THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

NEW DELHI

THESIS ON
“SALES PROMOTION SCHEMES OF VODAFONE’’

SUBMITTED TO:

PROF. SUMANTA SHARMA

PROF. VIJAY KUMAR BODDU

UNDER THE GUIDANCE OF:

MR. MUDIT SHASTRI

SUBMITTED BY:

DIVYA DEWAN
ALUMNI ID NUMBER: DF79-M-0301
BATCH:PGP/FW/2007-09
 ABSTRACT
Sales promotion consists of a variety of companies. Sponsored promotional
activities that supplement both advertising and personal set up. These
activities are impersonal and can be directed at industrial buyers,
intermediaries or consumers. Sales promotion consists of a diverse collection
of incentive tools, mostly short term, designed to stimulate quicker or greater
purchase of particular products or services by consumers of the trade. Sales
promotion tools vary in their specific objectives. Incentive type promotions are
used to attract new buyers, to reward loyal customers and to increase the
repurchase rates of the occasional users. Sales promotion often attracts the
branch switchers, because users of other brands and categories do not
always notice or act on a promotion.

In using the sales promotion a company must establish its objectives, select
the tools develop the program, a pretest the program, implement and control it
and evaluate the results.

Vodafone Essar in India is a subsidiary of Vodafone Group Plc and

commenced operations in 1994 when its predecessor Hutchison Telecom
acquired the cellular license for Mumbai. Vodafone Essar now has operations
in 16 circles covering 86% of India’s mobile customer base, with over 34.1
million customers*.
 SIGNATORY PAGE

TO WHOMESOEVER IT MAY CONCERN

This is to confirm that Divya Dewan, student of IIPM, NEW DELHI, is doing a
live project(Thesis) on the topic “Sales Promotion schemes of Vodafone”
under my guidance and that the work being done by the candidate is original
and is of the standard expected by an MBA student.

May god bless her with all success in her career.

Warm regards

Mr. Mudit Shastri

 TOPIC APPROVAL LETTER

Dear Divya Dewan,

This is to inform that the thesis topic “A Study on Sales Promotion Schemes of
Vodafone”, as proposed by you, has been approved .Thisemail is an official
confirmation that you would be doing your thesis work under the guidance of Mr.
Mudit Shastri . Make it a comprehensive thesis; the objective of a thesis should be
value addition to the existing knowledge base.

Please ensure that the objectives as stated by you in your synopsis are met using the
appropriate research design.
You must always use the thesis title as approved and registered with us.

Your Alumni ID Number is DF79-M-0301

You are required to correspond with us by sending at least six response sheets to
Prof. Vijay Kr. Boddu at boddu.vijay@iipm.edu. Ph-011-42789931 ( format attached
along with this mail) at regular intervals, before 31st July 2009(the last date for thesis
submission).

Regards,
Sumanta Sharma
Dean (Academics)
The Indian Institute of Planning and Management
New Delhi
Sumanta.sharma@iipm.edu
Phone: 011– 42789910,876
 ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lays an unfathomable

sea of gratitude to those who have extended their support and without whom
the project would never have come into existence.

I express my gratitude to IIPM, New Delhi for providing me an opportunity to

work on this thesis as a part of the curriculum.

Also, I express my gratitude to Prof. Sumanta Sharma and Prof. Vijay Kumar
Boddu for their kind cooperation.
 CONTENT

ABSTRACT........................................................................................ii

SIGNATORY PAGE..........................................................................iii

TOPIC APPROVAL LETTER............................................................iv

ACKNOWLEDGMENT......................................................................v

APPROVED THESIS SYNOPSIS...................................................vii

1. INTRODUCTION ...................................................................................1

2. COMPANY PROFILE...........................................................................18

3. LITERATURE REVIEW........................................................................38

4. RESEARCH METHODOLOGY............................................................67

5. FINDING AND ANALYSIS....................................................................69

6. RECOMMENDATION...........................................................................85

7. CONCLUSION......................................................................................87

8. BIBLIOGRAPHY...................................................................................90

9. ANNEXURE – QUESTIONNAIRE........................................................91
 APPROVED THESIS SYNOPSIS
Student Details:

Name: Divya Dewan

Batch: PGP- FW 2007-2009
Section: P-1
Specialization: Marketing
Phone no.: 9971670470
Email: divyadewan07@yahoo.com

Guide:

Mr Mudit Shastri
Designation: Relationship manager
Mobile No: 9811918629
Email: mudit.shastri@vodafone.com

Desired area of research:

Marketing

Title of thesis:

“Sales promotion schemes of Vodafone’’

Research Objective:

1) Impact of sales promotion on the customers of Vodafone in Delhi.

2) What does Vodafone do to attract its customers through
advertisements?
3) What are the additional benefits that the customers get by the
promotional schemes?
4) What are the customer retention strategies adopted by Vodafone?

Introduction to the area of research:

Vodafone is a mobile network operator with its headquarters in Newbury,
Berkshire, UK. It is the largest mobile telecommunications network company
in the world by turnover and has a market value of about £75 billion (August
2008). Vodafone currently has operations in 25 countries and partner
networks in a further 42 countries. The name Vodafone comes from Voice
data fone, chosen by the company to "reflect the provision of voice and data
services over mobile phones." As of 2006 Vodafone had an estimated 260
million customers in 25 markets across 5 continents. On this measure, it is the
second largest mobile telecom group in the world behind China Mobile. In the
United States, Vodafone owns 45% of Verizon Wireless, the largest American
mobile telecommunications company.

Scope of the thesis:

Delhi and NCR

South Delhi: Saket, Vasant Kunj, Gurgoan, Faridabad, Vasant Vihar

Research methodology:

Primary research

1) Structures Questionnaire method

2) In-depth interviews.

Secondary research
1) Internet
2) Magazine and newspapers

Justification of choosing the research:

There are two reasons for choosing this research:-

a) Sales promotion is essential for every organization. Sales for any
product would increase only when it has good promotional schemes. Even
though Vodafone is a world leader in communication it is facing tough
competition with Airtel and other players in the market. Therefore it is using
aggressive marketing strategies to have a competitive edge over the other
players.
b) The second reason is for choosing the research is my prime interest is
because I want to pursue my career in the Marketing. I think, this work will
help me build a solid background to clearly understand the essence of sales
promotion in the organizations.

Internal Guide:

Prof. Sumanta Sharma

Dean (Projects)

IIPM, New Delhi

External Guide:

Mr Mudit Shastri
Designation: Relationship manager
Mobile No: 9811918629
Email: mudit.shastri@vodafone.com
 1

INTRODUCTION

TELECOM INDUSTRY
 2
The telecommunications industry is growing at a very rapid pace in India. Also
India is one of the fastest growing telecom markets in Asia. India is the 4 th
largest telecom market in Asia. The telecom Market consists of mobile
phones, cellular service providers, and broadband network.

The telecommunications industry has undergone a lot of change in the last 2

decades. From deregulation to privatization to telecom services, to
liberalization of Indian telecom policies, increase in competition, introduction
of new technologies like black berry phones, and internet and convergence of
technologies. Since the telecom industry is growing at a rapid pace, Tata
Indicom School of telecom has been dedicated to the country.

This telecom revolution has contributed enormously to increased efficiency in

the economy. It has reduced transaction costs. It has increased connectivity
across the length and breadth of our vast subcontinent. It has brought Indians
closer to each other. The telecom sector is driving today the growth of both
incomes and employment. Indeed, this growth is creating new business and
new employment opportunities. India has emerged as a major base for the
telecom industry worldwide and we intend to facilitate the further growth of
this vital industry. Also new players like Vodafone, one of the leading telecom
companies in the world have entered the Indian telecom market.

The telecom industry is one of the fastest growing industries in India. India
has nearly 200 million telephone lines making it the third largest network in
the world after China and USA. With a growth rate of 45%, Indian telecom
industry has the highest growth rate in the world.

History of Indian Telecommunications started in 1851 when the first

operational land lines were laid by the government near Calcutta (seat of
British power). Telephone services were introduced in India in 1881. In 1883
telephone services were merged with the postal system. Indian Radio
Telegraph Company (IRT) was formed in 1923. After independence in 1947,
all the foreign telecommunication companies were nationalized to form the
Posts, Telephone and Telegraph (PTT), a monopoly run by the government's
Ministry of Communications. Telecom sector was considered as a strategic
service and the government considered it best to bring under state's control.
 3
The first wind of reforms in telecommunications sector began to flow in 1980s
when the private sector was allowed in telecommunications equipment
manufacturing. In 1985, Department of Telecommunications (DOT) was
established. It was an exclusive provider of domestic and long-distance
service that would be its own regulator (separate from the postal system). In
1986, two wholly government-owned companies were created: the Videsh
Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan
areas.

In 1990s, telecommunications sector benefited from the general opening up of

the economy. Also, examples of telecom revolution in many other countries,
which resulted in better quality of service and lower tariffs, led Indian policy
makers to initiate a change process finally resulting in opening up of telecom
services sector for the private sector. National Telecom Policy (NTP) 1994
was the first attempt to give a comprehensive roadmap for the Indian
telecommunications sector. In 1997, Telecom Regulatory Authority of India
(TRAI) was created. TRAI was formed to act as a regulator to facilitate the
growth of the telecom sector. New National Telecom Policy was adopted in
1999 and cellular services were also launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed

Service Provider (FSPs), and Cellular Services. Fixed line services consist of
basic services, national or domestic long distance and international long
distance services. The state operators (BSNL and MTNL), account for almost
90 per cent of revenues from basic services. Private sector services are
presently available in selective urban areas, and collectively account for less
than 5 per cent of subscriptions. However, private services focus on the
business/corporate sector, and offer reliable, high- end services, such as
leased lines, ISDN, closed user group and videoconferencing.

Cellular services can be further divided into two categories: Global System for
Mobile Communications (GSM) and Code Division Multiple Access (CDMA).
The GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular,
 4
while the CDMA sector is dominated by Reliance and Tata Indicom. Opening
up of international and domestic long distance telephony services are the
major growth drivers for cellular industry. Cellular operators get substantial
revenue from these services, and compensate them for reduction in tariffs on
airtime, which along with rental was the main source of revenue. The
reduction in tariffs for airtime, national long distance, international long
distance, and handset prices has driven demand.

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
Telephonyand 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 codeless 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
 5
GSM, CDMA, WLL service providers are all upgrading themselves to provide
3G mobile services.

Along with improvement in telecom services, there is also an improvement in

manufacturing. 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, Camera's, etc. The value
added services provided by the mobile service operators contribute more than
10% of the total revenue

The leading cellular service providers have the following number of

subscribers:

Tata Indicom Airtel has the largest customer base with 31% market share,
followed by Hutch and BSNL with each holding 22% market share.

The 2008 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. However, landline
telephony is likely to remain popular, too, in the foreseeable future. MTNL, the
largest landline service provider, has recently taken some bold initiatives to
retain its market share and, if possible, expand it.

The cellular phone industry is one of India's rapidly growing industries. Since
the industry came into being in the mid 1990s, its average per annum growth
rate has been a phenomenal 85 percent. By the end of 2009, the Indian
cellular phone industry had over 10 million subscribers. The industry has
undergone a number of changes over the years. The National Telecom Policy
1999 was an important landmark in the development of the cellular telecom
industry in India; the tariff rationalization and policy regulation introduced in
the Policy helped the industry grow at the pace it did. The years 2007 and
 6
2008 saw an increase in level of competition in the industry with more
operators being given licenses, and fixed line providers also entering the
mobile market.

In 2003, Telecom Regulatory Authority of India (TRAI) announced regulation

of interconnect user charges to resolve conflicts between cellular operators
and fixed line operators. Keywords Cellular phone industry, 1990, per annum,
growth rate, phenomenal, 85 percent, 2009, Indian cellular phone industry, 10
million, subscribers, National Telecom Policy, 1999, tariff rationalization, policy
regulation, 2001, 2002, competition, operators, mobile market, 2008, Telecom
Regulatory Authority of India, TRAI, interconnect user charges, conflicts,
cellular operators, fixed line operators The cellular phone industry is one of
India's rapidly growing industries. Since the industry came into being in the
mid 1990s, its average per annum growth rate has been a phenomenal 85
percent. By the end of 2008, the Indian cellular phone industry had over 10
million subscribers. The industry has undergone a number of changes over
the years.

