Airtel - Marketing Insights

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Airtel - Marketing Insights

  1. 1. Marketing Planning ProjectAirtel – A Study and Perspective Submitted By:- 12P139 – Ishpreet Singh 12P140 – J Abhinav 12P141 – Karan Jaidka 12P142 – Kshitij Agrawal 12P143 – Kshitij Ahuja 12P144 – Ladlee Rathore Group 4 – Section C – PGPM 2012-14
  2. 2. AcknowledgementsWe, as Group 4 of Section C, would collectively like to thank Dr. Kanwal Kapil, who for his in-depth analysis of various topics in Marketing Planning, arise in all of us a genuine curiosity andinterest in the subject. We would also like to express our gratitude to him for arrangingnumerous industry experts to come and speak to us. Through these guest sessions, we got afirst-hand perspective of how the theoretical concepts of Marketing Planning are applied in theindustry. Lastly, we thank the Almighty for guiding us through the implementation of thisproject. Group 4 – Section C Page | i
  3. 3. Executive SummaryBharti Airtel Ltd. started operations in 1995 and has steadily grown to be the most dominantTelecom player in India today. Along the way, it has encountered numerous difficulties andchallenges, strong competition and various regulatory road-blocks. How Bharti Airtel managedto be the No. 1 in the Indian Telecom space is an interesting journey in itself and the same hasbeen analyzed and presented in this report.The report presented is done in the form of a narrative to show and describe how Bharti AirtelLtd. grew, expanded and dominated the industry in its journey of over 17 years.The objectives of this study include:-  To analyse Bharti Airtel’s strategies through various mechanisms like SWOT and PEST analysis  To apply the Porter’s 5 Forces model to Airtel  To conduct a survey and study the consumer behaviour of a small sample of college going students and analyse their perceptions and expectations of Airtel  To study how Airtel branded and re-branded itself  To study the Segmentation and Positioning strategies adopted by Airtel  To analyse the various strategies implemented by Airtel and to give an outlook as to where we see Airtel in the near future Group 4 – Section C Page | ii
  4. 4. Table of ContentsTitle Page No.Acknowledgements iExecutive Summary iiSECTION 1 1 The Indian Telecom Sector 2 Bharti Airtel Ltd. 4 SWOT Analysis 5 PEST Analysis 8SECTION 2 10 Porter Analysis 11 Consumer Behavior Analysis 14SECTION 3 18 Segmentation 19 Branding 22 Positioning, Other Strategies and Outlook 28Conclusion 32Bibliography 33Group 4 – Section C Page | iii
  5. 5. SECTION 1Group 4 – Section C Page | 1
  6. 6. The Indian Telecom SectorIndias telecommunication network is the third largest in the world on the basis of its customerbase and it has one of the lowest tariffs in the world enabled by the hyper-competition in itsmarket. Major sectors of the Indian telecommunication industry are telephony, internet andbroadcasting. The Telephonic network in the country, employs an extensive system of networkelements such as digital telephone exchanges, mobile switching centers, media gateways andsignaling gateways at the core, interconnected by a wide variety of transmission systems usingmedia, such as optical fiber or Microwave radio relay.The Indian telecom industry underwent significant market liberalization in the 1990s, and it hasnow become one of the most competitive telecom markets in the world. India has the worldssecond-largest mobile phone user base with over 929.37 million users as of May 2012. It hasthe worlds third-largest Internet user-base with over 121 million as of December 2011.The industry is expected to reach a size of 344,921 crore (US$62.43 billion) by 2012 at a growthrate of over 26 per cent, and generate employment opportunities for about 10 million peopleduring the same period. According to analysts, the sector would create direct employment for2.8 million people and for 7 million indirectly. The total revenue of the Indian telecom sectorgrew by 7% to 283,207 crore (US$51.26 billion) for 2010–11 financial year, while revenues fromtelecom equipment segment stood at 117,039 crore (US$21.18 billion).Telecommunication has supported the socioeconomic development of India and has played asignificant role to narrow down the rural-urban digital divide to some extent. Figure 1 - Market share of major operators in India (February, 2012). Source: WikipediaGroup 4 – Section C Page | 2
  7. 7. The telecom sector in India is undergoing a major change with regards to growth drivers.Revenue from voice isgoing to stabilize and with recent 20% hike in price by major telecom companies, the tariff warover call rates may be coming to an end. As the telecom industry is showing signs of slowingdown in terms of subscriber growth, companies are looking at other revenue streams tosupplement their core services. Telecom operators are focusing on innovative m-VAS servicessuch as m-commerce, m-health, and m-education.Group 4 – Section C Page | 3
