • INVESTIGATIVE QUESTIONS OF OUR STUDY:  Which customer segments are more favorable to TATA DOCOMO’s promotional pricing?  Do other service providers lose their potential customers due to TATA DOCOMO’s promotional pricing? • SCOPE OF THE STUDY: The present study titled “A study on the effect of promotional pricing onbrand switching with reference to Tata Docomo’s 1p/sec plan.”  Attempts to analyze the effect of promotional pricing on brand switching.  Attempts to analyze which customer segments are more favorable to 1p/sec plan. Page | 10
  • 11. Page | 11
  • 12. LITERATURE REVIEWPromotional pricing: Promotional pricing is a sales and marketing technique. It involves reducingthe price of a product or service to attract customers. This technique can beeffectively used across numerous industries including food services, cosmetics,and household cleaning supplies. Promotional pricing often involves reducing prices to unsustainably lowlevels. In some cases, products and services may be sold at or below cost. A buyone get one free scheme may even be used. When this is done, interest in goodscan be greatly increased; meaning sales are also likely to increase dramatically. This technique may be used by retailers or by producers. When it is used byretailers, the goal is generally to attract attention to the business and to attractregular customers. When the technique is used by producers, the goal is generallyto attract customers to a product or brand and to encourage brand loyalty. Page | 12
  • 13. For example, a clothing store may offer clothing at prices that are below themanufacturer’s suggested retail price. Shoppers, attracted by the low prices, arelikely to remember that store and visit again when they have apparel needs. Acosmetic company may offer two compacts of eye shadow for the price of one.When women need eye shadow again, it is hoped they will be motivated to buythat brand again. What customers are likely to find when they return for a future purchase isthat the prices of these goods have increased. Promotional pricing is usuallytemporary. This means that in most cases, quality and experience need tocomplement this pricing strategy. If it does not, and customers do not feel there isanything significant about the product or service, it can be very difficult to getthem to purchase it at higher prices. There are other reasons the use of promotional pricing must be used wisely.If it is not, it can amount to a company losing a great deal of money without theexpected return. If the technique is used too often, for example, consumers mayanticipate the price lowering and refuse to buy goods at the normal price. Promotional pricing is typically used when new products are beingintroduced to the market. It can also be used to stimulate demand for products orservices with lagging demand. This strategy of price targets buyers who arelooking for the deal. Some examples of promotional pricing are: • Special event pricing. Pricing that is special (or lowered) for special events such as Christmas, Easter, Valentines Day, Mothers Day, Super Bowl, Thanksgiving and Back to School. Page | 13
  • 14. • Rebate programs. Such as a rebate or allowance when buying a home and the seller offers a move-in allowance, or a carpet replacement or renovation allowance or a rebate for all cash, no financing, and purchases of big ticket items like cars.• Low or no-interest financing. A number of furniture stores will advertise no-interest financing loans for furniture purchases. Car dealerships also offer these pricing programs - often for last years models. This strategy has been a sales success for a number of industries in the past, be careful how you use it though as consumers are becoming more sensitive to the true value of the strategy.• Buy One, Get One free or Two for the Price of One. If product costs are low, and price includes a healthy profit margin, this may be a good strategy to use if you have an overabundance of inventory. Even better if competitive pricing comparisons result in your product offer being the better deal.• Extended payment terms. This can also be viewed as a hold and pay, or lay-away, pricing model. You typically pay a deposit and pay over time. You do not get the product until paid up. The renovation and construction industry do a variation on this strategy: you usually are required to pay one third of the projected cost for the project up-front - this is to help pay for the materials; one third about half way through the project and the balance on completion. For the business-to-business market, the extended payment terms might be pays in net 30 days, or net 60 days or a discount if you pay in net 15 days. There are many variations to this pricing strategy.• No charge or low-cost warranties. If a business has a good warranty or return program (good in the sense that there are no, or few, product failures and no, or few, product returns), then it is not a high cost investment for them to offer low cost or no cost warranties. Buyers view these types of Page | 14
