group2 marketing project idea

IDEA

CEL

LULA

R

2009

AN

NU

AL

MA

RK

ETIN

G P

LAN

Abhishek Chandra (PGP13_002)

Biswa Bhusan (PGP13_012)

Premraj N (PGP13_032)

Sabith Salim (PGP13_042)

Subhash Pankaj (PGP13_052)

Vishnu Suresh (PGP13_062)

ContentsEXECUTIVE SUMMARY : 3

ABOUT ADITYA BIRLA GROUP 4

HISTORY4

RECENT HISTORY:………………………………………………………………………………………………………………………………………..4

IDEA CELLULAR : 5

MISSION 7

MAJOR PRODUCTS AND SERVICES 7

OVERVIEW OF TELECOM INDUSTRY8

TOP COMPETITIORS 9

ADVERTISING AND PROMOTION 12

SITUATION ANALYSIS 14

SWOT ANALYSIS:………………………………………………………………………………………………………………………………………14

MARKETING OBJECTIVES 18

MARKETING STRATEGIES 18

SEGMENTATION SCHEME:…………………………………………………………………………………………………………………………18

TARGETING :……………………………………………………………………………………………………………………………………………..19

POSITIONING :…………………………………………………………………………………………………………………………………………..19

MARKETING ACTION PROGRAMS ..20

MARKETING RESEARCH………………………..…………………………………………….……………………………………………..……………23

FINANCIAL PROJECTION………………………………………..………………………………………..………………..….………….……………..27

2 Indian Institute of Management Kozhikode

MARKETING BUDGET………………………………………………………..…………………………………………….………...…………………..28

ANNEXURE…………………………………………………..……………………………………………………….…………………………………..31

Executive SummaryIDEA Cellular is a part of the US $ 28 billion Aditya Birla Group, India’s first truly multinational

corporation. Customer Service and Innovation are the drivers of this Cellular Brand. A frontrunner in

introducing revolutionary tariff plans; IDEA Cellular has the distinction of offering the most customer

friendly and competitive Pre Paid offerings, for the first time in India in an increasingly segmented

market. IDEA has seen phenomenal growth since its inception, the company's footprint Idea is to first

achieve critical mass, then drill deep instead of spreading thin, however, does not increasing geographic

footprint only, it also drills deep and successfully attempts to provide excellent network coverage in all

its circles of operations. Idea has received international recognition for its path-breaking innovations

when it won the GSM Association Award for 'Best Billing and Customer Care Solution' for 2 consecutive

years.

Starting with a brief introduction of Aditya Birla Group and its recent history, we have in our plan, talked

about IDEA Cellular and its history. Then we carry out the detailed analysis based on market

demographics, products and services offered, Indian Telecom industry, the competition faced,

advertising and promotion etc. The different types of taglines, target segments were analyzed.

SWOT analysis, Porters 5 force analysis, positioning of Idea cellular on BCG matrix was done. In

marketing strategies we did the STP analysis of Idea cellular, found the Ansoffs matrix for it and also

talked about the 4 Ps of marketing.

A market research was conducted to know about the consumer preferences - what they looked in a

service provider, whether they preferred prepaid or postpaid .The results of the survey were

studied .The profit of Idea for the current year has been forecasted so has the advertising split up

needed to capture more market shares.


About Aditya Birla group

History

The Birla Group of companies was founded by Mr. Seth Shiv Narayan Birla in 1857. The origins of Aditya Birla Group can be traced back to the 19th century when Seth Shiv Narayan Birla started trading in cotton in the town of Pilani, Rajasthan. In the early part of the 20th century, Group's founding father, Ghanshyamdas Birla, expanded the group and set up industries in critical sectors such as textiles and fibre, aluminium, cement and chemicals. In 1969, Aditya Birla, the then Chairman of the Group, put the group on the global map. He set up 19 companies outside India, in Thailand, Malaysia, Indonesia, the Philippines and Egypt. Under Aditya Birla's leadership, the group attained new heights and it became world's largest producer of viscose staple fibre, the largest refiner of palm oil, the third largest producer of insulators and the sixth largest producer of carbon black. After Aditya Birla's demise his son Kumar Mangalam Birla took over the charge of the group and under his leadership the group has sustained the

numero uno position in the sectors in which it operates.

