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Airtel and its marketing strategy, 7Ps, Gaps model, Blue printing, Swot

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  • for example, point of sale placement or retailing.
  • Bharti Airtel uses aqua-based ink for all its in-shop branding, in spite of its cost being three times the cost of ink which is normally used. The aqua-based ink is environment friendly and does not emit any fumes and hazard.Sometimes flex materials are used for hoardings, but since they are not disposable these are donated to poor people so that they can use it as roof-material on their houses.
  • Airtel

    2. 2. EVOLUTION OF TELECOM INDUSTRY IN INDIA YEARS 1851 First operational landlines introduce 1881 Merger with postal system 1947 Merger of ETC and IRT into IRCC 1985 DOT established 1986 Conversion of DOT into VSNL and MTNL 1992 Private players were allowed in VAS 1994 National Telecom Policy (NTP) was formulated 1997 Independent regulator, TRAI, was established 1999 NTP-99 led to migration from high-cost fixed license fee to lowcost revenue sharing regime
    3. 3. 2000 BSNL was established by DoT 2002 ILD services was opened to competition, Go-ahead to the CDMA technology, Internet telephony initiated, Reduction of licence fees 2003 Unified Access Licensing (UASL) regime was introduced 2004 Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010 2005 FDI limit was increased from 49 to 74 percent 2006 Number portability was proposed 2007 Decision on 3G services
    4. 4. ABOUT THE COMPANY  Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India, with more than 124 million subscribers as of February 2010[update].  Bharti is now the world's third-largest, single-country mobile operator and sixth-largest integrated telecom operator.  The Bharti Airtel brand is headed by Sunil Bharti Mittal.  The businesses at Bharti Airtel have always been structured into three individual strategic business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise Services.
    6. 6.  The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel Digital TV.  Shahrukh Khan is the brand ambassador of the mobile company and Kareena Kapoor and Saif Ali Khan are the brand ambassadors of the DTH company.
    7. 7. MARKET SHARE OF BHARTI AIRTEL RELIANCE COM, 11.50% Idea cellular, 12.10 % vodafone, 20.7 0% BSNL, 10.20% Bharti airtel, 33.38%
    8. 8. MARKET SEGMENTATION  DEMOGRAPHIC SEGMENTATION: Airtel has divided its market on the basis of following variables Age: 18 to 40 years Gender: Male and Female Income: More than 60000 per annum  GEOGRAPHIC SEGMENTATION: Country: India State: Delhi, Maharshtra, Gujarat, Andhra Pradesh, Tamil Nadu, Punjab,etc District: Mumbai, Kolkata, Delhi, Ahmedebad, Chennai, etc.  BEHAVIORAL SEGMENTATION: Occasions: Birthday, Marriage, Anniversary, etc. Festivals: Rakshabandhan, Diwali, Christmas, etc.  PSYCOLOGICAL SEGMENTATION Lifestyle: Based on people‘s way of living. Values: According to the values of an individual.
    9. 9. MARKET TARGETING  121.63 million subscriber by 2010     elite class up market professionals women & senior citizen by postpaid connection PAN-INDIA targeting High corporate clients Low income group people Youth with youth club
    10. 10. POSITIONING  TAGLINE: ―Express Yourself‖  The product is sought to be positioned as a business efficiency tool. A lifestyle revolution and a status symbol the emphasis is to remove misconception that the cell phone is an expensive means of communication and drive home the point that the cell phone is actually a day-to-day utility.
    11. 11. Airtel has been successful in positioned itself as an efficient and good service provider. This can be clearly seen as Airtel is the market leader in Mobile services in India.