  • 15. promotional prices very positively because they believe it shows that the business has high confidence in the products performance. The promotional pricing strategy has been over-used in the retail markets andbuyers have developed a healthy skepticism about the reality of the deal. One ofthe most often used promotional pricing strategies is the "Going out of Business"sale; the sale seems to last for years and the business eventually just goes out ofbusiness at that location but then restarts elsewhere.Brand switching: Brand switching is the process of choosing to switch from routine use of oneproduct or brand to steady usage of a different but similar product. Much of theadvertising process is aimed at encouraging brand switching among consumers,thus helping to grow market share for a given brand or set of brands. Convincing consumers to switch brands is sometimes a difficult task. It isnot unusual for customers to build up a great deal of brand loyalty due to suchfactors as quality, price, and availability. To encourage switching brands,advertisers will often target these three areas as part of the strategy of encouragingbrand switching. Price is often an important factor to consumers who are tight budgets. Forthis reason, advertisers will often use a price comparison model to entice long timeusers of one brand to try a new one. The idea is to convince the end user that it ispossible to purchase the same amount of product while spending less money.Ideally, this means that the consumer can use the savings for other purchases, Page | 15
  • 16. possibly even a luxury item of some sort. The idea of more discretionary resourcesin the monthly budget can be an effective in the encouragement of jumping brands. However, price is not always enough to encourage brand switching. Whenthis is the case, comparing the quality of one brand to another is a commonapproach. With this model, the motivation is that the new Brand B will work justas well as the more established Brand A. When coupled with a cost savings, thecomparison of quality can often sway long time consumers at least long enough togive the newer product a try. There are consumers who are less concerned with cost. For these users, theapproach is to present the new brand as being of superior quality to the establishedbrand. Essentially, this means demonstrating that the new brand can do everythingthe older brand can do, plus a little more. For example, a product that can be usedto dust wood, glass, and plastic surfaces may be more attractive than a product thatis formulated for glass only. The implication is that the one product can take theplace of three products, and may motivate brand switching.Article reviews:Assessing the impact of a very successful price promotion on brand,category and competitor sales: Price promotions are endemic in consumer packaged goods markets. In1987, Abraham and Lodish reported that many consumer goods categories sold 90percent of their volume on deal (Abraham and Lodish, 1987).Ten years later, tradepromotions reportedly accounted for 50 per cent of the marketing budgets of USconsumer goods firms (Mela et al., 1997). It is well known that price promotionsproduce a short-term volume gain for the brand being promoted (e.g. Blattberg andNeslin, 1990). Previous research has also indicated that price promotions areunlikely to have any long-term positive impact for the brand by attracting newbuyers who repeat-buy, as per Ehrenberg et al. (1994). This promotion, with its Page | 16
  • 17. massive volume uplift and temporary category expansion, did not yield any longer-term benefits for the brand. The implications for manufacturers are that pricepromotions, even those that engender massive short-term volume uplifts, do notappear to induce new buyers to the brand who buy again later. This means that theevaluation of such promotions should be strictly based on the immediate effect onprofit margins. This criterion is likely to show price promotions, particularly deepones, in a negative light. Dickson (1997, Chapter 16) shows that it is virtuallyimpossible to make additional contribution to profit from deep price reductions.From the manufacturer’s perspective, however, this research also showed noappreciable long-term negative impact on brand sales. If there were such negativeeffects, the profit potential from temporary price reductions would be even moretenuous than currently thought. This is not to say that price promotions do not orcannot have longer-term negative effects. Evidence shows that repeated use ofpromotions can lower reference prices (Kalyanaram and Winer, 1995) and inducehabitual deal-buying (e.g. Blattberg and Neslin, 1990, Chapter 5; Mela et al., 1997,1998). For managers concerned about the effects on their brands from competitor’spromotions, this analysis demonstrates that in grocery goods, unpromoted brandsmay still sell at approximately normal volume levels even when a competing brandis being promoted and enjoying a massive sales uplift. The possible problem