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A study to analyze the effectiveness of various promotional activities practiced by Broadband operators.

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Final project report summer training

  1. 1. Summer Internship Project A study to analyze the effectiveness of various promotional activities practiced by Broadband operators TATA COM M UNIC ATION Submitted by: Anirudh Bhandegaonkar Roll No. C-08-09 PGDBA – 2008 - 2010 2nd Semester Submitted to:Graduate School of Business & Administration, Greater Noida
  2. 2. 2|Page Mr. T. N. Srivastava (Head, Placement Cell) GSBA, Greater Noida
  3. 3. 3|Page1. AcknowledgementsThis Project would not have come to fruition without the help, wittingly or unwittingly, of agreat many people too numerous to mention. This section provides a platform torecognize and acknowledge those fortunate enough to spring to mind.My Industry Mentor, Mr. Mayur Agarkar should be commended for the guidance, support,and wealth of ideas he provided in order to see this work completed.I would like to express my gratitude to my Faculty Mentor, Mrs. Rati Sharma who is morethan a mentor to me. His whole hearted support kept me upbeat in the toughest timesduring the project.This project was a team effort and I am proud to be a part of such a great team. I amdeeply indebted to them for their contribution with brilliant ideas and hard work. The creditof the successful completion of the project goes to my team.Thanks a lot to all the unnamed people who kindly responded to the Questionnaire,especially my friends at GSBA & Amity.Finally, my family for providing help, advice, and motivation when it was required.Anirudh BhandegaonkarC 08-09PGDBA (2008 – 10)2nd Semester
  4. 4. 4|Page2. AbstractIn India, in the past 4-5 years, growth in the number of Internet connections has beenphenomenal primarily driven by the broadband connections. Broadband is defined as anyspeed above 256 kbps. With the advent of several broadband service providers thecompetition has only got tougher and more intense.To increase their market, these operators use various promotional activities. Theseactivities can broadly be classified under two categories.1) ATL (Above the line) or Mass Promotional Activities. e.g. Ads on TV or internet, print media, Banners etc.2) BTL (Below the line) or personalized/Direct marketing. e.g. Tele-calling, promotion via mailing etc.Companies pour in millions of dollars to promote their brand, create brand awareness andmarket their services to boost their sales and grab higher market share. So it makesevery business sense to know the effectiveness of different media and invest in thosewhich have high effectiveness.The objective of our study was to analyze the effectiveness of these promotional activitiesused by the broadband service provides in Delhi/NCR.To achieve the target we first divided the work area into regions according toconvenience. The next big objective was to device a questionnaire. Basically three formsof sampling techniques were used, convenience, snow-ball and internet sampling.Valuable information and views of broadband users received via Questionnaires wereused to reach to the conclusion of the research.The study found out that BTL activity i.e. the direct marketing (Tele-calling etc) were muchmore effective than ATL activities i.e. mass marketing, much against the conventionalbelief. The two major contributors in this victory of BTL over ATL were campaigning andtele-calling. This may be due to the highly personalized and live nature of these forms ofpromotion. They are able to influence the human mind because here humans interact withhumans either directly or over the phone. Although what lead to BTL’s success is a topicof further research.
  5. 5. 5|PageHence, through the research, null hypothesis was rejected and replaced with “BTLactivities are more effective than ATL activities.”3. Table of Contents1. Acknowledgement2. Abstract3. Table of contents 3.1. List of charts 3.2. List of tables4. List of appendices5. Abbreviation and definition6. Introduction7. Literature review 7.1. ATL & BTL: Promotional tools 7.2. Broadband operators in India8. Problem definition9. Approach to problem10. Research aim11. Research hypothesis12. Research design13. Data analysis14. Results and findings
  6. 6. 6|Page 14.1. Demographics 14.1.1. Age 14.1.2. Gender 14.1.3. Region 14.1.4. Family income 14.2. General findings 14.2.1. Monthly bill 14.2.2. Broadband service provider of the users 14.2.3. Purpose of the internet 14.2.4. Source of information about the service provider 14.2.5. Most crucial deciding factor 14.2.6. Brand recall standing (absolute) 14.2.7. Brand recall ranking 14.3. Analysis of effectiveness and hypothesis testing 14.3.1. Analysis of effectiveness of various promotional methods 14.3.2. Analysis of effectiveness of ATL & BTL for diff. brands 14.3.3. Analysis of effectiveness of ATL & BTL ‘in toto’ 14.3.4. Hypothesis testing15. Conclusions 15.1. Research conclusion 15.2. Recommendations or Suggestions 15.3. Limitations16. Appendices
  7. 7. 7|Page17. Bibliography
  8. 8. 8|Page4. List of Appendices Appendix 1: Link to questionnaire Appendix 2: Z test, to test the significance of the results for effectiveness of ATL & BTL5. Abbreviations and Definitions:ATL: Above the lineAbove the line(ATL) is a type of advertising through media such as TV, cinema, radio,print, banners and search engines to promote brandsBTL: Below the lineBTL is a type of promotional activity which is targeted to a specific person or group ofpeople very similar in their characteristics. Tele-calling, launching a campaign, erectingcanopies, mailing, in-house promotions etc. come under BTL.MTNL: Mahanagar Telephone Nigam Limited, broadband operators in Delhi.NCR: National Capital RegionROI: Return on Investment
