Brand Management Project
Brand Management Project
Brand Management Project
BRAND
MANAGEMENT
PROJECT
Category Attractiveness
&
Product Opportunity
Phase- I
Submitted to:
Submitted by:
Executive Summary
The fast track growth of the Indian telecom industry has made it a
key contributor to India’s progress. India adopted a phased
approach for reforming the telecom sector right from the
beginning. Privatisation was gradually introduced, first in value-
added services, followed by cellular and basic services. An
independent regulatory body, Telecom Regulatory Authority of
India (TRAI), was established to deal with competition in a
balanced manner. This gradual and thoughtful reform process in
India has favoured industry growth. Today, there are more than
225 million telecom subscribers in India. Every month, 6-7 million
new subscribers are added. Upcoming services such as 3G and
WiMax will help to further augment the growth rate. Furthermore,
the Indian economy is slated to sustain its 7-9 per cent growth
rate in the near future. This is supported by the political stability
that the country is experiencing currently. India’s demographic
outlook makes it one of the largest markets in the world. A
conducive business environment is also created by a favourable
regulatory regime. There exists enormous business potential for
telecom companies on account of the country’s low teledensity,
The report below contains the Category attractiveness and product opportunity for
the brand management project submitted in partial fulfillment of the requirements
of MBA2 Program.
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which is close to 19 per cent presently. The Indian telecom
industry is growing at the fastest pace in the world and India is
projected to be the second largest telecom market globally by
2010.
CHAPTER-I
CATEGORY
ATTRACTIVENESS
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The Indian telecom market has been displaying sustained high growth rates.
Riding on expectations of overall high economic growth and consequent rising
income levels, it offers an unprecedented opportunity for foreign investment. A
combination of factors is driving growth in the telecom market, promising rich
returns on investments.
India is the fourth largest telecom market in
Asia after China, Japan and South Korea.
The Indian telecom network is the eighth largest in the world and the second
largest among emerging economies.
The Indian telecom market size of over US $ 8 billion is expected to
increase three fold by 2012. The expansion of the telecom industry in India has
been fuelled by a massive growth in mobile phone users, which has reached a
level of 10 million users in December 2002, an increase of nearly 100 per cent
in 2002.
This exponential growth of mobile telephony can be attributed to the
introduction of digital cellular technology and decrease in tariffs due to
competitive pressures. For the first time in India, the growth of cellular
subscriber base has exceeded the fixed line subscriber base. However, cellular
penetration is still 1 per cent as compared to world average of around 16 per
cent.
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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,
Vodafone (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.
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 codeless and the wireless instruments.
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Mobile phone providers have also come up with GPRS- enabled multimedia
messaging, Internet surfing, and mobile- commerce
The much-awaited 3G mobile technology has entered in the Indian telecom
market.
The GSM, CDMA, WLL service providers are all upgrading them to
provide 3G mobile services.
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, Camera's, etc. The value
added services provided by the mobile service operators contribute more than
10% of the total revenue.
The 2009 budget has brought further relief to the customers with the
reduction in the tariffs, both local and long distance, and with slashing down the
roaming rentals. This is likely to lead to even more people going for cellular
services and more and more use of the value added services.
Investors can look to capture the gains of the Indian telecom boom and
diversify their operations outside developed economies that are marked by
saturated telecom markets and lower GDP growth rates.
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1.1.6 COMPETITIVE LANDSCAPE:-
Ref:-planningcommission.gov.in/reports/genrep/.../1_bg2020.doc
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Ref:-planningcommission.gov.in/reports/genrep/.../2_bg2020.doc
Phase I (1998-2003)
Phase II (2003-2005)
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intervention. In Countries like India and China where Partial
regulations exist, government intervention does take place.
looking to other factors rather than fulfilling the most basic of user
needs (text messaging and phone calls) and price being such a
key factor.
The USO policy was laid along with NTP ’99 to widen the reach of
telephony services in rural India. All telecom operators are bound
to contribute 5 percent of their revenues to this fund. This system
was put in place to bridge the wide gap between urban and rural
teledensity, bringing it down from the current 31 percent. Initially,
only basic service providers were under the purview of USO. Later,
its scope was expanded to include mobile services also. Although
it increases the cost burden for the telecom companies, USO helps
in building the telecommunication infrastructure in the rural
areas.
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CHAPTER-
II
COMPETITOR ANALYSIS
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The nature of competition in an industry is strongly affected by
suggested five forces. The stronger the power of buyers and
suppliers, and the stronger the threats of entry and substitution,
the more intense competition is likely to be within the industry. In
concentrated industries, according to this model, organizations
would be expected to compete less fiercely, and make higher
profits, than in fragmented ones.
High Fixed Cost: The industry also suffers from high fixed cost
which makes the entry barrier also very high for the industry. It
comes as no surprise that in the capital-intensive telecom industry
the biggest barrier to entry is access to finance. To cover high
fixed costs, serious contenders typically require a lot of cash.
When capital markets are generous, the threat of competitive
entrants escalates. When financing opportunities are less readily
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available, the pace of entry slows. Meanwhile, ownership of a
telecom license can represent a huge barrier to entry.
Price wars: The price war is really very fierce in this industry.
Price war in telecom industry has commoditized the market that
branding has taken a backseat.
Now let us discuss this concept for telecom industry. The potential
major substitutes for telecom industry are as follows:
Email
Satellite phones
All of these technologies have a huge potential, though none of
the above a major threat in current scenario. So the telecom
industry has to keep a close look on these substitutes.
