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nokia report

  1. 1. “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services”
  2. 2. “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and What kind of Revenue Models can be tried with these Services” Submitted by: Submitted to: Rajat Sapra Mr. Kapil Sharma Management Student Sales Director Amity Business School Nokia India Pvt. Ltd. Amity University, U.P Nokia India Pvt. Ltd. (Nokia Networks) 2
  3. 3. Submitted on 10th July 2006 Letter of Authorization This is to certify that this Marketing Research report, title “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services” is the bonafide work of Mr. Rajat Sapra The report will only be used for Nokia India Pvt. Ltd. internal use and will not be used as a commercial data. Authorized by: Mr. Kapil Sharma Sales Director, Networks Nokia India Pvt. Ltd. (Industry Guide) 3
  4. 4. ACKNOWLEDGEMENT “Words express everything Mouth Co-ordinates, When it comes to gratitude, Heart comes to play.” It gives me immense pleasure for an opportunity to have undergone my Summer internship in Nokia India Pvt. Ltd. There is always a sense of gratitude which one expresses to other people for their helpful and needy service they render during phases of life. I too would like to do the same as I really wish to express my gratitude to those who have been helpful to me in getting this project completed. In representing this report I would like to express my gratitude to Mr. Kapil Sharma, Sales Director , Nokia India Pvt. Ltd. for giving me this opportunity to work with Nokia, and providing me with his able guidance and inspiration for the completion of project. I also would like to express my gratitude to Mr. Prashant Bhrgava and Mr. Rajbir Singh for their co-operation and guidance without which this project would never have been a success. I am also indebted to all the internal employees of Nokia for providing consistent encouragement and congenial atmosphere to complete the project. Last but not the least I will express my sincere thanks to Mr. Abhijeet Agashe and Amity Business School for providing me with support and necessary guidance and valuable instructions for the completion of this project. 4
  5. 5. RAJAT SAPRA TABLE OF CONTENTS Part 1: Introduction 1. Executive Summary…………………………………………………………….....8 2. Research Proposal..….………………………………………………………….....10 3. Nokia: Company Profile…………………………………………………………...12 4. Significance of Study…..………………………………………………………….10 5. Hypothesis………...……………………………………………………………….11 6. Objective of the project...………………………………………………………….12 7. Research Design………..………………………………………………………….13 8. Sample Questionnaire…..…...………………………………………………….....16 9. Sample Selection…….………………………………………………………….....17 10. Data Collection……...…………………………………………………………......18 11. Statistical Analysis..…………………………………………………………….....19 12. Project Cost and Schedule...…………………………………………………….....20 Part 2: Literature 1. Introduction…….... ……………………………………………………………...22 2. Present Development. …………………………………………………………...23 3. Passenger Airlines-The main Players….………………………………………...24 4. Customer Relationship Management- The concept ……………………..……....26 5. Customer Relationship Management in the Airline Industry.…………………...28 6. Jet Airways CRM Programs. ….………………………………………………...30 7. Indian Airlines CRM Programs…..……………………………………………...32 8. Kingfisher Airlines CRM Programs..…………………………………………....33 9. AirDeccan CRM Programs. ……….…..………………………………………...34 10. Balance Score Card and Branding. ……………………………………………...35 11. E-CRM for the Airline……………………………………………………….......41 12. Limitations……………………………………………………………………….47 Part 3: Analysis and Result………………………………………………………………48 Part 4: Recommendation…………………………………………………………………78 Part 5: Conclusion. & learning…………………………………………………………..84 Part 6: Appendix. ………………………………………………………………………..85 5
  6. 6. LIST OF ILLUSTRATIONS: 1. Region wise break up of the sample…………………………..35 2. Brand Awareness……………………………………………...36 3. Flight Class……………………………………………………37 4. Occasion of Use……………………………….........................37 5. Frequency of usage………………………………....................38 6. Circuits flown………………………………............................38 7. Scheme Preference……………………………….....................39 8. Consumer choice parameters……………………………….....39 9. Consumer perception……………………………….................40 10. Frequency of flying………………………………....................49 11. Airline ranking………………………………...........................50 12. In flight Services………………………………........................51 13. service factor………………………………..............................53 14. Crew members………………………………...........................55 15. Ground Staff………………………………..............................56 16. Plane ambience………………………………..........................57 17. Fooding preference………………………………....................58 18. Ground services……………………………….........................59 19. Customer relation employees………………………………....62 20. Programs/benefits awareness……………………………….....63 21. Value added service………………………………...................64 22. Technology Advancement……………………………….........65 23. Crosstabs (Airline Ranking * Technology advancement)…….66 24. Crosstabs (Frequency of flying- Male * Female)……………..68 25. Crosstabs (Airline Ranking- Male* Female)………………….69 26. Histogram for Airline Ranking……………………………….71 27. Histogram for Frequency of flying……………………………74 28. Airline customer value segmentation (By Revenue)………….79 29. Identifying customer needs……………………………………80 30. BCG Model……………………………………………………80 31. Customer focused Airline Operation………………………….82 6
  7. 7. Executive Summary 7
  8. 8. 1.1 EXECUTIVE SUMMARY An Introduction to Mobile communication Industry The mobile communications industry continues to undergo significant changes as more users in growth markets gain access to mobile communications, enterprise becomes increasingly mobile, the importance of end-to-end solutions increases, and technology continues to evolve. Another trend is an increased emphasis on the role of customization in mobile devices. These changes have demanded agility and flexibility from industry players to adapt to new market conditions. Today, Mobility is expanding into new areas such as imaging, games, entertainment, media and enterprises. There are new mobile services already taking telecommunication industry forward and creating new opportunities. At the same time, major opportunities still exist in bringing mobile voice to completely new users. The Telecommunication industry has reached the crossroads. The ever changing technology and decreasing revenues of the operators has made it important for the Mobile operators to change with time. Mobile operations of telcos are progressively overtaking fixed line operations. This is largely due to fixed-line operators not having introduced significant new products, services or cost-saving technologies in the same way that mobile operators have. However, despite retaining their role as cash cows for incumbent operators, fixed and mobile voice services are progressively being overtaken by broadband. Increasingly, operators will need to take a holistic view of the market, necessitating a total review of their business models. Executive Summary Faced with uncertainty over the demand for new 3G services and a growing multitude of technology evolution paths, mobile operators in India must now commit to 3G network roll-outs and service launches. Rather than being driven by 3G licence requirements, competitor actions or short-term cost savings, operators must take control of their own destinies. Mobile operators need to make critical decisions about what all 3G services will be successful in India and whether Indian end user is ready for a dive into the 3G Multimedia wave. Mobile 8
  9. 9. operators need to access the choice of technology and the speed, depth and breadth of roll-out of these services. By evaluating the diverse approaches being pursued worldwide, and wide variety of these services and applications being used around the world, this report on the basis of Market research identifies the most appropriate Service choices for Indian End user based on diversity of Indian culture. Therefore through this market research project on “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services” , I will try to get a more realistic picture of the set of applications and services that will be accepted by the Indian end user. I will also identify the main set of revenue models that can be tried with these services thus presenting a clear picture on which tariff plans are preferred by the Consumers. This Market Research also helps in identifying the consumer psych which can help the Mobile operators to target these services accurately in the minds of the consumer. 9
  10. 10. Research Proposal 10
  11. 11. 1.2 Research Proposal Management Dilemma Nokia faces apprehensions from its customer’s i.e the operators for launching the 3G/ WCDMA technology in India. Therefore the sales department in Nokia Networks are putting in Extra efforts in convincing the operators about the benefits of launching 3G/WCDMA technology and its compatibility with the existing GSM networks of the operators. Nokia also wants to tell its customers which set of the 3G services will be accepted by the Indian user. Management Question Which all 3G service have the Potential in Indian Market and are the Indian user willing to go for these services? Research Objective “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services” Research Questions • What are the Services the Indian Consumer is looking for and is he willing to go for these services? To What extent is the consumer willing to pay for these services? • For what purpose will the consumer be using these services so as to understand the consumer Psyche and target these services accurately? Hypothesis Null Hypothesis: The Indian End user is not willing to accept 3G Services. Alternate Hypothesis: The Indian end user is willing to accept 3G Services. Research Design This is a multidimensional research and will be conducted in following consumer Segments 1. Corporates/Service Class: In depth interviews and Questionnaires 2. Businessman (Small and Medium enterprises): In depth interviews and Questionnaires 3. Public opinion survey (Teenagers/Students/housewife’s): In depth interviews and Questionnaires. In addition it will also include secondary data analysis by study and learning from the experience of operators around the world 11
  12. 12. Scope of Study The research aims in identifying consumer preference towards 3G services. 1.3 Company Profile Nokia: Connecting People As we move further into the mobile world, Nokia remains committed to strong growth, profitability, and responsible market leadership. Nokia’s Vision: Life Goes Mobile! Today, Nokia sees mobility surpassing voice communications and expanding into new areas such as imaging, games, entertainment, media and enterprises. Ten years ago, Nokia had a vision that seemed revolutionary for the times: Voice Goes Mobile! As history shows, this vision became reality in an incredibly short amount of time. With more than 1.6 billion mobile phone subscriptions globally – and more mobile phones than fixed-line phones in use – we see that mobility has transformed the way people live their lives. Today, Nokia sees mobility expanding into new areas such as imaging, games, entertainment, media and enterprises. There are new mobile services already taking our industry forward and creating new opportunities. At the same time, major opportunities still exist in bringing mobile voice to completely new users. Strategy At Nokia, strategy focuses on activities designed to expand mobile communications in terms of volume and value. The Nokia Strategy continues to focus on three activities to expand mobile communications in terms of volume and value: • Expand mobile voice • Drive consumer multimedia • Bring extended mobility to enterprises 12