forcompetitor brands in this case appeared to be the longer-termcategory effects. Thismassively successful promotion for one brand reduced the total category sales forthe retailer that ran it, for approximately ten weeks following the promotion. Thismeans that for ten weeks after the promotion, competitor brands had a smallermarket from which to obtain sales in retailer. It is indeed surprising that given thiscontraction in category sales, sales for brand X itself did not exhibit a post-promotion trough. For the retailer, there are also clear implications for currentpractice. The results suggest that the benefits to grocery retailers of low-price, highuplift promotions should be evaluated over the longer-term. Due to the longer-termnegative effect on the category, the total extra volume to the retailer wasconsiderably less than what immediate reporting would indicate. Indeed, if theretailer had reduced its own margins during the promotion the overall profit resultmight have been negative. This is because it has simply transferred a considerableamount of normal price sales in future periods to discounted sales (with possiblylower margins) in the period of the promotion.Dynamics of price sensitivity among mobile service customers: Price sensitivity is one of the key factors affecting to companies pricingchoices. Yet in mobile services sector business practitioners are facing problems in Page | 17
  • 18. pricing decisions as they are short of knowledge on their customers’ pricesensitivity levels and dynamics. Price has been observed as an important elementaffecting the diffusion of new products and services, but pricing of a new productor service is particularly difficult (Foxall, 1984). To enable accurate pricingdecisions for new products or services, a detailed knowledge on the potentialcustomers’ perceptions and characteristics is needed. However, though it is knownthat price is an integral part of diffusion enhancement activities, we have a verylimited knowledge on its actual effects on the diffusion of mobile services. It isalso more or less unknown how customers of mobile services perceive the chargedprices and what are the dynamics affecting to price perceptions. The perceivedprice is formed from the bases of a customer’s experience about mobile servicesand in comparison to prices of other optional service delivery channels. Furtherchallenges for pricing of mobile services is brought by the fast evolving newwireless technologies and business practices. In this new service environmenttraditional pricing strategies have brought unsatisfactory results, a need to developpricing has generated. For that purpose it is necessary to study the customers’subjective price perceptions to enable the creation of more effective pricingschemes.In this study the researcher concentrates on studying how mobile servicecustomers perceive the prices, do customers differ in their price sensitivity levels,and could customers’ price sensitivity levels be accurately predicted. For thesepurposes we have divided mobile service customers into three segments which arebelieved to differ in terms of their price sensitivities:1 mobile segment;2 combined segment; and3 fixed-line segmentAt an aggregated level, price sensitivity is often used as a synonym for priceelasticity (Link, 1997) and thus also in this study these two terms are seen to assynonyms. Sensitivity of demand refers to how volume-sensitive a product or aservice is to price changes. Sensitivity represents a valuable strategic tool inpricing (Tucker, 1966).Price sensitivity on the individual adopter level appears tobe equivalent to the concept of price consciousness for a potential buyer of anyproduct. Price consciousness has been defined as:. . . the degree to which he or she is unwilling to pay a high price for a product andwilling to refrain from buying a product whose price is unacceptably high(Monroe, 1990).Price consciousness is related to the price acceptability level aswell as to the width of latitude of price acceptability(Lichtenstein et al., 1988).Individuals, who are price conscious, are generally not willing to pay high pricesfor the product in question. Furthermore, the range of acceptable prices isrelatively narrow for price conscious individuals (Link, 1997).In studies on price Page | 18
