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Bus 101 term paper

  1. 1. Term PaperAugust 2, 20111 Group IIBRAC UniversityBUS 101Introduction to BusinessSubmitted to:Mrs. Mahtab FaruqiSenior LecturerB.B.STerm Paper on:Marketing strategies ofGrameen Phone
  2. 2. Term PaperAugust 2, 20112 Group IIDone by Group II:Sl.No. Name I.D. Depart.1. Nikita Nandini 11304029 BBS2. Golam Asfia 11304057 BBS3. Samiya Yesmin 11304043 BBS4. Kazi Nikita Nur 10105008 ESSAcknowledgements:We would like to thank all mighty Allah, Mrs. Mahtab Faruqi for allthe help and guidance she has given us, and Grameen Phone for being soaccommodating and cooperative.Summary:This term paper is about the marketing sector of GrameenPhone, on how, what, when and why they propose and offer theirproducts and services to the market.
  3. 3. Term PaperAugust 2, 20113 Group IITable of Contents:Sl.No.Content Page no.1. Introduction 42. A. Background of Company 63. B. Report on Grameen Phone’s Marketing system 94. Market Response 195. Conclusion 196. Glossary 207. Bibliography and reference 20
  4. 4. Term PaperAugust 2, 20114 Group IIIntroduction:Background of report:Here we have compiled a brief report on how Grameen Phone putstogether its extensive products and markets them.Objectives:To find out how, what, when and why Grameen Phone makes andmarkets its products.Scope:Through researching for this we report we have found out how the bookdescribed marketing strategies are actually put to use in real life, a source ofgreat enlighten for us.Contact Person: Grameen phone employeesLimitations:-Due to frequent political strikes we were put in a time restrain which disabled usfrom researching more for our report.-As marketing strategy does help a company beat its competition, thus the exactmethods/ instruments used for it is kept a secret, due to this privacy issue wewere unable to do more in-depth research.- Because of Grameen Phone’ s long protocols, we are unable to providereference of our interviewee, as following GP’s protocol would entail gettingapproval from GP’s human resource department and other head entities, thiswould have take a very long time which we do not have.
  5. 5. Term PaperAugust 2, 20115 Group IIMethodology:We have used the primary research which entails taking up-front personal interview.And we have divided the entire assignment in the followingway, as you can see each and every one of us has played aspecial part to complete and bring together our term paper.Name of GroupMember ContributionNikita NadiniWrote Part A-1, 2,3,4,5, kept the group together and helpedwith the slide.Golam AsfiaWrote Part A-6, B-1, 2 and the glossary, and helped with theslide.Samiya YesminDesigned and edited the entire assignment, wrote Q/A of theinterview, Part-B3 and rest of the assignment, and helped withthe slide.Nikita NadiniWrote Part B-4, 5, 6, 7, got interview appointment, anddesigned the slide.
