Airtel and its marketing strategy, 7Ps, Gaps model, Blue printing, Swot

1. SERVICES MARKETING IN
TELECOM SECTOR
TANVI THAREJA(37)
DAPHNE JOAN
PIERCE(41)
SWADHA AGARWAL(42)

2. EVOLUTION OF TELECOM
INDUSTRY IN INDIA
YEARS
1851
First operational landlines introduce
1881
Merger with postal system
1947
Merger of ETC and IRT into IRCC
1985
DOT established
1986
Conversion of DOT into VSNL and MTNL
1992
Private players were allowed in VAS
1994
National Telecom Policy (NTP) was formulated
1997
Independent regulator, TRAI, was established
1999
NTP-99 led to migration from high-cost fixed license fee to lowcost revenue sharing regime

3. 2000
BSNL was established by DoT
2002
ILD services was opened to competition, Go-ahead to the CDMA
technology, Internet telephony initiated, Reduction of licence fees
2003
Unified Access Licensing (UASL) regime was introduced
2004
Broadband policy 2004 was formulated—targeting 20 million
subscribers by 2010
2005
FDI limit was increased from 49 to 74 percent
2006
Number portability was proposed
2007
Decision on 3G services

4. ABOUT THE COMPANY
 Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL)
is the largest cellular service provider in India, with more than 124
million subscribers as of February 2010[update].
 Bharti is now the world's third-largest, single-country mobile
operator and sixth-largest integrated telecom operator.
 The Bharti Airtel brand is headed by Sunil Bharti Mittal.
 The businesses at Bharti Airtel have always been structured into
three individual strategic business units (SBU's) - Mobile
Services, Airtel Telemedia Services & Enterprise Services.

5. AIRTEL
SERVICES

6.  The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the Airtel Telemedia Services
business offers broadband & telephone services in 95 cities and has recently
launched a Direct-to-Home (DTH) service, Airtel Digital TV.
 Shahrukh Khan is the brand ambassador of the mobile company and Kareena
Kapoor and Saif Ali Khan are the brand ambassadors of the DTH company.

7. MARKET SHARE OF BHARTI
AIRTEL
RELIANCE
COM, 11.50%
Idea
cellular, 12.10
%
vodafone, 20.7
0%
BSNL, 10.20%
Bharti
airtel, 33.38%

8. MARKET SEGMENTATION
 DEMOGRAPHIC SEGMENTATION: Airtel has divided its market on the basis of
following variables
Age: 18 to 40 years
Gender: Male and Female
Income: More than 60000 per annum
 GEOGRAPHIC SEGMENTATION:
Country: India
State: Delhi, Maharshtra, Gujarat, Andhra Pradesh, Tamil Nadu, Punjab,etc
District: Mumbai, Kolkata, Delhi, Ahmedebad, Chennai, etc.
 BEHAVIORAL SEGMENTATION:
Occasions: Birthday, Marriage, Anniversary, etc.
Festivals: Rakshabandhan, Diwali, Christmas, etc.
 PSYCOLOGICAL SEGMENTATION
Lifestyle: Based on people‘s way of living.
Values: According to the values of an individual.

9. MARKET TARGETING
 121.63 million subscriber by 2010




elite class
up market
professionals
women & senior citizen by postpaid connection
PAN-INDIA targeting
High corporate clients
Low income group people
Youth with youth club

11. POSITIONING
 TAGLINE: ―Express Yourself‖
 The product is sought to be positioned as a business efficiency tool.
A lifestyle revolution and a status symbol the emphasis is to remove
misconception that the cell phone is an expensive means of
communication and drive home the point that the cell phone is
actually a day-to-day utility.

12. Airtel has been successful in positioned itself as an
efficient and good service provider. This can be clearly
seen as Airtel is the market leader in Mobile services in
India.

13. SWOT ANALYSIS

14. 1) Very focused on telecom.
2) Leadership in fast growing cellular
segment.
3)Pan-India footprint.
4) The only Indian operator, other than
VSNL, that has an international submarine
cable
STRENGTHS
OPPORTUNITIES
1) The fast-expanding IPLC market.
2) Latest technology and low cost
advantage.
3) Huge market.
1)Price Competition from Vodafone and
Reliance
2)Untapped Rural market
WEAKNESS
ES
THREATS
1)Competition from other cellular and
mobile operators.
2)Saturation point in Basic telephony
service