  • 19. sensitivity in telecommunication industry three different consumer segments havebeen identified (e.g. Kollmann, 2000). It has been found that in both ends ofpricing (high-end versus low-end) the price sensitivity is substantially lower, inother words insensitive. Influencing on these two market segments with pricingwould be most probably ineffective. Thus, for these market segments it would bemost effective to pursue quality-focused marketing strategies (e.g. improvement ofservice/speech quality). Along with consumer attitudes and shopping orientation,there has been significant weight given to price perceptions of consumers, and itsimpact on the adoption of product and service innovations.The price/acceptance function: perspectives of a pricing policy inEuropean telecommunication marketsInnovation management success for telecommunication products depends not onlyon sales, but also, and primarily so, on actual call times by subscribers (e.g. ontheir mobile phones). It is not only the purchase price that plays a major role forthis type of service, but also call and rental charges. This study investigates twopotential subscribers decisions, using the graphic device of a price/acceptancefunction and a charge/acceptance function. The first decision is to buytelecommunications products (accepting the purchase price), and the seconddecision is to use these products (accepting the charges for using the product).In particular, an attempt is made to describe the general profile of theprice/acceptance function through considerations of plausibility. Based on anempirical experiment, conclusions are drawn for the pricing policy oftelecommunication products. The policy emerging is one of abandoning fixedbasic charges and of giving away end-user sets (e.g. mobile phones) free of charge. Page | 19
  • 20. The price and acceptance pricing:The charges/acceptance function: Page | 20
  • 21. Switching costs and consumer behavior: implications fortelecommunications regulationSwitching patterns provide an important indicator that the demand-side of a marketis well-developed and that consumers are sufficiently empowered to participateactively. The motivation to switch is generally a function of consumers’ estimateof the performance of their existing supplier; and whether or not they believe thereare better alternatives available from other suppliers on the aspects of service thatmatter to them. If the market is perceived to be undifferentiated and/or if theircurrent supplier is perceived to be the best on the market on the criteria that areimportant, there is no expected benefit from switching. The ability and willingnessof consumers to switch is critically important. If switching is discouraged orimpeded this could impact not only on the demand-side but also potentially raisesupply side barriers (Barrow, 2007). This is because new entrants could bedeterred from entering the market in the belief that it will be difficult to persuadeconsumers to switch from their existing provider. This could diminish theeffectiveness of competition and serve to limit the benefits that consumers wouldotherwise derive from it. It is important to note, however, that switching is not theonly measure of a vibrant demand-side, nor is switching necessarily always in aconsumer’s best interests. The decision to engage in co-ordinate informationgathering that will support the decision to switch or not to switch is also important.If a consumer is satisfied with a current provider, switching is not necessarily an Page | 21
  • 22. improvement. Moreover, choosing a new service does not necessarily meanswitching provider. Page | 22
  • 23. METHODOLOGY RESEARCH METHODOLOGYResearch simply means a search for facts, answers to questions and solution toproblem. It is a purposive investigation, an organized inquiry. It seeks to findexplanations to unexplained phenomenon, to clarify the doubtful propositions andto correct the misconceived facts. In order to comply with our objective and testour research hypotheses we design a study based on the effect of corporate socialresponsibility on the consumer purchase behavior. • TYPE OF RESEARCH Page | 23
  • 24. Descriptive ResearchDescriptive research, also known as statistical research, describes data andcharacteristics about the population or phenomenon being studied. Descriptiveresearch answers the questions who, what, where, when and how.Although the data description is factual, accurate and systematic, the researchcannot describe what caused a situation. Descriptive research can be said to have alow requirement for internal validity.Descriptive research deals with everything that can be counted and studied. Butthere are always restrictions to that. Your research must have an impact to the livesof the people around you. • TYPE OF SAMPLINGSampling is the use of a subset of the population to represent the whole populationfor the purpose of. Probability sampling, or random sampling, is a samplingtechnique in which the probability of getting any particular sample may becalculated. For the present study we have taken convenience sampling, a type ofnon random/ non probability sampling techniques. • SAMPLE SIZEThe sample size for our research is 100 which includes sample of age groupsbelow 30 and above 30. Page | 24
  • 25. DATA COLLECTION-Data collection is the process of collecting information for use in evaluation. Themost common methods are surveys, interviews, pre and post-testing, professionalobservation, self-report and review of existing records. The gathering ofinformation (figures, words or responses) from administered questionnaires thatdescribe some situation from which conclusions can be drawn. It is also theprocess of gathering and measuring information on variables of interest, in anestablished systematic fashion that enables one to answer stated researchquestions, test hypotheses, and evaluate outcomes. There are two types of data indata collection:- • Primary Data-it is the first hand information that is collected for the survey. It includes the behavioral responses, measuring attitudes, observation. Page | 25