The National Telecom Policy 1999 was an important landmark in the

development of the cellular telecom industry in India; the tariff rationalization
and policy regulation introduced in the Policy helped the industry grow at the
pace it did. The years 2007 and 2008 saw an increase in level of competition
in the industry with more operators being given licenses, and fixed line
providers also entering the mobile market. In 2009, Telecom Regulatory
Authority of India (TRAI) announced regulation of interconnect user charges
to resolve conflicts between cellular operators and fixed line operators
Economic theory suggests that there is a positive correlation between
infrastructure and economic development. Telecommunications is one of the
most important types of infrastructure. Communication is said to be the life-
blood of economic activity. Systems of communication assume critical
importance when globalization and contraction of geographic distances have
become the order of the day.

International studies indicate that for every one percent increase in the tale
density (penetration rate of telecommunications) of a country, there is a
 7
corresponding increase of three percent in the gross domestic product of the
country... The Indian telecommunications has been zooming up the growth
curve at a feverish pace, emerging as one of the key sectors responsible for
India's resurgent economic growth. India is set to surpass US to become the
second largest wireless network in the world with a subscriber base of over
300 million by April, according to the the Telecom Regulatory Authority of India
(Trai). The month of April 2008 will see India’ wireless subscriber base that
currently stands at 250.93 million surpassing that of the US to become the
second wireless network in the world.

The year 2009 saw India achieving significant distinctions: having the world's
lowest call rates (2-3 US cents), the fastest growth in the number of
subscribers (15.31 million in 4 months), the fastest sale of million mobile
phones (in a week), the world's cheapest mobile handset (US$ 17.2) and the
world's most affordable colour phone (US$ 27.42) and largest sale of mobile
handsets (in the third quarter). Segment-wise growth Wireless segment has
emerged as the preferred mode of telephone service by the consumers,
reflected in the rising share of mobile phone connections to total connections.
The share of mobile phones has increased from 71.69 per cent at the end of
March 2009 to 87.68 per cent at the end of May 2008. While total mobile
subscriber base was 277.92 million, wire line subscriber base was 39.05
million.

Consequently, overall tele-density has increased to 27.59 per cent at the end
of May 2008. India is likely to be second largest mobile market in the BRIC
nations, with 560 million mobile users representing the next great growth
curve for both mobile and interactive marketing industries, according to a
report by eMarketers. Also, private sector has become the dominant player in
the industry. While public sector companies added 53.6 million subscribers
during 1998-2007, private companies have added a whopping 133.58 million
subscribers during the same period. The dominance has been much more
pronounced in the mobile market, where private operators have added 124.68
million subscribers, while public sector operators added only 31.79 million
subscribers.
 8
Investment

The booming domestic telecom market has been attracting accelerating

amount of investment. During April 2000 to March 2009, cumulative FDI
inflows into the Indian telecommunications sector amounted to US$ 3.84
billion, accounting for 6.81 per cent of the total FDI inflows into the country. In
fact, the surge in mobile services market is likely to see investment worth
about US$ 24 billion by 2010, going by industry estimates. This is
understandable, when seen that the number of mobile subscribers is
estimated to increase to 600 million by 2012, according to Standard Chartered
Bank, implying a mobile in the hands of every second person in the country

The Tata Indicom Group, which operates in 23 circles, continues to be the

country's largest cellular operator, with 50 lakh subscribers. BSNL, which
operates in 22 circles, has a subscriber base of 37 lakh subscribers. Thus
BSNL stands second largest cellular operator in terms of subscriber base at
the end of the fiscal ending March 31, 2007, displacing Idea Cellular from the
second position.

Idea Cellular, which operates in only eighteen circles, is the third largest
operator with a subscriber base of 32 lakh. Unlike fellow public sector
undertaking, MTNL, which operates in Mumbai and Delhi, BSNL has been a
very aggressive player in the market. "Cellular operators who expected BSNL
to go the MTNL way, were taken by surprise and did not take effective steps
to counter it, till it was too late in the day," said a telecom analyst.

Belying fears of a slowdown in cellular subscriber acquisitions, the cell club

has reported a 7.92% growth, the highest growth in any month so far, during
March 2009. Year-on-year, the cellular subscriber base in the country has
almost doubled in March 2009, and is expanding at the rate of 25% per year
thereafter.

The cellular subscriber club expanded by 21.31 lakh last month. This is much
higher than 5.9 lakh subscribers added in February 2005 and 2.13 lakh in
January 2005. Idea, which operates in Seven circles, is the fourth largest
operator with a subscriber base of 17.80 lakh, higher than BPL's 11.31 lakh
 9
subscribers across four circles. The subscriber numbers per operator drop
sharply with the sixth largest operator, Spice Communications, having a
subscriber base of 9.40 lakh, followed by Reliance Telecom's 8.9 lakh
subscribers. MTNL is the ninth largest operator, with a base of 8.32 lakh
subscribers.

While the subscriber base-jumped by 3.38% to 44.39 lakh in the metros,

subscriber base of category A circles of Maharashtra, Gujarat, Andhra
Pradesh, Karnataka and Tamil Nadu jumped by 10.18 % to reach 43.64 lakh.
Category B circles of Kerala, Punjab, Haryana, Uttar Pradesh (West), Uttar
Pradesh (East), Rajasthan, Madhya Pradesh and West Bengal recorded a
jump of 10.69%, with a total base of 33.74 lakh subscribers. Circle C has
reported 12.74 % growth with subscriber numbers jumping to 5.08 lakh.

Among the metros, while Mumbai added 1,63,180 subscribers, higher than
the 1,58,646 added by Delhi, the Capital's cellular subscriber base of over 80
lakh is still higher than Mumbai's 66.89 lakh. While the cellular industry has
been on roll for the first three quarters of the previous financial year with an
average of 16.75 lakh monthly additions in the third quarter, the first two
months of 2007 had seen the growth slowing down.

GSM MARKET IN INDIA

Regional Interest Groups - GSM India

With a population of around 1.1 billion growing at roughly 1.7 per cent a year,
India is potentially one of the most exciting GSM markets in the world. After
two rather difficult years, the past 12 months have seen the region's promise
beginning to come to fruition. Much of this success can be attributed to the
stabilisation of the licensing and regulatory environment.

India's telecommunications have undergone a steady liberalisation since 1994

when the Indian government first sought private investment in the sector.
More significant liberalisation followed in 1996 with the licensing of new local
fixed line and mobile service providers. However, it has been the
government's New Telecom Policy (1999) that has had the most radical
impact on the development of GSM services. 'The policy's mission statement
 10
is 'affordable communications for all', There is a genuine commitment to
creating a modern and efficient communications infrastructure that takes
account of the convergence of telecom, IT and media. In addition, the policy
places significant emphasis on greater competition for both fixed and mobile
services.'

Competition in the mobile sector has already had a visible impact on prices
with calls currently costing less than 9 cents per minute. This means that
service costs have fallen by 60 per cent since the first GSM networks became
live in 1995. It also helps explain why a recent Telecom Asia survey revealed
that more than 70 per cent of Indian mobile subscribers felt that prices were
now at a reasonable level.

One of the challenges facing GSM operators in India is the diversity of the
coverage regions -from remote rural regions to some of the most densely
populated metropolitan areas in the world. India has more than 40 networks,
which cover the seven largest cities, over 7000 towns and several Lacs
Delhis. Such depth of coverage has required enormous investment from
India's operators. It is estimated that more than Rs200 billion had been
invested in India's GSM industry by mid-2009, a figure that is set to be
supplemented by a further Rs. 300 billion over the next five years. The good
news is that subscriber growth is beginning to look healthy. With India's low
PC penetration and high average Internet usage -at 14-20 hours a month per
user it is comparable to the US -the market for mobile data and m-commerce
looks extremely promising. WAP services have already been launched in the
subcontinent and the first GPRS networks are in the process of being rolled
out. In the year ahead, GSM India will work with its members to realise the
potential of early packet services in anticipation of the award of 3GSM
licences.

India fastest growing GSM mart

India is expected to have 145 million GSM (global system for mobile
communications) customers by 2009-10 compared to 26 million subscribers
as on March 2005, according to the Global Mobile Suppliers Association. "For
GSM, India is a success story. It is one of the fastest growing markets with its
 11
subscriber base doubling in 2005. At this pace, the target of 150 million
subscribers by 2009-2010 is definitely achievable," Alan Hadden, president of
GSA, said at a news conference in New Delhi. Globally, the GSM market
reached 1 billion users in February 2005, he said, adding GSM accounted for
80 per cent of the new subscriber growth in 2005."Almost every Latin
American operator has chosen GSM. In North America GSM growth is bigger
than CDMA (code division multiple access)," he said. Commenting on the
raging debate over GSM versus CDMA in mobile services arena, Hadden
said: "GSM is the world's most successful mobile standard with over 1 billion
users, and is an open mobile standard. It also supports automatic
international roaming, which is a major contributor to business plans."

India’s GSM mobile firms’ revenue up 30 pct

India’s private telecoms firms offering GSM-based mobile services reported a

24 percent rise in revenue in the year to March 2007 but said future growth
rates could slow because of heavy taxes on the nascent industry. Although
India’s mobile sector is the world’s fastest growing major wireless market, it is
amongst the highest taxed industries in the country. Mobile carriers pay as
much as 25 percent of their revenue as licence fee, spectrum charges and
other taxes. The Cellular Operators Association of India (COAI) said revenue
for fiscal 2009/08 stood at 83.08 billion rupees ($1.86 billion) compared with
64 billion rupees a year earlier. According to T.V. Ramachandran, director
general at COAI, “These revenue growth rates cannot be maintained unless
there is a concerted effort by the government to cut excessive levies and
allow sharing of infrastructure”

“But the potential to do much better exists as there is still huge demand in the
sector.” Ramachandran said the sector was still losing money but declined to
elaborate. Sales jumped because of a doubling of the GSM (Global System
of Mobile Communications) user base as more people entered the flourishing
market thanks to one of the lowest call rates in the world. But the monthly
average revenue per user, a key measure of profitability, declined 17.4
percent to 432 rupees in the fourth quarter compared with 523 rupees in the
first quarter due to a cut in tariffs and excessive competition among
 12
companies. Growth slowing, demand untapped: The association has not
included the financial performance and the GSM-user base of state-run firms
Bharat Sanchar Nigam Ltd, the second-ranked player, and Mahanagar
Telephone Nigam Ltd, Ramachandran said. There are 150 million GSM
customers and more than 96 million users of the rival CDMA-based mobile
services in the country.

The pace of growth in monthly additions is slowing after just 1.25 million users
took up the service in April compared with 1.9 million in the previous month
and 1.63 million in February. Ramachandran blamed the slowdown on a
majority of small GSM operators being unable to expand networks into rural
swathes where demand remained largely untapped.

“Our surpluses are not enough to cover costs of network expansion and
financing charges on loans. We are making money only to cover operating
expenses,” he said. Carriers are now subsidising handset costs to woo users
into the underpenetrated industry forecast to have more than 250 million
customers by 2007. Roughly three percent of Indians own a mobile phone
compared with about 20 percent in China. About a dozen firms such as Tata
Indicom Airtel Ltd, 28 percent owned by Singapore Telecommunications,
Reliance Infocomm Ltd and the Indian GSM-unit of Idea Cellular group battle
in the hotly competitive sector.

GSM EDGE

GSM operators are not the only ones who are worried about the rapid strides
made by CDMA mobile players Reliance Infocomm and Tata Indicom in the
Indian cellular market? The GSM suppliers – both handset and equipment -
who incidentally also have their other foot firmly placed in the CDMA pie, are
beginning to lose some sleep over what was earlier termed as `niche’ and
`minuscule’ data carriage market by the operators Apart from the strong
success of the two CDMA operators whose networks are based on code
division multiple access (CDMA), the miserable showing of the four global
standard for mobile (GSM) based networks that launched general packet
 13
radio service (GPRS) service for data connectivity in last three years, has the
vendors worried. Global mobile Suppliers Association (GSA) now believes
that even though India will primarily remain a voice traffic-led market in next
two-three years, the data traffic component will grow by 25-30 per cent, an
optimism that it’s trying to make GSM operators feel as well.