  13. 13. Expand mobile voice: Nokia believes it can further develop the mobile voice market -- both in markets where mobile telephony is just taking off as well as in more mature markets. Nokia estimates the number of mobile subscriptions to surpass three billion in 2008. Nokia’s position in mobile voice is strong thanks to our key assets and excellent logistics capabilities. Nokia believes that many opportunities for growth exist in the mobile voice market, and intends to continue to focus on this area. In doing so, Nokia aims to capitalize on its demonstrated efficiency and skill in execution and demand-supply chain management, and their history of innovation. The markets on which Nokia intends to focus include markets with low mobile subscription rates relative to the size of the population, geographic areas where it is more cost- effective to build wireless infrastructure than fixed-line networks, and heavily populated areas, where factors such as poor housing infrastructure or theft of materials tilt the scales in favor of wireless solutions. Nokia also intends to focus on markets where the need for network capacity is growing as a result of mobile network operators promoting the replacement of fixed networks with wireless. Drive consumer multimedia: Nokia is playing a key role in shaping this emerging complex market by focusing on the fastest growth areas: imaging, music, and games, to name a few. Nokia intends to enter new product and service niches, which are expected to emerge as technologies from diverse industries start to converge, especially in the area of consumer multimedia. Nokia strategy is to explore, identify and extract revenue from the most profitable and fastest growing segments of the consumer multimedia business and its value chain by anticipating consumer needs in this area, and developing innovative products and services. In the near term, Nokia intends to focus on imaging and games, where Nokia have already introduced a number of products. Bring extended mobility to enterprises: Nokia will provide a range of competitive, specifically targeted handsets, platforms, and connectivity solutions so enterprises can boost productivity through the power of mobility. Nokia intends to capture profitable segments of the corporate market by offering products and services that will benefit companies and individual business people alike, including a diverse handset range as well as security and mobile connectivity solutions specifically tailored for enterprise needs. Nokia also intends to capitalize on companies' needs for mobility and seamless mobile connectivity in their operations, and also expect to collaborate with leading technology and systems integration partners. 13
  14. 14. Nokia is structured into four business groups – Mobile Phones, Multimedia, Enterprise Solutions, and Networks -- to better focus and capitalize on the opportunities in each of these areas. Throughout all these, the Networks business group provides the infrastructure backbone and enables end-to-end communications. Nokia’s Mission - Connecting People By connecting people, Nokia helps fulfill a fundamental human need for social connections and contact. Nokia builds bridges between people – both when they are far apart and face-to-face – and also bridges the gap between people and the information they need. Business Environment Industry Development and Trends The mobile communications industry continues to undergo significant changes as more users in growth markets gain access to mobile communications, enterprise becomes increasingly mobile, the importance of end-to-end solutions increases, and technology continues to evolve. Another trend is an increased emphasis on the role of customization in mobile devices. These changes have demanded agility and flexibility from industry players to adapt to new market conditions. Converging Industries The mobile communications, information technology, media, and consumer electronics industries are converging in some areas into one broader industry. Some of the first examples of this convergence include camera phones, as well as the use of mobile devices for email, web browsing and applications, and music downloading. Multi-radio solutions and devices, which automatically transfer connectivity among cellular networks and complementary access technologies such as Wireless LAN and Bluetooth, are another example. Although this convergence presents new challenges, Nokia believe that these trends also expand the potential for future growth in the mobile communications industry. End-to-End Solutions Nokia sees the ability to offer tailored end-to-end solutions as being important to meet the needs of operators, enterprises, and consumers. A solution is considered end-to-end when it provides the hardware and software elements, including infrastructure, applications or service platforms and mobile devices. Today, Nokia's Push to talk over Cellular offering, which enables walkie-talkie communication between individuals or among a group, is an example of such a solution. Intellectual Ownership 14
  15. 15. The creation and ownership of relevant intellectual property rights, or IPR, are essential to maintaining competitiveness and to creating profitable products. Nokia believes that achieving technology leadership will depend on the ability to build a solid IPR portfolio through strong research and development capabilities. The Mobile Device Market The mobile device market continued its strong volume growth during 2004, reaching a record of 643 million units compared with 490 million units in 2003, according to Nokia estimates. Growth was driven by the ongoing boom in new subscribers in Latin America, Russia, India, and China, as mobile communications continued to become more affordable and widely available. Nokia expects growth in these markets to be a main driver for global mobile subscriptions, reaching approximately 2 billion users by the end of 2005 and approximately 3 billion users by 2010. Mobile device market growth during 2004 was also driven by attractively priced color-screen and camera phones in Western Europe and North America. In Nokia's five geographical sales areas, mobile device market volume growth was 100% in Latin America, 33% in Europe, the Middle-East, and Africa, 32% in China, 22% in North America, and 15% in the Asia-Pacific region, compared with 2003. Beyond Voice The mobile device market is expanding from voice-based communications towards new, data- driven areas and applications in consumer multimedia and enterprise mobility solutions. According to estimates, the global camera phone market reached approximately 215 million units in 2004 compared with approximately 90 million units sold in 2003, and is estimated to reach approximately 340 million units in 2005. Nokia has introduced 48 camera phones since the launch of its first one, the Nokia 7650, in 2002. The global megapixel camera phone market, the high end of the camera phone market, is expected to grow from around 40 million units in 2004 to around 100 million units in 2005. A smartphone is a new category of mobile device that can run computer-like applications such as email, web browsing and enterprise software, and can also have built-in music players, video recorders, and other multimedia features. The global smartphone market is expected to grow from around 22 million units in 2004 to more than 50 million units in 2005 and represent approximately 25% of the total global mobile device market volume in 2008. Some of these markets overlap with each other. In the longer term, Nokia believes that applications such as music, mobile games and mobile TV 15
  16. 16. will be taken widely into use. The Benefits of Mobility Mobility is increasingly important to the business market as enterprises assess the potential productivity gains, cost savings, and competitive advantages that can result from employees being able to work outside of the office. The enterprise mobility market is still fragmented, however. We expect that as the technologies become more reliable, affordable, and easier to use, mobility will be more widely used by employees. External studies currently show a very low percentage of mobile email among workers who spend much of their time on the move and who connect to their offices via a mobile device. This is expected to become the lead application as businesses mobilize. In the coming years, we believe that devices with multi-radio access and the addition of mobile elements to corporate applications will be key drivers for establishing and extending mobility in enterprises. Nokia is well positioned to take advantage of these trends given its expertise in these areas. The Mobile Infrastructure Market During 2004, the mobile infrastructure market showed year-on-year growth of approximately 14% in euro terms, following three years of decline. Growth was largely the result of operator investments in the current technologies of GSM, EDGE, and GPRS and their related services, and in new-generation technologies, such as WCDMA 3G. The pace of WCDMA 3G rollouts also picked up during 2004, and by the end of the year 63 operators had launched commercial WCDMA 3G services. Nokia supplied WCDMA 3G technology to 28 of these operators. The number of WCDMA 3G subscribers increased significantly during the year, reaching around 16 million by year-end. Nokia believe this subscriber growth was largely the result of attractive pricing of services and an expanded WCDMA 3G handsets range and the further maturity of WCDMA 3G technology. Nokia expects the number of WCDMA 3G subscribers to reach approximately 70 million by the end of 2005. Competition in both the 2G and the 3G network infrastructure market remains intense. In 2G, competition is driven by price, solutions that are able to offer low total cost of ownership, and the vendor's ability to roll-out mobile networks in new growth markets. In 3G technology, vendors compete on the grounds of price, track record of network implementations, and which future technologies they plan to offer and when, such as HSDPA, or High Speed Downlink 16
  17. 17. Packet Access, which provides high speed data delivery to 3G terminals to support multimedia services. Nokia Structure The Nokia Structure is Divided in 4 Business groups: • Mobile Phones • Multimedia • Enterprise Solutions • Networks Mobile Phones Mobile Phones connects people by providing expanding mobile voice and data capabilities across a wide range of mobile devices. Nokia seeks to put consumers first in product-creation process and primarily target high-volume category sales of mobile phones and devices based on the following global cellular technologies: GSM/EDGE, 3G/WCDMA and CDMA. In voicecentric and mainstream mobile phones, Nokia believes that design, brand, ease of use and price are customers' most important considerations. Multimedia 17
  18. 18. Multimedia brings mobile multimedia experiences to consumers in the form of advanced mobile devices and applications with connectivity over GSM, 3G/WCDMA, WLAN, Bluetooth and other standards. Nokia’s products give people the ability to create, access and consume multimedia, as well as share their experiences with others. Enterprise Solutions Enterprise Solutions offers businesses and institutions a broad range of products and solutions, including enterprise-grade mobile devices, underlying security infrastructure, software and services. Nokia also collaborates with a range of companies to provide fixed IP network security, mobilize corporate e-mail and extend corporate telephone systems to Nokia’s mobile devices. Networks Networks provide network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers. Networks focuses on the GSM family of radio technologies and aims at leadership in three areas: GSM, EDGE and 3G/WCDMA networks; core networks with increasing IP and multi-access capabilities; and services. At the end of 2005, Networks had more than 150 mobile network customers in more than 60 countries, with its systems serving in excess of 400 million subscribers. Customer and Market Operations Customer and Market Operations is responsible for marketing, sales, sourcing, manufacturing and logistics for mobile devices from Mobile Phones, Multimedia and Enterprise Solutions. The Networks business group has its own dedicated sales and marketing, logistics and sourcing functions. Technology Platforms Technology Platforms is responsible for the competitiveness of Nokia’s technology assets. It supports Nokia’s overall technology management and development by delivering leading technologies and well-defined platforms to Nokia’s business groups as well as to external customers. 18