  • 26. • Observation Consumer’s purchasing behavior of FMCG products (P&G, ITC, Britannia, HUL)• Questionnaire: Structured and unstructured• Secondary data- a secondary source is a document or recording that relates or discusses information originally presented elsewhere. A secondary source contrasts with a primary source, which is an original source of the information being discussed. Secondary sources involve generalization, analysis, synthesis, interpretation, or evaluation of the original information.• Literature review DATA ANALYsIs AND INTERpRETATION Page | 26
  • 27. Data analysis:TABLE 1: AGE OF THE RESPONDENT Valid CumulativeRespondents Frequency Percent Percent Percent <30 70 70.0 70.0 70.0 >30 30 30.0 30.0 100.0 Total 100 100.0 100.0 Page | 27
  • 28. >30 <30Inference:Out of 100 respondents 70% falls under the age group of less than 30 and 30%falls under the age group of above 30.TABLE 2: GENDER OF THE RESPONDENT Frequen Valid Cumulativ cy Percent Percent e PercentVali male 47 47.0 47.0 47.0d fema 53 53.0 53.0 100.0 le Total 100 100.0 100.0 Page | 28
  • 29. male femaleInference:Out of 100 respondents, 47% are male and 53% female.Table 3: Occupation of the respondents Frequen Valid Cumulativ Occupation cy Percent Percent e Percent busines 12 12.0 12.0 12.0 s housew 7 7.0 7.0 19.0 ife job 11 11.0 11.0 30.0 student 70 70.0 70.0 100.0 Total 100 100.0 100.0 Page | 29
  • 30. 80 60 40 20 0 business housewif job studentInference:Out of 100 respondents, 12% comes under the category “business”, 7% are housewives, 11% comes under the category “job”, and 70% are “students”.Table 4: mobile service the respondent usesMobile Frequen Valid Cumulativeservice cy Percent Percent Percent Airtel 37 37.0 37.0 37.0 Vodaf 13 13.0 13.0 50.0 one idea 9 9.0 9.0 59.0 cell 1 1.0 1.0 60.0 one relian 6 6.0 6.0 66.0 ce doco 34 34.0 34.0 100.0 mo Page | 30
  • 31. Total 100 100.0 100.0 40 30 20 10 0 airtel vodafone idea cellone reliance docomoInference: Out of 100 respondents the mobile users of Airtel are 37%, Vodafone13%, idea 9%, cell one 1%, reliance 6% and docomo 34%Table 5: purpose of usage of mobile service Frequen Valid Cumulativ cy Percent Percent e PercentValid busin 3 3.0 3.0 3.0 ess perso 64 64.0 64.0 67.0 nal both 33 33.0 33.0 100.0 Total 100 100.0 100.0 Page | 31
  • 32. 70 60 50 40 30 20 10 0 business personal bothInference:Out of 100 respondents, 3% use it for business, 64% for personal use and 33% forbusiness as well as for personal use.Table 6: spending per month Frequen Valid Cumulativ cy Percent Percent e PercentValid <100 14 14.0 14.0 14.0 100-3 59 59.0 59.0 73.0 00 301-5 18 18.0 18.0 91.0 00 >500 9 9.0 9.0 100.0 Total 100 100.0 100.0 Page | 32
  • 33. 70 60 50 40 30 20 10 0 <100 100-300 301-500 >500Inference:In a month Out of 100 respondents, 14% spend less than 100, 59% spend betweenthe range of 100- 300, 18% spend between the range of 301-500 and 9% spendmore than 500.Table 7: airtime per day Frequen Valid Cumulativ cy Percent Percent e PercentValid <30mi 31 31.0 31.0 31.0 n 30min- 45 45.0 45.0 76.0 2hrs 2hrs-5 18 18.0 18.0 94.0 hrs >5hrs 6 6.0 6.0 100.0 Total 100 100.0 100.0 Page | 33
  • 34. 50 40 30 20 10 0 <30min 30min-2hrs 2hrs-5hrs >5hrsInference: Out of 100 respondents, 31% talk for less than 30 min per day, 45% talk between30 min to 2 hours, 18% talk between 2 hours to 5 hours and 6% for more than 5hours.Table 8: factor considered while switching brand Frequen Valid Cumulativ cy Percent Percent e PercentValid price 45 45.0 45.0 45.0 good network 48 48.0 48.0 93.0 coverage customer 6 6.0 6.0 99.0 service other 1 1.0 1.0 100.0 factors Total 100 100.0 100.0 Page | 34
  • 35. 60 50 40 30 20 10 0 price customer service good netw ork coverag other factorsInference:Out of 100 respondents, 45% consider price, 48% good network coverage, 6%customer service and 1% other factors (location of dealers, the service providersused by family members) as an important factor while switching their brand.Table 9: Docomo’s 1p/sec plan is better than other services (local) Frequen Valid Cumulativ cy Percent Percent e PercentValid yes 38 38.0 38.0 38.0 no 43 43.0 43.0 81.0 cant 19 19.0 19.0 100.0 say Total 100 100.0 100.0 Page | 35
  • 36. 50 40 30 20 10 yes no cant sayInference:Out of 100 respondents, 38% think, while 43% don’t, 19% can’t say thatDocomo’s 1p/sec plan is better than other services providers for local call rates.Table 10: Docomo’s 1p/sec plan is better than other services (STD) Frequen Valid Cumulativ cy Percent Percent e PercentValid yes 47 47.0 47.0 47.0 no 35 35.0 35.0 82.0 can’t 18 18.0 18.0 100.0 say Total 100 100.0 100.0 Page | 36
