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Contents THE PRODUCT - Airtel Mobile Services ......................................................................................................... 4

OBJECTIVES ................................................................................................................................................... 5

Corporate Objectives ................................................................................................................................ 5

Marketing & Sales Objectives ................................................................................................................... 5

Financial & Operational Objectives........................................................................................................... 5

Customer Retention .................................................................................................................................. 5

SITUATION ANALYSIS .................................................................................................................................... 6

SWOT: ....................................................................................................................................................... 6

PORTER’S 5 FORCES .................................................................................................................................. 8

COMPANY & COMPETITOR ANALYSIS ......................................................................................................... 11

Product features matrix .............................................................................................................................. 11

Objectives of Competitors: ......................................................................................................................... 13

COMPETITOR ANALYSIS .............................................................................................................................. 14

COMPETITOR STRATEGY ............................................................................................................................. 17

Applying 4P Marketing Mix to Airtel ........................................................................................................... 18

Profits ...................................................................................................................................................... 21

Value Chain Analysis ................................................................................................................................... 22

Differential Advantages .......................................................................................................................... 23

Maintain Specialty .................................................................................................................................. 23

Hope for Market Growth ........................................................................................................................ 24

Maintain Cost Advantage ........................................................................................................................ 25

Outstanding Success ............................................................................................................................... 26

Market Segmentation ................................................................................................................................. 27

Targeting ..................................................................................................................................................... 28

Evaluation of Market segments .............................................................................................................. 28

Selecting a targeting strategy ................................................................................................................. 29

The Target Market Segments .................................................................................................................. 29

Positioning .................................................................................................................................................. 31

CONSUMER BEHAVIOUR ............................................................................................................................. 33

ASSUMPTION IN PLANNING PROCESS ........................................................................................................ 38

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THE PRODUCT STRATEGY ............................................................................................................................ 44

Strategy – Marketing Communications Programmes ................................................................................. 46

Integrated Marketing Communications Programs ................................................................................. 46

Pricing Strategy ....................................................................................................................................... 47

Channel Strategy ..................................................................................................................................... 48

Research Strategy ................................................................................................................................... 49

MONITORING & CONTIGENCY PLANS ......................................................................................................... 50

Recommended Marketing Strategies for Airtel .......................................................................................... 51

REFERENCES ................................................................................................................................................ 53

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THE PRODUCT - Airtel Mobile Services

Airtel Mobile services is one of the four strategic business units of Bharti-Airtel limited formerly known as Bharti-Tele Ventures LTD (BTVL). The mobile services division of the company is branded as Airtel.

Going by the subscriber base Bharti is the fifth largest mobile operator in the world, with an estimated base in about 18 countries.

Airtel currently offers both 2G and 3G services depending on the country of operation. It has recently secured the 3G licenses in 13 telecom circles of India and plans to launch 3G services by the month of October this year.2

The cellular services division of Airtel has also entered the smart phone market segment. On 19th October 2004 Airtel announced the launch of Black Berry Wireless Solutions in India. By August 2008 Airtel had signed up with Apple for the launch of Apple 3G iPhone services. It has however been unable to capitalise and emulate the success of Apple iPhone on the account of high pricing and contract bond

accompanying these services.

Considering the fact that India is now the second largest telecom market in the world and more

importantly the fastest growing market globally (about 19 million additions a month), there have been several new entrants in the markets lately.3 This has led to ever lowering tariffs and a decrease in the

revenue of existing players. Fresh acquisition of customers is then no longer a guarantee to increase in revenue. As a consequence in addition to the lower calling rates, the operators have been forced to provide a host of value added and auxiliary services. Here Airtel is already leading the way in areas of

mobile commerce, banking etc.

As the Indian telecom industry enters its third phase, growth in the markets are bound to mirror the growth in the economy. This provides valuable pointers to the next driver of growth – the rural India –

where mobile penetration levels still remain an abysmal 15%.4 Airtel has been looking to expand to learn and expand in the rural/low income market segment. In this regard Airtel has already ventured into providing mobile financial services, mobile money transfers to customers in rural areas, further

leveraging its existing base of cellular subscribers.

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OBJECTIVES

Corporate Objectives To dominate the cellular services industry by being the market leader in products and services category in wireless market and lead on all important fronts viz. market share, brand loyalty and customer satisfaction.

Marketing & Sales Objectives 1. To achieve higher penetration in rural markets by capitalising on the existing base to reach out

to new subscriber markets.

2. To create markets for Value added services by integrating more features into the existing scheme of things.

3. To reach out to different market segments with products and services customised to cater to the segment specific needs.

4. To study the brand loyalty within the existing set to better understand and appreciate our product differentiation. And also how we can build upon it further.

5. To engage with customers continuously to be able to adapt to the changing market needs and consumer behaviour.

6. To explore the potential for broadband data markets by exploring the scope of 2G and 3G cellular services in urban/rural markets.

Financial & Operational Objectives 1. To expand and outsource capital intensive tasks (involving building & maintenance).

2. To be able to break even on the capital spent in securing 3G licensing services by improving on the ARPU and ensuring better penetration into the SaaS market by broadband data services.

3. To ensure 3G services usage generates enough revenues per annum to enable normal pay back and returns.

Customer Retention 1. To leverage the existing base of customers by engaging them with new products and services

launches on a periodic basis

2. Empower and engage with consumers on a regular basis to ensure customer satisfaction and

value delivery.

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SITUATION ANALYSIS

SWOT: Strengths

1. It is the largest cellular service provider in India with a subscriber base of over 135 million (June 2010) and market share of 29.2%.

2. Airtel is currently operating in 18 different countries in Asia and Africa which reflects its global presence.

3. Airtel is in with strategic alliance with majors from other telecom leaders like Ericsson, Nokia

Siemens Network and Sing Tel which gives insight into other areas of telecommunication.

4. Mobile Business Unit of Airtel is a profit making division where profits soared by 3% to Rs. 8227 crore giving enough cash in hand.

5. Tie-ups with BlackBerry Wireless Solution, Apple Iphone 3G and Facebook give access to emerging new growth markets.

Weakness

1. Airtel outsources everything except marketing and sales which makes it dependent on other players.

2. Dominance within India is limited to circles in Northern and Eastern India with high competition

in Southern India.

3. Airtel focuses on nationwide advertisement strategies which give other regional players to

dominate in several regions.

4. Bharti did not own majority of its own network towers which hampers the coverage area and

give advantage to its competitors.

Opportunities

1. With the help of its wide national presence Airtel can aggressively venture into new emerging areas like mobile banking, 3G Technology

2. Strategic position of Airtel in international market can help to acquire new business divisions in other countries to expand the business horizontally.

3. With the huge cash base Airtel can hugely invest in innovative products like Airtel Worldwide SIM and Airtel App Central which is India’s first mobile app store.