  8. 8. Bharti Airtel Ltd.Bharti Airtel Ltd., commonly known as Airtel, was incorporated on the 7th of July, 1995 as aPublic Limited Company and one of the first companies to enter the Telecom Services businessin India. It is the largest Indian telecommunications company and it operates in more than 20countries across South Asia and Africa offering 2G, 3G and 4G services. It is the largest cellularservice provider in India, with 200 million subscribers as of 9th August 2012.In the early years, Bharti Airtel Ltd established itself as a supplier of basic telecom equipment.Mr. Sunil Mittal jumped at the opportunity provided when the government opened up thesector and allowed private players to provide telecom services. Bharti Airtel Ltd accepted everyopportunity provided by this new policy to evolve into Indias largest telecommunicationscompany and one of Indias most respected brands. It is considered to be the first mobile firmin the world to outsource everything except marketing, sales and financial operations.Airtel now offers a variety of services to its consumers including 4G services in select cities,Airtel Money, Telemedia, Mobile data services, enterprise business solutions, etc. Airtel globallyrebranded itself in 2010 and it now follows the ‘One Network’ strategy across all Airteloperating countries.Group 4 – Section C Page | 4
  9. 9. SWOT Analysis Figure 2 – SWOT Matrix of AirtelGroup 4 – Section C Page | 5
  10. 10. StrengthsBharti Airtel continues to be the largest telecommunications company and the market leader inIndia and in some countries in Africa. Having been established in 1995, it enjoyed the earlymover advantage in India and was able to quickly make full use of the government’sliberalization policies to firmly establish itself in India. Airtel offers the most expansive roamingnetwork, letting you roam anywhere in India with its Pan-India presence, and trot across theglobe with International Roaming spread in over 240 networks. Airtel’s subscriber basecontinues to grow and it had reached 220.9 million users in March, 2011. Airtel also boasts ofhaving the maximum number of active customers (~92%), the highest in the industry.Since Airtel outsources all its operations except Sales, Marketing and Finance, it has establishedstrong strategic alliances with Ericsson, Nokia, Huawei and IBM for its technological operations.Many consider this outsourcing strategy to be a masterpiece. Airtel’s ‘match box strategy’ inrural areas helped them to penetrate deep in the rural sectors. Bharti Airtel has its presence inmore than 300000+ rural areas. Airtel has always taken an initiative in promoting its serviceswith advertising campaigns that strike a chord with the consumer. Hence, it enjoys a very highbrand recognition and awareness among Indians. Its services continue to be excellent.WeaknessesSome analysts see Airtel’s outsourcing strategy as a weak point as they believe that Airtel is notable to cater to its own technical needs. In recent times, Airtel has not been performing verywell. It reported lower than expected earnings in the 1 st quarter of FY 13. This hit investorsentiment and the stock witnessed heavy selling, which saw it plummet to a 6 year low on thebourses. All these factors led to the downgrading of the stock, from “stable” to “negative”.Airtel has also been witnessing a steady decline in its ARPUs.OpportunitiesIndia continues to be the largest growing market in the world and provides ample opportunitiesfor telecom majors to expand services, especially in rural areas. Bharti Airtel has theopportunity of attracting subscribers of other telecom service providers through the MobileNumber Portability (MNP) recently, as the company has a reputation of providing excellentservices. The telemedia services provide a huge opportunity to Airtel to foray into differenttelemedia services and expand and diversify its services. Airtel has a huge presence in India andAfrica. It can continue to expand in Africa, buy penetrating its market further. Airtel should alsolook into expanding in other regions like Latin America and South-East Asia, as these marketsGroup 4 – Section C Page | 6
  11. 11. provide a huge opportunity for Airtel to stamp its global presence. The new greenfieldoperators have not been successful in acquiring a decent revenue and customer market share,in spite of offering lower prices. This may lead to an opportunity for the bigger players likeBharti to acquire these businesses in the future.ThreatsAirtel has witnessed steadily decreasing market share. Though it still enjoys the numero unoposition in India, it does so only marginally. The increasing number of competitors in the Indiantelecom market have continuously been eating into Airtel’s initial significant market share ofover 40% to reduce it to a mere 19% in 2012. Mobile Number Portability is a double-edgedsword and though it brings Airtel new customers, it also allows existing Airtel users to switch toother networks, which would always remain a significant threat. Intense competition from newentrants triggering Price war in a decreasing ARPU environment is another major threat. Theregulatory environment in India continues to be laden with risks and highly uncertain, with newpolicies and regulations being meted out, which do not necessarily work to the benefit of Airtel.Group 4 – Section C Page | 7