  6. 6. Term PaperAugust 2, 20116 Group IIA. Background of theCompany:1. Name of the company: “Grameen Phone” isextensively documented as GP. Their logo 2. Nature of business: With more than 27 million subscribers, Grameen phone isthe largest cellular operator in the country. It is a joint venture enterprise betweenTelenor and Grameen Telecom Corporation, a non-profit sister concern of theinternationally acclaimed microfinance organization and community developmentbank Grameen Bank. Telenor, the largest telecommunications company in Norway,owns 55.8% shares of Grameen phone, Grameen Telecom owns 34.2% and theremaining 10% is publicly held.3. Brief history:The idea of providing wider mobile phone access was at first conceived by IqbalQuadir, who is currently the founder and director of the Legatum Center forDevelopment and Entrepreneurship at MIT. He was inspired by the GrameenBank microcredit model. He imagined a business model where a cell phone can serve asa source of income. After leaving his job as an investment banker in the United States,he traveled back to Bangladesh, after meeting and successfully raising money from NewYork based investor and philanthropist Joshua Mailman, and worked for three yearsgaining support from various organizations including Nobel PeacePrize laureate Muhammad Yunus of Grameen Bank and the Norwegian telephonecompany, Telenor. He was finally successful in forming a group with Telenor and
  7. 7. Term PaperAugust 2, 20117 Group IIGrameen Bank to establish Grameen phone. Quadir remained a shareholder of Grameenphone until 2004.Grameen phone received a license for cellular phone operation in Bangladeshfrom the Ministry of Posts and Telecommunications on November 28, 1996. Grameenphone started operations on March 26, 1997, the Independence Day in Bangladesh.Grameen phone originally offered a mobile-to-mobile connectivity (widelyknown as GP-GP connection), which created a lot of enthusiasm among the users. Itbecame the first operator to reach the million subscriber milestone as well as ten millionsubscriber milestones in Bangladesh.4. Number of employees: Grameen Phone has a total of 4000 employees alongwith many student and other interns who work at GP’s call centers.5. Geographic locations: A Grameen phone center (GPC) provides as a one stopsolution for customers, with all telecommunications products and services, under asingle roof. A grameen phone center also sells phones from dealers likeNokia, Samsung, Motorola, Sagem and Benq. EDGE/GPRS modems and accessoriessuch chargers and headphones are also sold at GPCs.There are 76 GPCs and they are strategically located at all major locations of thecountry is operated by Grameen Phone. Most of the newly opened GPCs are franchisedwith GP controlling all management. Most of these franchised outlets are in non-metropolitan areas.The GPCs also provide the flexi load service without charging extra for smalldenominations unlike many retailers in the country. Thus making the gpcs and idealplace for many for such a service.Every once a while, the GPCs tie up with handset manufactures and start anationwide marketing scheme by selling the specific vendors products at a price lowerthan the markets or in bundle with a Grameen Phone connection loaded with freeminutes.
  8. 8. Term PaperAugust 2, 20118 Group II6. Financial performance:This companys debt to total capital ratio, at 9.46%, is in-line with the WirelessTelecommunication Services industrys norm. Additionally, even though there are notenough liquid assets to satisfy current obligations, Operating Profits are more thanadequate to service the debt. Accounts Receivable is among the industrys worst with24.29 days worth of sales outstanding. This implies that revenues are not being collectedin an efficient manner. Last, inventories seem to be well managed as the InventoryProcessing Period is typical for the industry, at 11.17 days.Balance Sheet:Currency inMillions of Bangladesh TakaAs of:Dec 312007RestatedBDTDec 312008ReclassifiedBDTDec 312009RestatedBDTDec 312010BDTTOTAL CASH AND SHORT TERM INVESTMENTS 804.6 7,020.7 14,601.3 21,685.2TOTAL RECEIVABLES 3,249.5 4,892.6 5,459.4 6,176.0TOTAL CURRENT ASSETS 6,851.1 14,429.8 22,181.7 30,802.0NET PROPERTY PLANT AND EQUIPMENT 80,318.2 85,553.9 79,288.0 71,696.1Long-Term Investments 4.5 4.5 -- --Other Intangibles 1,275.7 8,193.6 7,681.1 6,991.4Other Long-Term Assets 11.6 12.7 11.6 12.6TOTAL ASSETS 88,461.0 108,194.5 109,162.5 109,502.1LIABILITIES & EQUITYTOTAL CURRENT LIABILITIES 36,444.7 50,231.0 38,952.1 44,641.9TOTAL LIABILITIES 62,349.9 80,606.3 59,008.2 61,470.3TOTAL COMMON EQUITY 26,111.1 27,588.2 50,154.3 48,031.8TOTAL EQUITY 26,111.1 27,588.2 50,154.3 48,031.8TOTAL LIABILITIES AND EQUITY 88,461.0 108,194.5 109,162.5 109,502.1