    12. 12. SWOT ANALYSIS
    13. 13. 1) Very focused on telecom. 2) Leadership in fast growing cellular segment. 3)Pan-India footprint. 4) The only Indian operator, other than VSNL, that has an international submarine cable STRENGTHS OPPORTUNITIES 1) The fast-expanding IPLC market. 2) Latest technology and low cost advantage. 3) Huge market. 1)Price Competition from Vodafone and Reliance 2)Untapped Rural market WEAKNESS ES THREATS 1)Competition from other cellular and mobile operators. 2)Saturation point in Basic telephony service
    14. 14. MARKETING STRATEGY ADOPTED BY BHARTI AIRTEL  Bharti has spent a considerable amount on advertising its mobile phone service, Airtel. Besides print advertising, the company had put up large no of hoardings in and around Delhi.  The objective behind designing a promotion campaign for the ‗Airtel‘ services is to promote the brand awareness and to build brand preferences.  It is trying to set up a thematic campaign to build a stronger brand equity for Airtel. Given the Cell phone category, it is the network efficiency and the quality of service that becomes important. What now the buyer is looking at is to get the optimum price-performance package
    15. 15.  Brand awareness is spread through the' campaigns and brand preference through brand stature. Airtel's campaign in the capital began with a series of 'teaser' hoardings across the city,' bearing just the company's name and without explaining what Airtel was.  In the next phase the campaign associated Airtel with Cellular only thereafter was the Bharti Cellular connection brought up.  Vans with Airtel logos roamed the city, handing out brochures about the company and its services to all consumers. About 50,000 direct callers were sent out.  In the first four months alone Airtel's advertisement spend exceeded Rs. 4 crores.
    16. 16.  As of today the awareness level Is 60% unaided. This implies that if potential or knowledgeable consumers are asked to name a Cellular phone service provider that is on the top of his/her mind 60% of them would name Airtel. As for aided it -is 100% (by giving clues and hints etc.).  Airtel 's campaign strategy is designed keeping in mind its marketing strategy. It tries to portray the image of being a "first mover every time" and that of a "market leader".  The population which has just realised the importance of cellular phones has to be roped in. It is for this reason that the service provider offers a plethora of incentives and discounts. Concerts like the "Freedom concert" are being organised by Airtel
    17. 17. Connecting with the youth
    18. 18. Recent strategies
    19. 19.  Besides this, other promotional strategies that Airtel has adopted are: (i) People who have booked Airtel services have been treated to exclusive premiers of blockbuster movies. Airtel has tied up with Lufthansa to offer customer bonus miles on the German airlines frequent flier's programs. (ii) There have been educational campaigns, image campaigns, pre- launch advertisements, launch advertisements, congratulatory advertisements, promotional advertise-ments, attacking advertisements and tactical advertisements.
    20. 20. PRODUCT  Mobile Services- Prepaid and Postpaid Services.  Telemedia Services- Broadband & Telephone Services.  Enterprise Services- Corporate and Carrier Services.
    21. 21. PRICE  The biggest driver of its growth is the development of pricing plans catering to individual needs and requirements of the people at the prices they are willing to pay.  Two separate trends are evident for pricing which are in terms of the kind of usage by the subscriber. 1) Local or STD phone calls 2) Calls to a phone on same network or to a different network Combining these two trends, four different usage patterns emerge according to which a user can select the pricing plans: 1) Local calls to same network cell phone 2) Local calls to different network/landline 3) STD calls to same network 4) STD calls to different network/landline
    22. 22.  A research by IIM-B Professors and students reveal the following. 1) For local calls to Airtel phones, the pricing is close and intertwined and there is little difference across the plans. Similarly, for local calls to other subscribers, the plans are quite close to each other. Certain plans have lower per minute rates but they also turn out to be costlier throughout due to high rental. The current pricing strategy of Airtel is thus misleading as far as mixed local usage is concerned. The customer has an advantage if a major portion of his calls are to cell phones on the same network but this advantage is also constrained by the specific caveats of the plans. When there is a mixed STD-Local usage, different plans turn up to be cheaper for different duration of usage, but this is a difficult analysis for an average user and could possibly be a pricing technique of the company to exploit information asymmetry. However, it is inferred that Airtel uses its pricing plans strategically to increase its market share by giving customers incentives to talk to other Airtel users as it costs less. Such a pricing strategy has a network effect, as more and more people will and are adopting Airtel as the user base increases. 2) Docomo- The plans offered by Docomo are non-overlapping and distinct in terms of the fixed rentals when looked at upfront. The bill that a customer has to pay under different plans is different in each scenario, and follows the expected trend. However, for the high rental plans, which should become cheaper for higher usage, do not become cheap even much beyond 2000 minutes of usage. This implies that it probably is a way for the company to charge more while giving the perception of lesser bills per month.