THE CDMA CHALLENGE

CDMA players had launched their services with CDMA 2000 1X-based
networks, which can give hi-speed, always-on connectivity to the Internet, and
other data services. GSM operators, on the other hand, have had to migrate
from the frustrating experience of WAP (wireless application protocol) to
GPRS, which has not significantly improved the subscriber’s experience of
surfing the Net on/from mobile. The top brass of GSA, an organisation
comprising Nokia, Siemens, Ericsson, Alcatel and Lucent Technologies - met
on Tuesday in the capital to persuade the operators to adopt EDGE
(Enhanced Data rates for GSM Evolution) and leave GPRS behind as a
dream gone sour. Only Airtel, Idea Cellular, BPL Mobile and Idea Cellular had
launched GPRS, but the data transfer speeds of GPRS have been abysmal.
The field trials gave a speed of around 54 kbps, but the actual speeds have
not exceeded 14-18 kbps, a major reason why GPRS growth has been so
slow. As against the total GSM cellular base of 5.61 crore, the country has
between 2,80,000 lakh GPRS users only. In comparison, the two CDMA
operators have about 120 lakh connections. All these sets are data compliant.
Though no figures are available as to how many use these for data services,
the figure is believed to be respectable as a percentage ratio for CDMA.

But first, the EDGE! Tata Indicom Cellular is close to commercially launching
its EDGE service in Delhi and Mumbai by end May or early June, sources
said. The company was the first to conduct field trials in November with its
equipment supplier Ericsson. Idea too held EDGE field trials in February this
year with its vendor Nokia. Idea Cellular and BPL are yet to hold the trials.
The two companies would eventually migrate to EDGE, but perhaps after
seeing the response to Tata Indicom ’s service. EDGE holds the promise of
delivering data speeds of around 170-180 kbps (as against the theoretical
 14
speed of around 380 kbps) which, if achieved, promises the launch of many
data applications. The scalable cost of migrating from GPRS to EDGE is not
too high and mainly comprises software upgrades in case of a modern
network such as Tata Indicom and Hutch, claimed chairman of GSA India
chapter Rakesh Malik.

At the GSM Evolution Forum held in New Delhi, GSA president Alan Hadden
predicted that GSM growth will far outstrip CDMA as was happening globally.
He felt India could have as many as 200 million GSM subscribers by 2008-
2009, up from nine million in December 2009. According to GSA, there are
over 1.1 billion GSM subscribers worldwide as against 250 million CDMA
customers. The revenue of top 25 global operators from data averages 18 per
cent and 22 of these operators run GSM networks. Overall, there are 76
operators in 50 countries that have committed to deploy EDGE. Almost every
country has a GSM-based network and even those US operators, which
operated on now-defunct TDMA technology, were migrating gradually to GSM,
not CDMA, pointed out Hadden at the GSM Evolution Forum. The Forum is a
global GSA program to assist the operators for evolution to third generation
(3G) technologies. “People are using their phones for much more than voice.
Fifteen networks have commercially launched EDGE as it can run 3G like
services in the existing spectrum for the operators without needing a 3G
license. Even the migration to a full-fledged 3G level of Wideband CDMA
(WCDMA) will be smooth with EDGE,” said Hadden.

“Besides, the automatic roaming provided by GSM networks in almost 200

countries is a power that CDMA doesn’t give you. We know for sure that
almost 20-25 per cent of the revenue for some GSM operators comes from
roaming customers,” he added. But CDMA is no pushover with Korea and
Philippines as the shining jewels in its crown. The first CDMA 2000 1X was
commercially deployed in October 2000.

Already, 81 operators have launched 77 CDMA 2000 1X networks whereas

nine have launched services based on 1xEV-DO platform across Asia, the
Americas and Europe. At least, 16 new 1X and six 1xEV-DO networks are
scheduled to be deployed in 2004, according to CDMA Development Group.
 15
EV-DO and EV-DV are the next level of evolution on the CDMA 2000 1X
platform, capable of delivering services comparable to 3G WCDMA

Following are the key highlights of the report:

 Current Mobile VAS industry is estimated at Rs. 5780 crore

 To Grow 70% YOY to Rs. 9760 crores by end June 2009 & Rs.16520
crores by end June 2010.

 MVAS currently contributes around 9 % to the operator’s revenue.

 It is expected to increase to 10.4 % in the next 1 year and 12% by June

2010.

 Key growth driver of MVAS would be the consumers’ desire of getting

more from their mobile phone and also decreasing Average Revenues
Per User (ARPU)

 Alongwith Entertainment VAS utility based services like location

information, mobile commerce (M-Commerce) for mobile transactions
and Local content rich services would show enormous growth.

 The report also predicts changing roles of the operators, technology

enablers and content providers as given below:
 16
 The report also provides the following comparitive analysis of Mobile
Access Modes for VAS:

 The Report also compares the pro’s and cons of the soon to be
launched 3G services in India:
 17

 The report also provides the revenue share between all the VAS
players which clearly indicates an unfair % going to the operators while
the content owners suffer.

COMPANY PROFILE

Introduction to the Company:

Vodafone Essar in India is a subsidiary of Vodafone Group Plc and

commenced operations in 1994 when its predecessor Hutchison Telecom
 18
acquired the cellular license for Mumbai. Vodafone Essar now has operations
in 16 circles covering 86% of India’s mobile customer base, with over 34.1
million customers*.

Over the years, Vodafone Essar, under the Hutch brand, has been named the
'Most Respected Telecom Company', the 'Best Mobile Service in the country'
and the 'Most Creative and Most Effective Advertiser of the Year'. Vodafone is
the world's leading international mobile communications company. It now has
operations in 25 countries across 5 continents and 40 partner networks with
over 200 million customers worldwide. Vodafone has partnered with the Essar
Group as its principal joint venture partner for the Indian market.

The Essar Group is a diversified business corporation with interests spanning

the manufacturing and service sectors like Steel, Energy, Power,
Communications, Shipping & Logistics and Construction. The Group has an
asset base of over Rs.400 billion (US$ 10 billion) and employs over 20,000
people.

Introduction to Vodafone India:

Vodafone, the world’s leading international mobile communications company,

has fully arrived in India. The Vodafone brand was launched in India on 21st
September, 2007.

The popular and endearing brand, Hutch, was transitioned to Vodafone

across India. That marked a significant chapter in the evolution of Vodafone
as a dynamic and ever-growing brand. The brand was unveiled nationally
through a high profile campaign covering all important media.

Vodafone, the world’s leading mobile telecommunication company, had

completed the acquisition of Hutchison Essar in May 2007 and the company
was formally renamed Vodafone Essar in July 2007. The Vodafone mission is
to be the communications leader in an increasingly connected world –
enriching customers’ lives, helping individuals, businesses and communities
be more connected by delivering their total communication needs.
 19
Vodafone's logo is a true representation of that belief - The start of a new
conversation, a trigger, a catalyst, a mark of true pioneering.

Objectives and Mission of the PR dept:

The main objective of the PR dept is to create a positive image of Vodafone in

the minds of its customers. For the launches of any new services or mobile
phones intense PR is their objective. The Vodafone mission is to be the
communications leader in an increasingly connected world – enriching
customers’ lives, helping individuals, businesses and communities be more
connected by delivering their total communication needs. The next objective
of Vodafone is to cover as much market as possible on the basis of the
service that they provide. Their next objective is that their customers benefit
from a complete Vodafone experience in and out of their homes and offices.
Their main aim and mission is to give their customers a consistent
experience.

While entering India their main objective and mission was to create a visibility
of their company and promote it in a very positive way by promoting the global
image of Vodafone. The other objective was to appear as a leader.

Hierarchy:

The PR dept in Mumbai has been started only a month back and it only has 1
employee i.e the PR Head

Factors considered while formulating PR strategies:

One of the factors in formulating the PR strategies is that whenever a mention

of the telecom industry is made, positive articles of Vodafone has to be made.
Their main aim is to promote the brand Vodafone and its services. They also
keep in mind that the right medium of communication is used to reach the
target public, there target being each and every person right from a milkman
to high-profile people. They also keep in mind that they maintain good
relations with the media so that media can help them out when they are in
need of them.

Budget:
 20
There is a pre-determined budget. This budget is devised by the central unit
of India and is then passed down to various circles, Mumbai being one of
them. PR head needs to formulate all the strategies along with the outside
agency i.e Genesis which sits in the corporate office only. The major expense
of the PR department is the fees that they pay to the outside agency.

PR strategies used by Vodafone as a whole:

Advertisements: Vodafone believes in advertising through media like

television and press as people retain those things that they view visually.
Heavy mounts of money is spent on visual advertisements.

Corporate Advertising: Vodafone also undertakes corporate advertising.

The PR department informs the spokesperson Mr. Navin Chopra which details
he can reveal and which he shouldn’t reveal. He has to be very polite while
handling the media. They give everything in writing to the media. The PR
department also informs Mr. Navin about how to dodge certain questions with
trick and humours so as to maintain the confidentiality of certain important
issues like the future plans of the company.

Hoardings: Vodafone uses hoardings also in order to promote their company

and the new services or tariffs plans that they are coming up with. This
strategy helps in making their target audience aware of their upcoming plans.

Press Releases: Vodafone in USA has a separate press office that issues all
the Press Release. They press officer makes the entire press release and
then it’s confirmed by the spokesperson of Vodafone USA and is then
released. There they believe Press Releases help in order to maintain very
good relations with the media and it also helps them to be in the eye of the
audience. It had also held and India Analyst and Investor Day in London to
talk about its operations in India. It has issued a press release on it on 10 th
December, 2007.

Press Conference: Vodafone uses press conferences as a very powerful

tool in handling the media and seeking consumer attention. They hold press
conferences at the launch of new services or products of any kind. They also
hold press conferences when they are getting into a business deal for some
 21
company. They also hold press conferences for announcing half-yearly results
or financial reports of the company.

Media Interviews: Vodafone undertakes media interviews with proper

planning. It is sometimes initiated by media while most of the time it is by
Vodafone. It is handled very carefully specially during crisis or when a new
service is launched and is this used as a very good platform for promotion,
building image and even control crisis.

Social Activities: Vodafone undertakes social activities on a huge scale. The

Vodafone Group Foundation is committed to providing assistance in the area
of disaster response. Its main aim is to develop partnerships which enhance
long term disaster response and preparedness activity, working with
organizations such as the United Nations Foundation, Oxfam and MapAction.
It also seeks wherever possible to make a direct contribution in response to
critical humanitarian crises.

The Safaricom Foundation and The Vodafone Group Foundation, together

donate KShs 15,000,000 towards humanitarian relief in Kenya.

Oxfam: VGF is a founding sponsor of the Oxfam 365 programme, an initiative

aimed at funding a global rapid response team of aid workers and maintaining
the UK’s biggest warehouse with a stockpile of emergency supplies.

UN Foundations: The UN Foundation-Vodafone Group Foundation alliance

strives to be the leading public-private partnership using strategic technology
programmes to strengthen the UN’s humanitarian efforts worldwide.
 22
MapAction: VGF is supporting MapAction’s humanitarian aid effort in
delivering situation maps updated hour-by-hour in the field, that enable aid
agencies to do their job of delivering assistance.

Global Focus: World of Difference: World of Difference (WoD) is an innovative

charitable volunteering initiative currently being delivered across the
international network of Vodafone Foundations.

WoD is based around the concept that individuals and community

organisations should identify what they feel passionate about and then be
provided with the resources to make changes happen.

WoD creates the opportunity for individuals to work for one year for a
charitable partner organisation, with salary and related support provided. The
winners are chosen on merit through a public competition. To date, 52
individual winners have participated or are currently participating.

Based on a model which was initially developed by the Vodafone New

Zealand Foundation in 2002, WoD programmes have also been successfully
launched by the Vodafone Australia Foundation, the Vodafone Netherlands
Foundation and the Vodafone Ireland Foundation.

There are some slight variations in programme implementation from country

to country, but the basic format of the WoD model – support for an individual
to work for one year in a cutting-edge charitable organisation to achieve pre-
agreed outcomes – is the same in each foundation.

Sponsorships: Vodafone sponsors many events. Some of them are:

Vodafone McLaren Mercedes: Vodafone had a contract with the Mercedes.

Vodafone McLaren Mercedes has extended Lewis Hamilton’s contract with
 23
the team for a further five years. The new agreement, which starts for 2008,
will run up to and including the 2012 season.

UEFA Champions League: Vodafone is in its second season as Official

Partner and Official Mobile network of the UEFA Champions League, the
world's largest annual football competition.

Vodafone is delighted to be at the forefront of Europe’s premier club

competition. After the successes of last season's UEFA Champions League
sponsorship and the agreements announced in April to sponsor the UEFA
Cup Final and UEFA Super Cup, Vodafone is looking forward to strengthening
its position as a brand passionate about the beautiful game.