  12. 12. PEST Analysis Figure 3 – PEST Analysis of Bharti AirtelPoliticalThe Indian political scenario and regulations from TRAI are the most significant aspects whichwould affect Airtel. The recent 2G scam and the subsequent regulations passed by TRAI werepoints of debate. For example, the reserve price for the auction proposed by the telecomregulator should be reduced by at least 80%, felt CEOs of Airtel and other operators. FollowingTRAIs controversial spectrum recommendation, Fitch has revised the outlook of Airtel to“negative” from “stable” due to adverse regulatory environment in India and risks involved inits African operation.Regulatory risk is high for the Indian telecom industry compared with other markets in AsiaPacific. Fitch believes that an evolving regulatory framework, regular policy changes andcancellation of 2G licenses by Indias Supreme Court in February 2012 could change theindustry structure in 2012 and negatively affect Bhartis free cash flow generation. Regulatoryrisks for Airtel include a one-time charge for excess spectrum, spectrum reframing andimposition of high spectrum renewal fees as recommended by TRAI.Group 4 – Section C Page | 8
  13. 13. EconomicAirtel enjoys a very large consumer base in India and Africa, and this continues to be the driverof revenues for Bharti Airtel. Expanding more into the rural market will provide Airtel with moresuch opportunities to increase revenues and market shares. Airtels African operationscontributed about 20 percent to both its consolidated revenue and EBITDA during the first ninemonths of FY12.The telecom sector is also considered to be one of the major sectors which provide directemployment which indirectly helps in economic growth of India. Also, increasing investments inthis sector by means of Foreign Direct Investment (FDI) ensures that there are enougheconomic stimuli for Airtel and the industry as a whole. FDI to a limit of about 74% is permittedin this sector.SocialAirtel has been very successful in branding itself as “a brand for successful people”. It hasconsistently come up with advertising campaigns which emotionally affect the Indianconsumers. Earlier, Airtel focused on its plans and tariffs, but now, it advertises in such a waythat the user associates emotions and values with Airtel. The “Express Yourself” campaign, the“Barriers Break when People Talk” campaign, and the more recent “Har Ek Friend Zaroori HotaHai” campaigns are excellent examples of how Airtel managed to brand itself in all socio-economic classes. The Airtel tune became a rage amongst Indians and it has become the mostdownloaded ringtone.The rising Indian middle class and higher incomes at their disposals have also ushered in goodreturns for companies like Airtel.TechnologicalBharti Airtel is the first wireless service provider which supplies roaming services, internationaland long distance communication services and Value Added Services. Bharti Airtel has a high-speed optic fiber network. Airtel is the first mobile telephony company to outsource everythingexcept its marketing, sales and financial operations. Airtel outsourced their IT processes to IBM,entire network operations to Ericsson and Siemens along with Alcatel Lucent recently and thetransmission towers to another company. This has worked in its favor as Airtel can concentrateon other parameters and new innovations in its services, such as venturing into telemediaservices, new options like Airtel Money, broadband and 3G/4G services, etc. Airtel also buildson providing value and efficient services to its customers.Group 4 – Section C Page | 9
  14. 14. SECTION 2Group 4 – Section C Page | 10
  15. 15. Porter Analysis Figure 4 – Porter 5 Forces ModelIndustry competitors Figure 5 - Market share of major operators in India (February, 2012). Source: WikipediaGroup 4 – Section C Page | 11
  16. 16. Even though Airtel leads the market, there is cut throat competition with top 4 playersoccupying more than 75% of the market. Among new players, Aircel and Uninor have achievedsignificant recognition.The industry is a capital intensive industry with high fixed cost due to specialized equipment,spectrum cost, etc. This raises the exit barrier for an existing player to a very high level.Tariffs have declined significantly due to many players; price parallelism (the practice of varyingprices in a similar way and at the same time as competitors) is a common phenomenon of theindustry.With the introduction of mobile number portability, companies have had to compromise withtheir profits. Innovative schemes such as life time validity, caller tunes, etc. are easily imitatedby others so there is virtually no time to gain any significant advantage.Average Revenue per User (ARPU) has declined due to low tariffs but at the same time, it hasincreased the affordability by reaching till the bottom of the pyramid, hence revenues keep onincreasing.Bargaining powers of suppliers Network Equipment - Few suppliers are there (Nokia Siemens, Ericsson, etc.) and since demand is huge, powers are high. Tower Providers- High powers with a very few players (Indus towers) Handset Providers- Many players are there today- Nokia, Samsung, Sony, HTC, etc. their power is less since they are already competing with each other. Call Centre Outsourcing- Mphasis, Aegis BPO, etc.Bargaining powers of buyersConsumers have immense bargaining powers since- Switching cost is low, moreover, number portability has made changing the operator easier and a lot quickerGroup 4 – Section C Page | 12