4. The company can promote its worldwide presence by sponsoring more international events like Twenty-20 World Cup and UEFA Champions League.

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5. With the right regional marketing strategies Airtel can acquire the dominance in regional market and increasing the market share of the company.

Threats

1. Companies like Virgin and Tata Docomo are aggressively targeting younger generation with there new innovative products and applications, thereby reducing the market share of Airtel.

2. There is always a potential for entry of foreign player or revival of domestic competitor like Vodafone from Hutch.

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PORTER’S 5 FORCES Mobile Services Industry – Structure: Mobile services in India are fast growing with a YoY growth rate of

58.17% in 2008 and 50.06% in 2009. There are multiple service providers with as many as 12-13 service providers in all circles.6 While Circle A, Circle B and Metro circle is already nearing very high penetration levels, Circle C subscription base is increasing at the fastest rate, ensuring a high rate of increase in the overall subscription base.9

Subscriber base of mobile services (GSM and CDMA): 2007-2009

Service Providers

2007 2008 2009 YoY over 2009

Bharti 37.14 61.98 93.92 51.53%

BSNL 30.99 40.79 52.15 58.70%

Reliance 28.01 45.79 72.67 55.84%

Vodafone 26.44 44.13 68.77 27.85%

Tata 16.02 24.33 35.12 44.35%

Idea/Escotel 14.01 24 38.89 62.03%

Aircel 5.51 10.61 18.48 74.18%

Others 6.99 9.44 11.76 10.76%

TOTAL 165.11 261.07 391.76 50.06%

Source: TRAI

1. Threat of new entrants-HIGH

a. Department of Telecom and the Telecom Regulatory Authority of India (TRAI) are the policy formulating and regulatory bodies. TRAI’s stated objective is to”

encourage greater competition in the telecom sector together with better quality and affordable prices” and in line with that, has been following a “liberal regulatory

regime”

b. The government presently allows FDI of 76% in the sector, encouraging foreign players to enter the Indian market.

c. The sector offers tremendous growth opportunity. By 2012, total telecom penetration in rural markets is expected to reach 40% compared to the current tele-density of 16.6%.7

Given the profit opportunities and regulatory environment, threat of new entrants is high.

2. Bargaining Power of buyers- VERY HIGH

a. Lack of product differentiation- The product offering is similar from almost all players

with the same basic product and similar value added services. There are short term gains that one player may have from innovation/ first mover advantage into a new value added service, but these are soon offered by competitors as well

b. Extremely low switching costs in moving from 1 service provider to another

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c. Multiple service providers- very wide variety of choice for the customers.

d. Competitive landscape implies consistently better offers and deals for customers.

3. Bargaining power of suppliers-VERY LOW

Airtel outsources most of its operations. Since contracts are allocated to the highest bidder,

Airtel only looks at getting the best deal. This mechanism provides Airtel with a high degree of flexibility.

a. Network outsourcing/maintenance partners: Ericsson(15 circles), Siemens(7 circles),

Huawei.

b. IT system partner: IBM

c. Tower maintenance and other infrastructure: BhartiInfratel and Indus towers

d. Call center partners: IBM Daksh, Nortel, Hinduja TMT, Teleperformance, Mphasis, Firstsource& Aegis

4. Pressure from substitutes-HIGH

The communications space is very dynamic with new technology (3G and 4G) and products

flooding the market. Mobile services are competing with products such as

a. Wired-lines

b. CDMA

c. Video telephony

d. Tata/ Reliance- Walky phones

e. Internet telephony- Skype, google, fringetc

f. VSAT phones

Additionally, data services on cellular phones have become an essential product feature. On this

front, mobile services face a significant threat from local ISPs, broadband service, leased lines, Blackberry and iPad.

5. Current Rivalry

Airtel is the current market leader in the mobile service (GSM) sector with 31% market share. Vodafone, BSNL, Idea are its major competitors.6

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6. Category Capacity:

As of January 2010, the overall tele-density was recorded at 49.5 per cent with a total telephone subscriber base of 581.81 million.6 By 2012, the total telecom subscriber base is expected to reach approximately 700 million to include about 650 million wireless users and approximately 50 million fixed line users, driven by a rise in the demand for communications from semi-urban

and rural India.7

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COMPANY & COMPETITOR ANALYSIS

Product features matrix

Table 1 depicts the product feature matrix to simplify the difference between the product features or

services offered by Airtel Mobile as compared to other competitors in the market. By analyzing the table

we can get a very clear idea of the strength and weakness of Airtel product relative to the other

competitors.

Notes (As mentioned in Table below):

1. Process of receiving updates automatically on your phone without the need of initiating a

request every day.

2. It includes services like Call Conferencing, Call wait, Call Hold, Call Divert, Missed Call Alert

3. It includes service like Send/Receive Emails, Mobile Office, Fax and Data

4. mVoip or mobile Voice over Internet Protocol is an extension to VOIP through which a mobile

handset can be integrated into a VoIP network

5. Apple IPhone is available in India either through BhartiAirtel or Vodafone service provider. No

other service providers has given right to sell IPhone in India.

6. Service that provides instant chat with friends with any mobile number, anywhere in India. A

user can exchange text, photos and emoticons.

7. Customers can SMS to multiple contacts, anywhere in the world. Users can create their own

groups, communities in order to SMS all of them at the same time with reduced rates per SMS

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Various Mobile

Operators

Normal Users

GPRS

Prepaid Service

Postpaid Service No

Subscription Service1

Product

Call Management Service2

Features Data Service3

SMS Directory No No

Language SMS

MMS Service

National Roaming

E-Recharge

Business Users

Blackberry

m VOIP4 No No

ISD Calling Cards No No No

Operator Services

Just Dial

Conversion from Prepaid to Postpaid or vice versa

Customer Care

Caller Tunes

Voice SMS

Additional Features

Apple Iphone5 No No No No No

PC2Mobile6

Corporate Group Messaging7 No No No

Customized Chatting Client

m-Commerce

Phone Backup Table: Product feature matrix of Airtel Mobile

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Objectives of Competitors

Below are the current objectives of the competitors, an assessment of these objectives can give a brief

idea about the current strategy of the competitors and how aggressive it will be in future.

1) Vodafone Essar: Vodafone Essar is the Indian subsidiary of Vodafone group; previously it was

Essar who was in the telecom area since 1994.Company’s main objective is to leverage the

global position of Vodafone n India as well and become the top player in terms of market share

as well as revenue in Indian circle.

2) Reliance:ADA Group’s flagship company, Reliance Communications’s objectives include focus on

customer delight and hence business productivity and to offer communication services in all

sphere to all individual customers and business in India.

3) Idea: Idea is one of the few companies that are seen as an innovative, customer focused brand.

Its vision is to expand its mobile operations to all sectors of people according to their individual

needs. It also aims to expand its coverage area nationally as well as internationally to cater to

more consumers.