  9. 9. Term PaperAugust 2, 20119 Group IIB. Report on Grameen Phone’sMarketing System:1. Marketing Department: Grameen Phone regularly evaluates the performanceof its products portfolio which provides its management information regarding strategiesof new products or product modification and elimination.For tracking product performance management first of all establishes criteria andperformance level to gauge product performance. The motive of this system is to review aproduct that will help to spot out the problem products or features. Grameen phonemanagement uses this diagnosis to decide a strategy for eliminating the fault. Steps mayinclude cost reduction, new product addition, product improvement market strategyalteration or product elimination.a. Products life cycle analysis: Length of a products life is shorter in telecommunicationsector. So, within a short period of time Grammen Phones product changes phase fromthe introductory to growth to its present maturity stage.At the end of the cycle there arises the necessity to alter the cycle by introducingnew products or features.b. Products portfolio analysis: Grameen Phones products portfolio analysis ensureswhether each product fulfils managements minimum performance criteria, and accessthe strength and weakness of the product relative to other products in the portfolio.c. Cost reduction: Grameen Phone’s products quality gives this company major advantageover its competitors. Grameen Phone’s technological innovation, marketing productivityand mass consumer helps to maintain this lower cost.
  10. 10. Term PaperAugust 2, 201110 Group IId. Product alteration: Products are often improved by changing their features and quality.These features provide a way of differentiating a brand against competition. GrameenPhone renamed its products as Easy to Smile; Regular to Explore. A number of newfeatures also have been added with these products in that time. But consumer’spreferences suggest that quality is more important than features. So qualityimprovements are also considered as an important strategy for increasing competitiveadvantage.e. Product Elimination: In deciding to drop a product from product line, GrameenPhone’s management considers variety of performance criteria in addition to theproduct’s sales and priorities. But product elimination is a key decision that isthoroughly evaluated by Grameen Phone’s management. Because Grameen Phone’score value is to “Make it easy”.Grameen Phone and Banglalink have joined forces to share networkinfrastructure to take services at low costs to the untapped rural market. The partnershipwill help Banglalink expand its outreach via GPs infrastructure. Network-sharingbetween the two big players that occupy a combined 70 percent share of the six-operatormarket will help both minimise infrastructure costs by utilising resources together. Thiswill equally benefit both operators in providing faster and cost effective services.2. Product Mix:As being in a service oriented business Grameen Phone relies more on coverageand quality than the number of services or products offered. It has divided its productinto two types: Standardized and customized product.a. Standardised product is further divided into two categories i.e. Prepaid and Post-paid.-Smile(Standard)-Smile prepaid STD.-Shohoj package-Apon Package-Bondhu package-Badhon package
  11. 11. Term PaperAugust 2, 201111 Group IISmile standard allows subscribers to make and receive NWD and ISD call in all otheroperators whereas Xplore is the branded post paid service which usually comes in twotypes: Xplore package 1 and xplore package 2.Both of them has BTTB connectivity,Flexible credit policy and a wide range of value added services (SMS, EDGE, Voicemail, Voice SMS) and International roaming.b. Customized Product: Business Solutions are provided as a customized service todifferent medium and large organization and Professionals. This customization allowsinteresting call and sms charge among the member of the organization, fax and internetservice within the organization branch. The customized service of one organization isnever told to other or disclosed.c. Value Added Services (VAS): With VAS customers can use their phones for numerousother activities other than voice calls. Such as sending and receiving text, picture andvoice SMS, download ringtones, wallpapers and logos, receive news and Sports update,health line service, participate and vote for polls.d. Branding: It distinguishes a product from its competitors; as a result a strong brandidentity encourages repeated buying. Grameen Phone has been successful in this contextand more or else everyone is concerned about its Packages. Such an image is helped bysuperior quality and high promotional activities. Grameen Phone is a corporate entity inthe telecommunication sector and their branding i.e. Corporate Branding is used inadvertising and promotion to support the overall product line.3. Marketing Strategy:Setting Price: Grameen phone sets its products prices by closely evaluating thefollowing factors:i. per sim acquisition: depending upon the investment GP has put into theproduct and how much they want in return, this depends on the rate at which theywant/ need to pay back their loans.