Recent History


Aditya Birla Group (Aditya Birla) is an industrial conglomerate engaged in manufacturing and supplying of aluminum and copper products, cement, carbon black, textiles, fertilizers, chemicals, insulators, fatty alcohol and fatty acids. The company also engages in software, business process outsourcing (BPO), finance and insurance, telecom and retail businesses. Aditya Birla primarily operates in Asia, the Americas and Europe. It is headquartered in Mumbai, India, and employs 130,000 people.

Idea Cellular

Changed its name to Birla AT&T Communications Limited followed by joint venture between Grasim Industries and AT&T Corporation in the year 1996. After one year, in 1997, it commenced its operations in the Gujarat and Maharashtra. Migrated to revenues share license fee regime under New Telecommunications Policy ('NTP') Circles in the year 1999. During the year 2000, the company merged with Tata Cellular Limited, thereby acquired original license for the Andhra Pradesh Circle. IDEA acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chhattisgarh) Circle in the year 2001, and in the same year changed its name from Birla AT&T Communications Limited to Birla Tata AT&T Limited. They obtained license for providing GSM-based services in the Delhi Circle. Again in year later, in 2002, the company altered its name to Idea Cellular Limited and launched 'Idea' brand name and commenced its commercial operations in Delhi Circle. During the year, the company reached one million subscriber figures and consecutively in the year 2003, reached two million


IDEA Cellular Limited, a part of the Aditya Birla Group and an India's leading Global System for Mobile communication (GSM) Mobile Services operator was began its journey in the year 1995 as in the name of Birla Communications Limited for providing GSM-based services in the Gujarat and Maharashtra Circles. Later the company has licenses to operate in all 22 Service Areas. Presently, operations exist in 14 Service Areas covering Delhi, Maharashtra, Goa, Gujarat, Bihar, Tamil Nadu, Orissa, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh, UP-East, Rajasthan and Kerala. With a customer base of over 24 million, IDEA Cellular's footprint currently covers approximately 60% of India's telecom population.

subscriber marks.

During the year 2004, the company acquired Escotel Mobile Communications Limited (subsequently renamed as Idea Mobile Communications Limited), reached the four million subscriber mark and became the first operator in India to commercially launched EDGE services in 2005. Idea reached the five million subscriber mark in the year 2005 and also won an Award for the 'Bill Flash' service at GSM Association Awards in Barcelona, Spain. The Company became a part of the Aditya Birla Group in the year 2006 after TATA Group transferred its entire shareholding in the Company to the Aditya Birla Group. In the same year 2006, IDEA acquired Escorts Telecommunications Limited (subsequently renamed as Idea Telecommunications Limited). The Company reached the 10 million subscriber mark and also launched New Circles in order to obtain more and more customers. IDEA extended its reach to 500 towns in Andhra Pradesh in August of the year 2006. Also, it received Letter of Intent from the DoT for a new UAS License for both Mumbai and Bihar Circles. ABNL, the parent of Aditya Birla Telecom Limited, agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for the consideration of Rs. 100 million. In 2007, the company won an award for the 'CARE' service in the 'Best Billing or Customer Care Solution' at the GSM Association Awards in Barcelona, Spain.

