4. CONVENTIONAL MARKET STRUCTURE
COMPANY
FRANCHISE &
SERVICE CENTRE RETAILERS
DIRECT SALES
Family
members/Friends/Celebrities
INFLUENCERS
Admin, Colleagues & friends
PRODUCT
Jazz, Ufone Prepay, Telenor
Talkshawk, Djuice, Zem
Indigo, Ufone postpay, Persona, Zahi
Price Range Rs 30/=- Rs 2,000/= Rs 2,000 onwards
END USERS
Youngsters, Housewives, Price
Sensitive
Business units
SEGMENT
Pre-Paid Connections
Post Paid Connections
5. FURTHER CLASSIFICATION OF
MARKET STRUCTURE
COMPANY
FRANCHISE & SERVICE
CENTRE
RETAILERS
Pre-Paid
Connections
YOUTH AGE GROUP
15-30 YRS
HOUSEWIVES
MIDDLE AGE GROUP
URBAN MARKET
RURAL MARKET
CATTLE FARMERS
YOUTH
KISAN (FARMERS)
OLD AGE GROUP
LAND LORDS AND
MIDDLEMEN
HOUSEWIVES
7. • URBAN MARKET
ASSUMPTIONS
– Segment distribution amongst
urban-rural is based on 32.34%
based on the urbanization rate.
– We are also assuming that 98% of
the urban population has been
already catered
MARKET STRUCTURE ANALYSIS
Historical populations
Census Population Urban
1951 33,816,000 17.80%
1961 42,978,000 22.46%
1972 65,321,000 25.40%
1981 84,254,000 28.28%
1998 130,580,000 32.51%
2008 172,800,000 32.34%
8. URBAN MARKET
• HOUSEWIVES
– Market 11.24 million
– Needs=communicating with family
member, friends or calling on food
shows & talk shows.
– Average spending on calls Rs
300-900/= per month
– Product targeting this
segment=jazz ladies first
(Mobilink)
Total Population 172 Million
Total Urban Population
(32.34%)
55.62 Million
Proportion of females
in Urban Areas
(51%)
28.36 Million
Women under the age
of 15 years(43.4%)
12.3 million
Working women (30%) 4.82 Million
Housewives(70%) 11.24 Million
9. • YOUTH
– MALE/FEMALE BETWEEN 15-30
YEARS
– Market is about 16.21 Million
– Needs=socialize with friends, family
members, lovers. Security need and
need to help
– Average spending of Rs 300-1500 per
month
– Products targeting this segment are
• Djuice(Telenor),
• Talkhshalk(Telenor),
• uth(Ufone,
• Jazz(Mobilink),
• Glow (Warid)
Total youth
population
(29.15%)
50.14 Million
Proportion of youth
population living
in urban
areas(32.34%)
16.21 Million
URBAN MARKET
10. • OLD AGED
– Males/females above 60 years.
– Market= 2.78 Million
– need= to stay in touch with old
friends, family members or get
driver, doctor etc
– Average spending is Rs 300-700
per month
Total Population of
old aged people
(5%)
8.6 Million
Proportion of old age
group in Urban
Areas
2.78 Million
URBAN MARKET
11. RURAL MARKET
• LANDLORDS
– Individuals holding more than
300 acres of land
– Market= assuming 3% of rural
population
– Needs=business needs, social
needs, security needs,
information transfer needs
– Average spending is Rs 2000-
5000 per month
Total Population 172 Million
Rural Population
(67.66%)
116.37 Million
Land Lords (3%) 3.49 Million
12. RURAL MARKET
• YOUND INDIVIDUALS
– Males/females between ages
of 15-30 years
– Market 33.93 Million
– Needs=social needs, since
they travel to other villages &
regions they need to stay in
touch with family & business
partners. entertainment need
– Average spending is Rs 10-20
per day
Total Population 172 Million
Total Youth population 50.14 Million
Total youth in rural
areas (67.66%)
33.93 Million
13. RURAL MARKET
• RURAL WOMEN
– Females who live at home & work
in farms
– Market is 59.35 Million
– Needs= to communicate with
other females, children &
husband.
– Average spending on calls is
around Rs100-200 per month
Total Population 172 Million
Total Females in
Pakistan( 51%)
87.72 Million
Proportion of females
in Rural Areas
(67.66%)
59.35 Million
Working women
(20%)
11.87 Million
Housewives (80%) 47.48 Million
14. RURAL MARKET
• FARMERS (KISAN)
– This segment consist of
male/females working in the
agriculture segment of Pakistan
– Market = 8.78 million Females &
17.02 million Males totaling to
30.13 million
– Needs = work related information
required, social needs.