  • 37. 50 40 30 20 10 yes no cant sayInference:Out of 100 respondents, 47% think, while 35% don’t, 18% can’t say thatDocomo’s 1p/sec plan is better than other services providers for STD call rates.Table11: use of 1p/sec plan Frequen Valid Cumulativ cy Percent Percent e PercentVali yes 51 51.0 51.0 51.0d no 49 49.0 49.0 100.0 Tota 100 100.0 100.0 l Page | 37
  • 38. 51.5 51.0 50.5 50.0 49.5 49.0 48.5 yes noInference:Out of 100 respondents, 51% use, while 49 don’t use 1p/sec planTable12: if yes which service Valid Cumulative Frequency Percent Percent Percent Airtel 14 14.0 27.5 27.5 Vodafon 1 1.0 2.0 29.4 e reliance 3 3.0 5.9 35.3 docomo 32 32.0 62.7 98.0 others 1 1.0 2.0 100.0 Total 51 51.0 100.0 Page | 38
  • 39. if yes which which service 40 30 20 10 0 airtel vodafone reliance docomo othersInference:Out of 51 respondents who use 1p/sec scheme, 14% use Airtel, 1% use Vodafone,3% use reliance, 32% use docomo and 1% use other network services.Table13: if not interested in 1p/sec plan? Frequen Valid Cumulativ cy Percent Percent e PercentValid yes 20 20.0 40.8 40.8 no 29 29.0 59.2 100.0 Total 49 49.0 100.0Missi Syste 51 51.0ng mTotal 100 100.0 Page | 39
  • 40. if no - interested in 1p/sec plan? 30 20 10 0 yes noInference:Out of 49 respondents, who don’t use 1p/sec scheme 20% are interested to opt1p/sec plan while 29% are not.Table14: if interested, which service Valid CumulativRespondents Frequency Percent Percent e Percent Airtel 8 8.0 40.0 40.0 Vodafone 4 4.0 20.0 60.0 Idea 1 1.0 5.0 65.0 cell one 1 1.0 5.0 70.0 docomo 5 5.0 25.0 95.0 others 1 1.0 5.0 100.0 Total 20 20.0 100.0 Page | 40
  • 41. 10 8 6 4 2 0 airtel vodafone idea cellone docomo othersInference:Out of 20 respondents, who don’t use this scheme but are interested in using thisscheme, 8% prefer Airtel, 4% prefer Vodafone, 1% prefer idea, 1% prefer cell one,5% prefer docomo, the remaining 1% prefer others (Aircel)Table15: rating for docomo: beneficiary in terms of tariffs Frequen Valid Cumulativ cy Percent Percent e Percent Page | 41
  • 42. Valid strongly 4 4.0 4.0 4.0 disagree disagree 5 5.0 5.0 9.0 neither agree nor 30 30.0 30.0 39.0 disagree agree 50 50.0 50.0 89.0 strongly 11 11.0 11.0 100.0 agree Total 100 100.0 100.0 60 50 40 30 20 10 0 strongly disagree neither agree nor di strongly agree disagree agreeInference:Out of 100 respondents, 4% strongly disagree, 5% disagree, 30 %are neutral, 50%agree, 11% strongly agree that Docomo’s 1p/sec plan is beneficiary in terms oftariffs.Table16: rating for Docomo’s tactic to attract customers (1 p/sec plan) Frequen Valid Cumulativ cy Percent Percent e Percent Page | 42
  • 43. Valid strongly 2 2.0 2.0 2.0 disagree disagree 1 1.0 1.0 3.0 neither agree nor 38 38.0 38.0 41.0 disagree agree 25 25.0 25.0 66.0 strongly 34 34.0 34.0 100.0 agree Total 100 100.0 100.0 50 40 30 20 10 0 strongly disagree neither agree nor di strongly agree disagree agreeInference:Out of 100 respondents, 2% strongly disagree, 1% disagree, 38 %are neutral, 25%agree, 34% strongly agree that Docomo’s 1p/sec plan as a tactic to attractcustomers.Table17: rating for Airtel Frequen Valid Cumulativ cy Percent Percent e Percent Page | 43
  • 44. Valid excell 37 37.0 37.0 37.0 ent good 53 53.0 53.0 90.0 poor 5 5.0 5.0 95.0 no opinio 5 5.0 5.0 100.0 n Total 100 100.0 100.0 60 50 40 30 20 10 0 excellent good poor no opinionInference:Out of 100 respondents, 37% feel that Airtel’s pricing scheme are excellent, 53%feel it’s good, 5% feel it is poor, while the remaining 5% have no opinion.Table18: rating for docomo Frequen Valid Cumulativ cy Percent Percent e Percent Page | 44
  • 45. Valid excell 39 39.0 39.0 39.0 ent good 48 48.0 48.0 87.0 poor 5 5.0 5.0 92.0 no opinio 8 8.0 8.0 100.0 n Total 100 100.0 100.0 60 50 40 30 20 10 0 excellent good poor no opinionInference:Out of 100 respondents, 39% feel that Docomo’s pricing scheme are excellent,48% feel it is good, 5% feel it is poor, while the remaining 8% have no opinion.Table19: rating for Aircel Frequen Valid Cumulativ cy Percent Percent e Percent Page | 45
  • 46. Valid excell 3 3.0 3.0 3.0 ent good 28 28.0 28.0 31.0 poor 56 56.0 56.0 87.0 no opinio 13 13.0 13.0 100.0 n Total 100 100.0 100.0 60 50 40 30 20 10 0 excellent good poor no opinionInference:Out of 100 respondents, 3% feel that aircel’s pricing scheme are excellent, 28%feel it is good, 56% feel it is poor, while the remaining 13% have no opinion.Table20: rating for uninor Frequen Valid Cumulativ cy Percent Percent e Percent Page | 46
  • 47. Valid excell 13 13.0 13.0 13.0 ent good 38 38.0 38.0 51.0 poor 35 35.0 35.0 86.0 no opinio 14 14.0 14.0 100.0 n Total 100 100.0 100.0 40 30 20 10 0 excellent good poor no opinionInference:Out of 100 respondents, 13% feel that uninor’s pricing scheme are excellent, 38%feel it is good, 35% feel it is poor, while the remaining 14% have no opinion.Table21: price is considered as an important factor while switching brand Frequen Valid Cumulative cy Percent Percent Percent strongly 1 1.0 1.0 1.0 disagree Page | 47