It has also come up with Vodafone Stadium of Fans wherein fans can make
teams and play for themselves.

England Cricket Team: Vodafone can’t get enough of the England Cricket
Team – 11 years on and their support is still going strong as the principal
partner of the Team. And it’s not just about a logo on a shirt. This partnership
gives employees and lucky customers unbelievable access to get up close
and personal with the Team.

As you can imagine, the life of a cricketer means the team are on the road 10
out of 12 months of the year so a BlackBerry is a must have. The Team use
their handsets to email friends & family, surf the net, listen to music and send
texts which keep them up to speed no matter where they are in the world.
 24
Internal PR: Vodafone operates a range of all-employee share plans to
encourage widespread employee share ownership throughout the company.
Vodafone won a Global Equity Organization award for best share plan
communications in 2006 for the second year running.

They also operate a number of pension plans which vary according to the
conditions and practices in the countries concerned. These are provided
through defined benefit and defined contribution arrangements. Defined
benefit schemes provide benefits based on the employees’ length of
pensionable service and their final pensionable salary or other criteria.
Defined contribution schemes offer employees individual funds that are
converted into benefits at the time of retirement. They also involve them in the
decisions of the company. They conduct training programs also for the benefit
of the employees and for better experience. They also promote leadership on
a large scale. This is done in order to maintain very good relations with the
employees of the organization.

PR strategies of Vodafone India:

Press Releases: Vodafone India doesn’t have a separate press office to

issue all the Press Releases. The PR Head himself makes the entire press
release and then it’s confirmed by the spokesperson of Vodafone India i.e
Navin Chopra and is then released. There they believe Press Releases help
in order to maintain very good relations with the media and it also helps them
to be in the eye of the audience.

Press Conferences: Vodafone uses press conferences as a very powerful

tool in handling the media and seeking consumer attention. They hold press
conferences at the launch of new services or products of any kind. They also
use press conferences as a tool in order to control crisis.

Media Interviews: Vodafone undertakes media interviews with proper

planning. It is sometimes initiated by media while most of the time it is by
Vodafone. It is handled very carefully specially during crisis or when a new
service is launched and is this used as a very good platform for promotion,
building image and even control crisis.
 25
Hoardings and Advertisements: Vodafone uses advertisements as a
powerful tool. The hoardings are placed in every corner of a city. It helps in
seeking immediate attention of the consumers.

Vodafone also uses advertisements. It has it corporate news in the CAT 1

papers like Economic Times, Times of India, Hindustan Times and many
others. It also ahs its news in CAT 2 papers including all the regional language
papers. It also advertises on television and radio.

They also have running ads on Star India about the news updates or new
services or new tariff plans. Vodafone has entered into a Rebranding
Campaign with Star India in order to promote the Essar Brand.

Newsletter: Vodafone India issues house journals for its employees named
Baatchit. They believe this helps in maintaining good relations with them. It is
issued by the HR Head.

Agency: The last PR strategy that they use is that they have hired an agency
that goes to the Vodafone store with genuine problems. Then they report to
the top management of the company stating how the executives at the store
responded to their queries and how did they behave with them. This helps the
company in making the decisions regarding those executives at the stores.
This strategy has helped them a lot in making Vodafone stores a better place
so that their customers get even better service.
 26
Successful Strategies:

Vodafone has had many successful strategies. One of them is the success of
Vodafone in India. Vodafone for the Indian masses was a completely new
brand name. Therefore, Vodafone had to see that the positive image of
Vodafone is built up in the minds of the people.

In order to promote the brand Vodafone in India, a Central PR team was set
up in India. They handled all the promotion activities. They held many press
conferences and issued press releases. They also arranged for media
interviews. They released many positive articles about the Vodafone company
in all the CAT 1 papers.

Vodafone as been successful in retaining the position of Hutchison Essar and

infact make this telecom company much more successful. Today Vodafone
has 33 lakh customers. Its adding 2 lac customers every month.

Crisis:

It had faced a huge crisis during bomb blasts and floods. There was no
network at all. The cell sides were damaged in water. They had the Motorola
machine. It couldn’t take the heavy load of calls. That is why it became slow.
There were no generators so the whole system stopped functioning because
the supply of electricity was cut off.

This was a very delicate situation. The company and the PR dept dint lose
their cool. They were calm and were cautious and quick in taking steps. At
that time they immediately flashed news on all the news channels that people
shouldn’t take more time to talk as it was blocking the call lines. The PR dept
also informed all its employees not to use their mobile phones so that that
much load is reduced. They also held an immediate press conference in order
to explain what was going on and why was there no network.

As a result of this crisis, they immediately took steps to evaluate what went
wrong. They immediately planted generators everywhere. They started using
fibre optic cables. They immediately changed their Motorola machine and
 27
replaced with one of a more superior quality. After this incident they also
started with a Disaster Management Cell in the company.

PROMOTIONAL STRATEGY

Vodafone to “Touch Tomorrow” with a new brand vision

The Hutch Mobile promoted Vodafone cellular service will go in for

repositioning of its brand image. The new brand ethos is portrayed in two
distinct fashions - the tag line "Touch Tomorrow", which underscores the
leading theme for the new brand vision, followed by "The Good Life", which
underscores a more caring, more customer centric organization. Aimed at re-
engineering its image as just simply a cellular service provider to an all out
information communications services provider, Touch Tomorrow is meant to
embrace the new generation of mobile communication services and the
changing scope of customer needs and aspirations that come along with it

The new communication is about a new dimension in the cellular category

that goes beyond the Internet, SMS, roaming, IVRS, etc but which engulfs the
whole gamut of wireless digital broadband services that will constitute
tomorrows cellular services. The new campaign is in two phases - the first of
which will communicate overall brand philosophy and the second products
and services. According to Mr. Jagdish Kini, Chief Operating Officer, Hutch
Mobile Limited, Karnataka "We are adopting a new brand- platform - Touch
Tomorrow - not only to reflect our corporate ethos but also business strategy".

The new identity will have the logo in Red, Black and White colours along with
lower case typography to convey warmth. Vodafone will incorporate the latest
branding in all of its communication and will soon be going in for an enhanced
promotional drive to establish the brand's presence.

Life time Plan

PRE-PAID card users need not worry anymore about recharging their
coupons every month. Company has launched a plan that allows users to
take a pre-paid connection with lifetime validity for a one time payment of Rs.
999. Subscribers availing themselves of this scheme will also get full talk time
 28
for the recharge coupon they purchase and also have the option to buy
Taiwanese manufactured Bird mobile handsets for as low as Rs. 1,399.

The move is aimed at stopping the churn in the pre-paid subscriber base.
Once a subscriber takes this plan, he will always be an Vodafone subscriber
whether the mobile is being used or not.

MARKET SITUATION

At the time of launch

The first mover in the market was Vodafone which launched its services in
Delhi in Aug 1995 (Informal launch). Essar Cellphone followed by launching
its services informally in Oct 95. At this point of time, the market was at a
nascent stage, awareness level was low and both operators independently
tried to spread awareness and educate the people

Once the networks were commercially launched, it became a number game

with a multitude of schemes being offered to woo customers Initially the
cellphone was perceived as a status symbol and utility took a back seat The
target segment in Delhi were corporate and the high income group. The
average capacity installed was for 1.5 lakh subscribers. This coupled with the
steep license fee paid to DOT put pressure on the operators to break-even by
rapidly expanding their markets. In the first two years, this led to a number of
schemes being offered and prices crashing.

COMPETITIVE SITUATION

Vodafone launched its services before Essar and skimmed the market picking
up the bulk of the high usage premium clients. This is a very competitive
industry with the two companies differentiating either on value-added services
or price. Vodafone is perceived as the high quality provider and has a
premium image. Essar, on the other hand, is perceived as the lower end
service provider. Vodafone positions itself as the market leader on the basis
of the number of subscribers. Essar is trying to counter this by emphasising
on the reach of its network and the quality of its service. However, Essar is
 29
somewhat not been very successful largely due to the inconsistency in
advertising

To promote themselves, both the players have been dependent on tactical

advertising However, they have restrained from using comparative advertising
Hoardings have been a very popular medium for carrying the advertisements
Vodafone has also been advertising on television using the Hutch Telecom
name.

SALES DEPARTMENT AND STRATEGY

A. Major Accounts (Direct Channel)

 Handles corporate (named and famed) accounts

 Forecasting of sales

 Mapping the accounts

 Providing after sales support to the subscribers.

 Maintaining call reports for records.

 Providing Feedback to the marketing department regarding the

requirement of the market.

B. IDC (indirect Channel)

 Handling distribution

 Maintaining records and level check of the channel partner

 Liaisoning between the channel partner and the company.

 Target achievement

 Training the executives of the channel

C. Distribution Support
 30
1. Logistics

 Monitor handset and SIM card requirements of channel partners

and co-ordinate with stores

 Settle areas of concerns such as incentive claims of channel

partners

2. Rental

 Provide cellular services (SIM cards) on rent.

 Provide cellular phones on rent

 Useful for people visiting Delhi for a short interval.

3 Telesales

 Call customers and generate sales lead.

 Follow up with the customers, if they need any assistance

 Pass on the sales lead to the channel department.

4 Audit

 Consultant to the Vodafone showrooms.

 Monitor the operations at the Vodafone distribution outlets Organize

training.

5. Retail

 Locate shops to open retail counters.

 Monitor the retail counters.

MARKET SEGMENTATION
 31
Segmentation is beneficial because of better predictability of the target
consumer group, minimization of risk exposure, better ability to fine-tune a
product / service to the requirement of target buyer and the resultant ease in
designing a proper designing marketing mix strategy In this case
segmentation is on the bade of income.

In evaluating different market segments the company looks at two factors The
overall attractiveness of the segments and the company's objectives &
resources The present market for Cellular phones, pagers and conventional
phones is as follows

Premium Middle Economy

Upper Lower Upper Lower Upper Lower

Cellular Phones X X X - - -

Pager X X X X - -

Conventional X X X X X -
Phones

X Market Segment Targeted

TARGET MARKET SEGMENT

Vodafone has targeted the premium and upper middle class. The rationale
behind it is that only those segments should be targeted who value time and
have the paying capacity. It Is also planning to target the business tourists
during their stay in the capital

About 60% of the clientele are top executives of corporate houses. About
15% are foreign organisations and the rest are professionals and small
businessmen. During the introduction stage there was intense pressure to get
consumers across to hook up with their brand, because getting them to switch
brand loyalty later would be hard

So far Vodafone marketers have been concentrating totally on the business

executive class but now that the basic viable volumes has beer) built up and
prices have declined to a certain extent they are planning to venture further a
field.
 32
POSITIONING

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 cellphone is an expensive means of communication and drive home the
point that the cellphone is actually a day-to-day utility

PRODUCT POLICY AND PLANNING

The product or service is the heart of the marketing mix. Without a product or
a service customers' needs cannot be satisfied.

The basic product promise by Vodafone is mobility. Vodafone's main

marketing strategy is to be a first mover all the time. It has recognised the
significance of making the first move-- because in the field of Communication
& Information Technology changes occur at a tremendous pace.

Effective product segmentation has to be carried on continuously because

basic services can be and will be copied and in time become expected
component of the product. Vodafone seeks to carry out this segmentation
through provision of new information services and making new facilities
available. The product policy and planning depends on the stage of the
product life cycle. At present the cellular phone market has reached the
maturity stage. Since, the premium segment is nearing saturation the
company targeting the upper middle and middle-middle class. In order to do
so Vodafone is trying to optimise the price performance package by offering
suitable "product bundling".

This involves the selection of the suitable hardware (handset) and its software
(its services.) with reasonable price in order to deliver maximum price
performance to its customers. In addition, it offers free Airtime services and
other concessions to make the prices and thus the product more attractive. It
has also opened a 24 hours customer service.

Only price doesn't serve as an effective differentiator, value added services

become the effective differentiator.