Total Rural
Population
116.38 Million
Proportion of females
in Rural Areas
(51%)
59.35 Million
Working women
(20%)
11.87 Million
Proportion of
Women in
Agriculture
(74%)
8.78 Million
Proportion of Males
in Rural Areas
(49%)
57.02 Million
Working Men in rural
areas(80%)
45.62 Million
Men working in
agriculture
(37.3%)
17.02 Million
15. MARKET STRUCTURE OF
TELECOMMUNICATION INDUSTRY
Analysis
• Cellular sector consists of
93% of the
telecommunication
industry, followed by the
fixed lines and Wire less
local loop
• WLL sector is still in the
introductory stages and
has been unable to grab
much of the market
because of their limited
coverage
WLL
2%
Fixed
5%
Cellular
93%
MarketStructureOf
TelecommunicationIndustry
*Source PTA (Pakistan Telecommunication Authority)
16. Market Share
2005-2006 2006-2007 2007-2008 2008-2009
MARKET
SEGMENT Realized
Un-
Realiz
ed Realized
Un-
Realiz
ed Realized
Un-
Rea
lize
d
Realiz
ed
Un-
R
ea
liz
ed
Urban market
HOUSEWIVES 9.95 0.64 10.14 0.65 10.60 0.44 11.01 0.23
YOUTH (15-30
years) 14.73 0.92 14.9 0.61 15.62 0.31 15.88 0.32
MIDDLE AGED
(31-60 years) 11.75 0.82 12.18 0.51 12.51 0.52 12.9 0.26
OLD AGED(60
and above) 1.98 0.11 2.06 0.08 2.11 0.1 2.18 0.04
17. 2005-2006 2006-2007 2007-2008 2008-2009
MARKET
SEGMENT Realized
Un-
Reali
zed Realized
Un-
Reali
zed Realized
Un-
Rea
lize
d
Realize
d
Un-
R
ea
liz
ed
Rural Market
Landlords 1.97 1.31 2.00 1.34 2.22 1.20 2.44 1.05
Youth 19.05 12.70 19.33 12.89 21.51 11.58 23.57 10.10
Kisan(Farmers) 24.3 16.2 24.75 16.5 27.4625 14.7875 21.09 9.03
Rural Women 33.45 22.31 34.07 22.72 37.79 20.3 41.54 17.8
Market Share
26. INDUSTRY DRIVING FORCES
POLITICAL
• The current political situation in Pakistan is driving investors out of the industry, the impact of which can also be
seen in the telecom sector. As investors have reduced there investment share in Pakistan during last year
• With the budget year 2010 it was proposed by the political parties that certain laws should be passed to
discourage the ill saying against the political leaders/government officials, the suggestion further included
increased in the tariff rate of value added services such as SMS
*Source PTA (Pakistan Telecommunication Authority)
27. INDUSTRY DRIVING FORCES
Economical
• The economic condition of Pakistan has declined due to which the average income of
the country is going down, considering this fact as Telecomunication industry is
planning to enter the rural regions of Pakistan where Cell phone are still considered
as a luxury and not a necessity, therefore the companies will find it difficult to position
its product as ever day required product.
Social
• The social situation has been favorable for the telecom sector as the as now cell
phones are considered as a basic necessity rather than a luxury. Besides that due to
the current security threats to the country people feel comfortable while they are
having cell phones which provides instinct access to all news at any given point in
time
Technological
• There is a huge room in this particular industry as new technologies are already in
use in western countries which are yet to be introduced in Pakistan such as 3G
service which enables a person to make video calls through these mobile devices.
32. S.W.O.T Analysis
• STRENGTHS:
– Ufone is the subsidiary of PTCL, which is owned by Etisalat
(Emirates Telecommunication Corporation), thus it has strong
financial backing.
– International Roaming to more than 210 live operators across
123 countries; without any security deposit or activation charges.
– Ufone has the 1st mover advantage to cater the price sensitive
customers
– Ufone is offering more and better Value Added Services (VAS)
than its competitors i.e. Ufone’s Walkie talkie, Call block service
etc.
• WEAKNESSES:
– Ufone’s network connectivity is weak.
– Operational issues in converting packages.
– Ufone has comparatively lesser network coverage in rural areas.