  • 48. disagree 3 3.0 3.0 4.0 neither agree nor 7 7.0 7.0 11.0 disagree agree 51 51.0 51.0 62.0 strongly 38 38.0 38.0 100.0 agree Total 100 100.0 100.0 60 50 40 30 20 10 0 strongly disagree neither agree nor di strongly agree disagree agreeInference: Out of 100 respondents, 38% strongly agree, 51% agree, 7%neither agree nordisagree, 3% disagree and 1% strongly disagree that they consider price as animportant factor while switching their brand.Table22: consideration of call tariffs while switching brand Page | 48
  • 49. Freque Valid Cumulative ncy Percent Percent Percent not very 6 6.0 6.0 6.0 important not important 5 5.0 5.0 11.0 neither important nor 14 14.0 14.0 25.0 not important important 26 26.0 26.0 51.0 very important 49 49.0 49.0 100.0 Total 100 100.0 100.0 60 50 40 30 20 10 0 not very important neither important no very important not important importantInference: out of 100 respondents, 6% consider call tariffs as not very important, 5%consider as not important while 14% consider neither important nor not important,26% consider as important, 46% consider it as very important while switchingbrands.Table23: consideration of sms tariffs while switching brand Page | 49
  • 50. Freque Perce Valid Cumulative ncy nt Percent Percent not very 8 8.0 8.0 8.0 important not important 10 10.0 10.0 18.0 neither important nor 36 36.0 36.0 54.0 not important important 20 20.0 20.0 74.0 very important 26 26.0 26.0 100.0 Total 100 100.0 100.0 40 30 20 10 0 not very important neither important no very important not important importantInference: out of 100 respondents, 8% consider call tariffs as not very important, 10%consider as not important while 36% consider neither important nor not important,20% consider as important, 26% consider it as very important while switchingbrands.Table24: consideration of sim prices while switching brand Page | 50
  • 51. Freque Valid Cumulative ncy Percent Percent Percentnot very 26 26.0 26.0 26.0importantnot important 25 25.0 25.0 51.0neitherimportant nor 25 25.0 25.0 76.0not importantimportant 18 18.0 18.0 94.0very 6 6.0 6.0 100.0importantTotal 100 100.0 100.0 Page | 51
  • 52. 30 20 10 0 not very important neither important no very important not important importantInference: out of 100 respondents, 6% consider call tariffs as not very important, 5%consider as not important while 14% consider neither important nor not important,26% consider as important, 46% consider it as very important while switchingbrands.Table 25: cross tabulation of usage of 1 p/sec and consideration of tariff swhile switching brand:H0: There is no significant relationship between the usage of 1 p/sec plan andconsideration of call tariffs while switching brand. consideration of call tariffs while switching brand Total neither important not very not nor not importa very important important important nt importantuse of yes1p/sec 3 3 8 17 20 51plan no 3 2 6 9 29 49Total 6 5 14 26 49 100 Page | 52
  • 53. Chi-Square Tests Asymp. Sig. Value df (2-sided) Pearson Chi-Square 4.562a 4 .335 Likelihood Ratio 4.612 4 .329 Linear-by-Linear 1.253 1 .263 Association N of Valid Cases 100 a. 4 cells (40.0%) have expected count less than 5. The minimum expected count is 2.45.From the above table, minimum expected count is less than the value. Thereforethe null hypothesis is not accepted.From the table and from the test we can say that the there is significant relationshipbetween the usage of 1 p/sec plan and consideration of call tariffs while switchingtheir brands.Table 26: Usage of 1p/sec plan and price is consideration as an importantfactor while switching brandH0: there is no significant relationship between the usage of 1 p/sec plan andconsideration of price while switching brand price is considered as an important factor while switching brand Total neither strongly disagre agree nor strongly disagree e disagree agree agreeuse of yes1p/sec 1 0 6 31 13 51plan no 0 3 1 20 25 49Total 1 3 7 51 38 100 Page | 53
  • 54. Chi-Square Tests Asymp. Sig. Value df (2-sided) Pearson Chi-Square 13.699a 4 .008 Likelihood Ratio 15.714 4 .003 Linear-by-Linear 3.377 1 .066 Association N of Valid Cases 100 a. 6 cells (60.0%) have expected count less than 5. The minimum expected count is .49.From the above table, minimum expected count is less than the value. Thereforethe null hypothesis is not accepted. Therefore it is inferred that here is a significantrelationship between considering price as an important factor while switchingbrand and the usage of 1 p/sec plan.Table 27: purpose of usage of mobile service * rating for docomo rating for docomo no Total excellent good poor opinionpurpose of business 1 2 0 0 3usage of personal 22 33 3 6 64mobile bothservice 16 13 2 2 33Total 39 48 5 8 100 Page | 54
  • 55. Chi-Square Tests Asymp. Sig. Value df (2-sided) Pearson Chi-Square 2.816a 6 .832 Likelihood Ratio 3.175 6 .787 Linear-by-Linear .653 1 .419 Association N of Valid Cases 100 a. 7 cells (58.3%) have expected count less than 5. The minimum expected count is .15.Inference:From the above table, minimum expected count is less than the value. Thereforethe null hypothesis is not accepted. Therefore it is inferred that there is asignificant relationship between purpose of usage of mobile service and rating fordocomo. Page | 55