The Initial Public Offering aggregated to Rs. 28,187 million and the company got listed on both Bombay Stock Exchange and the National Stock Exchange during the year 2007. IDEA merged seven of its subsidiaries and reached the twenty million subscriber mark in the same year 2007. As on February 2008, IDEA Cellular Ltd tied up with Southern Biotechnologies Ltd to provide bio-diesel for operating IDEA's gensets at all towers in the Andhra Pradesh region. The Company with Geodesic, an innovator in communication, collaboration and entertainment applications on mobile and Internet platforms jointly announced the launch of 'Idea Radio', a truly differentiated mobile music service for IDEA customers in the same year 2008. Customer Service and Innovation are the drivers of this Cellular Brand. A brand known for their many firsts, IDEA is only the operator to launch General Packet Radio Service (GPRS) and EDGE in the country. IDEA has seen phenomenal growth since its inception, the company's footprint Idea is to first achieve critical mass, then drill deep instead of spreading thin, however, does not increasing geographic footprint only, it also drills deep and successfully attempts to provide excellent network coverage in all its circles of operations.

Recent history


Mission

“We delight our customers while meeting their individual communication needs anytime anywhere”

Major products and services

Idea Cellular is a part of the Aditya Birla Group. The company provides Global System for Mobile (GSM) services. The company's key services and brands include the following:


Overview of Telecom Industry

Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers.

The Indian telecom sector can be broadly classified into Fixed Line Telephony and mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments. Currently the Public Players have more than 60% of the market share.


Market shares of public and Private Players

Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the international calls with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the cordless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading their technologies to provide 3G mobile services.

Along with improvement in telecom services, there is also an improvement in manufacturing of telecom equipments. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Cameras etc. The value added services provided by the mobile service operators contribute more than 10% of their total revenue.

Top competitors


Bharat Sanchar Nigam Limited (BSNL)

Bharat Sanchar Nigam Ltd. is the World's 7th largest Telecommunications Company. BSNL is one of the largest public sector units in India. It has a wide

network and serves its customers with its wide bouquet of telecom services across India except Delhi and Mumbai. In all, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity, more than 37,382 fixed exchanges and 287 Satellite Stations, OFC Cable and Microwave Network connecting 602 Districts, 7330 cities and 550,000 villages across India. BSNL is the pioneer of rural telephony in India.

Today, BSNL offers total telecom solutions to Corporate Customers, big business houses and individuals. Their executives in the Business Development Cell act as single window point for Corporate Customers. They’ve recently slashed the rates for mobile services in order to compete with other private players who offer reduced charges. With a view to improve their network coverage and to improve performance, they are also in the process of expanding their GSM Network.


The company offers vide ranging and most transparent tariff schemes designed to suite every customer. Services are more expensive compared to other alternatives, but BSNL towers are better spread across the country and therefore offer better connectivity. Continuous innovation in product and delivery of services with the appropriate pricing and promotion is the key strategy of BSNL for developing their customer’s brand loyalty.

BSNL being a legacy operator earns a lot of criticism for its poor customer service. Efficiency of the company has drastically improved over the past few years and one can now get a connection in a matter of hours. Despite this growing concern for customer satisfaction, it is still below Industry’s expectations.

Bharti Airtel (Airtel):

Airtel is an offering of Bharti Airtel Limited, India’s largest integrated and incidentally, the first private telecom services provider with a footprint in all of the country’s 23 telecom circles. Airtel has largest customer base in India. Its market share is 101,114,971 i.e. 24.2% of the total 375,742,592 GSM and CDMA mobile connections in India till Feb’2009. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. In Dec’2008, Bharti Airtel rolled out third generation services in Sri Lanka in association with SingTel.

The ranges of products offered by Bharti Airtel are Airtel Prepaid, Airtel Postpaid, Calling cards, and BlackBerry. Airtel offers several unique services like having no minimum or fixed amount for recharge for their prepaid customers. This convenient recharge scheme was well received by their customers.

Vodafone Essar (Vodafone)

Vodafone Essar is a subsidiary of Vodafone Group PLC. It commenced operations in 1994 when its predecessor Hutchison Telecom acquired a license for providing cellular services in Mumbai. Despite the official name being Vodafone Essar, its products are simply branded Vodafone. Over the years, under the names of both Hutchison Essar (Hutch) and Vodafone, it has garnered a reputation of a respected, creative, and one of the best mobile services in the country. Vodafone provides services based on GSM technology, and offers both voice and data services. Like others, it offers both prepaid and postpaid coverage across India and is especially strong in the metros.