4) Aircel: Aircel is one of the recent entrants into the telecom sector with the aim of becoming

India’s pioneer in mobile technology and mobile services. With its aggressive marketing

campaign it has already gained a significant amount of market share. And hence company is

aiming to continue its growth in whole of India.

5) Tata Docomo: Docomo is the global leader in Value Added Services. It’s collaboration with Tata

as Tata Docomo was launched in 2009. Despite its late entry into telecom sector Tata Docomo is

aiming at broaden its telephone services to include Mobile Services, Wireless Desktop Phones,

Public Booth Telephony and Wire-line Services.

6) BSNL:BSNL is World's 7th largest Telecommunications Company providing comprehensive range

of telecom services. With its wide coverage area in terms of rural penetration in not only Mobile

Telephony but also in broadband has contributed in achieving top position. BSNL is looking

forward to maintain this position in coming years.

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COMPETITOR ANALYSIS

Presented below is the pictorial representation of Airtel's market share in Indian telecommunication market from January 2009 through April 2010.

January 09

April 2009

32.99%

23.64%

15.93%

14.94%

6.26%

4.01% 1.49%0.75%

Bharti Airtel

Vodafone Essar

BSNL

IDEA

Aircel

Reliance Telecom

MTNL

BPL

29.38%

20.75%21.82%

17.10%

6.57%

2.13%1.48% 0.78%

Bharti Airtel

Vodafone Essar

BSNL

IDEA

Aircel

Reliance Telecom

MTNL

BPL

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July 2009

October 2009

32.25%

24.12%

15.55%

14.88%

7.08%

4.07%1.33%

0.72%

Bharti Airtel

Vodafone Essar

BSNL

IDEA

Aircel

Reliance Telecom

MTNL

Loop Mobile

31.83%

24.13%

15.17%

15.00%

7.80%

4.11%1.25%

0.72%

Bharti Airtel

Vodafone Essar

BSNL

IDEA

Aircel

Reliance Telecom

MTNL

Loop Mobile

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January 2010

April 2010

Source of Figures: www.coai.com

Looking at the above market share data, it is clear that BhartiAirtel has been losing market share over the last one year. This can be attributed to the entry of new payers in the cellular market.

However, it is important to note that while all other players have been losing market share over the period, Airtel’s closest competitor Vodafone Essar has been able to hold on to its market share.

30.86%

23.87%

15.19%

15.08%

8.38%

4.00%1.17% 0.69% 0.64% 0.13%

Bharti Airtel

Vodafone Essar

IDEA

BSNL

Aircel

Reliance Telecom

MTNL

Loop Mobile

Uninor

STel

30.16%

23.96%15.08%

14.95%

8.88%

3.77%1.11%

1.16% 0.67% 0.26%0.00%

Bharti Airtel

Vodafone Essar

IDEA

BSNL

Aircel

Reliance Telecom

MTNL

Uninor

Loop Mobile

Stel

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COMPETITOR STRATEGY

A brief analysis of all major competitor strategy is listed under:

1. Vodafone Essar: Vodafone is a British Telecom giant and took over Hutchison Essar’s operations in India in February 2007. Ever since, Vodafone has concentrated on building its image as a

customer friendly organization as is reflected in its tagline “Happy to help”. With its aggressive telemarketing campaign, Vodafone has been able to maintain its market share over the last one year.

2. BSNL/MTNL: BSNL and MTNL are GoI owned telecom companies. While BSNL is the all India

operator, MTNL operates exclusively in the metros. Indian consumer’s faith in government institutes is BSNL’s biggest advantage. BSNL exploited its political clout to be the first to enter the 3G segment while its competitors waited for an auction. BSNL’s entry in the 3G segment saw an unprecedented increase in its market share from 17.5% to 23.5% in Q1 of 2009.5 However,

the market share dropped back to previous levels in the next quarter. BSNL/MTNL is struggling to change its image of being the service provider for the elderly.

3. Idea: Owned by the Aditya Birla Group, Idea has been operating in the cellular market since the very beginning. However, it has never been close to being the numerouno. Idea’s biggest

strength is its consistency. It has held on to nearly 15% of market share and the number does not seem to change. Idea seems to be concentrating on only holding on to its market share. It has not gone into aggressive marketing mode and concentrates on maintaining its subscriber

base by providing the lowest call rates in the market.

4. Aircel: Aircel, owned majorly by Maxis communications has been the top service provider in South India for very long. Only recently, it has entered into the other circles and is now

functional in 23 circles. Aircel has seen quick growth in the last one year with its market share rising steeply from 6.26% to 8.88%.6 Aircel does not enter into a price war with its existing competitors. It has tried to build a market for itself by providing superior service quality and

value added services.

5. Tata Docomo: Tata DOCOMO is Tata Teleservices Limited's (TTSL) telecom service on the GSM platform-arising out of the Tata Group's strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. Tata DOCOMO which operates in 18 circles has risen to be the

biggest force in the cellular market in the last one year, adding over 60 million customers. Tata

DOCMO has garnered market share through innovation and aggressive telemarketing.

6. Reliance Communication: Reliance Comm. majorly operates in the CDMA market and has recently entered the GSM market. However, it has not been received too eagerly by the consumers. This may be attributed to the fact that the Reliance has not differentiated its

services and has engaged in a price-war with the existing competition. Also, in its marketing campaign there seems to be no differentiation between its CDMA and GSM services.

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Applying 4P Marketing Mix to Airtel

1) Product: The 'products' offered by the Mobile Services unit of Airtel include the following:

Prepaid

Post-paid

Blackberry wireless handheld

Value-added services

Solutions for business enterprises

International facilities through calling cards and prepaid world SIMs

m-commerce

2) Price: Tariff analysis of major players in the market reveals that Airtel is not the cheapest service

provider. They are in an advantageous position due to offers like:

Variable customer based pricing strategies

Flexible pricing mechanism

Over the last few years, Airtel has provided its customers various facilities on the price front:

a) Total Cost Control: Customers can recharge their phones with a denomination of their choice.

b) Easy Recharge: Airtel was the pioneer of e-recharge facility being provided to customers.

c) 24-hour Recharge via ATM: Allows recharge of Airtel Prepaid round-the-clock at nearest ATM.

d) Internet Recharge: Airtel prepaid can be recharged online. However, customer survey shows

that the usability of Airtel’s online recharge portal is poor as compared to that of its

competitors.

e) Roaming: Airtel was the pioneer in reducing roaming tariffs.

3) Place: Airtel's aim is to help customers as quickly and as efficiently as possible at first point of

contact. The customers have the option to email Airtel directly, useful telephone numbers, quick

links to store locations, payment centres and many other facilities. The major point of contact is

the Airtel Relationship Centre where one can get a new Airtel connection, subscribe to any value

added services and get more information on them, pay bills or get a new handset. Airtel

provides its customers with the following facilities:

Extensive presence across 23 circles

Airtel customer care touch points – setting up convenient service centres in market

places helps to increase visibility and improves accessibility to customers.