  19. 19. 1.4 INTRODUCTION Faced with uncertainty over the demand for new 3G services and a growing multitude of technology evolution paths, mobile operators in India must now commit to 3G network roll-outs and service launches. Rather than being driven by 3G license requirements, competitor actions or short-term cost savings, operators must take control of their own destinies. Drawing on case studies of launched and planned 3G services from across the globe, critical decisions on services can be taken on how an optimum set of 3G services can be defined and assess the merits of alternative service strategies. It can also show how to decide on the timing and pricing of new services, highlighting the need to take positive action without forcing services to market too soon, and considering the best mix of voice telephony, small-screen services (including video-on-demand) and high-speed Internet/intranet services. Mobile operators in India need to make critical decisions about what will be required to support 3G services, including the choice of technology and the speed, depth and breadth of roll-out. By evaluating the diverse approaches being pursued worldwide, this report identifies the most appropriate service roll out choices for different 3G service mixes. This report identifies the most appropriate service roll out Choices and answers following critical questions. - What decisions and actions are 3G operators already taking on services around the world and how India can Learn from them? What are the potential pitfalls? - How do operators make the right decisions on set of 3G services suiting to the Indian end user? - What is the optimum mix of voice, small-screen data and high-speed Internet/intranet services? 19
  20. 20. - Where next for small-screen services? Does video-on-demand lead to a pot of gold? Can this be the killer application telecom’s were looking for in India? - What is the role for 3G wireless Internet access – just faster mobile Internet for business users – or can it substitute for fixed DSL? Current thinking is that 3G users are looking for email access, online gaming, video conferencing and location based services. But is this really what consumers want? Is it what they will pay for? Or is it simply only what can be provided just now? Several technical, regulatory and market issues are delaying the mass deployment of 3G networks and services in India. However, the demand for 3G services and applications is strong within the consumer population in India. Through this Market Research will examine the potential of these Third Generation mobile services, with special emphasis on the three most important segments i.e. Corporates, Businessman, and teenagers which form the bulk of users in India. 20
  21. 21. 1.5 SIGNIFICANCE OF STUDY The project is titled “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services”. The significance of this study is enumerated as follows: • It gives an in depth knowledge about 3G technology and how 3G technology is the next Big thing for the Indian Mobile communication industry. • This Research tells us about which all services is the Indian end user looking for from the pool of 3G services. • The study helps us to know about the customer psyche, preferences, attitudes, behaviors etc toward the new 3G/WCDMA services. • This research project will tell us as to which are the main services that the Indian operators should start with and whether to start these services for introductory free tariffs as in European countries or to come up with any other revenue model. • This research tells us that what is the optimum mix of voice, small-screen data and high- speed Internet/intranet services? 1.6 HYPOTHESIS Assuming Null Hypothesis that the Indian end user is not willing to accept 3G technology and is not ready for 3G services, whereas Alternate Hypothesis is assumed that Indian end user is ready for the 3G/WCDMA technology and is willing to use 3G services. 21
  22. 22. 1.7 OBJECTIVE OF THE PROJECT The main objective of this project lies in “Evaluating the potential of end user based services based on the 3G/WCDMA platform in India and what kind of Revenue Models can be tried with these Services” however there are other objectives also, which are as follows: • To study and learn from the experience of various 3G operators around the world. • To identify the Major 3G Applications and Services that are being offered to the end user around the world. • To establish with the help of Questionnaires and interviews about whether Indian end user is ready for 3G Services or not. • To develop a Revenue Model for the 3G services with reference to Tariff plan in UK by normalizing ARPU and Currency. • Identify the Services which are best suited to Indian end user according to culture and level of preference over other services. • To present recommendations to the Mobile operators in India in order to make critical decisions about what will be required to support 3G services, the speed, depth and breadth of roll-out. 22
  23. 23. 1.8 RESEARCH DESIGN The survey research will be conducted by filling up of questionnaires to a total of 300 Mobile user respondents between the age group of 15 years to 75 years at various locations in and around NCR region. The Total sample size will be divided into 3 consumer segments which are: 1. Corporates/Service Class 2. Businessman (Small and Medium enterprises) 3. Public opinion survey (Teenagers/Students/housewife’s) The survey was conducted in major market places and corporate houses in Delhi, Gurgaon and Noida. Major market places such as Vasant Vihar market, Khan Market, Canuoght Place, Karol Bagh, Chawri Bazaar, Darya Ganj and Malls in Gurgaon, Noida, and Delhi were targeted to get the responses from Businessman and Teenage segment. Corporate houses in Gurgaon such as DLF Infinity Towers, First India Place, JMD Regent Square, HCL Infotech, Augusta Point, DLF Corporate Park and many similar places were targeted to get responses from Corporate Segment. Apart from Primary data through Questionnaires, Secondary data was also collected from websites of operators around the world and Major 3G services and Practices of Operators were studied from the internet. 23
  24. 24. 1.9 SAMPLE QUESTIONNAIRE 1. Are you aware of GSM/GPRS/EDGE technology and its use in mobile phones? Yes No 2. Are You Aware of the 3G Technology in mobile phones? Yes No (3G WCDMA, is a global standard technology allowing video conferencing and high-speed, high-capacity data access to users on their 3G Mobile phones.) 3. Are you aware that you can use internet services on your mobile and through your mobile on computer? Yes No 4. Would you like to access high speed wireless internet on your 3G Mobile phone/laptop? (With Speeds 3 times faster than wired broadband) Yes No Can’t Say 5. Would you like to use your mobile as a TV while you are stuck in traffic or during free time and use following service? • Watch your Favorite TV serial on phone, which you missed? Yes No Can’t Say • Watch highlights of cricket/football matches on your phone. Yes No Can’t Say • Watch live news (business/weather/sports) on your phone. Yes No Can’t Say • Download and Read e-books on your mobile phone. Yes No Can’t Say 6. “Video Calling allows you to see the person you are talking to on your 3G phone “Will you like to use Video Calling feature? Yes No Can’t Say 7. For what Purpose will you be using video calling, Rate from 1 to 4 with 1 for Most Preferred and 4 for least preferred? Calling Relatives in India/Abroad Business Reasons – Showing a new product to Boss, which you saw in trade fair. Calling Friends and family Others please Specify (eg. Locating some one at the airport) ____________________________________________ 8. How would you like the tariff plan for this video calling service? 24
  25. 25. Fixed Monthly Rental + Usage Charges (Per Min) Rs. 250 Monthly Rent + Usage Rs. 2.50 per min Usage Charges (Per Min) Usage Rs. 3.50 Per min One time Subscription charges + Usage Charges Subscription Rs. 2000 non refundable + Rs. 3 per min. Bundle Pack Charges (Packs of 30/60/90minutes) Pack 30 = Rs. 150 Valid 5 days Pack 60 = Rs. 300 Valid 7 days Pack 90 = Rs. 450 Valid 10 Days I will only use it as long as it is for free 9. “Audio Streaming – Listening to Audio Tracks on phone – Radio on Demand” “Audi Download – Download Audio Tracks on your phone” Would you like to use Audio Streaming and Audio Download on your mobile phone? Yes No Can’t Say 10. How would you like the tariff plan for this Audio Streaming/ Audio Download service? Fixed Monthly Rental + Download/streaming Charges (Per track) Download/ Streaming Charges (Per Track) only Subscription charges per month for unlimited download/streaming I will only use it as long as it is for free 11. “Video Streaming – Watching Video on phone” “Video Download – Download Video on your phone” Would you like to use Video Streaming and Video Download on your mobile phone? Yes No Can’t Say 12. How would you like the tariff plan for this Video Streaming/ Video Download service? Fixed Monthly Rental + Download/streaming Charges Download/ Streaming Charges (Per Min) only Subscription charges per month for unlimited download/streaming I will only use it as long as it is for free 13. Would You like to use Instant Messaging Service (Yahoo Messenger, MSN, AOL) on your Mobile Phone just like you use it on Computer? Yes No Can’t Say 14. Would you like to play online games with no pause on your phone and download 3Dgames? Yes No Can’t Say 15. If Your Mobile offers Navigational Service (Driving assistance and Location Search) would you be willing to use these services? Yes No Can’t Say 16. Would you be willing to go for a new 3G Mobile handset which can cater to all these services and costs you 12000+ ? Yes No Can’t Say 17. What Service you rate as most needful by you from the upcoming 3G services? Rate 1 as Most needed, and 7 as Least needed Video Calling Audio Streaming/ Video Streaming/ Mobile TV Games Instant Others Audio Download Video Download Messaging Specify 25
  26. 26. 18. How much do you value the end user experience? Important Average Not important 19. Any other suggestions/inputs please specify? ______________________________________________________________________ Personal Information Name: _______________________________Age:_______ Sex:________________ Occupation:___________________________ Annual Income:___________________ Email:________________________________ Ph:_____________________________ Monthly Mobile Bill:____________________ Model of Mobile you own:__________ 1.10 SAMPLE SELECTION The sample size of 300 is taken with equal amount of responses from all the three segments, thus 100 Responses each from all the three segments. The Total sample size will be divided into 3 consumer segments which are: 1. Corporates/Service Class 2. Businessman (Small and Medium enterprises) 3. Public opinion survey (Teenagers/Students/housewife’s) 1.11 DATA COLLECTION The data for research is collected through the following ways: Primary Data:- • Survey questionnaires • Interviews with Working Professionals • Telephonic interviews Secondary data:- • Journals of 3GP Association • News Articles on 3G • Websites of the Operators offering 3G Services 26