15. MARKETING STRATEGY ADOPTED
BY BHARTI AIRTEL
 Bharti has spent a considerable amount on advertising its
mobile phone service, Airtel. Besides print advertising, the
company had put up large no of hoardings in and around
Delhi.
 The objective behind designing a promotion campaign for
the ‗Airtel‘ services is to promote the brand awareness and
to build brand preferences.
 It is trying to set up a thematic campaign to build a stronger
brand equity for Airtel. Given the Cell phone category, it is
the network efficiency and the quality of service that
becomes important. What now the buyer is looking at is to
get the optimum price-performance package

18.  Brand awareness is spread through the' campaigns and brand preference
through brand stature. Airtel's campaign in the capital began with a
series of 'teaser' hoardings across the city,' bearing just the company's
name and without explaining what Airtel was.
 In the next phase the campaign associated Airtel with Cellular only
thereafter was the Bharti Cellular connection brought up.
 Vans with Airtel logos roamed the city, handing out brochures about the
company and its services to all consumers. About 50,000 direct callers
were sent out.
 In the first four months alone Airtel's advertisement spend exceeded Rs.
4 crores.

19.  As of today the awareness level Is 60% unaided.
This implies that if potential or knowledgeable
consumers are asked to name a Cellular phone
service provider that is on the top of his/her mind
60% of them would name Airtel. As for aided it -is
100% (by giving clues and hints etc.).
 Airtel 's campaign strategy is designed keeping in
mind its marketing strategy. It tries to portray the
image of being a "first mover every time" and that of
a "market leader".
 The population which has just realised the
importance of cellular phones has to be roped in. It
is for this reason that the service provider offers a
plethora of incentives and discounts. Concerts like
the "Freedom concert" are being organised by Airtel

20. Connecting with the youth

22. Recent strategies

24.  Besides this, other promotional strategies that Airtel has adopted are:
(i)
People who have booked Airtel services have been treated to
exclusive premiers of blockbuster movies. Airtel has tied up with
Lufthansa to offer customer bonus miles on the German airlines
frequent flier's programs.
(ii) There have been educational campaigns, image campaigns, pre-
launch advertisements, launch advertisements, congratulatory
advertisements, promotional advertise-ments, attacking
advertisements and tactical advertisements.

26. PRODUCT
 Mobile Services- Prepaid and Postpaid Services.
 Telemedia Services- Broadband & Telephone Services.
 Enterprise Services- Corporate and Carrier Services.

27. PRICE
 The biggest driver of its growth is the development of pricing
plans catering to individual needs and requirements of the
people at the prices they are willing to pay.
 Two separate trends are evident for pricing which are in terms
of the kind of usage by the subscriber.
1) Local or STD phone calls
2) Calls to a phone on same network or to a different network
Combining these two trends, four different usage patterns
emerge according to which a user can select the pricing plans:
1) Local calls to same network cell phone
2) Local calls to different network/landline
3) STD calls to same network
4) STD calls to different network/landline

28.  A research by IIM-B Professors and students reveal the following.
1) For local calls to Airtel phones, the pricing is close and intertwined and there is
little difference across the plans. Similarly, for local calls to other subscribers, the
plans are quite close to each other. Certain plans have lower per minute rates but
they also turn out to be costlier throughout due to high rental. The current pricing
strategy of Airtel is thus misleading as far as mixed local usage is concerned. The
customer has an advantage if a major portion of his calls are to cell phones on the
same network but this advantage is also constrained by the specific caveats of the
plans.
When there is a mixed STD-Local usage, different plans turn up to be cheaper for
different duration of usage, but this is a difficult analysis for an average user and
could possibly be a pricing technique of the company to exploit information
asymmetry.
However, it is inferred that Airtel uses its pricing plans strategically to increase its
market share by giving customers incentives to talk to other Airtel users as it costs
less. Such a pricing strategy has a network effect, as more and more people will and
are adopting Airtel as the user base increases.
2) Docomo- The plans offered by Docomo are non-overlapping and distinct in terms
of the fixed rentals when looked at upfront. The bill that a customer has to pay
under different plans is different in each scenario, and follows the expected trend.
However, for the high rental plans, which should become cheaper for higher
usage, do not become cheap even much beyond 2000 minutes of usage. This
implies that it probably is a way for the company to charge more while giving the
perception of lesser bills per month.