The Hutch to Vodafone transitions in September 2007 was one of the biggest brand transition exercises of recent times. Vodafone Essar spent around Rs 2.50 billion (US$ 175.23 million) on this high profile transition and has been fairly successful so far. Hutch was often praised for its clean and simple advertisements. Their ad campaigns since 2003 featured a friendly dog named ‘Cheeka’ following a boy


everywhere, with the tagline – ‘Wherever you go, our network follows’. As this powerful advertisement was widely admired, Vodafone is still using similar advertisements for its ad campaign. The latest ad by Vodafone during IPL 2009 where a new character namely ‘Zoozoo’ was created was very well accepted by the viewers.

Owing to the aforementioned reasons, Vodafone has over 49.1 million customers currently. Most of their customers are still from their initial playing field: metropolitan cities Mumbai, Delhi and Kolkata.

Tata Teleservices (Tata Indicom)

Tata Teleservices Limited is a part of the US$29 billion (Rs 1.4 trillion) Tata group. Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata Group's presence in the Indian telecom sector, licensed to provide services in Maharashtra (including Mumbai) and Goa. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India, starting with the Andhra Pradesh circle. Tata Teleservices has all its services grouped under the Tata Indicom brand. Having pioneered the CDMA 3G 1 x technology platforms in India, Tata Teleservices boasts of a reliable telecom infrastructure that ensures quality in its services.

Like others, it offers both prepaid and postpaid coverage across India. Tata Indicom has been credited with path breaking schemes like their offering – Tata Indicom Non Stop Mobile, which allowed customers to receive free incoming calls for a period of two years without any recharge. They were amongst the first to offer full talk time on their recharge vouchers. As a brand, Tata Indicom stands out amongst other brands due to the trustworthiness and dynamic nature of the Tata trademark, as well as the consumer connect that it has successfully established over the years.

Reliance Communications (RelCom)

Reliance Communications Ltd. founded by the late Shri Dhirubhai H Ambani is the flagship company of Reliance Anil Dhirubhai Ambani Group. RelCom’s corporate clientele includes 2,100 Indian and multinational corporations, and over 800 global, regional and domestic carriers.

When mobile telephony first began in India, a local call cost Rs 16 (US$ 0.37) per min., an STD Rs 50 (US$ 1.17) per min., and a call to the US Rs 100 (US$ 2.34) per min. With Reliance Communications’ pioneering the price initiative as a part of their aggressive marketing strategy, a local call now costs a mere 15 paisa (less than US$ 0.01) per min., STD 40 paisa (less than US$ 0.01) per min., and a call to the US costs less than Rs 2 (US$ 0.05) per min. The presence of Reliance Communications is making competition in India panicky. Be it their distinctive branding activities, bold marketing campaigns or strong below the line activities, RelCom has constantly stormed the Indian telecom market with its


aggressive streak.

MTNL (Mahanagar Telephone Nigam Limited)

It is a state owned telephone service provider in the cities of Mumbai, Navi Mumbai, Thane and New Delhi. With a subscriber base close to 6 million, MTNL has more than 500 exchanges in its name. It offers a wide array of services including basic landline, CDMA fixed and mobile, GSM mobile, Internet, Broadband, PCO and ISD. It is the largest landline service provider in India, along with BSNL. It has recently taken bold initiatives to retain and recapture its market share lost to growing mobile services.

Advertising and promotion

"Stay Connected" is a brand promise that looks at the key purpose of mobile telephony. It converges with the tangible requirement of 'network depth' & at the same time, reflects the eternal human need for bonding, kinsmanship, and relationship forming. This campaign enables Idea to own the biggest category benefit of "keeping people connected", through a simple, unique and likeable expression of connectivity. And it makes consumers aware that "no one connects better than Idea".