  27. 27. • Business reports provided by the Mobile operators offering 3G 1.12 STATISTICAL ANALYSIS Statistical analysis is the most important part of any market research, without appropriate statistical analysis no accurate inference can be drawn on the research. Based on the response of market research appropriate statistical techniques are used to get the desired results. There are following statistical tools that I have used in this research: • Co-relation Analysis, Regression Analysis • Cross Tabs between Variables. • Frequency Tables • Bar graphs, Pie charts etc. The analysis of this project will help focus on the following parameters: • Which all services are most preferred by the end user? • Preference of one service to the other? • Consumer Psyche i.e. for what purpose will the consumer use that particular service? • Preference according to Segment (e.g. teenagers have more inclination towards 3G games and Audi streaming) • The tariff model customers are willing to pay for these services. 27
  28. 28. 1.13 PROJECT COST AND SCHEDULE The total estimated cost of this project is Rs 9000 (Nine thousand only) Traveling expenses: Rs 6000 Questionnaires: Rs 200 Internet Usage: Rs 1000 Report printout: Rs 1000 Miscellaneous expenses: Rs 500 The estimated time for project is 2 months Setting up research plan : 1stweek Collection of primary data : 5th – 7th week Secondary data collection : 2nd – 4th week Analysis of the data : 8th week Making of Questionnaire : 4th week Making of the report : 8th week 28
  29. 29. LITERATURE 29
  30. 30. 2.1 INTRODUCTION – WHAT IS 3G/WCDMA? 3G Dive into the Multimedia Wave ! UMTS (Universal Mobile Telecommunications System) is a so-called "third-generation (3G)," broadband, packet-based transmission of text, digitized voice, video, and multimedia at data rates up to and possibly higher than 2 megabits per second (Mbps), offering a consistent set of services to mobile computer and phone users no matter where they are located in the world. Based on the GSM communication standard, UMTS, endorsed by major standards bodies and manufacturers, is the planned standard for mobile users around the world since 2002. Once UMTS is fully implemented, computer and phone users can be constantly attached to the Internet as they travel and, as they roaming service, have the same set of capabilities no matter where they travel to. Users will have access through a combination of terrestrial wireless and satellite transmissions. Until UMTS is fully implemented, users can have multi-mode devices that switch to the currently available technology (such as Gprs and Edge) where UMTS is not yet available. 30
  31. 31. Today's cellular telephone systems are mainly circuit-switched, with connections always dependent on circuit availability. Packet-switched connection, using the Internet Protocol (Internet Protocol), means that a virtual connection is always available to any other end point in the network. It will also make it possible to provide new services, such as alternative billing methods (pay-per-bit, pay-per-session, flat rate, asymmetric bandwidth, and others). The higher bandwidth of UMTS also promises new services, such as video conferencing. UMTS promises to realize the Virtual Home Environment in which a roaming user can have the same services to which the user is accustomed when at home or in the office, through a combination of transparent terrestrial and satellite connections. UMTS is a network consisting of two main elements connected over a standard interface, called Iu. These two elements are: • UTRAN (UMTS Terrestrial Radio Access Network • The Core Network ATM based architecture: this R'99 architecture may reuses in some cases the two-domain architecture of GSM/GPRS, with: 1. Iu-PS (Packet Switched) interface instead of Gb on the packet domain. 2. Iu-CS (Circuit Switched) interface instead of A on the circuit domain Transport Independent and multimedia architecture: this R'00 architecture is in line with the Next Generation Networks architecture and introduces separation of control and user planes. It also integrates multimedia capabilities. 31
  32. 32. • Frequency use • Difference between regular CDMA and W-CDMA • W-CDMA makes possible a world of mobile multimedia. 32
  33. 33. GPRS & Edge V/s 3G GPRS (General Packet Radio Services) is a packet-based wireless communication service that, when available in late 2000, promises data rates from 56 up to 114 Kbps and continuous connection to the Internet for mobile phone and computer users. The reality will be around 33 Kbps (2+1 or 3+1 @ CS2, 4+1 for fixed modem). GPRS is based on "regular" GSM (with the same modulation) and will complement existing services such circuit-switched cellular phone connections such as SMS or cell broadcast. Voice over Ip over GPRS is also explored. In theory, GPRS packet-based service should cost users less than circuit-switched services since communication channels are being used on a shared-use, as-packets-are-needed basis rather than dedicated only to one user at a time. It should also be easier to make applications available to 33
  34. 34. mobile users and Wap or i-mode should far more attractive for the user. In addition to the Internet Protocol GPRS supports X.25, a packet-based protocol that is used mainly in Europe. Operator should deploy GPRS very fast as most of the interoperability test between the network and the Handset are now finished (September'00) and because GPRS is mainly a software upgrade for the BTS, BSC and servers. SPECTRUM EFFICIENCY Packet switching means that GPRS radio resources are used only when users are actually sending or receiving data. Rather than dedicating a radio channel to a mobile data user for a fixed period of time, the available radio resource can be concurrently shared between several users. This efficient use of scarce radio resources means that large numbers of GPRS users can potentially share the same bandwidth and be served from a single cell. The actual number of users supported depends on the application being used and how much data is being transferred. Because of the spectrum efficiency of GPRS, there is less need to build in idle capacity that is only used in peak hours. GPRS therefore lets network operators maximize the use of their network resources in a dynamic and flexible way, along with user access to resources and revenues. GPRS should improve the peak time capacity of a GSM network since it simultaneously: • allocates scarce radio resources more efficiently by supporting virtual connectivity • immigrates traffic that was previously sent using Circuit Switched Data to GPRS instead, and reduces SMS Center and signaling channel loading by migrating some traffic that previously was sent using SMS to GPRS instead using the GPRS/ SMS interconnect that is supported by the GPRS standards Relatively high mobile data speeds may not be available to individual mobile users until Enhanced Data rates for GSM Evolution (EDGE) or Universal Mobile Telephone System (UMTS) are introduced EDGE, Enhanced Data GSM Environment Enhanced Data rates for Global Evolution (EDGE) is a radio based high-speed mobile data standard. It allows data transmission speeds of 384 kbps to be achieved when all eight timeslots are used. In fact, EDGE was formerly called GSM384. This means a maximum bit rate of 48 kbps per timeslot. Even higher speeds may be available in good radio conditions. 34
  35. 35. EDGE was initially developed for mobile network operators who fail to win Universal Mobile Telephone System (UMTS) spectrum. EDGE gives incumbent GSM operators the opportunity to offer data services at speeds that are near to those available on UMTS networks. EDGE can also provide an evolutionary migration path from GPRS to UMTS by implementing now the changes in modulation that will be necessary for implementing UMTS later. The idea behind EDGE is to eke out even higher data rates on the current 200 kHz GSM radio carrier by changing the type of modulation used, whilst still working with current circuit (and packet) switches. Implementation of EDGE by network operators has been designed to be simple. Only one EDGE transceiver unit will need to be added to each cell. With most vendors, it is envisaged that software upgrades to the BSCs and Base Stations can be carried out remotely. The new EDGE capable transceiver can also handle standard GSM traffic and will automatically switch to EDGE mode when needed. EDGE capable terminals will also be needed- existing GSM terminals do not support the new modulation techniques and will need to be upgraded to use EDGE network functionality. Some EDGE capable terminals are expected to support high data rates in the downlink receiver only (i.e. high dates rates can be received but not sent), whilst others will access EDGE in both uplink and downlinks (i.e. high data rates can be received and sent). The later device types will therefore need greater terminal modifications to both the receiver and the transmitter parts. In addition, the TDMA industry association, the Universal Wireless Communications Corporation, has introduced what it calls EDGE Compact. This a spectrum efficient version of EDGE that will support the 384 kbits mandated packet data rates but will require only minimum spectral clearing and therefore could work for network operators with limited spectrum allocations. In fact, as a result of this, EDGE has been renamed Enhanced Data Rates for GSM and TDMA Evolution. (See the TDMA section below for more details). Source:mobileipworld.com EDGE is planned to be commercially available end of year 2001 (FOA). High Speed Circuit Switched Data (HSCSD) GSM Circuit Switched Data supports one user per channel per time slot. High Speed Circuit Switched Data (HSCSD) gives a single user simultaneous access to multiple channels (up to four) at the same time. As such, there is a direct trade-off between greater speed and the 35
  36. 36. associated cost from using more radio resources- it is expensive for end users to pay for multiple simultaneous calls. Assuming a standard Circuit Switched Data transmission rate of 14.4 kilobits per second (kbps), using four timeslots with High Speed Circuit Switched Data (HSCSD) allows theoretical speeds of up to 57.6 kbps. This is broadly equivalent to providing the same transmission rate as that available over one ISDN B-Channel. Some Mobile Switching Centres (MSCs) are limited to 64 kbps maximum throughput- this restriction is removed with GPRS. In networks where HSCSD is deployed, GPRS may only be assigned third priority, after voice as number one priority and HSCSD as number two. In theory, HSCSD can be preempted by voice calls- such that HSCSD calls can be reduced to one channel if voice calls are seeking to occupy these channels. HSCSD does not disrupt voice service availability, but it does affect GPRS. Even given preemption, it is difficult to see how HSCSD can be deployed in busy networks and still confer an agreeable user experience- i.e. continuously high data rate. HSCSD is therefore more likely to be deployed in start up networks or those with plenty of spare capacity- since it is relatively inexpensive to deploy and can turn some spare channels into revenue streams. High Speed Circuit Switched Data (HSCSD) is however easier to implement in mobile networks than General Packet Radio Service (GPRS) because some GSM vendor solutions require only a software upgrade of base stations and no new hardware. This is not the case with D-AMPS networks and some GSM vendor solutions. There are a couple of reasons why HSCSD may be the preferred bearer for certain applications when compared to GPRS. The fact that associated packets can be sent in different directions to arrive at the same destination should in theory make the transmission more robust since there are many different ways of achieving the end result. However, this nature of packet transmission means that packets are subject to variable delay and some could be lost. Whilst packet retransmission is incorporated into the GPRS standards, naturally this process does take time and in the case of applications such as video transmission can cause poor quality images. Another preferred application for HSCSD could be the fact that whilst GPRS is complementary for communicating with other packet-based networks such as the Internet, HSCSD could be the best way of communicating with other circuit switched communications media such as the PSTN and ISDN. HSCSD is mainly supported by Nokia with little success 36