    23. 23. PLACE  It refers to how the product gets to the customer i.e. the channel by which a product or services is sold(e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. PROMOTION     Use of Print Advertisement Material Innovative TV Advertisement Brand Ambassadors Sponsorships
    24. 24. PEOPLE  The Board of Directors  The Employees  The Target Customers- Airtel has poitioned itself as an aspirational and lifestyle brand, in a way that trivialises the price in the mind of the consumer. It pitches not merely as a mobile service provider, but as something that would give a customer certain badge value. PHYSICAL EVIDENCE  The physical environment plays an important role in shaping the service experience and delivering the customer satisfaction.
    25. 25. PROCESS  Process innovations and continuous improvement through people involvement.  Problem investigation by Fact based – Root Cause Analysis.  Based on customer specifications, Airtel has many business processes on the following concepts: 1) Delivery time 2) Lead – time 3) Time to market  Result Oriented Approach- Each process has been designed by first planning the desired result. The targeted results are then arrived at through identification of the following: 1) The next-customer and end-customer expectations. 2) Past experience of ―what went wrong and can go wrong‖
    26. 26. CUSTOMER GAP ANALYSIS THE BACKGROUND 1. The rapid growth of mobile telephony in India ranks inarguably as one of India‘s greatest success stories. Cheap telephone connectivity has empowered individuals in myriad ways, and has served as a massive productivity multiplier for the economy by collapsing communication costs. 2. Indian telecom industry underwent a high pace of market liberalization and growth since 1990s and now has become the world's most competitive and one of the fastest growing telecom markets. 3. The gateway to many foreign investors to get entry into the Indian Telecom Markets was when the government decided to reduce its stake in VSNL to 26% and TATA took a 25% stake in VSNL.
    27. 27. 4. The industry growth stage lasted from 2005-2009. At this point the industry is almost at the shakeout stage. The industry is rapidly approaching the matured market stage. But another theory refutes the claim. 6. The economic growth in India, currently the market is growing more on the Network area growth, providers are moving to smaller cities from big cities, demand is generated from ‗B‘ class & ‗C‘ class cities – middle class population. A major section of middle class population of India in smaller cities couldn‘t enjoy the advantages of Telecom service due to the Govt. monopoly, poor capacity, regulations; they are the immediate customers of the Mobile operators.
    28. 28. 7. The Landline is no more the preferable choice for the new telecom users; people like to use mobile phones because of its added advantages and easy subscription. Also the middle class size is expected to grow in India in next decades, so the Mobile market in India will be probably in Growth – Shakeout phase for a longer period. 8. Indian mobile operators offerings are segmented in two broad categories – Pre-paid and Post-paid. Although mobile market is growing positively, the Post-paid market is declining and Prepaid market is increasing by leaps and bounds.
    30. 30. BRIEF ON CUSTOMER SERVICE GAP MODEL STEP 1—Analyze the Provider Gap Market Information Gap – Not knowing what Customers Expect: The Company's incomplete or inaccurate knowledge of customers' service expectations. • • • • KEY FACTORS: Inadequate marketing research orientation Lack of upward communication Insufficient relationship focus Inadequate service recovery
    31. 31. Service Standards Gap – Not having right standard and design: The Company's failure to translate accurately customers' service expectations into specifications or guidelines for employees. Key Factors –  Poor service design  Absence of customer-defined standards  Inappropriate physical evidence and Servicescape
    32. 32. Service Performance Gap—Delivery lag: Lack of appropriate internal support systems (e.g., recruitment, training, technology, compensation) that enable employees to deliver to services standards. KEY FACTORS— • Deficiencies in HR policies • No matching Supply & Demand capacity • Customers failed to meet their roles • Intermediaries problem
    33. 33. Internal Communication Gap – Promises don‘t match: Inconsistencies between what customers are told the service will be like and the actual service performance. KEY FACTORS–  Lack of Integrated services marketing communication  Ineffective management of Customer expectation  Over promising  Inadequate horizontal communication
    34. 34. BHARTI AIRTEL: GAPS & EXPLAINATIONS 1. Consumer Perceptions – Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. Information inputs are the sensations received through sight, taste, hearing, smell and touch. This is very important factor for Indian consumers, as the average literacy level is low in India. People want to judge the quality of service with more on Physical evidences comparing to western world, where people rely on the specifications.