  17. 17.  New connections are coming up with attractive schemes which force existing players to adopt them too, this result in lack of differentiation in the service provider. Need for differentiation has led to need specific plans- this has become very popular e.g. STD plans, night calling, ISD, etc.Threat of substitutes Skype, emailing, Yahoo, Gtalk, etc. Social networking- Facebook, etc. Video conferencingNone of the above poses a real threat in the current scenario mainly due to availability andinfrastructure issues.Threat of new entrants With FDI upto 74%, foreign players have chipped in, e.g. Maxis communications launched Aircel in Tamil Nadu; Uninor formed by JV between Telenor and Unitech, etc. Due to restrictive govt. policies, spectrum allocation is limited which can be made available to new players.However, setting up afresh entails huge infrastructure as well as spectrum costs; also for a newplayer, creating brand image is also a humungous task.Group 4 – Section C Page | 13
  18. 18. Consumer Behavior AnalysisIn a random survey we wanted to know which mobile connection is used the most in our friendcircle. We saw that the most prominent mobile connection used is Airtel with an approximately56% market share followed by Vodafone with a distant 32% share.We next asked them to rate the services of Airtel on a scale of 5. The factors they consideredwere network availability, customer service, tariff plans etc. Majority of the customers ratedthe services of Airtel as good giving it a rating of 3.Group 4 – Section C Page | 14
  19. 19. 73% of the users prefer prepaid to a postpaid connection.As the number of internet users is increasing we wanted to see if the subscribers prefer 2G or3G. We saw that more users prefer 2G internet services despite their lower speeds. One reasoncould be the high cost of the 3G services that Airtel offers.Group 4 – Section C Page | 15
  20. 20. Of the various additional plans offered by Airtel, 58% of the users consider their SMS pack to bethe most useful followed by the internet plan and the STD plan.88% of the subscribers considered that the availability of network was the most importantfactor on which a mobile connection is decided. 70% users wanted low cost plans. Customerservice and value added services also affected the decision of the users.Group 4 – Section C Page | 16
  21. 21. Majority of the customers associated Airtel with its latest campaign - ‘Har ek friend zaroori hota hai’Thus, from our survey, we can conclude that most consumers are pretty satisfied with theservices and schemes provided by Airtel and Airtel continues to be a favorite amongst theyoungsters and the Indian consumer in general. People are able to remember and relate to theadvertising campaigns of Airtel, even the older ones, which proves that Airtel’s advertisementsdid strike the customers and they were able to relate with the brand more effectively. As aresult, their market share kept on increasing in the initial years.Group 4 – Section C Page | 17
  22. 22. SECTION 3Group 4 – Section C Page | 18
  23. 23. SegmentationDue to diminishing marginal returns on its voice revenues, Airtel was forced to abandon its onesize fits all demographic segmentation. It came up with a strategy where it classified users intodifferent segments.Segmentation can be defined as the process of dividing the market into customers with similarinterests into one segmentThere are basically 4 levels of segmentation and Airtel segmented its market as:1. Segment marketing: Here the target market is divided into different segments on the basis of homogenous needs. Airtel has broadly divided the whole market into 2 categories – prepaid and postpaid.2. Niche Marketing: It can be defined as the marketer’s effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketers. AIRTEL launched its product blackberry in this category which particularly focussed on the upper business class who have to be in touch with the world every time3. Local marketing: In this segment companies have to focus on the requirements of the local markets to be successful. Airtel is focussing on local marketing by their low tariff plans in rural and even urban cities.4. Individual Marketing: In this segmentation, companies focus on individual customers and try to be in touch with them by phone calls, email etc. Airtel regularly calls its every customer and tells them about its new features and schemesAirtel segmented its consumer market on the basis of:-1. Geographical segmentation: The market is divided into groups based on demographic attributes such as localities, regions, cities, density etc. Airtel segments the market on the basis of states, as they have different plans for different states. The different geographic regions are handled independently and different campaigns are run according to the tastes and preferences of people in each region.2. Demographic segmentation: The market is divided into groups based on demographic attributes like age, gender, income, occupation, religion, family life cycle etc  Age and lifecycle: Recognizing that senior citizens have the need to keep in touch with their children and relatives who may be located far away, Airtel came up with a senior plan which offered a discount on one STD number and one local number. Besides,Group 4 – Section C Page | 19