  37. 37. 2.2 HOW 3G WORKS? The main principle of Spread Spectrum communication is that the bandwidth occupancy is much higher than usual. Because of this much larger bandwidth the power spectral density is lower, in the channel the signal just looks like noise. The Spreading is done by combining the data signal with a code (code division multiple access) which is independent of the transmitted data message. 37
  38. 38. A number of advantages are: • As the signal is spread over a large frequency-band, the Power Spectral Density is getting very small, so other communications systems do not suffer from this kind of communications. However the Gaussian Noise level is increasing. • Random Access can be dealt with, as a large number of codes can be generated a large number of users can be permitted. • The maximal number of users is interference limited. • Security: without knowing the spreading code, it is (nearly) impossible to recover the transmitted data. • Fading rejection: as a large bandwidth is used the system is less susceptible to distortions. There are a couple of Spread Spectrum Techniques which can be used. The most famous one is Direct-Sequence (DS) also well-known is Frequency-Hopping (FH). A combination of these two (DS/FH) offers a lot of advantages over the other two and will be the basis of the proposed system. 38
  39. 39. Direct Sequence Direct Sequence is the most famous Spread Spectrum Technique. The data signal is multiplied by a Pseudo Random Noise Code (PN-code). A PN-code is a sequence of chips valued -1 and 1 (polar) or 0 and 1 (non-polar). The number of chips within one code is called the period of this code. A PN-code is a noise-like code with certain properties. Several classes of binary (2-phase) PN-codes exist: M-sequences (base), Gold-codes and Kasami-codes. There exists also 4-phase codes , these aren't taken into account yet. A PN-code can be created by means of one or more shift registers. When the length of such a shift register is , in general the following can be said about the period N = 2 (raised to power of n) - 1 In the most simple case a complete PN-code is multiplied with a single data bit (see figure, in this example ). The bandwidth of the data signal is now multiplied by a factor , this factor is said to be the processing gain. 39
  40. 40. Frequency Hopping When using Frequency Hopping, the carrier frequency is 'hopping' according to a known sequence (of length ). In this way the bandwidth is also increased. If the channels are non- overlapping the factor of spreading is , this factor is equal to the Processing Gain. The process of frequency hopping is shown below 40
  41. 41. There are two kinds of Frequency Hopping Techniques: • Slow Frequency Hopping (SFH) In this case one or more data bits are transmitted within one Frequency Hop. An advantage is that coherent data detection is possible. A disadvantage is that if one frequency hop channel is jammed, one or more data bits are lost. So we are forced to use error correcting codes Fast Frequency Hopping (FFH) In this technique one data bit is divided over more Frequency Hops. Now error correcting codes are not needed. An other advantage is that diversity can be applied. Every frequency hop a decision is made whether a -1 or a 1 is transmitted, at the end of each data bit a majority decision is made. A disadvantage is that coherent data detection is not possible because of phase discontinuities Hybrid System: DS/(F)FH The DS/FFH Spread Spectrum technique is a combination of direct-sequence and frequency- hopping. One data bit is divided over frequency-hop channels (carrier frequencies). In each frequency-hop channel one complete PN-code of length is added to the data signal (see figure, where is taken to be 5). Using the FFH scheme in stead of the SFH scheme causes the bandwidth to increase, this increase however is neglectable with regard to the enormous bandwidth already in use 41
  42. 42. As the FH-sequence and the PN-codes are coupled, an address is a combination of an FH- sequence and PN-codes. To bound the hit-chance (the chance that two users share the same frequency channel in the same time) the frequency-hop sequences are chosen in such a way that two transmitters with different FH-sequences share at most two frequencies at the same time (timeshift is random). From Jack P.F. Glas Difference between regular CDMA and W-CDMA 42
  43. 43. 2.3 WHAT 3G HAS TO OFFER? With 3G technology, communication is becoming richer. 3G opens up to a large array of services and applications, from rich seamless call to wireless internet at speed faster than the wired broadband. The table below shows the wide variety of services that can be availed with 3G and there are much more related services that can be availed and which are linked to these features such as mobile blogging, mobile TV, and many more. With 3G we also get faster business connectivity, faster streaming and faster content download. “Communication is becoming Richer , thanks to 3G” 3G Browse Internet Messaging Share Pic, Music, Video Video Sharing Interactive 3D Gaming Push to Talk Access corporate email Video Sharing Push to show Rich Call Video Calling Seamless Voice Mobile meeting Ring tones, games DL 43
  44. 44. “Graph showing bandwidth requirement for the service and value for the end user” The above graph shows the bandwidth requirement for the service and how much value does the end user associate with that service. It is quite evident that the services which require more band width are up on the value list for the end user. New services demand higher speed 44 Voice, SMS GSM 10-40 Kbps MMS, WAP, Download, Audio Streaming SMS GPRS 30-40 Kbps Web Browsing, Mobile intranet access, Video streaming, Video sharing. EDGE 80-160 Kbps Video telephony, Video sharing. Real time IP, real time games, mobile internet WCDMA 128-384 Kbps Faster Business connectivity, faster streaming, content download HSPA 1-14 Mbps
  45. 45. 3G offers a wide variety of services to choose from 2.4 PRESENT DEVELOPMENTS 45
  46. 46. 3G Operators generate higher ARPU than Voice and data operators 36 50 56 42 52 30 30 34 19 27 0 10 20 30 40 50 60 1 2 3 4 5 Countries ARPUPerUser(Euro) Source: www.3gtoday.com/ It is quite clear from the above forecasts that after Latin America, Asia has the highest subscriber forecast for the 3G segment. Moreover most of the Asian countries are already through with launching of 3G and the biggest market which is left untapped is India. “In respect to that, a total of 185 WCDMA licenses have been awarded by various governments and regulatory bodies to the operators up till the mid of 2006 in more than 60 countries.” 46
  47. 47. From the above graph indicating ARPU for 5 countries, 1 indicates Italy, 2 indicates UK, 3 indicates Austria, 4 indicates Sweden and 5 indicates Australia . The Blue bar indicates ARPU for 3G operator and Red indicates Average country ARPU. It is quite evident from the above graph that average revenue per user for a 3G operator is higher than for voice and data operators, thus not only it offers benefits for the consumer but it also brings a smile to the operator with increase in ARPU. Going by the over all trend, the 3G operators generate almost 1/3rd more revenue per user than voice and data operator. “3G compliments GSM rather than replacing it.” The 3G Networks are complimentary with the existing GSM networks. GSM networks are the most commonly user networks in most of the countries as in India. The operators do not need to establish their new network sites and put in new equipment for launching 3G technology rather they just need to buy a new 3G equipment and it can be attached to the existing network. Thus no extra infrastructure cost, or site buying cost has to be incurred by the operators. The operators thus can get maximum out of their 2G investments by moving towards 3G. Another important feature with 3G is that the coverage issue that most operators face is solved in 3G. As 3G provides paramount indoor converge. 47 GSM/GPRS GSM/GPRS GSM/GPRS EDGE 3G EDGE 3G
  48. 48. How many users (out of total population) use internet and use Mobiles? From the above graph it is quite clear that in western Europe, mobile subscribers are more than internet subscribers and same is the case in Japan. However in US and Canada, the Internet users are more than the mobile users, thus if people are given a choice of using internet on their mobile there is good chance of people going in for that service. How many users use internet on their phones for various operators in Europe? We can see a large number of mobile subscribers do use internet on their mobile phones. 48
  49. 49. 2.5 SECONDARY DATA ANALYSIS Secondary data is collected so as to learn and study the practices of major 3G operators around the world and identify the main 3G services and applications that they are offering to the consumer around the world. Secondary data study is carried out to learn from experience of previous researches and study the strategy and business models:- • Journals of 3GP Association • News Articles on 3G • Websites of the Operators offering 3G Services • Business reports provided by the Mobile operators offering 3G The secondary data also covers the tariff models that other operators are using around the world so that after going through various tariff models, the best tariff model can be recommended to the Indian operator. The Various are the list of 3G applications and services and their Tariffs that are being used by various operators around the world. Operator: Verizon Wireless (US) Service Type: Audio Downloading, Audio Streaming Overview  With V CAST Music, customers can download music over the 3G EV-DO network directly to their 3G wireless phones and to their Windows XP PCs, and can transfer new and existing digital music from the PC to their wireless phone.  V CAST Music lets customers immerse themselves in their favorite music with music videos, artist alerts, album art and more.  One million songs are available on V CAST Music Tariff  $15 V CAST VPAK per month  $2.50 per download to 3G mobile device  $0.99 per download to Windows XP PC 49
  50. 50. Operator: Cingular USA Service Type: Video Streaming Overview  Allow users to watch video clips from HBO shows on their phones.  Users could also get tones, graphics, and games from their favorite HBO shows! Tariff  HBO Mobile: $4:99/month  HBO Family: $2:99/month Operator: Cingular USA Service Type: Wireless Internet Overview  Cingular broadband Connect allows users to have wireless access on their laptops virtually anywhere.  Supported by Cingular 3G PC cards, this service frees the users' laptops from the limitations of wired connections and extend their reach far beyond the range of hotspots Tariff  $59:99 - 900 anytime minutes  $79:99 - 1350 anytime minutes 50
  51. 51. Operator: Cingular USA Service Type: Java Games Download Overview Users can download games with full-color animation and robust sound effects. Once downloaded, users can play the games again and again, creating a little diversion during a busy day. 3D Games  Action & Adventure  Strategy and Role Playing Games Sports  Card, Board & Casino  Gameroom  Star Wars, HBO, Disney and Cartoon Network  Puzzle  Retro Tariff $2.99-$7.99 per game Operator: Cingular USA Service Type: Instant Messaging Overview Allow users to send and receive instant messages using the AOL Instant Messenger or Yahoo! Messenger.  IM Forwarding: Forward instant messages from users' computers to their wireless phones.  PC to Mobile Instant Messaging: Send AIM, MSN, or Yahoo! instant messages from users' computers to friends and families using their 10-digit Cingular numbers Tariff $0.10 per message 51