Distributors like grocery stores/ small outlets etc.

Internationally offers telecom services in 18 countries across Indian subcontinent

and Africa. It includes three countries in Indian subcontinent: India, Sri Lanka,

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Bangladesh and fifteen African countries, namely: Burkina Faso, Chad, Democratic

Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar,

Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.

4) Promotion: Airtel is one of the best known brands in India. Not as many people relate with

Bharti as much as they do with Airtel. That is because its brand Airtel is so successful. Bharti is

now piggybacking on the success of its brand Airtel to create a giant conglomeration. Recently

Bharti unveiled its new logo.

Airtel is known for being the first mobile phone company in the world to outsource everything

except marketing and sales. Airtel’s marketing team’s emphasis lies in relating with the customer and

his/her idols. Airtel has consciously made an effort to make the best in business its brand ambassadors.

This is easily visible in the following cases:

Celebrity endorsers like Shah Rukh Khan, AR Rahman, and Sachin Tendulkar

BhartiAirtel signed a five-year deal with ESPN Star Sports to become the title sponsor

of the Champions League Twenty20 cricket tournament. The tournament itself is

named "Airtel Champions League Twenty20."

On May 9, 2009 Airtel signed a major deal with Manchester United Football Club. As

a result of the deal, Airtel gets the rights to broadcast the matches played by the

team to its customers.

Clearly, all its celebrity endorsers are the best in their field. Sponsoring the Champions League is also a

conscious effort of relating with the champion/best. Also, Manchester United is arguably the world’s

best football team.

Other than projecting the image of being the best in business, Airtel engages in marketing activities

typical of all firms of its size:

Extensive print and video advertising

Tie up with leading handset manufacturers like Nokia, Samsung and HTC to provide

Airtel connections as a part of the package.

Sponsoring socially relevant community programs across country, for example,

organising painting competitions for children, educational facilities for marginalised

children.

Sponsoring popular events like half marathons, concerts and boat races.

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Airtel’s advertisements are always very distinct and present the brand as very energetic, youthful and

essential. Airtel came up with many ad-specific taglines like 'Kabhibhi, Kahinbhi', 'Touch Tomorrow' and

the current tagline 'Express Yourself'. They capture the importance of Airtel in consumers' lives.

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Profits Airtel’sYoY revenue growth from the mobile services business has slowed. Simultaneously, net income

growth has slowed considerable for BhartiAirtel in 2010. Tata DoCoMo, a JV of India’s Tata Teleservices

Ltd and Japan’s wireless operator DoCoMo, has been capturing the new customers in the mobile

services space. Tata DoCoMo’s plan to charge per second for calls, unlike other operators who charge

per minute, has enabled it to garner more subscribers1

Figure: Total Revenues for 2009-10 (in Rs. '000)

Slower net income growth in 2010:

Airtel’s net income growth has slowed in 2010 particularly in the mobile services business. In the non

metro circles, the subscription growth average2 for BhartiAirtel has been slower than for competitors.

For example, in A circle, except in Andhra Pradesh, BhartiAirtel’s revenue growth has been lesser than

the industry average. This may be a serious threat for BhartiAirtel.

Operating income has, in fact, declined by 4% in 2010 as compared to a 36% rise in 2009.In 2009-2010,

BhartiAirtel posted net profits of Rs. 93 Billion.

270,249,348

369,615,517 396,150,229

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

450,000,000

1 2 3

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Value Chain Analysis

The traditional mobile industry value chain basically involved the mobile operator, service provider,

device manufacturer and the customer. However the mobile services industry is rapidly evolving with

value added services, data services etc. gaining significance. These are a very profitable revenue stream

for the service provider.

For example in the value added services segment, the network operator keeps about 60% of revenue,

the technology/software developer retains about 25%, while the content provider gets about 20% of the

revenue from value added services (Source: IMRB Research).

With M-Commerce contents becoming increasingly important in the value chain, it is seen that the

operator share in the value chain has been declining. Airtel has been tying up with entertainment

providers, FMCGs, insurance companies to maintain a share in the value chain. From a strategy

perspective, this should be one of the focus areas for Airtel.

Source:IMRB, 2006

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Differential Advantages The following matrix can be used to analyze the industry for differential advantages for each of the

companies in the wireless cellular services market.

The urban markets, typically in the mobile cellular divisions, have saturated causing players to move into

the digital data transfer/telemedia sectors. Using the existing infrastructure for Airtel-Mobile services,

the DTH and Enterprise data divisions SBU’s stand to benefit from it.

Maintain Specialty A high relative cost (incurred) and high differentiation area for the company. Typically requires the

company to have a specialty (differentiation product/service) to serve premium products priced at

premium levels. Considering the market structure of the telecomm sector, there are very few

products/services which can be termed as premium products for the companies. While there are several

player in the market, including the new entrants, Bharti-Airtel, Rcom and BSNL are the only players to

gain a differential advantage on the account of existing infrastructural capability.

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Hope for Market Growth

By New Products/Services

Represents - low product/services differentiated market at higher expected costs to company.

Commodities type of product with high cost and expected future revenues. Typically include services like

Direct to Home operations. The major players in the markets and the product services they have on

offer are:

The market for DTH is expected to grow from 18 million currently to 35 million households by 2013.

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By New Markets

Both Reliance and Bharti-Airtel are investing heavily in the rural markets. With a Pan-India network

presence Airtel is a clear leader as far as the rural subscriber base is concerned. Others like BSNL and

Vodafone are a close third and fourth. In-addition to providing voice/text services, all major players are

looking to cash in on the revenues from Value Added Services (VAS), expecting it to account for 15-20%

of the ARPU.

Maintain Cost Advantage The entry of new players in the telecom space has led to increased tariff wars and reduced ARPU’s. This

can be observed from the fact that Tata DoCoMo and TTSL are both loss making entities at the net-level.

An increase in operations may bring in new subscribers, however to sustain the players will need deep

pockets. It can be observed that RCom and Bharti are able to offer lower tariffs largely due to economies

attained over the 10-12 years on the account of several factors.

In recent times consolidation has been used by larger player to absorb the domestic operations on the

newer entrants. Examples abound in BPL, Spice Communications and Aircel which were sold to

domestic/international players.

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Outstanding Success Typically comprised by high differentiation and low cost to company. Implies the freedom to compete at

compete at any prices. Not relevant to this sector.