The "Value Added Services" provided from Vodafone are:-

 33
1). Voice Mail service
This system is similar to the answering machine - if the user is not able to
answer a call for some reason the caller can leave messages in the voice mail
box which can be later retrieved by the user

ii) Short Message Service

The short message service is like a two-way pager. It gives an option of
sending and receiving text messages directly from one mobile phone to
another without the intervention of an operator.

iii) Mobile Fax 1 Data Service

This service helps the subscriber to send and receive Faxes, access E-mail,
download computer files from other systems and remotely log on to another
computer and surf the Internet.

iv) Cash Card

The cash card is a pre-paid and pre-activated card which allows the buyers to
buy air time in advance. All it requires is the payment of an initial amount.
This is a useful service for people who travel to Delhi often and those who
want to control the expenses on their calls.

v) Caller ID
Displays calling person's number.

vi) Outgoing call restriction

To prevent or limit outgoing calls, for example, in peak hours. Also possible to
exclude one or several countries, or any geographical region, to permit only
local calls, or to limit the outgoing calls to a listed number.

viii) Call forward

Incoming calls can be forwarded to another fixed or mobile phone.

Besides these some other services provided by Vodafone are - Call

conferencing, Call Broadcast et cetera.
 34
It is in the operators -Interest that they not only get many subscribers but also
get them to use the mobile facility frequently. In the early stages getting
increases to subscribe may be easier than getting them to talk since they will
find it costlier to use the mobile phone as compared to a conventional phone
[if is believed that initially cellphones would be used buy]

viii) Roaming Facility

Roaming facility is available while the subscriber is travelling. The billing is

done in the home network (Delhi). Roaming facility is available manually* as
well as semi-automatically. Once a subscriber is In any other city or country,
where a GSM network is available, simply insert the SIM card of the local
operator Into your handset and start talking.

* Manual Roaming means a separate SIM card is provided for each city

** Semi automatic roaming means one card has the facility for different
cities.

VODAFONE'S MARKETING ORIENTATION.

Since this is a high-involvement expensive product, the service provider has

to fully take care of the customers.

a) They take personal responsibility to "get" the answer for any problem
faced by the customer

b) They anticipate customers' problems and take pro-active steps to

prevent them

c) They give answers to the questions & requests, quickly & efficiently.

d) They have a positive tone & manner while interacting with customers.

e) They end the interaction on a positive or a humorous note-making the

last 30 seconds count.

Vodafone realises that attracting people 'Is easy but converting them into loyal
customers is hard, hence emphasis is on maintaining a 'Smiling and a
Friendly Atmosphere' to please and retain the customer.
 35
PRICE AND PRICING POLICY

VODAFONE has realised that the Indian market is price sensitive. Therefore
it care of the has come up with various innovative tariff schemes to take
needs of different category of customers- Generally, the cellular services are
more expensive than the land line based telephone services. This is due to
the reason that the operating companies are required to pay a fee to the
government for using airtime.

MARKETING StrategyAdopted by Vodafone

Hutch has spent a considerable amount on advertising its mobile phone

service, Vodafone. Besides print advertising, the company had put up large
no of hoardings and kiosks in and around Delhi.

The objective behind designing a promotion campaign for the ‘Vodafone’

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

Vodafone. Since the cellular phone category itself is too restricted, also the
fact that a Cellular phone is a high involvement product, price doesn't qualify
as an effective differentiator. The image of the service provider counts a great
deal. 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. This also serves as an
effective differentiator

Brand awareness is spread through the' campaigns and brand preference

through brand stature. Vodafone'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 Vodafone was. In the next phase the campaign
associated Vodafone with Cellular only thereafter was the Hutch Cellular
connection brought up. Vans with Vodafone logos roamed the city, handing
out brochures about the company and its services to all consumers. About
50,000 direct callers were sent out. When the name was well entrenched in
the Delhiites’s mind, the Vodafone campaign began to focus on the utility of
 36
Cellphone. In the first four months alone Airtei's advertisement spend
exceeded Rs. 4 crores.

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 Vodafone.
As for aided it -is 100% (by giving clues and hints etc.).

Brand strength of a product or the health of a brand is measured by the

percentage score of the brand on the above aided and the unaided tests. The
figures show that Vodafone is a healthy and a thriving brand.

Every company has a goal, which might comprise a sales target and a game
plan with due regard to Its competitor. Vodafone 's campaign strategy is
designed keeping in mind its marketing strategy. The tone, tenor and the
stance of the visual ads are designed to convey the image of a market leader
in terms of its market share. It tries to portray the image of being a "first
mover every time" and that of a "market leader".

The status of the product in terms of its life cycle has just reached the maturity
stage in India. It is still on the rising part of the product life cycle curve in the
maturity stage.

The diagram on the left hand side shows the percentage of the users
classified into heavy, medium and low categories. The right hand side shows
the revenue share earned from the three types of users.

Vodafone, keeping in mind the importance of the customer retention, values

its heavy users the most and constantly indulges in service innovation. But,
since heavy users comprise only 15 - 20% of the population the other
segment cannot be neglected.

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 Vodafone in order to promote sales. The media channel is
chosen with economy in mind. The target segment is not very concrete but,
 37
there is an attempt to focus on those who can afford. The print
advertisements and hoarding are placed in those strategic areas which most
likely to catch the attention of those who need a cellular phone. The product
promise (which might cost different 1 higher) is an important variable in
determining the target audience.

Besides this, other promotional strategies that Vodafone has adopted are .

(i) People who have booked Vodafone services have been treated to
exclusive premiers of blockbuster movies. Vodafone 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

LITRATURE REVIEW

Sales promotion refers to many kinds of incentives and techniques directed

towards consumers and traders with the intention to produce immediate or
short-term sales effects.

Definition:
 38
“Sales promotion includes incentive-offering and interest-creating activities
which are generally short-term marketing events other than advertising,
personal selling, publicity and direct marketing. The purpose of sales
promotion is to stimulate, motivate and influence the purchase and other
desired behavioral responses of the firm’s customers.”

More on it...
Sales promotion offers a direct inducement to act by providing extra worth
over and above what is built into the product at its normal price. These
temporary inducements are offered usually at a time and place where the
buying decision is made. Not only are sales promotions very common in the
current competitive market conditions, they are increasing at a fast apace.
These promotions are direct inducements. In spite of the directness, sales
promotions are fairly complicated and a rich tool of marketing with
innumerable creative possibilities limited only by the imagination of promotion
planners. Sales promotion is often referred to by the names of ‘extra purchase
value’ and ‘below-the-line selling’.

Used to achieve short-term sales :

Sales promotion is a separate and distinct element in the promotion mix and
is an important and powerful tool of marketing. The aim of sales promotion is
goal-oriented to achieve sales/marketing objectives which are short-term and
immediate.

Becoming too common :

Today we find companies in almost all sectors offering some sort of a

promotion scheme. These sectors range from automobiles to beverages, from
financial services to foods, from household durables to services, from
household products to business products, from personal care to textiles and
apparel.

Writing about sales promotion tools, Prof. Philip Kotler observes – “they have
3 distinctive characteristics.”
 39
1. Communication: they gain attention and usually provide information
that may lead the customer to the product.

2. Incentive: they incorporate some concession, inducement, or

contribution that gives value to the consumer.

3. Invitation: they include a distinct invitation to engage in the transaction

now (offer valid till …or till stocks last)

Major users of sales promotions are marketers of soaps, detergents,

toiletries, soft drinks, toothpastes, tea, coffee, footwear, textiles, readymade
garments, consumer durable goods, music systems, autos, televisions,
washing machines, microwave ovens, refrigerators, magazines and many
other household items. In fact the list of product categories using sales
promotion is ever-increasing, no matter what the product category, it could be
staples, impulse goods, emergency goods shopping goods, speciality goods,
unsought goods, industrial products, or different types of services.

Sales promotion is now established as an important and increasingly

respectable element of the marketing communication tools. Sales promotion
expenditures are increasing dramatically, and economic recession is most
likely to fuel this trend further.

Advantages of sales promotion

Sales promotions have a significant effect on the behaviour of consumers

and trades people. Such promotions can bring in more profits for the
manufacturers because they permit price discrimination.

 Price discrimination

Producers can introduce price discrimination through the use of sales

promotions. They can charge different prices to different consumers and
trade segments depending on how sensitive each segment is to particular
prices. Coupons, special sales events, clearance sales and discounts are
examples to explain the phenomenon.
 40
Often such price discrimination are offered in specific cities in the country, .

Such price discriminating sales promotions that enable consumers and

traders to pay less in certain market area or stores usually bring in more
contribution than if one price is charged to all. Such price discrimination also
held in adjusting to fluctuations in demand and supply situation without
affecting any changes in the list price.

 Effect on consumer behaviour

As sales promotions are mostly announced for a short period, customers may
feel a sense of urgency and stop comparing the alternatives. They are
persuaded to act now rather than later.

With every 500g pack of Bournvita, you get a free mug . Offer valid only till
stocks last.
In our over communicated society and because of selective attention, it is
not uncommon to ignore many advertisements. Sales promotion deals such
as discounts, debates, coupons, premiums, etc also increased the attention
getting power of advertisements and convey the advantages and benefits of
the brand, including price information. By using promotions, marketers can
reach the deal prone customers and encourage brand switching.

 Effect on trade behaviour

Short-term promotions present an opportunity and encourage dealers to

forward by. This forward buying ensures that retailers won’t to go out of
stocks. As dealers have more than the normal stocks, they think it advisable
to advertise in local media, arranged displays and offer attractive promotion
deals to consumers. These actions help in increasing the store traffic.

 Retailer promotion: Buy Cadbury’s products worth Rs.3000/- and get

any 30 chocolates worth Rs.5 each free.

 Buy a box of Munch and get 1 Munch free.

Regional Differences
 41
The South is generally characterised by greater degree of going out and
people tend to drink outside the house. The Tamilian, consumer in particular,
is value oriented, rational and looks up to film stars, while the Keralite is more
international in his outlook. The Bangalorean is as cosmopolitan as his
Mumbai or Delhi counterpart." That sort of diversity believes Coca-Cola, calls
for a corresponding variety in promotions. The place to attract is the retail
zone. Coca-Cola recently launched a promotion called ' world of Coca-Cola'
covering Chennai in Tamil Nadu and Bangalore and Mysore in Karnataka. It
was a value deal, aimed at the consumer disposed towards global- style
outings. The consumer pays Rs 20 along with a label of a 500 ml of PET
bottle to get a card that entitles him to gifts and discounts at 29 outlets,
including those of global chains such as TGI Friday and Baskin and Robbins
this, in these cities. About four years ago, Pepsi had a similar promotion with
its Pep cards. This, however was on a national level, while the Coca-Cola
promotion is South based build retail level activity matters more than it does in
the North. The primary aim is to help the retail raise volumes.

Disadvantages of sales promotions

While sales promotion is a powerful and effective method to produce
immediate short term positive results, it is not a cure for a bad product or bad
advertising. In fact, a promotion is speed up the killing of a bad product.

 Increased price sensitivity

Frequently promoted brands in the product category, especially on the basis
of price, make consumers and traders more price sensitive not only for the
promoted brands but for other brands as well in the same product category.

Consumers wait for the promotion deals to be announced and then purchase
the product. This is true even for brands where brand loyalty exists.
Customers wait and time their purchases to coincide with promotional offers
on their preferred brands.

 Quality image may become tarnished

If the promotions in a product category have been rare, or the product

happens to be of high involvement category, the promotions could have a
 42
negative effect about its quality image. Consumers may start suspecting that
perhaps the product has not been selling well, the quality of the product is true
compared to the price or the product is likely to be discontinued because it
has become outdated.

 Dealers forward buy and divert stocks

In case of deals for the trade, many dealers forward buy, in excess of their
inventory requirements. This is particularly happens if a product is low bulk,
much in demand and the inventory holding costs are favourably low. This is
true both for wholesalers as well as retailers. Forward buying of excessive
stocks on deals or quantity discounts can lead to diversion of some of the
stocks in non-deal areas. Forward buying of excessive stocks on deals or
quantity discounts can lead to diversion of some of the stocks in non- deal
areas. Wholesalers and retailers do not hesitate in selling these excess
stocks in non- deal areas on prices that are less than the list price, but
keeping some reasonable margin for themselves. This is likely to have a
negative effect on price discrimination efforts of the company as dealers and
those areas would not be buying even the normal requirements from the
company.

 Merchandising support from dealers is doubtful

One of the trade promotions tool is to offer promotional allowances to trade

people to motivate them to provide merchandising support and to pass on
some benefit to consumers. This generally is the condition attached with such
promotional allowances. In many cases, the dealers do not cooperate in
providing the merchandising support nor do they pass on any benefit to
consumers. The retailer might not be willing to give support because he does
not have the place, or the product does not sell much in his shop, or may be
he thinks the effort required is more than the commission/benefit derived.