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http://www.indianomics.com/2009/07/15/top-12-wireless-operators-in-india-by-
subscribers/
private operators GSM as well as the CDMA operators have been very
consistent in their performance.
However the recent regulatory developments have been negative for the
telecom companies as it has increased the number operators per circle which
intensified the competition. The addition of players like Aircel, Loop Telecom
(formerly BPL), Tata Docomo, Virgin Mobile and a few more yet to roll out
their services like Swan Telecom, and Unitech Telecom the pressure on
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established players is set to increase. So also with the implementation of MNP
and 3G spectrum allocation the Service providers have to be the best service
caterers to hold on to their market shares.
GSM
74%
www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-
telecom-sector
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www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-
sector
The Market leader in GSM sector being Bharti Airtel with 32% of Market share
followed by Vodafone at 24%. The state owned BSNL is third in the
competition with 16% of the share in the GSM market.
CDMA market majors Reliance has got licence to operate(in 14 circles
and 4 metro cities) in the GSM band and they have launched their services in
the market. The existing players face a tough competition as Reliance and Tata
(with Docomo) have existing distribution channels and brand name, and can be
a potential threat to Airtel and Vodafone.
So is the case for Tata Indicom which recently launched its GSM services by
the name Tata Docomo in 18 circles in India.
Tata Docomo: Tata Docomo, the latest entrant into the GSM market had to get
some innovative and low priced packs to attract customers to switch to Tata
Docomo even before the actual implementation of MNP. As a part of this they
are offering 1paise calling per second for local( and STD calls as a limited
period offer). The success for Tata Docomo lies in winning third
generation(3G) airwaves in as many circles as possible and bringing their
internationally famed expertise into the domain.
The innovativeness here is they are branding their service on the basis of “value
for each second”, and “pay for only what you have used”. Thus they are trying
to attract customers even before the implementation of MNP. As Toshinari
Kuneida- M.D.of Docomo their target is to achieve 100million customers in the
next three years.
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www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-
sector
They are targeting the Youth segment by offering schemes like get paid for
incoming calls, pay for the first message and get 100 messages free for that day.
With a 32% market share. Airtel has emerged as a market leader, Bharti
televentures have positioned themselves as intergrated players with desire to
have a presence in basic (wire line and wireless) as well as national and
international long distance.
Environmental Scan
/ \
Strengths Internal Analysis External Analysis
/\ /\
Here we will Strengths Weakne Opportunities Th
sses reats
analyze the |
strengths of SWOT Matrix
the telecom
industry as a whole. The most important factors are:
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Weakness
Opportunity
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was thought as an emergency service, now it has become an
essential part of life in our country.
Threats
Satellite phones
To summarize the SW0T analysis we can draw the following
framework for telecom industry:
CHAPTER-
III
Customer Analysis
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o Promotional calls
o Network jam
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• Television facility
• No network jam
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CHAPTER-
IV
General Comments
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It is projected that the industry will generate revenues worth
US$ 43 billion in 2009-2010.
4.1.2 Feasibility:-
The telecom sector is one of the fastest growing sectors.
It offers three categories of services. Fixed line services,
wireless services and cellular services, the cellular services is
called as mobile service because of its nature of usage . there
are two types of mobile services networks- Global system for
mobile (GSM) and code division multiple access(CDMA).
According to available data the tele-density was only 0.02% in
1948, now in the year 2007 the tele- density has reached by
22.5% and the subscriber base has crossed 250 million mark.
This is very significant indicator. And almost 70% of our
population living in rural and semi-urban areas. We have an
opportunity because still rural and semi rural is covered only
15%-20% by the Telecom companies. Huge untapped market is
available so there is great scope of improvement.
Conclusion
Telecom industry is seeing a rise as the trend goes and has
potential for growth. Taking into account the tele-density of
38.88% there is still unexplored market. The competition is fierce
with around 10 Service providers in most of the 18 circles and also
the implementation of MNP. The service providers have to be
different and have to stick to strict service norms and provide
excellent customer service in order to hold on to the market
share. Thus there is intense competition in the market but at the
same time scope for development in rural areas. Airtel,Idia and
Vodafone have taken up initiatives to provide customized
connections to Rural customers like Motor pumps control system,
loud speaker phone for illiterates and so on.
In a few words Telecom sector has a lot of scope for growth and
the customers at the same time have the benefit to choose from a
wide range of service providers offering various plans targeted to
specific customers.
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Annexure:-
REFERENCES:-
b. http://www.indianomics.com/2009/07/15/top-12-wireless-operators-in-
india-by-subscribers/
c. http://www.cellular-news.com/story/37761.php
d. www.efytimes.com/efytimes/fullnews.asp?edid=30375
e. www.bharatbook.com/productdetail.asp?id=82391
f. http://www.scribd.com/doc/15684486/Marketing-Report-on-Bharti-Airtel
g. http://www.slideshare.net/goel.gauravgoel/study-of-telecom-sector
h. http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Bharti
%20Airtel%20Limited%20and%20the%20Indian%20Telecom%20Sector.htm
i. http://www.bharatbook.com.
j. planningcommission.gov.in/reports/genrep/.../1_bg2020.doc
k. www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-sector-in-
future/
l. www.ficci.com/telecom.htm
m. tutor2u.net/business/strategy/competitor_analysis.htm
n. http://www.airtel.in/
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