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Failure Story of Icon

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The Story behind the failure of Icon........

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Failure Story of Icon

  1. 1. banglalinkiconbanglalinkiconba nglalinkiconbanglalinkiconbangl alinkiconbanglalinkiconbanglali CASE STUDY nkiconbanglalinkiconbanglalinki conbanglalinkiconbanglalinkico Failure Story nbanglalinkiconbanglalinkiconb Of anglalinkiconbanglalinkiconban glalinkiconbanglalinkiconbangla linkiconbanglalinkiconbanglalin kiconbanglalinkiconbanglalinkic onbanglalinkiconbanglalinkicon banglalinkiconbanglalinkiconba nglalinkiconbanglalinkiconbangl alinkiconbanglalinkiconbanglali nkiconbanglalinkiconbanglalinki conbanglalinkiconbanglalinkico nbanglalinkiconbanglalinkiconb
  2. 2. STRATEGIC MANAGEMENT Course Code: MGT (4356) Section: B Submitted To: Prof. Abu Saleh Md. Sohel-Uz-Zaman Professor School of Business & Economics, United International University Submitted By: Name Id. No. Jannatul Ferdaous Impa 111 092 081 Md. Shakhawatul Islam 111 093 033 Kazi Tousif Rafi Omar 111 093 070 Riad Chowdhury 111 101 122 Date of Submission: January 9, 2014
  3. 3. Term paper on 1. Introduction: Banlaglink is second largest telecommunication and mobile operator in Bangladesh. As of June 2013, Banglalink has a subscriber base of 27 million with 25.7% market share. It is a wholly owned subsidiary of Telecom Ventures Limited of Malta which is owned by Global Telecom Holding. Banglalink was established in 2004 after purchasing from BangladeshMalaysia Joint Venture Company “Sheba Telecommunication”. Banglalink had 1.03 million connections until December, 2005. The number of Banglalink users increased by 257% and stood at 3.64 million at the end of 2006, making it the fastest growing operator in the world of that year. In August, 2006, Banglalink became the first company to provide free incoming calls from BTTB for both postpaid and prepaid connections. On 2008, Banglalink got past the landmark of 10 million subscriber base in Bangladesh Telecommunication Industry. Orascom Telecom Bangladesh Limited introduced a premium brand, "Icon" on November 25, 2010. Icon subscribers enjoy solutions to all mobile telephony needs. Icon also adds value to the lifestyles of its customers by providing various exclusive offers. It service are provided for Corporate Segment like official personals and high corporate official, SME Segment like business owners and Enterprise personals. Their target was beat Grameenphone‟s Business Solution service and take the second mover advantage as they try to take advantages Banglalink toke over Sheba and become second largest company in Bangladesh. They tried to create market share for premium product services. Icon subscribers also enjoy some of the same benefits that are enjoyed by Postpaid Unlimited subscribers, such as: •Supplementary connections facility. • Loyalty discount. • Special discounts at various restaurants, hotels, shops etc. 1
  4. 4. Term paper on 2. Product: In here, Icon have offered that people will always be in touch be it locally or internationally, with our monthly bundle package. For only Tk. 3000 per month, there are two bundle packages that customers can enjoy those offers details are given below: Icon Bundle 1:  3000 minutes to any local operator  1000 SMS to any local operator  300 MB mobile Internet  Tk. 1000 ISD calls to any country Icon Bundle 2:  3500 minutes to any local operator  1000 SMS to any local operator  Unlimited mobile Internet Any unused bundle elements will be carried forward to the next bill cycle. After consuming the bundle elements, the following rates will apply: - For local calls: Tk. 0.1083/ 10 second to any operator. - For SMS: Tk. 0.50 + VAT per SMS. - For Internet in Icon bundle 1: Pay as you go. - For international calls: standard BTRC approved rates will apply. All of this call charges are VAT exclusive. (Icon) 2
  5. 5. Term paper on 3. Customers: Their segmentation of market was based priority base customers those who are spending a lot of money on personal communication facility and they are holding an organization‟s most top rank positions. Their target is to create most flexible communication system for corporate & and most high officials or personals. They almost follow niche marketing but the product customization is consider under two bundle package that they are providing  Corporate: Here, The Icon have targeted at the corporate used or official purpose use segment where they will be communicated by special numbers or sequel of numbers that in corporate world they can be represent very easily. It is only applicable for high officials so that their numbers can be easy to remember and ironical.  