 Short-term orientation

Sales promotions are generally for a short duration. This gives a boost to
sales for a short period. This short-term orientation may sometimes have
negative effects on long-term future of the organization. Promotions mostly
 43
build short-term sales volume that is not maintained. Heavy use of sales
promotion, in certain product categories, may be responsible for causing
brand quality image dilution.

The argument given in favour is that companies should develop superior

products or services which are better than competitors and consumer should
be convinced through appropriate and focused advertising about the
superiority of the product and its image.

This will result in lasting brand identities reflecting brand image will keep
customers loyal to the brand.

Difference Between Advertising And Sales Promotion

Advertising Sales Promotions

By using a variety of persuasive Besides giving reasons in the form of

appeals, it offers reasons to buy a different appeals, they offer incentive
product or service. to the consumers to buy the product or
service now.

Appeals are emotional or functional in Appeals are rational

nature

Time-frame is long term Time frame is short term

The primary objective is to create an To get sales quickly or to induce trial.

enduring brand image

Indirect and subtle approach towards Direct in approach to induce

persuading customers to buy a product consumers to buy a product or service
or service immediately by temporarily changing
the existing price-value relationship of
the product or service.

But both advertising and sales promotions go hand in hand. Both are very
essential to achieve success. Both are complementary to each other.

Reasons For Rapid Growth Of Sales Promotion

 44
There are a number of reasons that are favorable to the growth of sales
promotion:

 Increasing Competition

The air of change is gaining momentum after the introduction of economic

liberalisation. Due to increase in competition, companies are finding it
increasingly difficult to compete on quality. They are therefore resorting to
more and innovative methods of sales promotion.

Customers Have Become More Price Sensitive

This increased price sensitivity is a direct result of rampant inflation. Economic

recession is likely to fuel this trend further, as consumers and dealers become
more sensitive towards prices.

 Sales Promotions Generally Create An Immediate Positive Impact On

Sales

Advertising, personal selling and other methods of promotion produce slower

sales response compared to sales promotion. Sales promotions are mostly for
short duration, for a specified period, leading to a sense of urgency in
consumers to buy now. This creates an immediate positive impact on sales.
With careful planning, it would not be difficult to measure the impact on sales
volume and profit, and see the consequences of running the promotion even
on weekly or daily basis.

 Products have become more standardized

In many product categories, there is a proliferation of brands; many of them

are line extensions and me-too brands. Most brands are being perceived by
consumers to be more or less similar within a given price range because of
the inability of manufacturers to develop truly differentiated products. Under
these circumstances, advertising messages are unable to strongly influence
the consumers’ perceptions and create brand franchise. As a result of these
perceptions of similarity among brands, marketers have no way but to
compete on the basis of extra benefit offered through sales promotion.
 45
Competing companies struggle to capture market share by using every tool
likely to bring sales success.

 Consumer Acceptance

As competition intensifies and promotions proliferate, consumers have learnt

to earn the rewards of being smart shoppers. Over a period of time, they have
also learnt that brands on promotion are not necessarily of lower quality.

Woodland has a scheme of upto 50% off on Woodland shoes and apparel.

This learning based on experience, gets transferred to other product

categories as well. Consumers have learnt that promotions are being
extended to many product categories where such promotions were unheard
of.

 Expectations Of Price Decrease

With the entry of many different brands of consumer durable products in the
same product category, consumers anticipate that the prices of durable goods
will come down. This encourages them to postpone their purchases. To speed
up the purchase in this segment of consumers, sales promotions are an
effective and attractive method. Consumers evaluate the incentives
associated with their purchase decision and are motivated to act now, rather
than wait for the anticipated decrease in price. The marketers should ensure
that the extra benefit is attractive enough to create a sense of urgency in
consumers.

 Advertising Has Become More Expensive And Less Effective

All the advertising media have become quite expensive. Audio-visual medium,
which is considered as the most effective for short-duration ads, may cost in
excess of Rs. 1 lakh for a 10 second exposure during prime time. In many
cases, consumers have reached a point of boredom due to excessive
advertising on TV. Some consumers even consider advertising as an intrusion
into their privacy, leading to zapping (surfing channels). Firms with small
budgets cannot compete with big companies which spend huge sums of
 46
money on advertising. For these small budget firms, sales promotion is a
more cost-effective promotion method to produce sales results.

 Trade Has Become More Powerful

Retailers and wholesalers have become powerful and find themselves in a

position to demand extra facilities from the companies. They Channel
members demand more incentives to get the desired results. Manufacturers
do not seem to have any alternatives but to concede to their demands,
keeping in view the competitive market conditions.

 Pepsi offers silver coins to their dealers stocking Pepsi cases during
Diwali season. And the promotions offer differs across dealers.

 Emphasis On Sales Volumes

Towards achieving the long-term profit goals, manufacturers try to attain high
sales volume. Brand managers and product managers find themselves under
pressure to achieve short-term sales results for the sake of their careers.
Compared to any other promotional method, sales promotion is a more
effective method to generate short-term sales volume.

 Sales Promotions Maximize Profits

A number of economic theories conclude that a company can maximise profits

by using sales promotion. Such promotions can permit price discrimination by
allowing the brand to compete in 2 or more different market segments. Sales
promotion may allow a premium brand to compete with a lower tier brand
among price sensitive consumers. For example, a premium band of toilet
soap may be on promotion in some price sensitive markets, while in the
remaining markets it is sold at its normal price.

 Introducing An Element Of Interest

There are a number of promotions which are often called interest promotions.
Some of the more popular interest promotion techniques are samples,
contests, and sweepstakes, free premiums and mail-in premiums. These
promotions create an element of interest and excitement, and consumers
 47
enjoy these and response enthusiastically to such contests and sweepstakes,
etc.

 Impulse Buying Is Increasing

The number of marginal customers is increasing. Displays at the point of

purchases lead to impulse buying by consumers, more so if the items on
display are not expensive. There is a popular saying in Hindi, “jo dikhta hai,
voh bikta hai.”

This strategy is followed by soft drink majors like Pepsi and Coke on a large
scale. They pay huge sums of money to keep their products in front so that
they are visible.

These are also known as display promotions

 Sales Promotion Specialists Are Available

As a result of economic liberalisation, the number of management institutions

has increased. This has lead to the availability of specialists, who are not only
well paid but can handle this specialised work more efficiently in the current
market conditions, where sales promotion has become more important.

 Excess Stocks

Because of increasing number of brands, it is difficult for manufacturers and

dealers to anticipate future sales. This, at times, leads to excessive
inventories, and the quickest way to clear that, is to go for sales promotion.
Footwear companies like Bata, Woodland, etc regularly offer around 50%
discount on their products.
Pull And Push Strategies

Sales promotion decisions are significantly affected by whether the company

decides to do to pull or push strategies to accomplish its objectives. Such a
decision may require a little or a lot of cooperation from resellers. The
requirements to implement one strategy might be little more than to just stock
the product by the retailers. The other strategy may demand more
 48
participation from resellers such as the ability to explain to the consumers as
to how a product works.

In case of using a pull strategy, marketing efforts are directed at the ultimate
consumer and consumer promotions such as consumer contests and
sweepstakes, rebates, coupons, free samples, consumer premiums, etc are
used. If this strategy is also chosen to include advertising, there are large
advertising expenditures. The objective of such promotional efforts would be
to create sufficient consumer demand to pull the product through the
channels, that is the consumers are encouraged to demand the product from
retailers who in torn place orders with wholesaler or manufacturer to meet the
consumer demand.

PULL

This strategy may require little promotional efforts from the resellers except to
stock input the product on shelves.

A pull strategy is appropriate when

 The product demand as high.

 It is possible to differentiate the product on the basis of real or

emotional features,

 Brand consumers show high degree of involvement in the product

purchase,

 There is reasonably highly brand loyalty and consumers make brand

choice decision before they go to the store.

PUSH

If a firm decides to use push strategy, its efforts are directed at resellers and
the manufacturer becomes very dependent on their personal selling abilities
and efforts. The promotional efforts are focused at pushing the product
through the distribution channels; the resellers may be required to display,
demonstrate and offer discounts, to sell the product. The communication to
resellers is generally through trade circulars or the sales force.
 49
PUSH

Push strategies generally appropriate for product categories where there is

low brand loyalty and many acceptable substitutes are available in the
market. It may also be suitable for relatively new products or when the brand
choice is often made in response to displays in the stores, the product
purchase is unplanned or on impulse and the consumer is familiar and has
reasonably adequate knowledge about the product. Manufacturers, who
cannot afford to engage in sustained mass advertising, often use push
strategy and offer effective incentives to dealers.

Retailer promotion: Buy Cadbury’s products worth Rs.3000/- and get any 30
chocolates worth Rs.5 each free.

Through this offer the company is pushing its product to the retailers and now
that the retailer has enough incentive the retailer stocks more and thus it
becomes essential for the retailer to push the product to the consumers.

Pull promotions Push promotions Push promotions

(Manufacturer to consumer) (Offered to trade) (Offered by retailer)

Sampling Discounts Price cut

Coupons Display allowance Free goods

Price packs Advertising allowance Premiums

Rebates Free goods Displays

Continuity programs Contests Feature advertising

Contests Trade coupons Quantity discount

Sweepstakes Quantity discounts Clearance sale

Tie-in promotion

Financing incentives

Special events
 50
Premiums

Bonus packs

Exchange offers

Product life cycle and pull or push strategies

It is quite important for brand managers to analyze and identify the stage of a
particular brand in its life cycle before deciding about using sales promotion.
During the stage of product introductions, a product requires different sales
promotional tactics.

Likewise, during the product growth stage, its maturity and the decline stages,
the sales promotion tactics required are likely to be quite different.
Promotional strategies are also likely to be affected for different non-durable
and durable products. Also important in the development of promotional
strategy would be the target audience is towards whom the

 Introduction stage

When the product is being introduced, the major objective is to increase the
trial rate and distribution of the product. For increasing trial sampling,
coupons, demonstration which are all pull promotions, can be used. To make
the product available in distribution channels, it may become necessary to use
some kind of incentive scheme for the resellers to encourage them and
minimise their risk associating stalking a new product. Manufacturers can
offer display allowances to resellers to make the product highly visible. There
could be liberal guarantees to take back the stocks, if unsold, to reassure the
trader. These are all push promotions. For most new products, it would be
 51
difficult to be successful without pull promotions. In fact when new products
are introduced, much more emphasis is given to pull rather than push
promotions.

 Cadbury is introducing the new brand bytes having an introductory

offer Rs5 off which will be available through the coupons that are
distributed with newspapers like the Times of India.

Growth stage

In this stage, the dominant objectives are to expand the market for increasing
the number of new customers who would try the product for the first time and
to encourage the repeat purchase by those who have already tried the
product. Another important objective is to expand or at least maintain the
distribution. For increasing trial, pull promotions are appropriate however as
the trial rate increases free samples become quite an expensive proposition.
To encourage repeat purchase by consumers, in pack or on-pack coupons
can be used.

This would also help in converting those customers who have already tried
the product into regular users of the product. Another tool of sales promotion
that can be used is to offer bonus packs containing additional quantity at the
same price as an incentive to encourage repeat purchase. To expand the
distribution, push promotions such as different types of discounts, free goods
that increase the profitability of the trade, can be used.

 Maturity stage

When the product is in maturity stage, many similar brands are available to
customers. Due to price discounts or other extra benefits, consumers often
switched brands. This phenomenon of brand switching is more common if the
product category happens to be one of low involvement. The sales
promotional strategy in this stage can focus on attracting maximum number of
brand switchers, reward and reinforce the loyalty of regular users and use
more of push promotions to build inventories with resellers. Many tools of
sales promotion such as premiums, price discounts, extra goods, displays,
dealer contests, feature advertising become important.
 52
Generally a combination of pull and push promotions prove more effective
during maturity stage of a product life cycle. The market share of the brand is
an important factor in gaining the support of resellers.

Techniques Of Sales Promotions

Consumer market sales Trade sales promotions Sales force sales

promotions promotions

Price discounts Off-Invoice Allowance Sales contests

Price pack deals Buying allowance Incentives

Rebates/refunds Display and advertising Awards and prizes

allowance

Continuity programs Buy back allowance Premiums (gifts)

Coupons Bill back allowance Sales meetings

Samples Count and recount Training

allowance

Contests and sweepstakes Slotting allowance Sales manuals etc.