  12. 12. Term PaperAugust 2, 201112 Group IIii. Market demand: as GP’s products have competitive advantage in themarket, it is therefore at very high demand thus this allows GP to rule the marketas monopolistic competitor.iii. Competitor’s price: As GP is a part of a very vast competition, they do haveto price their products by regarding their competitor’s prices so as to pleasetheir customers more.iv. Economic condition: Product pricing depends a lot on the country’seconomic condition as without a stable economy their products will not sell asexpected thus prices will then have to be reduced.v. Seasonal Fluctuations: GP offers some products and services depending onthe season. This consideration of seasonal fluctuations helps GP offer discountsand other offers during festivals which would please their customers further.vi. Desired image: GP has the image of Bangladesh’s most high endtelecommunication service provider. This is because they have maintained higherprice which is contributed to their very strong vast network service and uniqueproducts which only GP provides or are the first to provide. Market needs: GP dominates the market by providing the best network service inall of Bangladesh, something no other service provider has. This is GP’s strongestselling point. Being a service based product, GP has to introduced, altered, changedetc their products according to the market’s needs, this not only helps them to beahead of their competitors but also gain market preference. Product development:a. Opportunity: As we all know Bangladesh has a very high population,before GP there were no wireless telecommunication service in our country.Seeing such vast untouched market, GP took up the opportunity and set basehere. They knew soon a vast strong network would be required to provideservice for such mass population, thus they set working towards it. And today
  13. 13. Term PaperAugust 2, 201113 Group IIGP has used these opportunities, which are not being provided by theircompetitors, to their advantage to appease thousands of their customers. Nowafter completely saturating urban area markets, GP is working towardsappeasing and taking over the rural areas of Bangladesh too.b. Research: Initially when GP started, they used their foreign experience toprovide goods and services for Bangladeshis. But now over the years GP hasdeveloped special features and offers to satisfy Bangladeshi market by usingtheir customer usage records, surveys etc. to extensively research on themarkets’ ever changing needs. This helps fulfill the special needs of ourcountry.c. Target market: GP’s telecommunication service targets the entirepopulation of Bangladesh. Initially their market consisted of urbanities only, asduring those times urbanities were the only ones to use wirelesstelecommunication system. But now with the expansion of education andtechnology everyone is ready to use GP’s services. Their present target marketis the rural area people who form the almost untouched market a huge numberof potential clients in this sector.d. Designing product: GP’s services and products are technology based,thus are frequently subjected to change. With time market needs changes andGP strives to provide for every change in demand. Like they have this specialpriority based offer for their loyal customers which gives them specialadvantages over other users due to their loyalty to GP. This special “StarSubscribers” offer helps them retain their customers in this heavily competitivemarket. This was just one e.g. of the many special services designed by GPwhich is based upon their market’s needs.
  14. 14. Term PaperAugust 2, 201114 Group IIe. Test: Before launching any product in the market, they have to be tested forsuccess. GP does this by setting up expected criterions which they form fromtheir research on the product’s market demand. For e.g. GP had expected aspecial new sim to sell about 2000 pieces in Bandorbon, but in the test run itwas found to have been sold less than 2000 pieces, thus this new product hadto be discontinued. If the criterions were met then product would have beenlaunched in the entire market. Hence we can see that GP does extensiveresearch and testing of its products which has made them a great success.f. Name/design/price: GP names, designs and prices its products toentice and win more customers. Although it is a part of a foreign company,GP’s products mostly have Bangladesh oriented names which enables them toconnect more with their customers. For e.g. ekota, shojon, bondhu, Apon,Baadhon etc are names of some GP products. They are specially designed tofulfill all kinds of needs based on customer stratification. This stratificationprovides the best call rates and other services depending upon the customertype.g. Distribution: Although GP’s head quarters are in Boshundhora, they havestill managed to gain and keep customers’ satisfied with their 76 strategicallyplaced customer care centers all over Bangladesh, along with their innumerousflexi/credit load centers. This vast network of GP provides very easy access toGP’s services, helping them maintain proper care of their customers.