Personal: The Icon customers can get service in very cheap call rate service and can have a large talk time facility. Icon service is basically based person use concern for VIP persons and high officials. Icon 3.1 Situation The basic problem they have really faced that they have product will interest lots of peoples but in term of Bangladesh they couldn‟t find that kind of customer who is really going to pay for their services. First of all, Icon tried to create different kind of environment that will prioritize their customer in anywhere they pleased to. While they were thinking that Grameenphone is dominating telecom industry by providing priority customer service provider through GP xplore and GP Business Solution, they want put some value add service so that they could alter GP xplore and GP Business Solution. But for some reasons Icon Icon was a total failure for Banglalink. The main issues are: 3.2 Customer point of view: 3.2.1 Cost The cost of Icon monthly bundle is reasonable but for some persons can‟t fully utilize Tk. 3000 package. In these circumstances, they are unwilling to pay the monthly bills and don‟t want to use it any more. Some of them think that Icon‟s bundle package is too expensive because whether they fully utilize or not they have to pay monthly TK. 3000. For this reason 3
  6. 6. Term paper on they use for one month and use all the advantages they provide and unwilling to pay the monthly bills. They disconnect from next month. 3.2.2 Discount The discount facilities that they offered it doesn‟t interest the customers and doesn‟t create any kind of drive to any encourage to take Icon services, because Grameenphone‟s business solution and GP Xplore offer all most same offers. Most of time customers said that Grameenphone‟s offer is much better because they offer better discount offers with good network coverage. This sort of situation will create more obstacles for Icons. However, the Icon can‟t create anything out of box to offer the customers. Icon gives discount offer on purchasing Smartphone by giving barrier of TK. 20,000/= privilege. Icon provides discount facility over landscaped hillside in Khadimnagar, Sylhet, Nazimgarh is a self-contained island of tranquility amidst lush green foliage.  50% concession on deluxe rooms for the first night and 15% concession on subsequent nights  Complimentary services including breakfast, fruit baskets, access to gym, swimming pool, snooker tables, and much more! Moreover, Icon offer 45% discount over Hotel Seagull at Cox‟s Bazar. (Icon) But all this services are provided by Icon, the user doesn‟t know they have a discount facility or not. Sometime the discount offer becomes most embarrassing for the users. For example: Enjoy complimentary meals worth Tk. 1,000 at Nando‟s. Now Icon customers are that kind of persons who earns money monthly at least TK. 100000/= or above for him or her it is most embarrassing. They earn a lot in month so for them this amount of discount is very insulting. 3.2.3 Usages Icon usages are for those who are high officials of an organization or VIP persons. For them this offer is suitable but in term of Bangladesh some persons can‟t fully utilize these facilities. The people who are using Icon services they all use it to stay connected with office and with their superiors. They are providing lot offer and subscription facility. These things made a user very much confusing. A VIP person can even get angry and doesn‟t have time for this kind thing. For example: Icon has ISD call facility incoming and outgoing both in bundle 1 package. But if bundle 2 package subscriber want to us ISD services that person have to 4
  7. 7. Term paper on migrate to bundle 1 package. For this reason customers are almost feed up over Icon‟s product plan. Because according to customer, they are paying for priority service that means high customization of product, but in term of Icon they are less concern about product customization rather than high concern about service to the customers. Though the person‟s the Icon is dealing with they are the well-known corporate personal that might not take any kind of consideration about the facilities if not served. 3.2.4 Network Coverage The network coverage of Icon is less convenient Grameenphone. The customers want to be connected at all the time. So in that case the customer wants maximum level of network coverage. Icon is a part of Banglalink, their network coverage is in a moderate situation. Therefore the customers are not willing take or unwilling operate this service. 4. Marketing Myopia Icon‟s planners are facing marketing myopia. As we all know, marketing myopia consist of not paying any kind attention over the product rather than giving benefits to the customers. In this case, Icon have lost their market, because some clients doesn‟t need the extra benefit they need services and they need how fast you can solve their problems. The Icon have another most boring thing that customer can‟t choose or customize the services. As we understand that priority service based products are highly customizable that why this are very costly. The person who is paying the price he or she, expect the best service from them. 5. Communication Icon has done major mistake and that communication failure with the target customers. The advertisement or TVC they have made it doesn‟t express what its purpose and what are they offering. In some sort they have used mystery marketing concept, but in Bangladesh people have less interest if you don‟t tell them what it is for. Most of country person doesn‟t know what it is, some of the people thought that it might be new design fragment or product of “Fit Elegance”. For these they have lost most of the customer‟s attention and made disaster in market. 5