Premiums and advertising Merchandise allowance

specialties

Free trials POP displays

Brand placement Cash rebate

Event sponsorship Free goods

Product warranties Trade coupons

Exchange offers Dealer listing

Internet promotions Dealer loaders

Low interest financing Sales contests

Free service camps SPIFFS (push money)

Incentives

Sales training programs

 53
Trade shows

Consumer sales promotions

Sales promotions directed at the end-user, whether by the manufacturer or

the retailer, are called consumer sales promotions. Manufacturer announced
promotions to consumers are based on ‘pull’ strategy of the manufacturer and
retailer announced promotions to consumers constitute ‘push’ strategy of the
retailer.

Objectives of consumer market sales promotions

The following basic objectives can be pursued with sales promotions in the
consumer market.

 Stimulate trial purchase

When a firm wants to attract new users sales promotions tools can reduce the
consumer’s risk of trying something new. A reduced price or offer of a rebate
may stimulate trail purchase.

 Pantene when it was launched did a lot of sampling, to stimulate trail

purchase. Their efforts have surely shown results, with Pantene being
one of the top selling brands in India today.

 Stimulate repeat purchases

In-package coupons good for the next purchase, or the accumulation of points
with repeat purchases, can keep consumers loyal to a particular brand.

The most prominent frequency programs are found in the airline industry
where competitors try to retain their most lucrative costumers by enrolling
them for various perks such as frequent flyers can earn free travel, hotel
stays, gifts etc.

Stimulate larger purchases

 54
Price reductions or two-for-one sales can motivate consumers to stock up on
a brand, thus allowing firms to reduce inventory or increase cash flow.

Many soaps brands are doing sales promotions to stimulate larger purchases.
When people generally come to buy soaps, and see the offers like,

 Introduce a new brand

Because sales promotions can attract attention and motivate trial purchase, it
is commonly used for new brand introductions.

Cadbury bytes was promoted with Rs 5 off

 Combat or disrupt competitors strategies

Because sales promotions often motivate consumers to buy in large quantities

or try new brands, they can be used to disrupt competitors marketing
strategies. If a firm knows that one of its competitors is launching a new brand
or initiating a new advertising campaign, a well-timed sales promotions
offering deep discounts or extra quantity can disrupt the competitor strategy.
Add to the original discount an in-package coupon for future purchases, and a
marketer can severely compromise competitor’s efforts.

 Contribute to Integrated Marketing Communications

In conjunction with advertising, direct marketing, public relations and other

programs being carried out by a firm, sales promotions can add yet another
type of communication to the mix. Sales promotions suggest an additional
value, with price reductions, premiums, or a chance to win a prize. This is an
additional and different message within the overall communication effort.

Techniques of consumer sales promotions

 Price discounts or price-off deals.

Price deals are probably the most commonly used promotional techniques. A
price deal for a customer means a reduction in the price of the promoted
product and the consumer saves money on purchase.
 55
 Boost 500gm pack, Rs. 10 off on normal price, now available at Rs. 90
only.

Price discounts are communicated through POP advertising, window displays,

sales people, advertising in newspapers, magazines and TV ads.

Determining the quantum of discount depends on the consumer’s price

perceptions and may be difficult to decide.

Such promotions work very well in gaining the attention of consumers,

particularly at the point of purchase among similar brands and may also
encourage unplanned or impulse buying. If there are three different models of
a product and because of the discount offered the price of the higher end
model is appears, not too high to the consumer as compared to the lesser
priced model, then the consumer may buy the higher end model.

The main advantage of this tool is that it has a very Strong consumer
response

Such discounts offer immediate value and strong consumer response.

The Flexibility and convenience of implementation is another advantage. Price

offers are extremely flexible in the sense that the producer has total control on
the number of units being promoted and the market area in which the offer will
be given. If different packs of the same brand are available, the marketer can
choose the one size that is not selling well.

A discount offer may rapidly lose its advantage if competitors announce a

similar offer. In fact, competitors are very likely to retaliate leading to the
danger of triggering a promotion wall in which no one benefits except the
consumer.

Such discounts are short term and are unlikely to produce any long-term
gains because the incentive is to purchase now by creating sense of urgency.
When the discount is withdrawn the sales may fall below the level of pre-
promotion period. And in the long run the sales would return to pre-promotion
period level.
 56
 Price pack deals

Price pack deals are also called value packs.

They can take any of the two forms: one is bonus pack and banded pack.

In case of a bonus pack, an additional quantity of the same product is offered

free when the standard pack size of the product is purchased at the regular
price.

 Cadbury temptation offers 10% extra free. 200gms+20gms

 Boost 500grm jar gives 20% more free.
A variation of this offer is when the marketer develops special packs of the
product containing more quantity but the price is proportionately low. This is a
method to “load” the consumer up with the product. This technique is often
used to introduce a new large size of the product or to encourage continued
usage and also to increase consumption.

The offer is termed as “banded pack” when 2 or more units of the products
are sold at a reduced price compared to the regular price.

Another variation of this technique is “buy 1 get 1 free” or some similar offer, it
could be “same for less” or “more for the same.”

The main advantage of this tool is that extra product may encourage
increased usage and help sustain the habit. Also among other similar brands,
a bonus pack stands out at the point of sale.

 Refunds And Rebates

Refund is the repayment of total money paid for purchase, while the rebate
represents repayment of only part of the money paid for the purchase. Refund
offers seems to work very well in guaranteeing the trial of a product or service
since there is no risk involved for the customer because of the promise of total
refund of the purchase amount.
 57
Refunds and Rebates play an important role in the consumer durable
segment because the product price is reduced to a great extent because of
the rebate offer.

 Coupon

A coupon entitles a buyer to a designated reduction in price for a product or

service. Coupons are the oldest and most widely used form of sales
promotions. Coupons bear an expiry date and cannot be redeemed after the
cut off date.

Coupons can be of 3 types:

 Direct to the consumer

 Media distributed

 Product distributed.

The main Advantages of coupons are:

 Encourage brand switching

 Stimulate trial for a product

 Take off the attention from price

Many companies to create more product trials has coupons in the

newspapers and magazines which avail you some rupees off on there
products Contests And Sweepstakes

Contests and sweepstakes can draw attention to a brand like no other sales
promotions technique.

A contest has consumers compete for prizes based on skill or ability. Winners
in a contest are determined by a panel of judges or based on which
contestant comes closest to a predetermined criterion for the contest.
Contests tend to be somewhat expensive to administer because each entry
must be judged against winning criteria.
 58
Contests were very often used earlier where people has to write slogans,
poems, stories etc. generally “I like the product because …” and the best ones
won prizes. But off lately, contests are becoming less and sweepstakes
increasing. People are more willing to play on luck rather than participate by
showing their abilities. A sweepstake is a promotion in which winners are
determined purely by chance.

Consumers need only to enter their names in the sweepstakes as a criterion

for winning. Some popular types of sweepstakes also use “scratch-off cards”.

Contests and sweepstakes often create excitement and generate interest for
a brand, but the problems of administering these promotions are substantial.

One problem is that the game itself may become the consumer’s primary
focus, while the brand becomes secondary. The technique thus fails to build
long-term affinity for the brand.

 Britannia khao world cup jao campaign has taken the market by a
swing.

Under the offer you collect points available on Britannia biscuit packets and
exchange 100 points for a scratch card, which has various gifts and the 100
world cup tickets. The offer was actually introduced during the last world cup
and had shown phenomenal results. Sale increased tremendously; there was
an increase in the sales by 25%, claims the company. So it is being done this
year too. This year too the contest is showing good results.

 Sampling

Getting consumers to simply try a brand can have a powerful effect on future
decision-making. Sampling is a sales promotion technique designed to
provide a consumer with an opportunity to use a brand on a trial basis with
little or no risk. Saying that sampling is a popular technique is an
understatement. Sampling is particularly useful for new products, but should
not be reserved for new products alone. It can be used successfully for
established brands with weak market share in specific geographic areas.
 59

Techniques used in sampling:

 In-store sampling

 Door-to-Door sampling

 Newspaper sampling

 On-package sampling
 Mobile sampling
Trial offers

Trial offers have the same goal as sampling – to induce consumer trial use of
a brand- but they are used for more expensive items.

Ex: exercise equipment, appliances, consumer electronics, etc. the expense

to the firm of course can be formidable. Segments chosen for this sales
promotion technique must have high sales potential.

 Premiums and advertising specialties

Premiums

They are items offered free or at a reduced price, with, the purchase of
another item. Many firms offer a related product free.

There are 2 options available for the use of premiums:

1. A free premium provides consumers with an item at no cost, the item is

included in the package of the purchase item.

2. A self-liquidating premium requires a consumer to pay most of the cost

of the item received as a premium. In this promotion offer the
consumer is required to send a specified sum of money along with a
proof of purchase to claim the premium.

Premiums have become very common today. Many companies are offering
lots and lots of premiums. The main advantage of Premiums is that they offer
 60
not only that one product but also another product, which may influence the
customer, a lot to buy the product. Especially if the other product is worth it.

Also new products are given free with established brands to stimulate trial of
the new brand.

 Buy a Cadbury Bournvita and get a dairymilk worth rs 10 free

Advertising specialties

Popular advertising specialties are caps, t-shirts, toys, mugs, mouse pads,
pens, calendars, etc.

Advertising specialties have 3 key elements:

A message placed on a useful icon, and given to consumers with no

obligation.

 Pepsodent toothpaste 100gm pack get free dental insurance worth

Rs.1000, this is a very effective strategy because it is giving you’re the
guarantee that nothing can happen to your teeth. The Rs.1000
insurance speaks a lot for its brand and its product thrust.

 Buy any Nestle chocolate and get tatoo free.

Many other kids products are influence a lot by such specialties especially
liked by the kids like tattoos, masks, tazo, cricket bats etc. hence products
that have such offers sell more than the other brand available.

 Ruffles lays, get free Tazo,

 Rasna, get free Prankies

Continuity/frequency Programmes

In recent years, one of the most popular sales promotion techniques among
consumers has been “frequency Programmes”. The main objective of such
Programmes is encouraging repeat purchases or repeated visits to particular
retail shops. Frequency Programmes offer consumers discounts or free
 61
product rewards for repeat purchase or patronage of the same brand or
company.

sBrand placement

Brand placement often referred to, as product placement is the sales

promotions technique of getting a marketer’s brand featured in movies and
television shows. The use of a brand by actors and actresses or the mere
association of the brand with a popular film/ television show can create a
positive image and have a huge impact on the sales of a brand.

Marketers and advertisers used to think that brand placements affected only
consumers’ perceptions of a brand, much like advertising. But recent brand
placements have shown that the technique can have a sales impact like a
traditional sales promotions.

Brand placement has varying results; if the brand name is spoken aloud the
impact can be dramatic but less obvious placements, referred to as
background placements are considered by some as a waste of money.

 Coke in Yaadein , Pepsi in Khushi

 Pass Pass in Yaadein

 Event sponsorship

When a firm sponsors or co-sponsors an event such as a rock concert, a

cricket match, etc. the brand featured in an event immediately gains credibility
with the event audience. The audience attending an event already has a
positive attitude and affinity for the contest – they choose to attend. When this
audience encounters a brand in this very favourable reception environment,
the brand benefits from the already favourable audience attitude.

 Coke and Pepsi keep sponsoring many events.

 Exchange offers

If a family bought a refrigerator 10 years ago and the machine is still giving
reasonable service then the family is unlikely to buy a newer and more
 62
advanced version of the refrigerator unless they get rid of the older one by
selling it to someone. No one in our
country is prepared to throw it as junk. Same thing is true for a number of
products such as televisions, microwave ovens, washing machines, cars, two-
wheelers, computers, etc.

This segment of present owners is sizeable enough yet to sell new brands to
those who already own a similar product is not easy. To attract this segment,
manufacturers regularly announce exchange offers.

Consumer durables market is the one where exchange offers are used the
most. Almost all the TVs, Refrigerators, Washing Machines, etc. have
exchange offers.

 Internet promotions

They are the most recent form of sales promotions. They are promotions that
are done via the Internet. It is becoming increasingly popular because of the
large use of Internet. But still it has a lot to develop.

Marketing communications

Marketing communications breaks down the strategies involved with

marketing messages into categories based on the goals of each message.
There are distinct stages in converting strangers to customers that govern the
communication medium that should be used.