30. PLACE
 It refers to how the product gets to the customer i.e. the channel
by which a product or services is sold(e.g. online vs.
retail), which geographic region or industry, to which segment
(young adults, families, business people), etc.
PROMOTION




Use of Print Advertisement Material
Innovative TV Advertisement
Brand Ambassadors
Sponsorships

31. PEOPLE
 The Board of Directors
 The Employees
 The Target Customers- Airtel has poitioned itself as an aspirational
and lifestyle brand, in a way that trivialises the price in the mind of
the consumer. It pitches not merely as a mobile service provider, but
as something that would give a customer certain badge value.
PHYSICAL EVIDENCE
 The physical environment plays an important role in shaping the
service experience and delivering the customer satisfaction.

32. PROCESS
 Process innovations and continuous improvement through people
involvement.
 Problem investigation by Fact based – Root Cause Analysis.
 Based on customer specifications, Airtel has many business
processes on the following concepts:
1) Delivery time
2) Lead – time
3) Time to market
 Result Oriented Approach- Each process has been designed by first
planning the desired result. The targeted results are then arrived at
through identification of the following:
1) The next-customer and end-customer expectations.
2) Past experience of ―what went wrong and can go wrong‖

35. CUSTOMER GAP ANALYSIS
THE BACKGROUND
1. The rapid growth of mobile telephony in India ranks inarguably
as one of India‘s greatest success stories. Cheap telephone
connectivity has empowered individuals in myriad ways, and
has served as a massive productivity multiplier for the
economy by collapsing communication costs.
2. Indian telecom industry underwent a high pace of market
liberalization and growth since 1990s and now has become the
world's most competitive and one of the fastest growing
telecom markets.
3. The gateway to many foreign investors to get entry into the
Indian Telecom Markets was when the government decided to
reduce its stake in VSNL to 26% and TATA took a 25% stake in
VSNL.

36. 4. The industry growth stage lasted from 2005-2009. At this point the
industry is almost at the shakeout stage. The industry is rapidly
approaching the matured market stage. But another theory refutes the
claim.
6. The economic growth in India, currently the market is growing
more on the Network area growth, providers are moving to smaller
cities from big cities, demand is generated from ‗B‘ class & ‗C‘ class
cities – middle class population. A major section of middle class
population of India in smaller cities couldn‘t enjoy the advantages of
Telecom service due to the Govt. monopoly, poor capacity, regulations;
they are the immediate customers of the Mobile operators.

37. 7. The Landline is no more the preferable choice for the new
telecom users; people like to use mobile phones because of its
added advantages and easy subscription. Also the middle class
size is expected to grow in India in next decades, so the Mobile
market in India will be probably in Growth – Shakeout phase for
a longer period.
8. Indian mobile operators offerings are segmented in two broad
categories – Pre-paid and Post-paid. Although mobile market is
growing positively, the Post-paid market is declining and Prepaid market is increasing by leaps and bounds.

38. SERVICES GAPS MODEL

39. BRIEF ON CUSTOMER SERVICE GAP
MODEL
STEP 1—Analyze the Provider Gap
Market Information Gap – Not knowing what Customers Expect:
The Company's incomplete or inaccurate knowledge of
customers' service expectations.
•
•
•
•
KEY FACTORS:
Inadequate marketing research orientation
Lack of upward communication
Insufficient relationship focus
Inadequate service recovery

40. Service Standards Gap – Not having right standard and
design:
The Company's failure to translate accurately customers'
service
expectations into specifications or guidelines for employees.
Key Factors –
 Poor service design
 Absence of customer-defined standards
 Inappropriate physical evidence and Servicescape

41. Service Performance Gap—Delivery lag: Lack of
appropriate
internal support systems
(e.g., recruitment, training, technology,
compensation) that enable employees to deliver to services
standards.
KEY FACTORS—
• Deficiencies in HR policies
• No matching Supply & Demand capacity
• Customers failed to meet their roles
• Intermediaries problem

42. Internal Communication Gap – Promises don‘t match:
Inconsistencies between what customers are told the service
will
be like and the actual service performance.
KEY FACTORS–
 Lack of Integrated services marketing communication
 Ineffective management of Customer expectation
 Over promising
 Inadequate horizontal communication

43. BHARTI AIRTEL: GAPS &
EXPLAINATIONS
1.
Consumer Perceptions – Perception is the process of
selecting, organizing and interpreting information inputs
to produce meaning. Information inputs are the sensations
received through sight, taste, hearing, smell and touch.
This is very important factor for Indian consumers, as the
average literacy level is low in India.
People want to judge the quality of service with more on
Physical evidences comparing to western world, where
people rely on the specifications.