  24. 24. subscribers of this plan would get special discounts for health check-ups and would have a facility to club bills with that of their children  Gender: The Company has also launched special packages to target the women. Airtel had started the Ladies Special plan targeted at women and allowed subscriber to receive special beauty and lifestyle tips, apart from subscriptions to cosmopolitan and housekeeping magazines. The plan also offers women the option to club the monthly bills with that of their spouses.  Income: Airtel also segmented the market on the basis of income through their corporate plans. They had started the corporate scheme on the basis of the higher usage rate and higher income persons.  Generation: Airtel had started ‘Friendz’ pre-paid connection, SMS plans and VAS like hello tunes, which was targeted towards the 15-25 year age. This includes phone-to- phone (P2P) recharge facility, enabling the consumer to transfer talk time and validity to any Airtel prepaid subscriber. In addition comes the introduction of ‘Hot Spot’ tariffs where Airtel Friendz customers can enjoy tariff discounts at pre-designated places within the city3. Psychographic segmentation: In this segmentation, marketers segment the market on the basis of motivation, values, belief, lifestyle, personality etc  Lifestyle: Airtel focused its attention on two groups in particular.  The first group was known as "funsters" -- consumers aged between 18-35 years old, who share a common trait -- a high adoption of VAS. Airtel believes that with some targeted marketing, spending from this group can increase quite significantly. The Telco has exclusive tie-ups with application providers like Google and has identified music-on-demand as a key value proposition.  The other segment of focus is the "achievers", who are the top five percent of mobile users. While this segment isnt a high adopter of VAS, it contributes to revenues nearly 10 times that of Airtels ARPU.  To enhance customer experience for this segment, Airtel has separate priority relationship managers. It also partnered with HTC and Blackberry to offer high- end handsets catering specifically for those customers who want to be in touch with their peers or their subordinates, colleagues etc.  Personality: Airtel last year had also started life Time Validity scheme for the persons who are not financially strong and can’t afford the normal schemesGroup 4 – Section C Page | 20
  25. 25. 4. Behavioural segmentation: Organisations also divide the market on the basis of behaviour that the customer shows towards the usage of products. Various variables for segmenting market on the basis of purchase behaviour of customers are occasions, benefits, user status, user rate, loyalty etc.  Occasions: Airtel on the occasion of Independence day, introduced a recharge coupon of Rs 1947 with two years validity for its Delhi and NCR prepaid customers  Benefits: Airtel also provides various tangible and intangible benefits for its customers. Like Airtel launched various tangible benefits like validity schemes for its customers and intangible benefits like roaming, voice mail, fax mail, close user group etc.  Usage rate: Airtel very often comes up with schemes like Get the talk time of 1111 on the recharge on 1000 i.e. getting more talk time value for which customers are paying.Group 4 – Section C Page | 21
  26. 26. BrandingAdvertisingThe way telecom firms advertise, gives an approximate idea about the telecom trends.The Indian Telecom Sector liberalized in 1994 after which the Indian cellular market witnessed asurge in cellular services. By 2005, there were a total of 12 players in the market with the fivemajor players being Bharti Tele-Ventures Limited (Bharti), Bharat Sanchar Nigam Limited(BSNL), Hutchinson-Essar Limited (Hutch), Idea Cellular Limited (Idea) and Reliance India Mobile(RIM). Due to severe competition, BHARTI AIRTEL had to take new initiatives to woo customers.Prominent among these were - celebrity endorsements, loyalty rewards, discount coupons,business solutions and talk time schemes. As of date, AIRTEL has used the maximum number ofcelebrities for advertisements. The list includes -Sachin, Shahrukh, Rehmaan, Saif Ali Khan,Kareena Kapoor, Zaheer Khan, etc. The Youth segment and the business class segment wereconsidered most important by cellular industries of which the youth segment was the largestand fastest growing.Airtel sought the services of Sachin Tendulkar as he was the brand ambassador. One of themost famous tunes for Airtel was given by A.R.Rehman