'Government of the People, For the People, and By the People' media campaign of IDEA Cellular, gives the Idea of 'Participative Management' for Governance where two-way communication is encouraged between government and public.

The brand tagline "What an Idea Sirji!" is the message given by Brand Ambassador, Abhishek Bachchan, which is echoed by the public at large in the story, and even viewers of the new imaginative ad. The ad explores the Idea of Government(s) using mobile service as an efficient tool to gather public opinion and support, while taking vital decisions impacting people's lives.

Idea Cellular has launched WalkWhenYouTalk.co.in as a part of its ‘Walk When You Talk’ campaign where the company encourages mobile phone users to walk while they talk on their mobile phone. The website invites visitors to enter their friends’ mobile phone numbers and triggers a reminder call on those numbers asking the receivers to walk as they talk.

WalkWhenYouTalk.co.in also hosts a walk-n-talk meter, which helps the user to calculate the amount of calories he or she might lose by walking while talking for a particular amount of time on mobile phone. Users can also upload or check out interesting 'walking while talking' videos on the site.


http://www.youtube.com/watch?v=GhFA0vQcm8s

http://www.walkwhenyoutalk.co.in/

http://www.ideacellular.com/

Situation analysis

SWOT ANALYSIS


BCG MATRIX

BCG Matrix of IDEA Cellular with respect to Airtel ( Market Leader)

Analysis:

Idea Cellular falls in the first quadrant i.e. “question mark” in BCG matrix Airtel being the “Market Leader” in the telecom sector has a strong influence in the

market

Prober strategies has to be devised for IDEA


IDEA has 12% market share

PORTER’S 5 FORCES ANALYSIS


Idea recorded the highest revenue growth rate in last 4 quarters across all major players

Highest subscriber growth rate in last 2 years across all major players


TRENDS THAT REVOLUTIONIZED THE TELECOM INDUSTRY

Technologies of mobile telecommunications and Internet are going to set the contours of further technological progress in the current decade and the next

The most recent initiative aims at convergence of voice and data received from multiple sources, both web based and real time video streams, in mobile handheld devices. Global satellite systems, mobile handsets and calling cards have made virtual presence possible almost everywhere and anywhere overcoming the barriers of distance, topography and remoteness.

A techno-economic alternative is helping in improving telecom penetration bypassing shortages of fixed lines. Consequently, it is bringing along with it all concomitant economic benefits of enhanced telecom accessibility.

A shift in investment burden from state to private sector and the consumers Growth in Internet usage Faster expansion and consolidation of technologies ushering in Internet revolution. Broadband

access technologies, which include Digital Subscriber Lines (DSL) and cable modem, permit faster download and graphic-intensive Internet applications.

Increase in Voip and 3G usages

Marketing Objectives

The marketing objectives of Idea cellular are:


To expand the market to other states where Idea has not yet been introduced . To increase the market share in existing states To maintain its existing customers To introduce new technologies and services To continue to develop the Idea brand

Marketing Strategies

Segmentation Scheme

Geographic variables

o Region: Different schemes need to be provided to different states as consumer preferences and purchase habits are different in different states..

o Category: Metro, Tier I/II cities

Demographic variables

o Age: 18-25, 25-35, >35 are the targeted age groups. The usage patterns and requirements are different for different age groups

o Income: Medium Income and High Income. The type of income determines the duration for which they use their mobiles.

o Generation: Younger generation, older generation require different needs.

o Occupation: Students, Executives, Professionals. All these category of people make use of mobile phones. Different offers should be there to cater to different groups’ needs.