  52. 52. Operator: Cingular USA Service Type: Mobile Portal Overview Allows users to personalize their homepage with topics of their interest, and instantly check out sports scores, surf the web, get email, grab new ringtones and games, and more Tariff  MEdia Net 1MB: $4:99/month  MEdia Net 5MB: $9:99/month  MEdia Net 10MB: $14:99/month  MEdia Net Unlimited: $19:99/month  MEdia Net pay Pay-Per-Use: $0.01/KB Operator: Cingular USA Service Type: Email Overview  Cingular Mobile Email allows users to have access to their personal emails such as AOL, Yahoo, and Hotmail.  Cingular Mobile Email allows users to Instantly check personal e-mail quickly and easily from a 3G Cingular phone Tariff No monthly fees. Standard data charges apply while downloading inbox and messages Operator: Cingular USA Service Type: Picture Message, Video Message Overview Allow users to send pictures, video, and voice messages to another phone or e-mail address even with personalized text or a voice recording. Services include Picture messaging, Video Messaging, Voice Messaging, Greeting Cards, Kodak Mobile, Multimedia Fun. Tariff 52
  53. 53.  20 messages: $2.99/month  40 messages: $4.99/month  Messages pay per use; $0.25/message Operator: Cingular USA Service Type: Video Streaming Overview  Users can get video clips of breaking and headline news, sports highlights, weather, entertainment and television shows  Cingular Video allows users to get stats and commentary from your favorite sports commentator.  Cingular “Sounds Live” users can get exclusive access to see and hear concert performances by some of today's most popular artists just days after the live event. Tariff $ 19.99 Per Month Basic Package Operator: Cingular USA Service Type: Mobile Radio Overview  MobiRadio on Cingular offers programmed commercial and interruption-free audio music channels that feature a wide variety of popular music genres .  MobiRadio on Cingular is a rich consumer application which gives customers 44 channels of high quality music from which to choose from and displays album art, song and artist information during playback. Tariff  $ 6.99 per month + data usage Operator: Optus Australia Service Type: Navigation, User Location, Location Search, Proximity Overview With Optus Zoo FindA users can get detailed maps and directions from A to B in the palm of their hand. FindA offers several types of location based services.  Navigation, User Location, Location Search, Proximity 53
  54. 54. Tariff AU$4.95 (US$3.65) per month, or “Pay-as-you-Go” at rate of AU$0.55 (US$0.40) for 20 minutes Operator: Vodafone UK Service Type: Mobile TV Overview With the Vodafone Live! Mobile TV service users can watch a wide variety of popular TV channels on their 3G Vodafone mobile Tariff  Sky Mobile TV pack: £5 (US$9.40) per month.  Variety pack: £3 (US$5.60) per month. Operator: 3 (Hutchison Telecom) UK Service Type: Video Messaging , Video Download Overview  SeeMe TV is a new video service where the users produce and act in their own home- made movies that are submitted to 3 to be viewed by the rest of the subscriber base. Each time their video is viewed they receive a monetary credit in their account from 3.  SeeMe TV subscribers can record mini-movies (15 seconds) on their 3G mobile phone and send them to 3 to earn money Tariff  Each time a user downloads your Video from See Me TV, you earn money in your See Me TV account, as follows:  Video Price Credit Amount  10p 1p  20p 2p  30p 3p  50p 5p Operator: Orange UK Service Type: Games Download 54
  55. 55. Overview  Orange offers a large selection of mobile games, including 3D, action, board, casino, puzzle, racing strategy and film games. Tariff  All games are priced between £3-5 (US$5.20- 8.70). Operator: Sprint US Service Type: Video Streaming Overview  Users can watch live TV on the go with full-motion video and vivid sound. Power Vision TV phones provide up-to-the-minute breaking news, sports, weather, movie trailers, and entertainment channels, including the latest music videos.  Sprint TV offers 19 channels, including ABC, Fox Sports, Fox News Channel Live, NFL Network, Discovery, Discovery Kids, Discovery Tariff  Monthly Subscription $ 20 + Channel Subscription Operator: 3 (Hutchison Telecom) UK Service Type: Video Streaming Overview  MobiTV allows users to watch news, sport, comedy, or music videos anytime they want. Users can choose between 7 TV Channels or 19 TV Channels offered through MobiTV  MobiTV offers the following channels: Extreme Sports Network, ITN, Kiss TV, The Cartoon Network, MTV Trax, VidZone, Nickelodeon, MTV shows, Paramount Comedy, Playboy TV and many more. Tariff  Monthly Subscription 5 Pound + Individual Channel Subsciption 55
  56. 56. Operator: 3 (Hutchison Telecom) UK Service Type: Video Telephony, Dating Overview  3 Video Dating allows users to view and meet prospective dates via video messages. Users can now flirt face-to-face before making their minds up.  3 Video Dating allows each user to create an online profile and a video greeting that describes their interests and dream date. Tariff  Standard Video Call Tariffs Apply 56
  57. 57. Jet Airways has been voted India's 'Best Domestic Airline' consecutively and won several national and international awards, including the 'Market Development Award' for 2001 awarded by Air Transport World. AIR DECCAN Air Deccan is a unit of Deccan Aviation Private Limited, India's largest private heli- charter company. Formed in 1995, Deccan Aviation Private Limited has carved a niche for itself in the Indian aviation scene with its reputation for providing speedy and reliable heli-services for company charters, tourism, medical evacuation, off-shore logistics and a host of other services. The company has a modern fleet of ATR-42-320 aircraft, one of the finest and most efficient Turbo-Prop aircraft flying. ATR is a European joint venture between Alenia Aeronautica and EADS. The ATR 42 has become a reference aircraft amongst airlines around the world, by offering a safe, easy to maintain and comfortable aircraft operating on the regional market with the best economics on short haul sectors. To date, ATR has sold over 650 aircraft to more than 100 operators in 73 countries all around the world. The company has adopted a 'lean-and-mean' approach to staffing and aims at maintaining a low aircraft-to-employee ratio. A good work culture coupled with a skilled workforce is the backbone of the company. 57
  58. 58. 2.4 CUSTOMER RELATIONSHIP MANAGEMENT –THE CONCEPT The business environment has changed—becoming more intensely competitive as globalization has brought new competitors into the marketplace... This trend is both a blessing and a curse since companies can now connect with customers around the globe but will have to compete with players around the globe as well. Customers have become harder to satisfy as they have become inundated with rapidly changing product and service offerings. In fact, product proliferation has resulted from a greater number of competing companies trying to offer global consumers an array of choices in order to fulfill their diverse needs and wants. In addition, technology advances resulting in improved transportation and communication capabilities have enabled faster delivery times as well. As a result of these trends, customers’ expectations have risen rapidly to the level of demanding what they want, where, when and how they want it. To understand what exactly Customer Relationship Management is, first we have to understand the terms customer, customer perceived value, total customer satisfaction, customer equity, value equity brand equity, and relationship equity. Customer: Customer is defined as that person who buys any product or services from any business house to satisfy his daily need wants and demands. Customer Perceived Value: It is the difference between the prospective customer’s evaluation of all the benefits and all the costs of the offerings and the perceived alternatives. Total Customer Satisfaction: It is defined as a person’s feeling of pleasure or disappointment resulting from comparing the products perceived performance in relation to his expectations. If the performance matches his expectations the customer is a satisfied customer, if the performance of the product or service exceeds his expectations then the customer is a delighted customer. Today the rule is to make your customer delighted and not only satisfied. 58
  59. 59. Customer Equity: is the total of the discounted lifetime values of all the firm’s customers. Value Equity: It is defined as the customer’s objective assessment of the utility of an offering based on perception of its benefits relative to its costs. Brand Equity: In terms of CRM, it is defined as customer’s subjective and intangible assessment of the brand, above and beyond, it’s objectively perceived value. Relationship Equity: It is the customer’s tendency to stick with the brand, above and beyond the objective and subjective assessment of its worth. The above defined terms will now enable us to get a clear understanding of the term Customer Relationship management. Customer Relationship Management: Customer Relationship Management, is the business strategy that aims to understand, anticipate, manage and personalize the needs of an organization's current and potential customers" -- PWC Consulting. Therefore we can say that CRM is a business strategy, one that puts the customer at the heart of the business. 59
  60. 60. 2.5 CUSTOMER RELATIONSHIP MANAGEMENT IN THE AIRLINE INDUSTRY Today the major carriers are moving in direction of Customer Relationship Management, but none is fully there yet. Smaller airlines are behind, but chasing. The consultants at McKinsey estimate that true CRM could boost the operating profits of a large Indian airline by up to $250 million a year. Even small carriers could increase their annual income by $15-50 million each year. The gains come mostly in reducing customer churn, increasing an airline’s share of existing customers’ spending and in gaining new customers. In order to manage the customer more effectively across all lines of service, airlines have the following approaches to CRM: • Customer segmentation—Airlines need to recognize that mileage-based segmentation is inadequate, whereas value-based and needs-based approaches can help guide investment decisions and drive greater insight into the needs of high-value customers. • CRM initiative development—In order to differentiate themselves from the competition, airlines must abandon a “fast follower” approach to CRM initiative development, in favor of investing in initiatives with a high return, which responds to the needs and desires of their own customers. • Organizational design and management—Airlines need to instill a service mentality in their employees, empowering them with a complete view of the customer and clearly articulating the employee’s role in the CRM strategy. 60