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Market Segmentation

Using a combination of Behavioral Segmentation and Demographic Segmentation, Airtel can divide its

customers into the following segments. During segmenting customers, emphasis has been laid on

customer need and benefits sought:

Segmentation Basis Segments included

Benefits sought (in Rs./month) High consumption of Value-added-services (VAS) (>Rs.100/month)

Medium consumption of VAS (Rs. 25-100/month)

Low consumption of VAS(<Rs.25/month)

Usage rate (in terms of minutes/month) High level of usage (>1500 min/month)

Medium level of usage (500-1500 min/month)

Low level of usage (<500 min/month)

Usage rate (in terms of no. of calls made/day) High (>25 calls/day)

Medium(10-25 calls/day)

Low(<10 calls/day) Type of usage Corporate customer

Individual customer

User status Non-users

First-time users

Ex-users

Potential users

Existing users

Loyalty status Extremely loyal customers

Not-so-loyal customers

Disloyal customers

Demographics (based on age) Teen and youth (13-30yrs)

Matured

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Targeting

Evaluation of Market segments Of all the 21 market segments identified in the market segmentation, 18 are evaluated based on current

segment sales, growth rates and profitability. Evaluation has been done on a 3 point scale wherein 3 is

the highest and 1 is the lowest.

The segmentation based on consumer-loyalty is used to develop better marketing strategies. These

segments cannot be done justice with based on the three criteria listed above. Hence, they have been

excluded from the ratings.

Evaluation of market segments is an important step towards recognizing the target market. Segments

rating highly on the chosen criteria will be chosen as target segments. The highest preference among

the segments will be given to the profitability.

Segment Sales Growth Rates Profitability

High consumption of Value-added-services (VAS) (>Rs.100/month)

2 2 3

Medium consumption of VAS (Rs. 25-100/month)

3 3 2

Low consumption of VAS (<Rs.25/month)

2 3 1

High level of usage (>1500 min/month)

2 3 3

Medium level of usage (500-1500 min/month)

3 3 2

Low level of usage (<500 min/month)

2 2 1

High (>25 calls/day) 2 3 3

Medium(10-25 calls/day)

3 2 1

Low(<10 calls/day) 1 2 1

Corporate customer 3 2 3

Individual customer 3 3 1

Non-users NA NA NA

First-time users 2 3 3

Ex-users NA NA NA

Potential users NA NA NA

Existing users 3 1 2

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Teen and youth (13-30yrs)

3 3 3

Matured 2 1 2

Selecting a targeting strategy The targeting strategy can be chosen based on five parameters:

1. Company resources

2. Product variability

3. Product life cycle

4. Market variability

5. Competitor’s strategy

All these parameters are now analyzed individually and an appropriate targeting strategy is arrived at.

Bharti is one of the largest companies of India and has no dearth of resources. Also, looking at its large

consumer base, Bharti should not use Concentrated Marketing.

With the introduction of value-added-services, mobile services can no longer be classified as uniform

services. There is a large degree of variability that can be introduced in mobile services. Thus, it makes

sense to use differentiated marketing.

Airtel has been rated as the most highly recognized brand of India for the past few years.Although the

mobile phone services market is growing at a rapid pace, as a brand, Airtel is in its mature phase. In the

mature phase, its best to go for differentiated marketing.

The market variability is high because of the difference in amounts and types of usage the mobile phone

is put to. Thus, undifferentiated marketing cannot be done. It is best to go for differentiated marketing.

Nearly all mobile phone service providers (with the exception of Virgin) are still going for

undifferentiated marketing. This is a major opportunity for Airtel to start differentiated marketing and

capture specific market segments.

Looking at the above factors, it is clear that Airtel should change its current target marketing strategy of

mass marketing and start Differentiated Marketing.

The Target Market Segments Based on the analysis of targeting strategy to be chosen and evaluation of various market segments,

Airtel should target the following market segments:

1. High and medium VAS consumers

2. High and medium usage rate consumers (based on min/month)

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3. High usage rate consumers (based on no. of calls/day)

4. Corporate users

5. First-time users and maintaining current users

6. Teen and youth

Some of these target market segments are likely to be overlapping since they were segmented using

various different criteria. However, the overlap does not change the importance of any of these target

segments.

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Positioning

Through various phases in time, Airtel has repositioned itself in the minds of the consumers. Airtel’s

“Live Every Moment”, “Touch Tomorrow” and “Express Yourself” have been the best recognized taglines

of their times.

We can also try and categorize Airtel on a positioning-map vis-a-vis its competitors. The following

positioning map uses three criteria to position these brands – Quality of service, Customer Satisfaction

and Value-service (inexpensive service).

Thus, it can be seen that Airtel is perceived by the customers as a brand which concentrates on quality

of service provided leading to customer satisfaction.

Over the years, with the entry of new players in the market, a major price war has begun. Unlike

vodafone which has refrained from entering the price war, Airtel, in spite of being the market leader has

gotten sucked into it. This has resulted in a dilution of the Airtel brand. Also, Airtel lags far behind

Vodafone and Docomo in its online platforms and services, which has resulted in a decrease in customer

perception about Airtel’s services.

Value-service Quality of service

Airtel

R. Comm

Idea

DOCOMO

BSNL

Vodafone

Airtel

Customer

Satisfaction

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Based on the customer targeting done, Airtel needs to concentrate more on the quality of services it

provides to increase profitability. Instead of fighting a price war with established players, Airtel must

utilize its resources and reposition itself as a high quality brand with attractive options for corporate

users and youth. Given the decreasing Average Revenue per User (ARPU), Airtel should also come out

with useful schemes to incentivize high usage.

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CONSUMER BEHAVIOUR

Below is the basic framework of Consumer Behavior process which includes 3 stages of consumer

behavior segregated into the environment, buyer’s black box and buyer’s response. The environment

analysis like 4P’s has been presented before therefore we will analyze the Buyers decision making

process.

Figure: Model of Consumer Behavior

Buyer’s Black Box

To understand the buyers decision making process following data was collected from 105 respondents in Jamshedpur area.

1) Monthly Expenditure on Mobile: Below is the data that we got from the respondents about

their expenditure on mobile for a month. As we can see from the data given almost half of

the consumers falls into category who spends grater than 500 rupees but less than 1000

rupees

The Environment

1) Marketing Stimuli : 4P's - Product, Price, Place, Promotion

2) Other: Economic, Social, Technological, Cultural

Buyer's Black Box

1) Buyer's characteristics

2) Buyer's decision Process

Buyer's Response

1) Buying Attitude

2) Purchase behaviour

3) Brand and Company relationship bhaviour

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Amount (in Rs) No of

Respondents Percentage

Less than Rs 100 4 3.81

Between 100 to 500 22 20.95

Between 500 to 1000 52 49.52

Greater than 1000 27 25.71

2) Use of internet or any other method before taking a new connection:

Information Search No of Respondents Percentage

Internet 32 30.48

Friends/Groups 55 52.38

Newspaper/Magazine 3 2.86

None 15 14.29

3.81

20.95

49.52

25.71

Montly Expenditure

1

2

3

4

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3) Awareness of other competitors in market: After collecting data , it is known that most of

the consumers are aware of the competitors in the market like Vodafone, Tata Docomo,

Uninor, Idea, Reliance.