33. • OPPORTUNITIES:
– Reduction in the cost of Mobule Handsets making it
affordable to lower income class
– Huge market potential of Women in rural Areas
– Emerging technology such as 3G
• THREATS:
– Further aggressive price wars by the competitors
– mobile portability service enable users to switch
services without changing their numbers and codes
– Political instability & poor economic condition and
direct threat to infrastructure
S.W.O.T Analysis
34. Confrontation Matrix
S-O Strategies W-O Strategies
With great financial backing and decreasing mobile
handset cost Ufone can now offer its products to lower
income class also more aggressively
With this great financial backing Ufone will have an edge
to reach the emerging market such as rural women.
Since Ufone has always been in the first row to implement
new technologies therefore with good financial backing it
will be helpful for implementing 3G
As Ufone has an brand image of low cost service provider
thereforer this will give Ufne an extra edge to penetrate in
Rural Markets of Pakistan
Huge potential market in the rural area of Pakistan
requires good network coverage.
Already Ufone has a weak network coverage and with the
upcoming 3G technology Ufone will have to spent more
on its network coverage in order to support it.
Since the urban markets have reached its saturation and
most part of the rural markets have also been covered
Ufone has to work on its network in rural areas to reach
the market.
S-T Strategies W-T Strategies
• Ufone should develop attractive product and
packages to cover the customer base more as price
war will result in the shrinkage in the Profit
contribution and market will be volume base.
As market is highly competitive and % of profits per call
has reduced and profitability is now more volume based
therefore with less network coverage u fone is losing out
on its potential customers in the rural area of country.
Which will as a result effect its profits
Problem in the operation leads more customer
dissatisfaction and with the introduction of MNP customer
are more active in switching networks
35. Customer Buying Criteria
Important Factors
Important
Factors
Urban
Areas
Absolutely
Critical
Very
Important
Quite
Important
Nice to
Have
Not
significant
Don’t Want
it
5 4 3 2 1 0
Tariff Rates
SMS
Package
MMS
Package
GPRS
Service
3 G service
Voice
Clarity
Network
Coverage
36. Customer Buying Criteria
Important Factors
Important
Factors Rural
Areas
Absolutely
Critical
Very
Important
Quite
Important
Nice to Have Not
significant
Don’t Want it
5 4 3 2 1 0
Tariff Rates
SMS Package
MMS Package
GPRS Service
3 G service
Voice Clarity
Network
Coverage
37. NON PRICE
UFONE
TELENOR WARID ZONG
ATTRIBUTES
AFFECTING WEIGHTAGE
CUSTOMER
CHOICE %
MOBILINK
PRODUCT
RELATED 50% Rating on the scale of 1 to 10
1. Tariffs 25% 9 7 9 8 9
2. VAS 25% 8 6 8 7 8
SERVICE
RELATED 50%
1. Network
Coverage 25% 8 10 7 7 6
2. Voice Clarity 25% 8 9 9 9 6
Total 100% 82.5 80 82.5 77.5 72.5
38. Vision Statement
• UFONE VISION
“In order to evolve with our customers and to keep pace
with your needs, we rejuvenated and revamped our
image by changing our visual identity.”
PROPOSED VISION OF UFONE
“To become number one cellular service provider in
Pakistan by gaining excellence in communication
services”
39. Mission Statement
UFONE MISSION STATEMENT
“At Ufone we understand the value of words and the need
to communicate effectively and efficiently at all levels of
society, which is why our primary focus is on U, our
valued customers bring strength to our company.”
PROPOSED MISSION STATEMENT
“To become number one by exploring new and untapped
market increasing our customer based by providing new
and unique Services”
40. • OBJECTIVES
– Increase network coverage area atleast by 15-20% by
the end 2011
– To become the leading mobile operator in the country
by achieving subscriber wise market share of 35% or
more by 2011.
– To install 4500 additional cell sites to ensure
customer satisfaction in terms of connectivity by year
end of 2010
– To implement new distribution channel by promoting it
on all major platforms starting from December 2010
41. STRATEGIC INTENT
Become the 1st choice of the customer in both
urban & Rural Areas
• Key issues
– Network Coverage (Rural Areas)
– Operational Issues (Billing & package conversion
issues)
– Cultural Issue at Ufone
42. STRATEGIC DIRECTION
• UFONE’S STRATEGIC DIRECTIONS:
– Since the urban markets have been saturated and with the ongoing
price wars with the competitor on existing customer base. Ufone will
have to focus on new emerging markets such as Females, Farmers,
Youth in the rural areas of Pakistan
– Since the profitability in the future will be based on volume therefore it is
very important for Ufone to come up with services that are unique.
– To beat its major competitor like Mobilink and the other emerging
operators like Telenor and Warid, Ufone needs to increase its
availability by increasing its network coverage. It needs to go into
extensive expansion into the untapped markets so that it can expand its
operations and also increase its market share. Ufone has finalized a
network expansion contract amounting to about $50 million, which will
enhance the subscriber’s capacity by 10 million.