with which people could easily connectwith the brand.Airtel was the first company to target specific customers and it came out with advertising itsgroup card labeled as ‘Friendz’. In fact, until now, the market was treated as homogenous.Airtel then announced Senior citizen cards targeted at those above 60. The “Friends card” is forthose who wish to restrict themselves to their group with low calling rates and some freemessages.Airtel introduced its Airtel Live! The value added services were provided to customers togenerate more revenue. Hence, they introduced value added cards, which would help todownload ring tones and other fancy stuff.Airtel ads were categorized by mostly as emotional ads. They had a differentiation point fromtheir competitors as well as innovative. But, on the other hand, people criticized that there isno fun part in Airtel ads.Initial BrandingInitially, the target group was elite professionals since tariff rates were high. Airtel positioneditself as an inspirational and lifestyle brand. It was pitched not merely as a mobile service, butGroup 4 – Section C Page | 22
  27. 27. as something that gave consumer a badge value. The Brand was developed to connoteleadership in network, innovations, offerings and services.The taglines like "Airtel celebrates the spirit of leadership" and "The first choice of the corporateleaders" emphasized that stance.The ‘Leadership’ campaign was reportedly successful.“Leadership” to “Touch Tomorrow”Bharti decided to ‘humanize’ the brand ‘Airtel’ in 2000. It started with Bharti launching its new‘Touch Tomorrow’ campaign which aimed at strengthening its relationship with its customersand make the brand ‘softer’ to cater a wide variety of people across the society.The advertising became two-pronged: a product-driven communication that showcased newofferings like the Magic prepaid card, and an emotional communication to connect withyounger people.“Touch Tomorrow” to “Live Every Moment”Airtel came out with a new logo. The logo signified a strong, contemporary and confidentsymbol for a brand that was always ahead of the rest. It had two solid, red rectangular formswhose counter forms create an open doorway. Capital “A” showed leadership and red dot on“i” showed innovation. LIVE EVERY MOMENTGroup 4 – Section C Page | 23
  28. 28. In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live everymoment": Rahmans signature tune for Airtel is, perhaps, the most downloaded ringtone inIndia.“Live every moment” to “Express Yourself”Later, Airtel adopted the "Express yourself" positioning, the emotional angle was predominant– it wanted to stand out in what was becoming a highly commoditized, crowded market. EXPRESS YOURSELF“Express Yourself” to “Har ek friend zaroori hota hai”Airtel came up with a new logo. The new logo was supposed to give Airtel and the brand a more"youthful and international" look.The logo is a modern representation of the letter a on a bright red background.  The unique symbol is an interpretation of the ‘a’ in Airtel.  The curved shape & the gentle highlights on the red colour make it warm & inviting, almost as if it were a living object.  The colour Red shows the heritage. It is the colour of energy & passion that expresses the dynamism that has made Airtel the success it is today, in India, and now on the global stage.  The logo is called “The Wave”.Group 4 – Section C Page | 24
  29. 29. Taglines of Airtel Power to keep in touch (1995) Elite and premium brand Touch tomorrow (1999) With NTP99 ,prices could be dropped,started looking from regional to pan india position Live every moment (2002) To catch some emotions and feelings, brand of the masses Express yourself (2003-2009) To strengthen the emotional connect of customers, wanted a fresh and contemporary idea that built a brand their customers could identify with Har ek friend zaroori hota hai (2011-2012) Targets the youth with an evergreen theme of Friendship and its relevance Figure 6 – Timeline depicting the various taglines of AirtelGroup 4 – Section C Page | 25
  30. 30. Umbrella BrandingAIRTEL incorporated umbrella branding strategy, a marketing practice that involves sellingmany related products under a single brand name.It involves creating huge brand equity for a single brand, and thereafter leveraging that overmultiple products. On the flipside, bad reputation of any one product, may affect the equity ofall the other products using the same brand name.Group 4 – Section C Page | 26
  31. 31. Co-BrandingAirtel made partnership with brands, it formed an alliance to work together, creating marketingsynergy.The object for this is to combine the strength of two brands, in order to increase the premiumconsumers are willing to pay, to combine the different perceived properties associated withthese brands with a single product. Ultimately, co-branding helps both the partners as eachcontributes some aspect of its brand (expertise, distribution, status, etc.) to create an offeringthat neither could develop as effectively on their own.Group 4 – Section C Page | 27