44.  As Mobile Telecom service is ‗Remote Service‘, people
don‘t see any infrastructure of Network, consumers want
to see the Front offices people of the provider.
 This was realized by Reliance very quickly, they offered the
Handset on Mail order basis which didn‘t work out
well, immediately they started opening retail store which
brought lot of success for them, even entering late in the
market.
 AirTel (Bharti), Hutch, Spice offer this presence through
the dealer network and selective retail store. But
provider direct presence is more valuable.

45.  BSNL being the poor customer handler, they are still able
to keep large market share because of their physical
presence. But this concept is changing gradually amongst
young generation.
 Usually the Indian consumers see large gaps in GAP 4
(Internal Communication gap), and they believe that
Physical presence can only reduce this gap, Physical
presence also helps provider to get feed back quickly and
reduce GAP 1.

46. 2. Learning & Communications – In India this process is
comparatively slower than western world or developed
countries.
So the communication to the consumers play much bigger
role than here, the need for mobile communication is much
more in rural India than cities, but the impediments are the
cost and learning process.
As the costs of mobile services are coming down, the
opportunity in rural India will grow. But the providers and
operators have to communicate much more in teaching the
people.

47.  Bharti planned to open a SMS based public booth Network
in cities few years before, but that business plan became
infeasible as SMS prices dropped substantially. But
potential for similar mobile public booth in Rural India is
very high.
 Learning & Communications are more required to close
GAP 3 and GAP 4.

48. 3. Perceived risks – In service risk assessed as it is consumed and
experience, also ‗Word-of-Mouth‘. People perceive more risk in
service than products, because of its‘ intangibility. In India this is
more because of rudimentary legal framework, the Consumer
protection is much less than developed country.
This is one ‗Major Reason‘ also for booming Pre- paid market
than Post-paid. TSPs have to offer some kind of financial
warranty in case of Post-paid connection.
So far the experience of Indian consumers with Govt. Telecom
organization is very poor. Physical presence and financial back
up required more to reduce the risk factors.
The risk will be perceived less as Gap 3 and Gap 4 will be
closing.

49. 4. Group Dynamics – This is one of the most important factors in
Indian market, here ‗Word-of-Mouth‘ is much powerful than any
other communication, and people follow their families, friends
and social groups. The Market communication from TSPs should
keep this in mind.
The Call Plan should consider this with high importance, some
mobile operators are considering this factor, but there is no still
Customer analysis or segmentation done. Group dynamics
consideration should be taken care in closing Gap 3.

50. 5. Customer Service Quality analysis— Extensive qualitative and
empirical research-spanning multiple phases, covering a variety
of sectors, and involving a number of companies-suggests the
following general insights about how customers assess service
quality.
Firstly, customer-defined service quality stems from a
comparison of customers' service expectations (i.e., their mental
standards about what a company ought to provide by way of
service) with their perceptions of the delivered services.

51. Secondly, customers evaluate the nature and extent of the gap
between their perceptions and expectations along five broad service
attributes (listed below in decreasing order of importance):
 Reliability: Ability to perform the promised service dependably and
accurately. This is more dependent on the Technology and Network
Infrastructure is used, Indian TSPs are at per or near per with Global
standards in this regard.
 Responsiveness: Willingness to help customers and provide prompt
service. This one major are Indian Mobile operators are lagging and lot
of work needed to be done.

52.  Assurance: Knowledge and courtesy of employees and their
ability to inspire trust and confidence. This is also another
lagging area.
 Empathy: Caring, individualized attention the firm provides its
customers. This is also another lagging area.
 Tangibles: Appearance of physical
facilities, equipment, personnel, and communication materials.
Mobile service is ‗Remote Service‘; the Tangibility needs to be
created other ways.

53. Recommendations & Conclusion
• Till today all the Mobile Operators are focused on
Transactional Marketing (Get new customers) than
Relationship Marketing (Retaining old customers). Bharti
needs to see what it can do to re-attract its existing
customers just to strengthen relationships.
• They are more focused on increasing Network area and
circles – which is definitely require. And India has a huge
market, which is fragmented in nature and too many
customer segments – geography, income, age, language
spoken, culture.
• Relationship Marketing is not much emphasized in India
but the Industry, which is too competitive and can be
operated remotely, this will be more important.

54.  Also the operators should come with new Business plans for
Rural Areas. There is huge market in Mobile Data & Voice
communication, there is huge potential but proper learning tools
and communication required.
 As the Wireless Network cost is reducing, the focus in rural area
will become important.

55. Final Recommendation List to Close Customer Gaps –
 Relationship Marketing Focus
 Employee Management
 Service focus on Pre-paid market
 New Business Ideas for Rural market
 Usage of right CRM tool