  61. 61. By taking steps to implement a truly consumer-centric approach to relationship management, an airline is better positioned to acquire, develop and retain high-value customers. Through the development and implementation of customer analytics and decision-support technologies, airlines are beginning to use customer information not only to differentiate service levels based on customer value, but also to drive crucial operational decisions. In the end, an airline’s CRM program becomes a platform for achieving both near-term operational efficiency and long-term relationship management and growth. As the Indian airline industry grapple with how to deliver a consistent and distinctive customer experience while maintaining low operating costs, they have turned to the promise of CRM. Although operational and security issues became top-of-mind immediately after September 11th, CRM has gradually come back into focus as airlines recognize the importance of effective customer management in establishing long-term competitive advantage. CRM’s promise is indeed compelling: strengthened loyalty driving increased revenue, with lower acquisition costs and improved operational efficiency. For full-service airlines, CRM is an essential component of their corporate strategy—the means of differentiating themselves from competitors in the eyes of the customer. And although low-cost carriers may be less reliant on CRM as a means of driving competitive differentiation, even they must invest in fundamental CRM technologies and processes to manage the customer efficiently over the course of the travel experience. Increasingly, airlines are recognizing that CRM is a long-term investment, with the true benefits reaped through profitable lifelong customer relationships. To date, the Indian airline industry have used CRM primarily as a competitive “catch-up” rather than a means of differentiation. Rushing to imitate the customer-oriented initiatives introduced by competitors, many airlines have done little to determine the value to the customer of those initiatives, or to the business itself. Today, not only are frequent flyer programs a universal cost of doing business, but even recent innovations such as kiosk check-in One of the primary goals of CRM is to differentiate a company’s services to the customer through personalization. 61
  62. 62. 2.6 JET AIRWAYS CRM PROGRAMS On ground customer services: • Check-In Options: 1. Web Check-in – India’s first and only online service where you can choose your seat and print your boarding pass from home or office. Whether you’re flying Club Premiere or Economy, whether you’re a frequent flyer or a first-time flyer all you require is a valid Jet Airways e-ticket, access to the Internet and a printer. 2. City Check-in-If you have a confirmed ticket and will be traveling with only hand baggage, bid adieu to long queues at the airport. Jet Airways now brings Bangalore, Kolkata, Chennai, Delhi, Indore and Mumbai airports closer to you. Passengers traveling with hand baggage and a confirmed ticket need not report at the airport hours before their flight departure. All you need to do is to drop in at our conveniently located city offices and check-in as early as 24 hours prior to your flight departure 3. Tele Check-in-if you are a member of Club Première passenger or a holder of the Jet Privilege Platinum/Gold/Silver/Blue Plus card? You just avoided the wait at the airport. Use the extra time to shop, go sightseeing or simply catch up with 62
  63. 63. your work. When business takes you places, your every minute is precious. Breeze through check-in with our Tele check-in facility. • 24 hours Help Desk: Jet Airways provide a 24 hours help desk for their customers to provide any sort of information regarding boarding, tickets, bookings ,flight and seat availability, etc any time of the day and night. In Flight Customer Services • In-Flight Convenience: Jet Airways provide full convenience service in-flight to their passengers ranging from Towels, Sleep Easy Pillows and blankets are available on request on all our flights. Reading Material Every Jet Airways flight has a wide choice of newspapers and magazines. Club Première passengers may request the cabin crew to provide them with exclusive stationery.First Aid A first-aid kit is available with the cabin crew on all our flights Class of service: Jet Airways operates two classes of service - Club Premiere and Economy class. Club Premiere is the exclusive Business Class and the preferred mode of travel for businessmen and senior personnel in the corporate world. Benefits and privileges programs for customers: Jet Airways, believe in providing passengers with the best experiences possible. And now with the introduction of International long-haul flights, they have enhanced the Jet Privilege programme to be more global in nature. As a member of the Jet Privilege programme, passengers will enjoy a variety of enhanced benefits that transcend beyond traditional forms of Frequent Flyer programmes. 5 Membership Levels In addition to the 3 existing tiers, the new Jet Privilege programme introduces 2 new tier levels. JP Blue continues to be the entry level into the JP Programme. JP Blue Plus is a new tier, introduced for our JP Blue members who are on the fast track to an upgrade; they can start enjoying the facility of Tele Check-in as soon as they complete 10 Jet Airways flights or 15,000 Status JPMiles in a six-month period.JP Silver & JP Gold continue to remain the elite tier levels of the JP Programme. JP Platinum is an exclusive elite tier level, specially created for our most frequent flyers The Dynamic Tier Review (DTR) System - A world first! To make the tier upgrade and retention easier for our JP Members, Jet Privilege has developed a multi-criteria based tier assessment system. This innovative system, which is referred to as the DTR System, is totally unique to Jet Airways and has no precedent anywhere in the world. With this system, we will be 63
  64. 64. able to provide members with quicker tier upgrades as well as more opportunities to retain their tier status. Check-in at Club Première & PREMIERE counters As JP Silver, JP Gold, JP Platinum or Jet Airways Citibank Gold Credit Card member, you can now check-in at the Club Première & PREMIERE desk, irrespective of your class of travel. E-ticketing: An unique fast function where a customer can book his ticket online and then get a simple print out of his ticket in order to walk in the departure area of the airport. 2.7 INDIAN AIRLINES CRM PROGRAMS Premium Clubs for Customers: The Maharajah Club: The Maharajah Club has been specially created for discerning travelers like you. It is Air India's way of providing you superior service, convenience and comfort that will make flying an extremely pleasurable experience for you. Anywhere. Every time Golden Edge Club: Life is a journey full of surprising rewards if you are a frequent flyer with Indian Airlines, and the awards seem to multiply with every passing nautical mile. Gradually, you realize that you now belong to an exclusive club, where sky is not the limit. Leading Edge Club: We like to make your experience with Air India pleasant both in the air and on ground. In our Endeavour to satisfy your special needs and offer you the best in luxury travel, we have linked up with organizations of high repute, in India and abroad. Silver Edge Club: As a high profile executive, you are the centre of the limelight. The frequent flights you take on Indian Airlines ads up to two things. Membership to the elite Silver Edge Club, a world of rewards, offers and promotions. Super Saver Utsav Plus: In order to facilitate and give 'value for money' to frequent travelers like Indian has introduced a new scheme "Super Saver Utsav Plus", during the New Year / Festive Season. 64
  65. 65. Desh Videsh: Indian has launched various Customer Schemes and Easy Fares/Unchecked fares in the market, by offering very attractive discounts, to valued customers. In order to recognize and reward all passengers, who are loyal and traveling on Indian Airlines, a new scheme "Desh - Videsh 2006" is being launched with effect from 6th February 2006."Desh-Videsh 2006" is a scheme to reward passengers, based on the total volume of travel, irrespective of the type of discounted ticket they are traveling on E-ticketing: Electronic tickets are permitted between the following online points in India: Mumbai, Delhi, Hyderabad, Bangalore, Ahmedabad, Kolkata, Chennai, Kochi and Thiruvanthapuram and online points in the USA Region viz. New York, Newark, Chicago and Los Angeles. Passengers availing of stopovers at Paris and Frankfurt will not be able to avail of electronic tickets. These tickets can be booked/purchased at our Booking Offices and online on www.airindia.in 2.8 KINGFISHER AIRLINES CRM PROGRAMS King Club: Kingfisher airlines have always believed in treating their passengers to the Good Times on- board. As their loyal Guest, they believe that passengers deserve special care. And they are proud to crown the passengers King of the skies. Each time passengers fly the Good Times, they get a treasury full of rewards and privileges. Please and as always, they assure of unparalleled levels of service that have become accustomed to with Kingfisher Airlines. Come have a royal time… Online ticket Booking: This service enables the passengers to book their tickets online through the internet from any corner of the world, saving their precious time in going to a travel agent and standing in long standing lines. In-flight entertainment: Personalized video screens and headphones broadcasting 5 video channels of the trendy FUN TV and the exclusive Kingfisher Radio - 10 channels of chartbusting music from across the globe. King Club Miles and Tiers: The King Club membership comprises 3 Royal tiers - Red, Silver and Gold. Tier status determines the benefits & privileges that the passengers are entitled to. Needless to add, the higher the tier, the more the benefits. Passengers will, however, continue to accrue and redeem Miles, regardless of their tier status. All Guests automatically enroll into the King Red tier on completion of 3 valid flights on Kingfisher Airlines. If the passengers have 65
  66. 66. taken 30 or more flights during the course of the year, he would be automatically upgraded to the King Silver tier. On completion of 60 or more flights a year, the tier status would be further upgraded to King Gold. Tiers are reviewed annually. In order to retain tier status, our King Club Guests would require flying a specified minimum number of times on Kingfisher Airlines during the course of the membership year. 2.9 AIR DECCAN CRM PROGRAMS Super Value Flier: this is one of the most important schemes for the customers that the airline has adopted to build up a long relationship with its customer or rather its potential passengers. These are special packages for frequent flyers and include the following: Package Name: Price: INR No of Tickets: Valid For: Value Flier Plus 48000.00 14 12 Months Value Flier 24000.00 12 12 Months Super Flier Plus 100000.00 32 12 Months Super Flier 50000.00 26 12 Months Citizen charter: Air Deccan’s Citizens' Charter is presented to give information on all the interfaces between our valued customers and us at Air Deccan. Relevant information regarding reservations, check-in procedures, baggage allowance, cancellation charges and security regulations is briefly outlined in this Citizens' Charter. 66
  67. 67. 2.10 BALANCED SCORE CARD IN BRANDING To develop a balanced score card for the airline companies we first have to know as to how these various Indian companies are positioning their airlines name as a brand in the market as well as in the minds of their customers or rather passengers. Air Deccan:” India’s low cost airline carrier” Jet Airways:” The joy of flying” India Airlines:” New horizons, enduring values” Kingfisher:” Fly king class” We studied the passengers and found out as to what their perceptions about the various airline companies are and what the parameters that effect their perception are. The chart here gives us passengers traveling to Delhi from the different regions of India mainly region-wise spilt up of the sample is as follows: 67