Psychographic variables

o Personality: Ambitious, Authoritarian, Free spirited

o Value: Value for money, Strong product differentiation

o Attitude: Up-market; college/office going youth with aspirations; status seekers

Behavioral variables


o Occasions: Daily usage in offices, college/universities. Most importantly we can talk to anyone anytime, so convenience factor

o User status: Regular users, potential users and first time users

o Usage rate: Heavy user rate. Hence service providers come up with different packages and offers

o Loyalty status: Hardcore loyalist who stick to the brand they brought initially and would not change their service providers even if they provide better services, shifting loyal who switch to another service provider if they provide better services and switchers who keep changing their service providers to get maximum benefits

Targeting

Nowadays mobiles are most commonly found with the younger generation than with the older generation .Hence this segment should be targeted .For this Idea cellular has adopted a new strategy. Previously the taglines were “no one connects better than IDEA”, “what an Idea sirji”. These taglines were meant to add the Indian value to the brand .It was mainly targeted at the rural section of the people as they constituted a large number. But now Idea cellular has targeted the urban young people with the introduction of the virtual character “Zac”. He is young, cool, smart & stylish, forever on his mobile phone just like any other youngster of his age; health conscious, he loves to walk when he talks on the phone. Idea is trying to target the youth entirely by introducing this character .Games and contests are made based on this character to attract more customers.

Positioning

Idea cellular is trying to position itself entirely as Indian brand, more specifically stress is given on rural markets in India. Rural markets are perceived to be not-so-lucrative in India and are very much neglected by other telecom service companies. Idea was the first cellular company to target rural India market effectively. This positioning is advantageous because urban markets are getting saturated exponentially. With rising incomes in rural India, it promises to be good market for cellular services. Idea already has extensive network coverage in rural areas to substantiate claims made in the promotion. Recently they have also started campaigns targeted at youth.

On the whole side, Idea is trying to be common people’s cellular service as they continue to bring common people’s problem in the promotional ads like decision of building malls on agricultural land, problem of outsiders in city of Mumbai, Caste related clashes, struggle to get quality education.

Ansoff Matrix:


The Ansoff Matrix focuses on the firm’s present and potential products and markets/ customers. The company should follow all four strategies depending on the demand and product as indicated in the matrix. The company perhaps needs to focus more on the comparatively neglected area of diversification.

Marketing action programs

Product

Idea currently offers various services like Prepaid, Postpaid services and Idea Net Setter for its GPRS customers. The Prepaid and Postpaid services are priced differently as different plans in various circles where Idea operates. In many metros like Mumbai, New Delhi, Pune and Bangalore in order to lure young working professions, Idea comes up with innovatively competitive schemes as a part of its corporate plan. Also, it offers various other voice services like Call Conference, Fixed Cellular Terminals etc. The different value added and other voice services provide cost effective access to the GSM telecommunications Network for incoming and outgoing calls to the subscribers.

IDEA 'Women's Card' caters to the special needs of women on the move, and 'Youth Card' covers the emerging youth segment. IDEA 'My Gang' is the product widely popular among community user group.


One of the recent innovations is their online recharge facility. Pre-paid customers can now recharge their Idea prepaid without physically going to a retail outlet. The same can be done through their website itself.

According to our market survey results, customers have shown an inclination to use few utility-based services like Mobile Banking and Mobile Ticketing and are willing to pay extra for it. Our recommendation is that Idea should offer these value added services by charging the customers extra.

Price

Idea cellular right now is competitively coming up with new pricing plans for people It had recently launched new tariff vouchers where only 50 paisa will be charged for all the local calls. It has also launched an STD and local combo pack where for Rs. 128 you can get all local calls for 50 paisa for and STD for Re. 1. In many states Idea has reduced STD rates to 75 paisa.

Cellular companies mainly have to deal with the customers that use local calls. The new pricing plans many of which are state specific will give Idea greater penetration in the local customer market. Though there are good pricing techniques in communication but in internet GPRS Idea’s Net Setter is highly priced at Rs. 749 per month and the promised speed of 236.8 Kbps is overstated while one of its competitors Airtel offers the fastest broadband for only Rs. 500.

Place

With acquiring of Spice Idea operated in 15 circles. Now with the launching of operations in Orissa, Tamil Nadu and Chennai in April’09, May’09 and July’09 respectively Idea now covers 90% of the subscriber

base. Idea is soon to expand its operations to West Bengal and Kolkata so as to cover 97% of total subscriber base. With that and further expansions to other areas, Idea is going to be a pan-India operator in 2009 itself.