  32. 32. Positioning, Other Strategies and OutlookBharti Airtel, in its mobile networks, initially during the mid-late 1990s positioned itself as abrand for the elite. The high government tariff and the low awareness about mobile phonesamong the masses, called for such a positioning. A mobile phone was a luxury affordable onlyto the price insensitive customer in those days and Airtel rightly positioned themselves in thissegment.Their tagline was “Power to Keep in touch” and it was a part of their motto to associate theirbrand with leadership and an inspirational lifestyle. This was part of their “Leadership Series”campaign.As time progressed, in 1999-2000, the competition intensified and Essar almost caught up toBharti Airtel. It was during this period that through surveys conducted, Airtel realized that theidea of Leadership itself was changing and also that people perceived Airtel as an efficient butcold brand. These surveys further went on to show that in the mobile network industry,customer service was of paramount importance and the existing consumer base was invaluableas more and more people brought mobile phones only on the recommendations of friends andfamily.In August 2000, Bharti launched its new “Touch Tomorrow” campaign to humanize the brand.The advertisements featured mobile users surrounded by caring family members. These adsspanned across the print, electronic and outdoor media. They aimed to capture the SEC Bmarkets also as the mobile price and government tariff were reducing. This resulted in thecreation of a huge consumer base and they changed the logo to reflect their core values ofleadership, performance and dynamism. Special features like music download, SMS, permanentGPRS were introduced at affordable prices.In 2002, Airtel again repositioned its brand to “Live Every Moment” and changed their logo. Itwas done to give the brand a young and international feel. Several celebrities like SachinTendulkar and Shah Rukh Khan were roped in as brand ambassadors. All the wireless productswere replaced under the Airtel brand and the company began following a 2-tier architecture.This repositioning and new advertising changed the way the consumer felt about the brand andimproved the reach.From 2003-2009, the mobile market was predicted to grow even further and Airtel realized theimportance of targeting rural consumers. They repositioned their brand again to “ExpressYourself” in 2003 and came out with advertisements in regional languages and more powerfulemotional connect.Group 4 – Section C Page | 28
  33. 33. This was also the period where they came out with a whole wide variety of offers like STDpacks, roaming packs, and SMS packs etc., which were able to attract and retain the massmarkets. Their target market now included SEC C also and they had therefore positioned theirbrand accordingly. They began emphasizing on the strength of their network and its functioningin all areas, rural and urban without any glitches.It was during this period that they also ran the “Breaking Barriers” campaign under the expressyourself campaign. It was a sign of the brand taking off globally and also to indicate that it hadthe largest market presence in the Nation.Airtel’s Key Competitive AdvantageFor any telecom operator in the Indian market, the most important advantage is quick roll outof coverage. Airtel has been very aggressive in increasing its coverage and hence they haveclearly maintained its position of leadership in the Indian market.Airtel has made huge investments each year as company intends not only to expand itsfootprint in the local market but it also has plans to expand its operations to a global scale. Itsforay into the Sri Lankan and the African market is a step towards the plan of expansion beyondIndia.Effective rollout of distributionThe company believes that effective distribution is the key to the success of gaining marketleadership. Bharti has a huge distribution network covering 672,297 outlets. RCOM distributesthrough its own branded retail outlets, whereas Bharti uses the small retailers and the localshops to retail its recharge coupons to customers. This significantly reduces costs in terms ofoverhead expenses. This distribution strategy has been a success for Bharti and has enabled thecompany to improve its penetration and add to its profits as well.Selective strategy to focus on cities with high revenue potentialThe Company used a selective strategy for this segment as it had to focus on the cities whichhad a potential for generating high revenues. Further the selective strategy could have beendue to the higher cost and lower return ratios involved. The company’s focus was to go deeperthan wider.Group 4 – Section C Page | 29