  68. 68. The areas covered in measuring perceptions of the passengers are as follows: 1. Brand Awareness 2. Airlines usage – a. Frequency b. Brands c. Purpose d. Circuits e. Class 3. Factors affecting consumer perception 4. Promotional Scheme Preferences 5. Brand parameter preferences 6. Circuits flown Brand Awareness Study Indian Airlines ranks number one in brand awareness. This could be attributed to its long stay in the market and continued support from the government. Today, Indian Airlines has become synonymous with reliability and efficiency. Jet Airways is offering stiff competition and ranks second in the list. Sahara is providing value-add services and is following closely. The concept of a low-cost, no-frills airline is being merged into having high quality, low-cost carriers. Air Deccan, following the low-cost airlines model, being a relatively new entrant in the market, comes in lowest currently on brand awareness. 68
  69. 69. Usage of Airlines Indian Airlines, mostly used by government employees, recorded the highest usage followed by Jet Airways. Although most consumers rated Jet Airways high on price, it still ranks second in usage and this could be attributed to its excellent service and promotion schemes. Similar data for the entire population reflects a higher usage of Jet Airways than IA, and a lower usage of Sahara, which is a possible implication of the sample location being concentrated in almost equal proportion in Lucknow (which has a higher price sensitive population) as other major metros. 69
  70. 70. Frequency of Usage As indicated in the graph below, a majority the population flies relatively infrequently (as compared to the developed markets). Passengers traveling on business were found to be 70
  71. 71. more frequent users, while those flying on holidays and emergencies were those that tended to make up the segment that flew less than once a year. Flight Class and Occasion of use Although the occasion of use indicates that maximum usage is for business, the flight class graph indicates that the proportion travelled by business class is very small in comparison to that travelled by economy class. This indicates that most business travellers are flying Economy class as well. Further, the second important occasion of usage is for emergencies and time-critical travels. Circuits Flown: The most frequently flown circuit is that between major metros, followed by other state capitals and Delhi-Mumbai. Delhi and Mumbai airports accounts for roughly half of passengers flown, and metro airports account for 66% of the passengers flown (and 47% of revenues, as per secondary data). 71
  72. 72. Scheme Preference: With the entry of new players in the market, airlines are competing for passengers on non-price parameters. This increases the product differentiation in order to decrease elasticity of demand in the market. Given the key differentiators that substitute for price, consumers have rated Apex fares as their most preferred scheme. Indian Airlines, Jet and Air Sahara offer apex fares. Next most preferred to Apex fares is the frequent flyer program, a trend noticed predictably in the high frequency repeat users and those traveling on business. Factors affecting consumer perception We identified the following factors that make the demand function of consumers. a) Price b) Service c) Promotional Schemes d) Loyalty programmes e) Flight Schedules f) Comfort with the brand g) Corporate tie-ups 72
  73. 73. Consumer Choice Parameters Price appears to be most important factor for the consumer followed by service provided and flight schedules. Indian Airlines has been rated high on most parameters while Jet Airways, although rated low on price, is rated highest in most other factors. Air Deccan, which has been ranked best on prices, has succeeded in its mission to provide reliable low-cost air-travel to common man by constantly driving down air-fares. Kingfisher’s many services such as In-flight entertainment and Wings n' Wheels coach service, exclusive business lounges being operated at departure halls at airports in a number of cities, providing for business and refreshment services has made it second most popular under services. It has taken the lead in introducing novel initiatives such as Steal-a-seat flexi fare options, Sixer/Super Sixer and Square Drive/Super Four. Corporate tie-ups were a trend significant by their absence on the brand preference parameters. While the only major tie-ups were by Indian Airlines with government agencies, these were not perceived as strictly ‘corporate’ tie-ups. This segment is hence a possible opportunity which can be explored as a non-price differentiator, given the large frequency of use by business travelers 73
  74. 74. 2.11 E-CRM FOR THE AIRLINES What is e-CRM Today, more and more airlines are using the Internet to implement e-business applications and CRM strategy. These applications can be very resource intensive. e-CRM is interest intensified in managing customer relationship through the Internet, and many airlines approached this as a separate project to their e-business strategy. What differentiates airlines in today's hyper-competitive and demand-driven markets is their ability to address their customers' preferences and priorities. This means more than simply knowing and understanding their customers better than their competitors do. It means strategically implementing this customer knowledge in every area of the airline, from the highest management level to all the employees who come into direct contact with customers. E-CRM involves far more than automating processes in sales, marketing, and service and then increasing the efficiency of these processes. It involves conducting interactions with customers on a more informed basis and individually tailoring them to customers' needs. Business Drivers--Why CRM There are three primary reasons why CRM has taken hold as rapidly as it has: 1. Competition is fierce; 2. The economics of customer retention are unequivocal; 3. Technology allows airlines to do this more effectively and profitably today. The benefit of application CRM to the airline industry There are only three ways to increase the profitability of a customer base; acquire more customers, optimize the value of existing customers, or retain the right customers longer. All of these benefits must be achieved with lower costs. 74
  75. 75. Of the three choices above, acquiring new customers is the most expensive. Research shows that acquiring a new customer cost 5 to 10 times more than retaining an existing one. Studies also show that loyal customers will buy more over their lifetime and are willing to pay a premium for doing business with someone they like and trust. An investigation of the India airlines industry has clearly indicated that significant revenue improvements of n 0.9 and 2.4% are achievable Benefits of a CRM Strategy This revenue increase comes from three areas: • Re-attracting defected customers, which accounts for between 0.1 and 0.3% of revenues; • Increasing the share of a customer's travel wallet, which accounts for 0.3 and 1.2% of revenues; • Acquiring new customers, which accounts for approximately 0.05% of revenues? Naturally, associated with these revenues are costs, but these only amounts to between 0.3 and 0.6% of the existing cost base: • The marginal additional flights needed as incentives estimated to be between 0.2 and 0.4% of costs; • Additional CRM initiatives amounting to between 0.2 and 0.5% of costs. Savings in costs due to more efficient and targeted running of the existing CRM program, providing a reduction of 0.1 to 0.3% of costs; As stated above, the bottom line impact of CRM is significant, but varies according to the airline implementing the initiatives. The range estimates are: • For a large airline: $100-$250 million per year; • For a midsize airline: $25-$60 million per year; • For a smaller airline: $15-$50 million per year. 75
  76. 76. There are many benefits to be gained for airlines and airline passengers, firstly, passengers could book and check in through internet 24 hours, 7 days a week, at any time, any where. Secondly, airlines could reduce sales cost. Specific benefits to implementing a CRM strategy with Interaction Management And to the customers: • Planning and implementing business processes across airlines and CRM applications ensures customers are handled in the most efficient and effective fashion • Implementing CRM applications may simultaneously lower the cost of design, implementation, etc. It also reduces the risk of re-engineering systems at a later date. CRM - ensuring streamlined processes are in place before the customer makes contact • Influence and enhance intelligent call routing by leveraging the data gathered from the switch (ANI, DNIS, and Caller ID), caller, and CRM applications. • The E-mail was responded to immediately, with personalized, valuable information. • Web self-service allowed customer to take immediate action to resolve issue. • Personalization enabled promotion tailored to customer profile - enhancing one-to-one marketing. • The "callback" option was easy to use, enabling the customer to quickly request live support. • The intelligent interaction routing engine immediately connected the customer to the right CSR. For the airlines implementing CRM, it becomes possible to single out customers who are profitable, gaining an understanding of their preferences to improve retention and increase the volumes sold. These valuable customers can become advocates for the airline and its products. Finally, CRM helps an airline to build loyalty. With e-CRM, airlines can increase sales and customer loyalty. This strategy can improve sales effectiveness, bring higher value to all of airline's key business relationships, help airline to understand what each client relationship is truly worth, develop and reinforce a consistent experience for customers, improve management effectiveness, improve tactical and strategic planning, respond faster to competitive challenges, use critical resources more efficiently, and reduce administrative burdens and overall cost. 76
  77. 77. How to e-CRM Four Steps to e-CRM success e-CRM is a business strategy that should guide airlines to increased profitability by creating customer loyalty. In order to implement a true e-CRM strategy, airlines must have a vision and look at CRM as one holistic project - whether implemented all at once, or through a phased approach. First, an airline must commit to focus on the customer and create a complete vision that fosters a true customer-centric organization. Once a clear vision is in place, developing a strategy and establishing goals are the next steps toward effectively deploying e-CRM. The entire plan must align the airline's strategy, goals, and technology in order to achieve the objectives of the e-CRM project. Airlines that make strategic e-CRM investments and align processes, strategies, and technology around customers are in a better position to deliver a seamless, high-quality customer experience across all channels. 1. Airlines have a clear overall strategy to achieve enterprise-wide acceptance of a customer-focused culture. Without clear direction, resources are likely to be misdirected and return on investment sacrificed. Underpinning this must be senior management sponsorship of the complete culture, process and business change needed to successfully re-focus a business on its customers rather than its products. 2. Airlines have maximized value from their investment in technology to achieve the sought after 'single view' of each customer. Being customer-centric is not just about technology, however any airline considering using on-line channels to reach its customers knows it needs a clear vision of what it wants the technology to do. It is essential to have a coherent strategy for unifying multiple customer contact channels but ultimately, success lies in ensuring that the online customer experience is relevant, personalized, and supported with excellent customer service, support and fulfillment. Done badly, e-business provides an open door for mass customer defection. 77

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