  9. 9. 9|Page6. Introduction:It’s said that the greatest invention of the millennium is Internet. It’s because of the extentto which it has made an impact in our lives. Since its inception, Internet has come a longway and the technology behind it is constantly improving at a very rapid pace.The latest technology i.e. Broadband give great surfing as well as downloading speed tothe users which is why it has seen a boom in demand in the past 4-5 rears. This has alsobrought in new players leading tough competition.Everyone is trying to dominate by promoting its brand and product through TV, print,launching campaigns, sending mailers and news-letters etc. methods to promote aremany but due to budgetary constraints, search of most effective method of promotion ison, big time. Promotion is classified under two categories ATL and BTL and marketers arequite curious to know which one has the last laugh, ATL or BTL.This research is an attempt to unravel this suspense and come up with findings which notonly satiate this curiosity but also provides results that are commercially viable and helpour organization to gain significant market share thru application of those results in itsmarketing strategy.The report also tries to analyze the strength of association b/w Market share and ATL/BTLactivities. Few other parameters are also touched.The research is broken into 5 main sections.Research design, demographics, general findings, analysis of effectiveness & hypothesistesting and results & recommendation.
  10. 10. 10 | P a g e7. Literature Review 7.1. ATL & BTL : Promotional toolsPromotion can be loosely be classified as "above the line"(ATL) or "below the line"(BTL).The term "below the line" (BTL) promotion or communications, refers to forms of non-media communication, even non-media advertising. Below the line promotions, such asTele-calling, direct mailing, canopies, launching campaigns etc are becoming increasinglyimportant within the communications mix of many companies, not only those involved inFMCG products, but also for industrial goods and telecommunication.“Above the line” (ATL) is a type of advertising through media such as TV, cinema, radio,print, banners and search engines to promote brands. Major uses include television andradio advertising, web and Internet banner ads. This type of communication isconventional in nature and is considered impersonal to customers. It differs from Belowthe line advertising, which believes in unconventional brand-building strategies, such asdirect mail and printed media (and usually involves no motion graphics).The term comes from accountancy and involves the way in which Procter and Gamble,one of the world’s biggest advertising clients, was charged for its media in the 1950s and1960s. Advertising agencies made so much commission from booking media for clientsthat the creative generation and actual production costs of making TV ads was free –hence above the line. Everything else they paid for was therefore below the line. Sincethen, models have changed and clients are no longer charged for their media in that way.Used loosely, ‘above the line’ means mass media. However the media landscape hasshifted so dramatically that advertisers have reconsidered the definitions of mass media.What needs consideration is the definition of "What does the line divide? For some retailgiants the definition of the line is "their floor space" where they convert footfall topurchase. Loosely put, everything done prior to a customers actual entry into a retailoutlet is ATL for some retailers, as they define shop-floor activities as the true BTL set ofactivities which decide on which brand sells eventually.Below the line sales promotions are short-term incentives, largely aimed at consumers.With the increasing pressure on the marketing team to achieve communication objectivesmore efficiently in a limited budget, there has been a need to find out more effective andcost efficient ways to communicate with the target markets. This has led to a shift fromthe regular media based advertising.Below the Line uses less conventional methods than the usual specific channels ofadvertising to promote products, services, etc. than Above the Line strategies. These may
  11. 11. 11 | P a g einclude activities such as direct mail, tele-calling, public relations and sales promotions forwhich a fee is agreed upon and charged up front. Below the line advertising typicallyfocuses on direct means of communication, most commonly direct mail and e-mail, oftenusing highly targeted lists of names to maximize response rates.Above the line is much more effective when the target group is very large and difficult todefine. But if the target group is limited and specific, it is always advisable to use BTLpromotions for efficiency and cost-effectiveness.Say, for example, if a pen manufacturer is going to promote its product, it may take theATL route, but if a company manufactures computer UPS, it will certainly take the BTLroute, as the target group is very limited and specific.More recently, agencies and clients have switched to an Integrated CommunicationApproach. BTL is a common technique used for "touch and feel" products (consumeritems where the customer will rely on immediate information rather than previouslyresearched items). BTL techniques ensure recall of the brand while at the same timehighlighting the features of the product.In a nutshell, while Above-the-Line promotions are tailored for a mass audience, BTLpromotions are targeted at individuals according to their needs or preferences. WhileAbove-the-Line promotions can establish brand identity, BTL can actually lead to a sale.Above-the-line promotions are also somewhat impossible to measure well, while BTLpromotions are highly measurable, giving marketers valuable insights into their return-on-investment.According to EBS Worldwide, mainstream mass broadcast marketing is increasinglybeing viewed as uneconomical, in terms of Return on Investment, which is where BTLmarketing fits in.Examples of BTL promotionMost of the big brands are following the suit of BTL promotion because of rising prices ofmedia based promotion, advertising clutter and increased impulse purchasing. • Ring tones and music videos on cell phones are helping the entertainment industry to promote for a music video or a movie for dirt-cheap rate as compared to media promotion. • Various companies sponsor sport events to promote their brand, but media companies like Hindustan Times are holding weekly events throughout the country in which companies can put up their stalls, display banners and posters and