4) Buying of multiple mobile SIM’s:

Number of SIM's No of Respondents Percentage

1 89 84.76

2 16 15.24

3 0 0.00

30.48

52.38

2.86 14.29

Information Search

1

2

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5) Post purchase behaviour- rating of Airtel services:

Rank

Features 1(Best) 2(Good) 3(Average) 4(Poor) 5(Worst)

Coverage 21 24 35 22 3

Call Charges 14 28 38 23 2

Schemes 11 13 39 35 7

Customer Care 39 37 28 1 0

Percentage 20.24 24.29 33.33 19.29 2.86

84.76

15.24

0 0

Number of SIM's

1

2

3

4

20.24

24.29

33.33

19.29

2.86

Rank Distribution %

1

2

3

4

5

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We can see from the Consumer Research that most of the respondents areusing Airtel but they are just

using it because it is available in the market at theaffordable and comparative prices. As we can see

from the result above the buying behavior of the customer is dependent on the involvement and

difference between brands which is similar as given in figure below.

Involvement of Consumer

High Involvement Low Involvement

Difference between brands Significant Complex Variety Seeking

Few Dissonance

reducing Habitual buying

Figure: Four types of buying behaviour

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ASSUMPTION IN PLANNING PROCESS

Market potential:

Planning and management of mobile services requires an understanding of the factors that are responsible for the evolution of the market. The most important factors for the purpose of capacity planning are market potential, timing and speed of adoption.

BhartiAirtel was founded in 1995 as a public limited company4. The telecom sector was

predominantly under public sector control at this time. India ranked 14th in the world in 1995

in terms of number of main telephone lines1. From the point of view of telecom potential in

India, this was a momentous era due to following reasons:

1. Policy environment started changing from 1994 onwards. This provided impetus for development of telecom sector:

The industry transited from monopoly to duopoly, as the Government mandated two fixed and two mobile operators in each circle in 1995

Independent regulator, TRAI, established in 1997

NTP in 1999 stimulated migration from high-cost fixed licence fee to a low-cost revenue sharing regime .

2. National telecom policy was announced in 1994. Steps were taken to allow private players in telecom domain1.

3. Mobile phone manufacturing firms (Nokia) started its operations in 19953. Infact the first mobile phone call was made in India in 1995 on a Nokia phone over Nokia network.

4. The manufacturing sector opened in 1984 .

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This was the most crucial time for players who wanted to make a niche in telecom sector in

India. The effects of adoption of liberalization policy were starting to show. New technologies

were being adopted by India, private participation was increasing and being encouraged by the

conducive policies of government. During this time when Airtel just started, cellular mobile

telephones subscribers in India were around 77 thousand in 1995. The proportion

of cellular subscribers total number of telephone subscribers (basic plus cellular) was 0.6

percent in 1995. In 2002 this figure was around 14.6 and has tremendously increased since1.

Mobile density was close to 0.003 in 1995.

In fact, the overall development of telecom industry, in terms of overall size of sector and

advancement of technologies used, started in the late 90's in India.

Forecast Assumptions:

The most important criteria for establishing business in a capital intensive sector like telecom is

correct analysis of market demand and potential. Also it is important to develop understanding

of future trends, be able to develop reasonable estimates of patterns and rates of adoption etc.

For this it is important to know about the theoretical models of diffusion of innovations in the

market.

Successful innovations tend to follow a sigmoid or S-shaped curve. During the initial stages only

a few members of the society adopt the innovation. These are the people who are highly

involved in buying process and like to experiment and are the first adopters of new

technologies and innovations. Gradually, owing to development of better technologies and

dissemination of information many people consumethe innovation and the diffusion process

further unfolds. Finally, during the maturing phase, the rate of diffusion goes down and

diffusion curve reaches a saturation level.

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Figure: Innovation Life Cycle

Hence, it can be hypothesized that mobile density growth can be modeled on a sigmoid or S-

curve. Logistic and Gompertz sigmoid curves are the most commonly used ones. Hence,

forecasting and modeling may be done using them.

Figure: Projections of Mobile Density in India

Using these growth and market potential may be forecasted and analysed. The assumptions

used in the analysis are:

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a) For any country the saturation level will depend on whether it is an early or late adopter of

the technology.

b) Early adopters are usually developed countries and they show a lesser reliance on mobiles

due to high switching costs.

c) Late adopters are mostly developing countries and they show a lesser reliance on fixed line

phones due to high infrastructure costs.

d) Various mathematical models are used by companies to forecast demand and growth

patterns. The studies done on Indian mobile sector using different models confirm the

theoretical pattern of growth.

Other Assumptions:

a) The marketing and business strategies must be aligned over the short, intermediate and long

planning horizons.

b) The strategy must reflect the company's mission and must be used to achieve the goals set

by management.

c) This requires extensive research and analysis by the company as described above.

d) The company must obtain inputs primarily on the following:

1) Competitive threats: no major threats when Airtel started operations. In fact it was one of the earliest private players and had considerable first-mover's advantage. Currently, its main competitors are Idea, Vodafone, BSNL and now in many areas Tata Docomo and Reliance GSM.

2) Profitable opportunities: immense scope for profit when it started as entire untapped market was waiting to be catered to. With government policy impetus, profitability was definite. Currently, intense price competition in the market combined with growing mobile penetration offer a unique profitabile scenario. Also, with its Zain acquisition, Airtel has no dearth of profitable opportunities with 15 African nations' markets in its pockets. Its sales increased by 17% while EBITDA rose 3% in the first quarter of 20107.

3) Areas of market growth, maturity and decline: commencement of Airtel operations along with many other incidents was responsible for developing Indian telecom market. India's market is still growing and will continue to do so for another 10 years at least before it reaches maturity phase. Airtel still occupies a mjor chunk of Indian market (~ 30%). When it started operations, the

42 | P a g e

metros were the main and focal areas of growth. Currently, the focus is on maintaining quality of service in cities while expanding base in rural areas.

Figure: Customer Needs Analysis

4) Latent and explicit customer needs:telecom industry particularly cellular operations and services have long transcended the basic utility of communication. Airtel has invested heavily in infrastructure and marketing campaigns to promise and deliver quality communication facilities. Of late mobile operators are increasingly venturing into internet and other wireless services along with a variety of value added services. As the average customer is likely to be quite removed from the intricacies of mobile technology, the onus is on the operator to identify and provide new services. Mobile banking especially microfinance in rural areas is an example of such innovation.

5) Ideas for distributing and pricing: even though Airtel is competitively priced, intense price wars and more number of players in the market led to a loss of 32% in its profit. Its net income shrank to 16.8 billion rupees in the first quarter that ended on June 30, 2010 form 24.7 billion rupees a year ago7. Indian market already boasts of having the lowest mobile tariffs in the world according to International Telecom Union. Recently, Airtel aggressively revamped its pricing and marketing strategies to become more competitive. It was the first to offer lifetime prepaid connections. It also offered differential pricing based on time of call. It also keeps launching a lot of full talk time and various discounted call-rate and messaging schemes from time to time. Recently, it also reduced the call rates on national roaming especially on incoming calls. Besides, special schemes and discounts offered vary between circles based on needs of customers in that area.