  8. 8. Term paper on 5.1 Internal Problems o Segmented customers are not found properly o Selection of usage pattern are not also an a proper way o They don‟t matched the market current size with users o They use the same channel for both sales and services o They recruited inexperience and fresh work forces for sales channel o Bundles packages with commitments of usages are not matched. o Commitment failure and not user friendly o Their promotional activities are as lower that they failed to attract the customers. o They invests a huge capital without proper planning They don‟t take any proper planned to recruits a huge manpower. 6. Solution or Fact Finding: The major problems that I have identified that Icon have marketing myopia and weak advertisement or communication lack. For this reason Icon is a fail project in telecommunication industry. There are some issues that Icon has to recover if they want to stay in the business. They are:  Think out of the box in offer services to the customers.  Provide maximum customization of product and services.  Diversify sales channel and service channel.  Communicate with the customers very frequently.  Solve problems in minimum time.  Use product development.  Strengthen network coverage.  Develop some facility of discount that client doesn‟t have to carry extra card.  Develop CSR not business but for social responsibility.  Arrange idea generate completion for fresher. All of this is primary things that we have identified that if Icon can develop things they can turn around in the market. As far their top level management have said they are current is in growth stage. But, the reality is they are in problem child or decline stage. Some of the 6
  9. 9. Term paper on former officials they have expressed that Icon was the first product that can fully mean a priority service based telecom service, it have the total essence of it. Although they have fall back because of they have only two bundle packages and those were overcharged. The customers were unwilling to pay the bills. For that reason, Icon has lots credits in the market. If Icon doesn‟t change their strategy, it‟s a matter of time Banglalink have to shut down Icon. 7. Current Situation: The telecom regulator has directed the cellphone operator Banglalink to stop its premium telecom brand „icon‟, saying the service was being provided illegally, said a top official. The regulator—Bangladesh Telecommunication Regulatory Commission (BTRC) - has taken the move, as the explanation on the icon provided by the Banglalink did not seem logical before it (regulator), he added. Recently, the regulator asked for explanation from the operator for providing the icon service to customer without taking approval from it. “Every kind of telecom service has to be offered to the customer by taking approval from the BTRC as per the telecommunication act,” chairman of the regulatory body Major General (retd.) Zia Ahmed told BSS yesterday. He said the commission is going to take necessary steps for ensuring customer interest. According to the telecommunication act, the operator has to take approval from the BTRC for setting any kind of service value. But, Banglalink did not take approval from the regulator for operating icon brand. So, the commission in last month directed the operator to stop the icon service immediately. Otherwise, it (regulator) will take legal action against Banglalink. In response to the regulator‟s directive, Banglalink gave explanation to the regulator about their icon services. But, the explanation has failed to satisfy the regulator. Talking to BSS, Shehjad Hossain, head of communication of Banglalink, said that they are discussing the icon service to meet the regulator‟s criteria. 7
  10. 10. Term paper on “We are hopeful to resolve the issue immediately as application has been submitted to the regulator for fresh approval,” he said. Officials said different kinds of bundle offers including air ticket, handset made by the icon brand are totally illegal, as those are not complying with the telecom act. (www.muthofon.com) 8. Bibliography Icon. (n.d.). Icon- Feel Special. Retrieved from http://www.icongsm.com.bd/ www.muthofon.com. (n.d.). Retrieved from www.muthofon.com: http://www.muthofon.com/news_details/banglalink-asked-to-shutdown-icon-service-151.php 8
  11. 11. Term paper on 9. Courtesy 1. Khodokar Mosabber Hussain Corporate Account Manager Sales 2. Yeamin Hossain Icon Manager 9

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