Promotion

From the survey results it is clear that the main mode of promotion among youth is through friends’ recommendations. To make use of it, currently Idea has started promotion via social networking sites like facebook


through ‘Zac’, and is providing real-time games. Since the customers top priorities are still call and messaging should come out with attractive special tariffs. Also internet facilities should also be promoted well since that is the value added service in which, largest number of survey respondents showed interest.

Recommendations

Online promotion via social networking sites: Currently ‘Zac’ has presence in facebook and twitter. They can continue the move by further by establishing Idea widgets in more social networking sites like ‘orkut’ which are more popular in India. As prizes for the games present, gift which introduces Idea products could be given. Also providing more online games which don’t require money to be spent to keep visitors involved more online will be a better option.

Advertisements on Print and Electronic media: Has to make a strong presence in print and electronic media. Along with the ads aimed at rural India, New ads focusing on youth and vibrancy should be introduced along with the theme of “Walk while you Talk”.

Channel and organization associations: associations with various Television-programs that attract youth or channels itself like MTV.

Street promotions, Campus promotions: Apart from the above two mediums, Street promotions also has got a considerable influence among target customers. Hence street promotions and Sponsoring campus events along with involving activities and games should be made.

Market Research

Market research was based on online surveys and individual customer interviews. Data such as market-share was obtained from secondary sources. Survey was conducted via the link:


Majority of the respondents belonged to the age group 20-24 years, ie college going or just entered their jobs. So the survey results will be indicative of this target group

More than half of people depend on friend’s recommendation or word of mouth publicity. Advertisements and Street promotions too where significantly influential in consumer choice

http://spreadsheets.google.com/ viewform?formkey=dGRzajZuSjI5Z1E0dVFiSHh1djI2RlE6MA..

Online Survey

Which age group do you belong to?

How did you get information about the current service provider?

How frequently do you switch between service providers?


Majority of respondents (more than 75%) have never switched or using the same service for more than two years. Focus should be on converting them into loyal customers of Idea.

70% of the respondents are willing to switch if better services are offered than their current service. That shows a good potential for converting them

If Idea Cellular offers a better service than your current service provider, will you switch to it?

Which of the following paid services would you like to have?

What are you top three priorities in choosing a particular service provider?


People primarily prefer value added services like Internet, mobile-banking, Mobile ticketing etc which are more utility based rather than for entertainment purpose.

The top priorities are still remaining as call rates, SMS and coverage. So gaining market by providing better offers on this strategy and making more profit on value added services, roaming facilities etc can be a good strategy.

Consumer Interview

To get the preferences of other age groups, consumer surveys conducted on such target groups. The results were similar to survey results obtained in higher age groups. The customer was reluctant towards switching. The top preference for choosing the provider was again Call rates and coverage. Roaming rates also were important. The customers from the lower age group preferred content download and internet services along with call rates.

They were also interviewed about the effectiveness of advertisements. The campaigns ‘What an Idea’ and ‘Walk while you Talk’ has caught the attention and the brand awareness has increased a lot over the previous times, but the present advertisements are not answering the basic question, ‘why should people choose Idea’.

Market share

Currently, Idea’s market share is lowest among the top-five players. That is primarily because Idea operates in lesser no. of circles as compared to its competitors. So Idea can either enter more circles to increase its total market share or concentrate more on circles in which they are operating presently and become top players there.

Financial Projections

Using the existing data for profit from 2005 to 2008 we can estimate the profits for next four years from 2009.This is done using “Straight line fit method “.the formulas required to make the estimation are shown below.

Y=a+bX

∑XY=a∑X+b∑Y2

∑Y2=a∑Y+b∑XY


Brand awareness has increased very much, but the basic question of ‘why one should choose Idea’ remains unanswered

Idea should either expand to more operating circles or focus on improving situation in present circles to improve total market share

where Y is the profit and X is the last digit of the year.