44. Product Pricing
• 25 pc per 30 Seconds on any network
• 1 hour free after 2 mins
• 24 FM services free
• Free Sports update
• 5 Friends and family numbers (Rs 10 per addition charges)
– 45 pc per Minute all day
• On per minute incoming call subscriber will get 10 Pc
YOUTHhUm-Jawan
45. Product Pricing
• 65 pc per Minute
• Comodity Market Updates (Pricing) (Rs 100 per month charges)
• 24 hours FM services free
• Free Sports update
• News Updates (Rs 50 activation charges) and monthly Rs 10
• 100 free minutes per month Ufone to Ufone only
• F & F services totaling 7
– 55 pc per minute
Land lordshUm-Karobar
46. Product Pricing
FarmershUm-Kisan
• 25 pc per 30 Seconds on any network
• 24 FM services free
• Free weather updates
• Experts opinion for agriculture in local languages
• 5 Friends and family numbers (Rs 10 per addition charges)
– 45 pc per Minute all day
• On per minute incoming call subscriber will get 10 Pc
47. Product Pricing
HouswiveshUm-Aurat
• 35 pc per 30 Seconds on off network
• 20 pc per 30 seconds on on network
• 24 FM services free
• Free Cooking recipes
• Health & Care advices
• 5 Friends and family numbers
– 45 pc per Minute all day
• On per minute incoming call subscriber will get 10 Pc
48. MARKET SEGMENTATION & PRODUCT POSITIONING
Assumption:
We are assuming that out of 100% of Ufone’s market share, 85% is urban and 15% is rural
Market
Segment
Current
Revenue
Projected Growth Existing/new packages
Contribution in
Profitability
%
Prepaid Urban 34,053 M 1.5%
Prepay existing
-Ufone Prepaid
-Ufone Super Ghanta
-Ufone Ghanta Package
-U Fone Life Plus
-Uth Package
-Tension free package
-Ufone Paanch Ka Pandrah
-Ufone Uwon
90%
Prepaid Rural 6,009 M 20%
Prepay New
-Hum Jawan
-Hum Karobar
-Hum Kisan
-Hum Aurat
10%
50. • Marketing in the Rural
• Step 1:
• Free distribution of SIMS & Cell phones with local languages targeted to different
segments differently
– Kisan: collaboration with various agri products like pestisides, fertilizer etc
– Rural Females: Door to Door our female sales representative will distribute free cell
phones by competition
– Youth: Introductory Mela will be organized to target this segment and we will distribute free
phones by simple competitions like one leg race, Kabadi Match etc
– Landlords: This segment will be targeted by our senior sales representative.
• The main aim behind organizing the carnival and other activities is with the sole
purpose of breaking into the market and expanding the customer base
• Step 2:
• Offering insentives to the existing subscribers as and when they introduce a new
subscriber to Ufone, by doing so Ufone will save the cost of developing a sales team
in rural areas and in return the subscriber will also benefit. This will help create a
sense of belongingness to our customer with Ufone making them a more brand loyal
person and making the customer not just customer but an integral part of the Ufone
Family
• The following diagram represents how our customers will work as a sales men and in
return both the company and subscriber will benefit
• With the introduction of every new customer(A) by existing subscriber(B) will get Rs
20 balance and going forward every call that Customer A does Subscriber B will get 5
Bonus points which he can utilize at various places acting as discount
51. ACTION PLAN
What How Who When
Business Scope
Increase the coverage to Rural
regions
Installing new
infrastructure which
will enable to reach
rural market
customers
Engineering and finance
CFO of U Fone
Jan-11
Market structure / Distribution
o Conventional and outdated
structure
o Reducing the role of
middle men from the
structure
o Head of Marketing and
distribution
Jun-11
Conventional distribution structure is
not appropriate for the rural
market
Targeting the new market with
entirely new method
Product manager and sales
managers
Market Share By introducing new
products for each
identified market
segments and
working our way into
these segment.
Sales team initially and
followed by our new
distribution method by
which ever subscriber
will at as our salesmen
Jun-11
Markets in the rural areas are
in the Growth stage
showing huge potentials
52. New Product
hUm Jawan New packages specially
design for the
targeted segments
Ufone – Marketing, Sales &
Distribution
Department
Jun-11
hUm Karobar
hUm Kisan
hUm Aurat
Infrastructure
Expanding network coverage
area
Setting up new cell sites in
rural areas
Ufone technical Department Jan-11