  15. 15. Term PaperAugust 2, 201115 Group IIh. Promotion: GP promotes their products through all media systems; let thatbe television, radio, billboard, internet, or print. Due to such extensive andstrategically timed advertisement, GP is capable of reaching and informinganyone and everyone, in and outside Bangladesh about its products. Thusforming a really good communication and relationship with all their presentand potential customers.i. Consumer relationship: GP maintains very good relationship with theircustomers by prioritizing their customer needs. The latest service GP offerscalled “My Zone”, helps fulfill each and every individual customer’s needs butproviding them discounts based on the area’s in which they have their highesttalk times. This most used area of any customer is set as their home zone inwhich customers’ can enjoy special and high discounts on their service usagerates which are based on their usage. No other telecommunication serviceprovider gives such individual attention and offer to their customers. GP alsorewards their loyal customers by giving them the new priority based “Star”subscription. This “Star” status gives GP’s most loyal customers’ a hugevariety of offers, keeping them happy and in return making GP happy.4. Competitors:Nowadays, there are quite a number of telecommunication companies in themarket; as a result competition has increased. Though Grameen Phone has thestrongest and the widest ranged networks but on the other hand they do have highercall rates than any other companies. Using this as a fact and weapon other companieshave followed the strategy of keeping their call rates lower and also by offeringbonuses, cash back offers etc. to attract more and more customers. Companies notonly tried to get hold of the customers but also to get more of the market shares. Someof the major competitors of Grameen phone are, Airtel, City Cell, Banglalink, andRobi. There are not only telecommunication competitions but also in the field ofinternet services, companies like Banglalion which is a part of Banglalink, Zoom ofCity Cell and then Qubee are giving tough competitions to Grameen Phone.
  16. 16. Term PaperAugust 2, 201116 Group IIOverall Grameen Phone is on a battle field with the competitors, fighting to keepthe position as they have always done.5. Strategy to Beat Competition:Every company follows certain strategies to beat market competition, in the same wayGrameen Phone applies some of its very new and interesting strategies. Their first andforemost strategy is their strong network which is accessible in almost all the places ofour country, this is the primary reason which has given a huge rise in the power ofGrameen Phone. They have also launched some new products which are not provided byanyone else in the market. Such as Grameen Phone’s handset with a built-in sim cardbundle, it is to satisfy all of their customers whom they have divided in three categories:the rich, the middle class and the rural people. As Grameen Phone has captured theurban market, they have now started their journey to capture the rural market. This istheir new strategy to stay on top, by moving onto the rural side of their country, they aredoing this not only by launching handsets but also providing the lowest call rates for therural people, because they want to make them feel that Grameen Phone not only servesthe rich but they also have a place for the poor. This goes on with the strategy of handsetfor the rural people. Grameen Phone has not stopped thinking about urban people; theyhave launched products like internet modems and data cables to satisfy all. Launchinginternet modems for people have made life easier for every class of people starting fromthe corporate to students, as it is not only portable and fast but can be used anywhere inBangladesh, not just in the city! Thus, now there is no need to have a wired permanentconnection to get connected to the world, people can get access to the internet fromanywhere and at anytime. Grameen Phone has not only launched new products but hasalso given people a way to save money from call rates by offering them “my zone”,where people get discount on every calls they make and they also get the highest amountof discount from their home networks which is the place they have the maximum talktime from. Grameen Phone has set up customer care centers in every possible location,in order to help their customers whenever they need help.