  12. 12. 12 | P a g e arrange for some fun activities. These events give the companies a platform at very low price to promote their brand and increase visibility among target consumer. These companies also give discount coupons to winners in the games, which in turn boost the sales of the products and ensure that first time users try these products as well.BTL promotions are gaining popularity among all big companies nowadays consideringtheir effectiveness because of the "individual customer promotion" at a price, which ismuch less than the normal media promotions. 7.2. Broadband operators and their promotional activityBroadband operators are using both ATL and BTL for their brand Promotion whicheventually aims for higher sales and larger market share.Major players in India such as Airtel, MTNL, BSNL, Reliance, Tata, Sify and few othersare in a cut-throat competition with each other.Lately, broadband operators have realized the virtues of BTL and channelized their focusas well advertising dollars to the BTL promotional activities due to its low revenuerequirements and high sales output. Moreover they can maintain precise information oftheir returns on investment which is very difficult in case of ATL.ATL has always been regarded as an easy tool to reach out to the masses instantly.Broadband companies thus use ATL and BTL activities in a mix which they try tohomogenize according to their growth plan, revenue constraints, target area andmanagement’s discretion.The present market leader Airtel is very good in using ATL (Mass promotion) and BTL(Direct marketing) in a very balanced way to optimize its expenditure and maximize thereturns.It uses exhaustive ATL promotion to spread itself throughout the market. TV ads
  13. 13. 13 | P a g ehave a major strategic importance in airtel’s quest to be a leader. Not only TV ads, Airtelis everywhere, newspapers, magazines, internet, banners, huge hoardings along roadsand highways, you name it.At the same time they haven’t marginalized the virtues of BTL. Go to some residentialapartments, colonies or blocks and you can certainly find few Airtel canopies, givingdemos, handing out pamphlets and educating its prospective buyers.On the other hand, there is Sify, which hardly give any Ads in TV or print but still boasts ofa significant market share. So which media works better is very company specific anddepends on its marketing strategy and targets.8. Problem DefinitionA broadband operator is just like any other company which a product or services to offerand it works for profit. To market a product, it has to be promoted and advertised to itstarget customers. Now there are many ways in which you promote a product, few arecertainly better more effective than others.Promotional activities are broadly classified under ATL and BTL. Due to the inherentdifference in their nature, they work differently and outshine one another depending onthe industry and the target audience they are directed towards.Tata Communications is broadband service provider. To gain a higher market share, theywant to promote their products / Services.Here lies the problem, what type of promotional activity one should use. Whether oneshould go with ATL or BTL?Which one has greater effectiveness, ATL or BTL ?If we could calculate the effectiveness of a particular media, the dilemma to choosebetween ATL and BTL can be solved.Now, how can we calculate effectiveness of a promotional activity?Conventional way of revenue generated per unit expenditure was not an option, as wedidn’t have any date giving those figures. Nor did we have any sample data which gavethe information about the revenue generated or sales figure before and after theapplication of a particular promotional tool.Hence, new avenues had to be searched and a totally different approach was developedto answer the question that which media is more effective.
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  15. 15. 15 | P a g e9. Approach to the problemWe basically had to answer the question that, “If a person had subscribed to a particularservice provider which promotional activity influenced him to do that.”But this would not lave given us the effectiveness, as effectiveness is a ratio.But if we also get the number of people we got the information about the service providethrough the same promotional activity, we can calculate effectiveness.So,Effectiveness = no. of people who chose a promotional activity as the crucial deciding factor for subscription no. of people who got the information about the operator thru that promotional activityTo achieve this objective a questionnaire was devised, which explicitly asked these twovery important questions, accessorized with demographic and other supporting questions.People who are already broadband users could have given the answer to the above twoquestions, so only those people constitute our sample.The collected data was later analyzed to get effectiveness of various media, which wastested for its significance via Z- test.10.Research AimTo analyze the effectiveness of various promotional activities, which are broadly classifiedas ATL and BTL, carried out by the broadband operators.11.Research HypothesisNull Hypothesis, H0: “There is no significant difference between ATL and BTL activities”.So, an alternative hypothesis would be,H1: “There is significant difference between ATL and BTL activities”.12.Research designOnce, the approach to the problem was zeroed down, a questionnaire was designed toget the information from the respondents to calculate the effectiveness of ATL and BTLpromotional activities.The target population was broadband users in Delhi/ NCR.We were a team of 5 and a target sample size of 250 was decided with 50 sampleelements per member.