  • 56. FINDINGsFindings: • Among the sample, Tata docomo stands second among various brands used by the respondents. • Most of the respondents spend on an average of Rs.100- 300 per month and talk between 30 min to 2 hours per day. Page | 56
  • 57. • While switching their brands, customers mostly consider good network coverage followed by price.• On an average, half of the samples feel Docomo’s 1p/sec plan is good for local and STD call rates.• Among half of the respondents, who use 1p/sec plan docomo stands first followed by Airtel.• Among the remaining half who are not using and interested to use in the recent future, docomo stands second.• More than half of the samples feel that Docomo’s pricing scheme is beneficiary in terms of tariffs.• Most of the respondents agreed that price is considered as an important factor while switching their brand.• While switching brand call tariffs, sms charges are more considered than the sim rates. Page | 57
  • 58. CONCLUsIONConclusion:It is a rewarding exercise “to study the promotional pricing vs. brand switchingwith reference to 1p/sec scheme of Tata docomo”. From the overall analysis of the Page | 58
  • 59. study it is noted that promotional pricing plays an important role while brandswitching. But it is also observed that this scheme(promotional pricing) is morefavorable among the customer segments who talk and spend more. Page | 59
  • 60. AppENDIxBibliography:Websites and links:www.tatadocomo.com Page | 60
  • 61. http://www.telesutra.com/2009/09/25/indian-telecom-update-for-august-2009/http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-base-soars-to-543m-as-mobile-cos-add-record-1765m-in-Nov/articleshow/5370510.cmshttp://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/712/pr23dec09no79.pdfBooks:  Marketing Research, Rajendra Nargundkar- Tata McGraw-Hill Publishing House,2003  Marketing Management-A South Asian Perspective, Kotler, Keller, Koshy and Jha- Pearson Education, 13th edition.  Business Research Methods, Donald R. Cooper and Pameela S. Schindler- Tata McGraw-Hill Publishing House,2003Journals:  Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 · pp. 303–314  Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 · pp. 303–314  European Journal of Innovation Management, Volume 3 . Number 1 . 2000 . pp. 7-14  VOL. 10 NO. 4 2008, pp. 13-29, Emerald Group Publishing Limited, ISSN 1463-6697 Page | 61
  • 62. Questionnaire:Age: ___________ Gender: _________ Occupation: _____________1. Which mobile service do you use?a. Airtel ( ) b. Vodafone ( ) c. Idea ( )d. Cell one ( ) e. Reliance ( ) f. TATA DOCOMO ( ) g. Uninor ( )h. TATA Indicom ( ) i. Other specify.................2. What is the purpose of your mobile service? Page | 62
  • 63. a. Business ( ) b. Personal ( ) c. Both ( )3. How much do you spend on mobile service per month?a. <100 ( ) b. 100-300 ( ) c. 301-500 ( ) d. >500 ( )4. How much air time you spend daily on your phone?a. >30 min ( ) b. 30min -2hrs ( ) c. 2hrs – 5hrs ( ) d. >5 hrs ( )5. What is the most important factor you consider when you choose mobile serviceprovider? a. Price ( ) b. Good network coverage ( ) c. Customer service ( ) d. Location of dealer ( ) e. Other please specify: _____________6. Do you think 1paise/second Tata DOCOMO plan is better than any otherservices (for local call rates)? a. Yes ( ) b. No ( ) c. Can’t say ( )7. Do you think 1paisa/second Tata DOCOMO plan better than other offers ofother network providers (for STD call rates)? a. Yes ( ) b. No ( ) c. Can’t say ( )8. Are you using any of the 1 paisa/ sec scheme? a. Yes ( ) b. No ( )9. If yes please specify which mobile service? __________________10. If no, then are you interested in 1 paisa/second scheme? a. Yes ( ) b. No ( )11. If you are interested then specify which mobile service would you prefer? Page | 63
  • 64. Please specify: ____________________12. What is your opinion about TATA DOCOMO’s one paisa per second billing?Rate 1 to 5 for the following attributes (1 – strongly agree 2 – agree 3 – neutral 4 –disagree 5 – strongly disagree) a. Beneficiary in terms of tariffs ___________ b. As a tactic to attract customers ____________13. Rate the pricing policy of following telecom services. (1-excellent 2-good 3- poor) a. Airtel (RS 22 with validity period 1 year-1 p/sec):___ b. Tata DOCOMO (Rs 49 with life time validity with sim):___ c. Aircel (Rs 47 with validity 1 month):___ d. Uninor (Rs. 110 sim + 29 p/min offer): ____14. While switching the brand, you consider price (call n sms rates) as animportant factor a. Strongly agree ( ) b. Agree ( ) c. Neither agree nor disagree ( ) d. Disagree ( ) e. strongly disagree ( )15. Rank the following attributes from 1 to 5(1- not very important to 5-veryimportant) when switch your brand a. Call tariffs ________ b. Sms tariffs _______ c. Sim prices ________ Page | 64
  • 65. Page | 65

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