  17. 17. Term PaperAugust 2, 201117 Group II6. Grameen Phone’s Selling Point:Grameen Phone is trying every possible way to make them unique from othercompanies. The first thing they have is obviously their network, because this is whatevery customer wants. People use cell phones to stay connected to close ones, and forthat they need a very good network with which they can get to anyone from anywhere.Then comes on their own handsets, every people cannot afford to buy handsets whichwe know costs a lot and nowadays with the increasing amount of stealing they do notwant to lose their very expensive handsets. So, taking care of these facts Grameen Phonehas launched their own handsets which look good and costs less. Then comes on the factof the helping hand of the rural people, they have given a serious thought and engagedthemselves in helping the rural people by providing them with lower cost handsets,cheapest call rates and the never ending network. Thus mixtures of all these factorsmake Grameen Phone unique in every manner.7. Marketing environments:a. Social:Grameen Phone does not only think about capturing the market but it also thinksabout people. Grameen Phone has encouraged employees about doing socialwork, i.e. doing something for the underprivileged. They have arranged socialservice programs in which they send their own employees to work for thebetterment of the people of our country. In this way they are not only doingsocial work but they are also promoting Grameen Phone.b. Global:If we think of the global market, then we will see how far Grameen phone hasgone. As we know they come from a Norwegian company Telenor, but now theyare not only in Norway and Bangladesh, they are serving different countries andrecently one of them is India, where it is named as Uninor, overall there are a
  18. 18. Term PaperAugust 2, 201118 Group IItotal 13 markets under this Norwegian company. Grameen Phone offers roamingfor 170 countries, so now it’s huge.c. Technology:Grameen Phone is not only launching products and giving offers but they arealso thinking about the betterment of the technology. They are planning to bringon 3G, which is not only good but it’s great.
  19. 19. Term PaperAugust 2, 201119 Group IIMarket Response:As Grameen Phone regards market’s needs on deciding about any product or service, for whichthey perform extensive researches. This brings GP closer to its subscriber resulting in a verypositive market response for its products as they are specially designed to fulfill customerneeds.ConclusionGrameen Phone was the first telecommunication service provider to reach a million subscribersmilestone in Bangladesh, which is still increasing. With their vast strong network, niche marketservices, loyalty based offers and new unique products; GP has gained its customers completedevotion hence they are able to stay as the best telecommunication service provider inBangladesh while commanding the most premium charges.
  20. 20. Term PaperAugust 2, 201120 Group IIGlossary- EDGE: Enhanced data rate for Global Evolution deployed at GSM networks,considerably a pre 3G concept.- 3G: 3rd generation mobile telecommunications, Application services include wide-areawireless voice telephone, mobile Internet access, video calls and mobile TV, all in amobile environment.- ISD: International Subscriber Dialing (ISD) is the term used to describe an internationaltelephone call dialled by the caller rather than going via an operator.- BTTB: The Bangladesh Telegraph and Telephone (T&T) Department was created underthe Ministry of Posts & Telecommunications after the independence of Bangladesh in1971 to run the telecommunication services on a commercial basis.- GPRS: General packet radio service (GPRS) is a packet oriented mobile data service onthe 2G and 3G cellular communication systems global system for mobilecommunications (GSM).Bibliography and References- http://www.Grameen Phone.com/- http://www.scribd.com/doc/24455104/MKT-GP- http://investing.businessweek.com/research/stocks/financials- http://www.scribd.com/doc/40481911/Financial-Statement-Analysis-of-Grameen Phone- http://investor-relations.Grameen Phone.com/annualreport/- http://www.slideshare.net/rubayatppt/organizational-environment-of-Grameen Phone- http://en.wikipedia.org/wiki/Grameen Phone- Interview and Class notes- Understanding Business, (8thEdition), William G. Nickels, James M. McHugh & SusanM. McHugh, McGraw-Hill, 2008.