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Airtel has maintained a dedicated and strong distribution channel by way of distributors,

wholesalers, and franchisees and company owned Relationship Centers which are 'one-stop

solutions' shops'. The distribution channels under the company include Direct Selling

Associates, Corporate Selling Associates, Franchisee Selling Associates and Airtel Relationship

Centers. Airtel also offers sales based remuneration to its distributors and franchisees.

Example: for prepaid connections in all circles distributors and franchisees are paid 15-20% of

the value of card sold.

Figure: Cellular Operator Distribution Channel

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THE PRODUCT STRATEGY

Airtel’s mobile (GSM/CDMA) SBU is a cash cow for Bharti. Airtel’s mobile SBU presently serves more

than 130 million customers across India. It is an established product category with high market

penetration and high profitability. Airtel’s profits in this category have been growing yoy. Though Airtel

is the overall market leader in India, it is a challenge to maintain its market share in view of the

consistently evolving technology and high degree of competition.

BhartiAirtel’s product strategy revolves around maintaining its “Star” status in the market.

The Product Line:

BhartiAirtel’s product line has changed over the years. In the 1990s, the focus was on providing the

mobile connection while now the focus has shifted to enhancing the customer’s experience on his

mobile phone. This explains Airtel’s focus on value added services, additional facilities and M-

Commerce.

BhartiAirtel’s product focus is three fold within the mobile services space with a view to provide a

differentiated product to its customers:

Provide high quality cellular service to its customers and expand its network across the country.

Market Growth

STAR QUESTION

MARK

CASH COW DOG

Market Share Market Share Market Share

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Providing additional facilities to its valued customers (International calling, cheaper roaming

rates, STD calling, Freedom Plan).

Provide innovative services and features to enhance customer experience on their mobile

phones (Value Added Services).

With a high level of market penetration in the urban areas, Airtel is looking to expand its footprint in

rural India with a large untapped market. Features such as M-Commerce and plans such as Freedom

plan and advantage plan are expected to help reach this market segment.

Growth Strategy:

Existing Market

New Market

Product Development: The Value added services, blackberry services, M-Commerce are a

part of Airtel’s product development strategy.

Market Development:Airtel is creating new markets via its inorganic growth strategy. E.g.Zain

in Africa.

Market Penetration: Airtel is expanding its rural footprint and targets greater market

penetration in rural India where more than 60% of the potential is untapped.

Market Penetartion

Product Development

Market Development

Diversification

Existing Product New Product

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Strategy – Marketing Communications Programmes

Integrated Marketing Communications Programs

Integrated marketing communications (IMC) is a mix bag of communication strategies used to convey a

holistic and consistent image of the company. Airtel has used several IMC programs to including both

offline and online marketing channels to identify customer insights and develop the right strategy to

forge a strong brand-customer relationship.

The IMC programs used by the company have been:

Advertisements: A large chunk of the budget used for the promotion of the Airtel brand especially

in the mobile telephony has been used creating and distribution of ads. In-fact the theme of each of

these has also changed.

Value Communicated: Their promotion and advertising strategy has evolved over time as:

Figure: Value Communication over the years

1995-98

Positioning in premium catageory, aimed at targeting the elite.

Projected as an aspirational and lifestyle brand.

Change - New telecom policy of 1999 replacing

license fee with revenue sharing

scheme.

"The power to keep in touch"

"Airtel celebrates the spirit of leadership"

"The first choice of the corporate leaders"

1999-2001

Expanding to new segments, establishing the brand as a quality

of life product.

Associated with leadership,performance

and dynamism.

"Touch tomorrow"

Change from regional to pan-India outlook.

2001-02

Added emotional appeal to the brand.

Famous A.R.Rahman Airtel musical

Signature tune to increase brand

recallability

"Live every moment"

Appeal to the masses.

2003-10

Clear focus on emotions.

Several youth icons hired as brand ambassadors

Intent on giving brand a Human touch.

"Express Yourself"

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Product to Services Branding: Shift in the strategy from product based to Services based branding.

Though product innovations continue as hello tunes, easy recharges, blackberry option.

Customer Relationship Strategy: First cellular service provider to start customer call centres (Airtel

Connects) where customers could pay their bills, apply for new connections and touch and feel new

handset models. Modelled as one-stop shop to all customer solutions and queries.

Umbrella Marketing: Use of umbrella marketing by Bharti-Airtel to promote several of the its

products namely Airtel broadband, GPRS, DTH under one single Brand name.

Co-Branding: Airtel has done several ties ups with online community sites (Hungama.com), public-

private (Incredible India-Taj-Hotels-Airtel-Cox & Kings), media channels (MTV), Credit cards (ICICI

Bank - Airtel Silver Credit Card) etc. to further the visibility of its brands.

Pricing Strategy

Some common strategies used by Airtel over the years, at different stages in its growth can be classified

under:

Penetration Pricing: Done by Airtel in response to the aggressively lower pricing-tariff strategies

adopted by new entrants like DoCoMo and Reliance. The price wars have escalated in the recent

times. This has however also led to buy-outs of several new entrants on the account of falling

APRU’s.

Price Skimming: Adopted by Airtel during the initial years when competition was limited and scope

for expansion limited. The brand was projected to the elite and corporate as a symbol of leadership

and excellence. The strategy has become irrelevant in recent times on the account of increased

number of competitors in the market.

Psychological Pricing: Most of the value recharge at smaller denominations i.eRs. 10/-, 30/-, 60/- etc.

and tariff and broadband plans at Rs 99/-, 999/- etc. are aimed at getting emotional rather than

rational appeals.

Product Line Pricing: Pricing to reflect benefits of the individual components of the plan. Most top-

ups in like SMS packs, Monthly GPRS, Airtel Live etc. fall under this category.

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Promotional Pricing: Used at several occasions to promote a new tariff plan, Value added service,

Roaming charges etc.

Channel Strategy

Channel Strategy comes as of extreme importance due to the high services oriented nature of the

telecomm industry. When each company in the telecomm sector is selling similar products and virtually

the same pricing and at same cost incurred, the only sustainable competitive advantage can come from

the strategy/means used to sell. A definitive advantage to this can come by selecting the appropriate

mix of distribution channels – direct sales force, agents, retailers, Internet etc.

Further plans of expansion in semi-urban India, and mushrooming number of service providers makes

the distribution networks all the more important. Some of the initiatives taken by Airtel in this regard

include:

Customer Relationship Centres

Facility for Mobile banking (using m-cheques)

Recharge using pre-paid and Magic coupons

Airtel Live using Internet

In addition to these Airtel is rapidly looking to expand in Rural India and in this regard is energizing its sales force network and distribution centres (at local Kiryana’s) to better understand the customer base.