By making use of the above table and the formula we arrived at the following results.

The Marketing budget

The advertising costs of 2009 -10 were projected using the data available for previous years advertising costs.


Based on previous year’s advertising expenses we projected this year’s advertising expense to be around 5676 million. This was allocated according to the above break ups.

TV ads: amount to be spend equals 0.356*5676=2020.65million

Major portion of the advertising is done through television ads as they help to target both the youth and the older people.

Magazine ads: amount to be spend equals 0.071*5676 = 402.996 million

Internet ads: amount to be spend equals 0 .051*5676 =289.476 million

Newspaper ads: amount to be spend equals 0.119*5676=675.444 million

Retailer awards: amount to be spend equals 0.047*5676= 266.772 million

Distributor awards: amount to be spend equals 0.032 *5676= 181.632 million

Sponsorship amount: to be allocated equals 0.147 *5676=834.372 million

Retail chain amount: to be spend equals 0.059 *5676 =334.825 million

Road side banners: amount to be spend equals 0.051*5676=289.4 million

Multiplex ads: amount to be spend equals 0.068 *5676=385.968 million


REFERENCES

1. www.indiastat.com2. www.Ideacellular.com3. www.adityabirla.com4. http://ieeexplore.ieee.org/Xplore/dynhome.jsp5. Marketing Management ,Kotler 6. Financial report of Idea Cellular7. Quarterly report of Idea cellular8. Investor Presentation Q1FY10 9. www.capitaline.com10. http://titania.sourceoecd.org/vl=1591291/cl=15/nw=1/rpsv/home.htm11. http://site.securities.com/ch.html?pc=IN12. www.warc.com13. Cygnus business consulting and research data14. The Indian telecom industry ,by marketing club of IIM Calcutta15. Comparative study of Telecom Service Providers in India (IEEE paper)


http://www.warc.com/

http://site.securities.com/ch.html?pc=IN

http://titania.sourceoecd.org/vl=1591291/cl=15/nw=1/rpsv/home.htm

http://www.capitaline.com/

http://www.adityabirla.com/

http://www.ideacellular.com/

Annexure

Market Survey on Cellular service usageMarket survey conducted as a part of academic project at IIM Kozhikode

* Required

Which age group do you belong to? *

Below 15 years

15- 19 years

20-24 years

25-34 years

35 years and above


Which age group do you belong to? *

Below 15 years

15- 19 years

20-24 years

25-34 years

35 years and above

What is your average monthly income (in Rupees) ? *

less than 7,500

7,500-15,000

15,000-25,000

Above 25,000

What is your average monthly mobile bill (in rupees)?

less than 200

200-400

400-1000

Above 1000

Which mobile service do you use? *

Aircel

Airtel

BSNL


Idea/Spice

Tata Indicom

Vodafone

No cell phone

Other:

How did you get information about the above service provider? (or how do you usually get info. about different mobile operators)

Friend's reccomendation

Advertisements in news paper, media etc

Sales promotional calls

Internet browsing

Street promotion, pamphlets, Hoardings etc

Other:

How frequently do you switch between service providers? *

less than three months

3 months to one year

1 to 2 years

more than two years

never switched

If Idea Cellular offers a better service than your current service provider, will you switch to it ?


Yes

No

Will think about it

What do you like to use, pre-paid or post-paid?

Pre-paid

Post-paid

How much is your approximate weekly mobile usage?

less than one hour

1 to 3 hours

more than 3 hours

Which of the following paid services would you like to have? (choose maximum THREE most important uses only

Mobile Banking

Mobile ticketing services

Content download (wallpapers, ringtones)

Daily tips (news,horoscopes, jokes etc)

Mobile radio

Internet

Other:

What are you top three priorities in Choosing a particular service provider Please choose maximum three options only


Local and STD call rates

Free SMS services

subsidised calls to closed user groups/with in same networ

Area coverage

Roaming facilities

Value added services

Customer care service

Style and Brand

Other:

0

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