  34. 34. Recent financial crisisBharti’s results showed that even after consistently losing its revenue share over the pastcouple of years it had now regained some of its share. However, TRAI released some data whichsuggested that Bharti had slipped on a year on year basis and this gain in its market share camedue to the restructuring of its operations in India and South Asia after it had faced a constantdecline in its profits.Strategy during the crisisIt was during this period that Bharti made a move that was unprecedented in the telecomindustry which defied the industry trend. It became the first operator to increase call tariffs byabout 20% in the month of June. This was a move that was immediately followed by otherleading players. This signified Bharti’s position as the clear market leader. This purpose of thishike was to address declining profitability in a cut-throat Indian telecom industry.“Bharti seems to be getting more aggressive in acquiring new subscribers, going by the telecomindustrys subscriber addition figures for the month of January. It added 1.3 million subscriberslast month, after four successive months of relatively sluggish subscriber addition figures of lessthan 1 million.” –– Voice & Data - CIOL MagazineFuture OutlookThe future outlook for Airtel depends on the following aspects:- 1) The entry of new players would pose a challenge to Airtel’s ability to sustain a fierce competitive environment. 2) Success on the 3G services front. 3) Overseas expansion 4) Assistance in the form of diversification into new businesses under the Bharti Group.India is set to witness entry of new players in the mobile services market. These players aremost likely to focus on the rural segment for their subscriber base.The incumbent operator advantage should hold Bharti Airtel in good stead. The company is wellpositioned to expand its network in the remote areas of the country. Also, while new entrantswill only be able to use a start-up spectrum of 4.4MHa, from having more spectrum in most ofthe circles would work in Airtel’s favour.Group 4 – Section C Page | 30
  35. 35. When it comes to offering 3G services, Bharti, due to its association with SingTel has manyadvantages. It is expected to bid for pan-India 3G licences and particularly for metro circleswhere keeping a check on dwindling ARPUs is a major challenge.Bharti is off late focussing on emerging markets for new acquisitions. Some time back it was inthe news for its proposed merger with South African MTN which did not work out ultimately.But the company has made it clear many a time that it is on the lookout for an acquisition in theglobal telecom sector.Bharti Airtel is also expanding and diversifying into new businesses now. Addition of areasonable subscriber base to the company would happen as a result of Bharti offering serviceslike IPTV and DTH. These would also help Bharti Airtel to increase ARPU from its currentsubscribers.Significantly, Bharti’s tie-up with Wal-Mart is widely perceived to take it to the next level ofCorporate Growth and consolidate its position in the Indian and overseas markets.Group 4 – Section C Page | 31
  36. 36. ConclusionFrom this exhaustive study on Bharti Airtel Ltd., we got to learn a lot about how Airtelestablished itself a market leader in the Indian telecom space. The journey was not a bed ofroses for Airtel. They faced numerous stumbling roadblocks along the way and overcame mostof them. This is because they applied and adopted sound strategies relating to Outsourcing,Marketing, Advertising, creating Customer Value and Satisfaction, Positioning, etc. The abovefacts are proved through the survey we conducted which emphasizes the fact that Airtelcontinues to be the most preferred telecom operator in our country, and also amongst theyouth.Even though the growth of the company is stagnating in recent times, and the pressure fromcompetitors and regulatory bodies is always on the increase, new strategies and innovations,acquisitions, penetration into international markets better schemes for customers shouldensure that Airtel keeps its nose above its strong competition. The prospects of Airtel continueto remain strong because it is built around very strong fundamentals, and this growth should bevisible in the near future.Group 4 – Section C Page | 32
  37. 37. BibliographyThe following sources were referred to while making this report:- 1) Bharti Airtel website – http://www.airtel.in/ 2) TRAI website – http://www.trai.gov.in/traiannualreport.asp 3) Manish Sinha, “Segmenting India’s Mobile Market” - www.imediaconnection.com/asia/ index.asp?listpage=25, Mar 18, 2008. 4) Our online survey - http://www.surveymonkey.com/s/WNXXDTX 5) Outsourcing - http://trak.in/tags/business/2010/09/20/bharti-airtel-outsourcing-africa- business/ 6) FDI in Telecom - http://ictps.blogspot.in/2012/04/fdi-in-telecom-sector-of-india-and.html 7) The Economic Times 8) The Hindu 9) Mint newspaper 10) Business Today 11) Harvard Business Case – Strategic Outsourcing at Bharti Airtel 12) Cisco’s Consumer Based Study on Airtel’s Rural Strategies 13) Bharti Airtel – Business News - http://www.moneycontrol.com/news/bhartiairtel/ business-BTV-6months-1.html#BA08 14) Wikipedia - http://en.wikipedia.org/wiki/Bharti_Airtel 15) Success starts weighing down Bharti Airtel, www.livemint.com/2009/07/24000659/Success-starts-weighing-down-B.html 16) “Bharti Airtel: Nervousness all around”, http://www.equitymaster.com/detail.asp?date=12/4/2009&story=2, 17) Positioning - http://www.icmrindia.org/free%20resources/casestudies/Airtel%20 positioning%20and%20repositioning.htmGroup 4 – Section C Page | 33

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