Several initiatives in this regards i.e. real time pricing of farmer produces in the markets (getting quotes), mobile advice on better agriculture techniques etc. are helping win networks and further consumer bases.

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Research Strategy

The typical marketing research methodology adopted by Airtel and others in the telecommunications

industry includes:

Figure: Research strategy matrix

•Sale at retail outlets

•Customer relationship centers

•Sales and ditribution reports

•Competitors annual reports

•Hypothesis testing •Density

•Affluence

•Age

Population Purpose

Procedure Publications

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MONITORING & CONTIGENCY PLANS

A marketing strategy should always have a contingency plan for situations when they could go against

the planned strategies. Following are the points that should be taken in consideration while thinking of

making a contingency plan.

Problem 1: If for any reasons the new launches done by Airtel i.e. the new mobile offers and packages

are not successful or able to compete with the other competitor’s strategies.

This problem can be solved by adopting the promotional or free trial offer marketing strategy

where the new offers can be provided to selected customers to stimulate brand and product

awareness, and ultimately increase sales demand through word-of-mouth promotion

This will not only create the awareness of the new offers introduced by Airtel in the market but

also it will help to analyze or estimate the market perception of any type of new addition.

Problem 2: If we consider the growth in market share of the company, then there is a possibility of

entering of new firms and eating up market share.

For stopping of new entries into this segment the only thing is to increase the entry barriers but

since in this market the competitors are so many that there is always a good chance of

emergence of new competitors. Therefore, this problem can be solved by product

differentiation both in vertical as well as horizontal direction.

Problem 3: Expansion in rural areas where the hold of Airtel is not much as compared to other

competitors, refrain from adopting Airtel as there mobile channel partner

For tackling this problem , Airtel can either go for pricing strategy where the prices can be made

cheaper vis-à-vis other competitors

Or the company can focus on promotion of its service in rural market in an aggressive manner.

Moreover, there is also a possibility of adopting new offers specially catering to rural sector and

scrapping off some features which are not useful to rural market

Problem 4: When we consider of adopting new technologies to improve the service offered by Airtel

which is in tune with the objective of this marketing strategy, there is good chance that the competitors

like Vodafone, Idea came up with new technology like 3G much earlier than Airtel

Carefully monitor major competitors pricing and promotional activities and entry into the 3G

market, and prepare recommendations and potential adjustments to our marketing mix to

ensure our leading market position and healthy sales are maintained in the long-run.

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Recommended Marketing Strategies for Airtel

With the entry of multiple new players in the sector and an ever decreasing ARPU, Airtel’s marketing

team needs to innovate constantly. In the foreseeable future, the marketing team must emphasize on

the following aspects:

Refrain from using pricing as a marketing tactic. With the ongoing price war, the price levels

have become unsustainable anyways. Any further aggressive pricing strategies on Airtel’s part

will only do further damage.

Concentrate on the untapped rural market segment. Airtel should aggressively increase its

network in the rural sector and market itself before other players enter the market in a big way.

The conservative nature of the typical rural Indian consumer must be kept in mind. The first

mover is bound to get an advantage.

Build strong corporate contacts and offer more benefits for corporate users. This is going to be the biggest cash generating segment and Airtel must consolidate its position here. This can be achieved by entering into tie-ups with various companies.

Providing more useful value added services (VAS). VAS has emerged as the most important

source of revenue for mobile operators. Airtel needs to further its efforts of providing users the

best possible VAS.

Provide special incentives for Airtel-Airtel calls. This is a proven way of expanding customer base

and has been exploited by Reliance Communication and Tata.

Airtel must differentiate services for consumers with high usage rates by providing them special

band-width such that they do not face increasing problems like call-drops and network-jams.

This can result in a major source of revenue for Airtel and will do wonders for customer

satisfaction and customer perception of brand quality.

Airtel must ensure that it does not lose its current users to competitors. This can be ensured by

increasing quality of service provided. Decreasing prices further is not going to help retention of

customers.

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Airtel must position itself as a youth brand. Most new consumers getting added to the mobile

services market are young teenagers who should perceive Airtel as their first choice. Also, given

India’s age based demographics, maintaining a high youth penetration is extremely important.

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REFERENCES

1. Sites from where data is collected:

(a) Telecom Regulatory Authority of India : http://trai.gov.in

(b) Bharti : http://www.bharti.com

(c) Airtel : http://www.airtel.in

(d) Communications in India: http://en.wikipedia.org/wiki/communications_in_india

(e) International Telecommunications Union : http://www.itu.int/ITU- D/ict/statistics/ict/index.html

(f) Bharat Sanchar Nigam Limited: http://www.bsnl.co.in

(g) The Economic Times, “Ericsson wins Airtel's $1.3-billion outsourcing project”, April 1, 2010 :

http://economictimes.indiatimes.com/news/news-by-industry/telecom/Ericsson-wins- Airtels-13-billion- outsourcing-project/articleshow/5748843.cms

(h) Ernst & Young, India 2012 – Telecom Growth Continues : https://webforms.ey.com/Content/vwWFPreview/GL/en/India_2012:_Telecom_growth_co

ntinues?OpenDocument

(i) Nokia : http://www.nokia.co.in/about-nokia/company

(j) Ketaki Gokhale, “Bharti Airtel First-Quarter Profit Falls 32% as Price Cuts Erode Margins”, Bloomberg, August 11,2010 http://www.bloomberg.com/news/2010-08-11/bharti-airtel-first-quarter-profit-falls-32-as-price-cuts-erode-margins.html

(k) Amit Ranjan Rai & Aarti Menon Carroll, “Airtel vs Hutch: And the winner is...” , Rediff

Business, Jan 04,2006 http://www.rediff.com/money/2006/jan/04spec.htm

(l) CBS Interactive Business Network, http://www.bnet.com/cp/developing-a-channel-strategy/168339

(m) Pricing Strategy, http://www.marketingteacher.com/lesson-store/lesson-pricing.html

(n) Integrated Marketing Communications, http://www.multimediamarketing.com/mkc/marketingcommunications/

2. Books:

(a) Kotler, Armstrong, Agnihotri & Haque; Principles of Marketing; 13th ed; Prentice Hall, ISBN - 978-0131469181

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(b) Kotler, Marketing Insights from A-Z, John Wiley & Sons, Inc , ISBN 0-471-26867-4

3. Reports and Reference :

(a) The Hindu - Survey of Indian Industries – 2010

(b) Indian Brand Equity Foundation – Telecommunications Report, April 2010

(c) Manas Bhattacharya (IES), Committee on India: Vision 2020 – Telecom Sector in India: Vision 2020

(d) Sanjay Singh, The diffusion of mobile phones in India, Dr. Sanjay Singh, 2003