    35. 35.  As Mobile Telecom service is ‗Remote Service‘, people don‘t see any infrastructure of Network, consumers want to see the Front offices people of the provider.  This was realized by Reliance very quickly, they offered the Handset on Mail order basis which didn‘t work out well, immediately they started opening retail store which brought lot of success for them, even entering late in the market.  AirTel (Bharti), Hutch, Spice offer this presence through the dealer network and selective retail store. But provider direct presence is more valuable.
    36. 36.  BSNL being the poor customer handler, they are still able to keep large market share because of their physical presence. But this concept is changing gradually amongst young generation.  Usually the Indian consumers see large gaps in GAP 4 (Internal Communication gap), and they believe that Physical presence can only reduce this gap, Physical presence also helps provider to get feed back quickly and reduce GAP 1.
    37. 37. 2. Learning & Communications – In India this process is comparatively slower than western world or developed countries. So the communication to the consumers play much bigger role than here, the need for mobile communication is much more in rural India than cities, but the impediments are the cost and learning process. As the costs of mobile services are coming down, the opportunity in rural India will grow. But the providers and operators have to communicate much more in teaching the people.
    38. 38.  Bharti planned to open a SMS based public booth Network in cities few years before, but that business plan became infeasible as SMS prices dropped substantially. But potential for similar mobile public booth in Rural India is very high.  Learning & Communications are more required to close GAP 3 and GAP 4.
    39. 39. 3. Perceived risks – In service risk assessed as it is consumed and experience, also ‗Word-of-Mouth‘. People perceive more risk in service than products, because of its‘ intangibility. In India this is more because of rudimentary legal framework, the Consumer protection is much less than developed country. This is one ‗Major Reason‘ also for booming Pre- paid market than Post-paid. TSPs have to offer some kind of financial warranty in case of Post-paid connection. So far the experience of Indian consumers with Govt. Telecom organization is very poor. Physical presence and financial back up required more to reduce the risk factors. The risk will be perceived less as Gap 3 and Gap 4 will be closing.
    40. 40. 4. Group Dynamics – This is one of the most important factors in Indian market, here ‗Word-of-Mouth‘ is much powerful than any other communication, and people follow their families, friends and social groups. The Market communication from TSPs should keep this in mind. The Call Plan should consider this with high importance, some mobile operators are considering this factor, but there is no still Customer analysis or segmentation done. Group dynamics consideration should be taken care in closing Gap 3.
    41. 41. 5. Customer Service Quality analysis— Extensive qualitative and empirical research-spanning multiple phases, covering a variety of sectors, and involving a number of companies-suggests the following general insights about how customers assess service quality. Firstly, customer-defined service quality stems from a comparison of customers' service expectations (i.e., their mental standards about what a company ought to provide by way of service) with their perceptions of the delivered services.
    42. 42. Secondly, customers evaluate the nature and extent of the gap between their perceptions and expectations along five broad service attributes (listed below in decreasing order of importance):  Reliability: Ability to perform the promised service dependably and accurately. This is more dependent on the Technology and Network Infrastructure is used, Indian TSPs are at per or near per with Global standards in this regard.  Responsiveness: Willingness to help customers and provide prompt service. This one major are Indian Mobile operators are lagging and lot of work needed to be done.
    43. 43.  Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence. This is also another lagging area.  Empathy: Caring, individualized attention the firm provides its customers. This is also another lagging area.  Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials. Mobile service is ‗Remote Service‘; the Tangibility needs to be created other ways.
    44. 44. Recommendations & Conclusion • Till today all the Mobile Operators are focused on Transactional Marketing (Get new customers) than Relationship Marketing (Retaining old customers). Bharti needs to see what it can do to re-attract its existing customers just to strengthen relationships. • They are more focused on increasing Network area and circles – which is definitely require. And India has a huge market, which is fragmented in nature and too many customer segments – geography, income, age, language spoken, culture. • Relationship Marketing is not much emphasized in India but the Industry, which is too competitive and can be operated remotely, this will be more important.
    45. 45.  Also the operators should come with new Business plans for Rural Areas. There is huge market in Mobile Data & Voice communication, there is huge potential but proper learning tools and communication required.  As the Wireless Network cost is reducing, the focus in rural area will become important.
    46. 46. Final Recommendation List to Close Customer Gaps –  Relationship Marketing Focus  Employee Management  Service focus on Pre-paid market  New Business Ideas for Rural market  Usage of right CRM tool