Advertising

 Paid form of public presentation and expressive promotion of ideas

 Aimed at masses

 Manufacturer may determine what goes into advertisement

 Pervasive and impersonal medium

 Functions and advantages of successful advertising

 Task of the salesman made easier

 63
 Forces manufacturer to live up to conveyed image

 Protects and warns customers against false claims and inferior

products

 Enables manufacturer to mass-produce product

 Continuous reminder

 Uninterrupted production a possibility

 Increases goodwill

 Raises standards of living (or perceptions thereof)

 Prices decrease with increased popularity

 Educates manufacturer and wholesaler about competitors' offerings as

well as shortcomings in their own.

 Objectives

 Maintain demand for well-known goods

 Introduce new and unknown goods

 Increase demand for well-known goods/products/services

 Requirements of a good advertisement

 Attract attention (awareness)

 Stimulate interest

 Create a desire

 Bring about action

 Eight steps in an advertising campaign

 Market research

 Setting out aims

 64
 Budgeting

 Choice of media (television, newspaper, radio)

 Choice of actors (New Trend)

 Design and wording

 Co-ordination

 Test results

 Personal sales

Oral presentation given by a salesman who approaches individuals or a group

of potential customers:

 Live, interactive relationship

 Personal interest

 Attention and response

 Interesting presentation

 Sales promotion

 Short-term incentives to encourage buying of products:

An example of this is coupons or a sale. People are given an incentive to buy,

but it does not build customer loyalty, nor encourage repeat buys in the future.
A major drawback of sales promotion is that it is easily copied by competition.
It cannot be used as a sustainable source of differentiation.

 Marketing Public Relations (MPR)

 Stimulation of demand through press release giving a favourable

report to a product

 Higher degree of credibility

 Effectively news
 65
 Boosts enterprise's image

 Customer focus

Many companies today have a customer focus (or customer orientation). This
implies that the company focuses its activities and products on consumer
demands. Generally there are three ways of doing this: the customer-driven
approach, the sense of identifying market changes and the product innovation
approach. In the consumer-driven approach, consumer wants are the drivers
of all strategic marketing decisions. No strategy is pursued until it passes the
test of consumer research. Every aspect of a market offering, including the
nature of the product itself, is driven by the needs of potential consumers. The
starting point is always the consumer. The rationale for this approach is that
there is no point spending R&D funds developing products that people will not
buy. History attests to many products that were commercial failures in spite of
being technological breakthroughs.
66
 67
RESEARCH METHODOLOGY

Research Objective:

1) How does Vodafone attract their customers through advertisements?

2) What are the additional benefits that the customers get by the promotional
schemes?

3) What is the impact of promotions of Vodafone on customers?

Scope of the thesis:

Delhi and NCR – South Delhi: Saket, Vasant Kunj, Gurgoan, Faridabad,
Vasant Vihar.

Research methodology:

Primary research

1. Structures Questionnaire method

2. In-depth interviews.

Secondary research

3) Internet

4) Magazine and newspapers

Justification of choosing the research:

There are two reasons for choosing this research:-

a) Customer relation is essential to the survival of any businesses. The best

way to find out whether your customers are satisfied is to ask them. There is a
need for such a research at Vodafone which can help and formulate a
strategy to satisfy more and more customer through all services and solve the
quires and curiosities about the new Schemes and thus providing the
customer a platform for connecting with the company.
 68
b) The second reason is for choosing the research is my prime interest is
because I want to pursue my career in the Marketing. I think, this work will
help me build a solid background to clearly understand the
 69
PRIMARY DATA AND ANALYSIS

Que1: How did you come to know about Vodafone ?

Consumer
Awareness

Friends/relative 12

Newspaper/Magazine Stalls 45

Internet 9

Advertisement 30

Hoardings 4

As per our study suggested that the consumer awareness of the Vodafone
increasing due to of the advertisement Through digital media as well as one
aspect of the consumer awareness of the Vodafone also increases due to of
its promotion though Newspaper and Magazine stalls. Increasing level of
consumer awareness is also help any organisation to retain more and more
consumer base.

Que2: Why do you prefer this brand?

Preference of Vodafone
 70

Price 12

Brand Name 11

Quality 20

Sales promotion 22

Easily Available 9

Scheme / Offers 13

Packaging 7

Others 6

As per our study suggested that people prefer Vodafone because Sales
promotion of the Vodafone is always has a top preference of the people
which has very positive impact on the sales of Vodafone . As we seen from
the tabular graph and the data chart which is shown above of this
interpretation, As one of the objective of our study also to justify this term with
the sales promotion.

22% of the people purchasing Vodafone because they like the promotional
strategy of the company while 20% of the people prefer Vodafone because of
the content quality of the magazine. Since brand name of the Vodafone also
making positive impact towards the sales promotion, as per out study
 71
suggested that 11% of the people like the brand of Vodafone so in this area
Vodafone need to improve.

Que3: Would you recommend company’s products to others?

1 Yes

2 No
 72
Recommendation

Yes 98

No 2

In this study my primary research result suggested that 98% of the people out
of 100 will recommend to others for purchasing of the Vodafone while only
2% are those population area who is either don’t want to give this kind of
recommendation due to of personal or other reason. This is good sign for the
company to grow faster than the competitor with the help of word of mouth
publicity.

Que4: Which promotional activities influence your decision to go for

Vodafone rank in a preference order

Promotional Activity

Excellent Very good Good Fair Worst

Discount 34 28 18 12 8
 73

Coupons 12 16 37 22 13

Extra Talktime 15 19 42 14 10

Free Gifts 38 21 15 16 10

Contest 19 18 38 16 9

As this study suggested that if Vodafone gives discount and free gifts both for
sales promotion it would give impact on the sales by 90% another scenario
tells us that if Vodafone management allow coupons and extra Talktime that
will increase Vodafone sales by 91.2%, while coupon & contest will help
Vodafone to achieving its 88.2% sales then the others.

Que5 : Which promotional activities do you want in near future from

Vodafone rank in a preference order?

Future Promotional Activity

Excellent Very good Good Fair Worst

Price-off
Promotion 14 15 38 27 6 100

Premium offers 27 18 39 7 9 100

 74
Couponing 18 19 43 17 3 100

Loyalty
schemes 17 21 47 10 5 100

Guarantees 12 32 20 14 22 100

Welcome-
Cocktail 21 22 38 12 7 100

As per our study suggested that the in future people are very particular about
the some of the promotional strategies, for the price off promotion 38 people
are said they want good report on this as a price promotional strategies. 39
people out of 100 people suggested that they want premium offers which
gives extra leverage to the Vodafone customer.

Q6. Quality of Products & Packaging please rank in order of preference

Range of products catering to all types of consumer preference

Attractiveness of consumer packaging

Competitiveness of the product in the market/Ease of selling

Promptness in dealing with products complaints

Proper labeling (way of using)

 75
Range of Attractive Competitiveness/ Promptness Proper
products packaging Ease of selling with labelling
complaints

Excellent 64 28 36 17 34

Very 11 18 27 29 23
good

Good 6 13 11 12 11

Fair 6 16 12 18 9

Poor 7 12 9 10 16

Don’t 4 6 3 6 5
Know

Refused 2 7 2 8 2

Vodafone has excellent product range, 63 Vodafone managers suggested

that company has Excellent product range to be offer to the customer and has
unique value proposition than the other company. As per our correlation test
showing packaging and product range has similarity of 86.8% which means
that company has good packaging range with the excellent product range but
 76
company need to improve the quality of the customer grievances because
when you increasing the product range your promptness towards solving
customer query should be in the higher side. As per 100 who is contributed in
our survey suggested that Packaging of the Vodafone give competitiveness
of the firm as per our correlation test suggested that these two are 95% of the
correlated to the each other. While almost 66% of the suggested that
packaging of the Vodafone would be good.

Q7. Quality of Sales Promotion and schemes

Frequency of sales promotion/schemes

Attractiveness of sales promotion/schemes

Innovativeness of sales promotion

Promptness of response to competitive sales schemes

Sufficient supply of stocks provided with schemes/offers

Frequenc Attractiveness Innovativeness competitive Sufficient

y of sales of sales of sales sales supply of
promotion promotion promotion schemes stocks

Excellent 43 64 43 75 67

Very good 32 11 32 10 10

Good 1 6 12 9 7
 77
Fair 9 6 2 1 8

Poor 6 7 9 1 1

Don’t Know 7 4 1 2 4

Refused 2 2 1 2 3

As per our study suggested that the quality of sales scheme of the Vodafone
is very satisfactory while we analyze the data, Innovativeness and the
Frequency of sales promotion is the biggest factor which contributed to the
sales promotion of the Vodafone while this has been proved through the
which we applying above 93.5% chances of the getting best deal through
these situation. While as per the correlation test also showing the sufficient
stock would necessarily to have when any new sale promotion launched by
the Vodafone these factor are highly correlated to each other which is about
to 99.3%.
 78

8. Do you find that the government’s telecom policy has had the most
radical impact on the development of mobile service providers?

Company Yes No

Airtel 4 1

Vodafone 3 2

Idea 3 2

MTNL 5 --

As according to the above table 15 (75%) out of the total 20 interviewed

people in all the above four specified Indian mobile service providers find that
the government’s telecom policy has had the most radical impact on the
development of mobile service providers, whereas some 5 (25%) of them
deny this.
 79
9. Do you believe that one of the challenges facing mobile operators in
India is the diversity of the coverage regions?

Company Yes No

Airtel 2 3

Vodafone 3 2

Idea 3 2

MTNL 2 3

As according to the above table 10 (50%) out of the total 20 interviewed

people in the mobile service providers are of belief that one of the challenges
facing mobile operations in India is the diversify of the coverage regions,
whereas interestingly another 10 (50%) of them deny this.

10. To what extent, does you find that mobile service providers is a very
complex standard?
 80
Company To some extent To great extent

(1-5) (6-10)

Airtel 3 2

Vodafone 2 3

Idea 2 3

MTNL 3 2

As according to the above table 10 (50%) out of the total 20 interviewed

people in all the above four major the mobile service providers in Indian
Cellular industry find only to some extent that GSM is a very complex
standard, whereas the another 10 (50%) respondents find to great extent that
mobile service providers is a very complex standard.

CONSUMER LEVEL

11. Do you believe that mobile service providers comes close to fulfilling
the requirements for a personal communication system?

Company Yes No

Airtel 9 1
 81

Vodafone 8 2

Idea 8 2

MTNL 5 5

As the above shows 30 (75%) out of total 40 respondents are of the belief that
mobile service providers comes close to fulfilling the requirements for a
personal communication system, whereas 10 (25%) of them are in no way to
this belief.
 82
12. Do you find that mobile service providers as the most exciting and
satisfying mobile standard?

Company Yes No

Airtel 9 1

Vodafone 7 3

Idea 8 2

MTNL 8 2

As the above shows 32 (80%) out of total 40 respondents find that mobile
service providers as the most exciting and satisfying mobile standard,
whereas the remaining 8 (10%) respondents deny this.
 83
13. Do you believe that your service provider has a genuine commitment
to creating a modern and efficient communications?

Company Yes No

Airtel 10 --

Vodafone 8 2

Idea 10 --

MTNL 8 2

As the above shows 36 (90%) out of total 40 respondents are of the belief that
their service providers have a genuine commitment to creating a modern and
efficient communications whereas the remaining 4 (10%) respondents deny
this.

RECOMMENDATION
 84
Today the marketer truly understands the needs of the Delhi consumers, he
should strive to provide them with those products and services that would
meet their requirements. The marketer has to focus on his core competencies
like the technological expertise to design the products for the Delhi masses.
Companies like Cavin Care who launched their shampoo in sachets, Britannia
who conveniently packaged its Tiger brand biscuits with low price tag are the
best examples of understanding the Delhi customer's needs and providing
them with the desired products.

The marketer's basic need is to understand the pulse of the Delhi masses and
serve them accordingly. The companies need to make proper assessment
while marketing for the Delhi India. This could most probably happen in one
way by changing the profile of their managers. As most of them are
management graduates bred in urban areas and are taught marketing
principles and strategies applicable for the western countries, there is a
mismatch in their thinking and the requirements of the Delhi consumers.
Hence, hiring professionals who have expertise in Delhi marketing would go a
long way to improve the situation as they can truly understand the Delhi
traditions and cultures, understand the feelings of Delhi people before
designing and actually launching the product. It is very essential for the Delhi
marketer to understand the psychology of their consumers in terms of their
usage habits and shopping behavior along with their emotions and value
systems. The integration of both technological and managerial knowledge
would help them to develop the various marketing strategies for the Delhi
Indian markets. This will further lead to technologically superior, robust and
low cost products that would be in resemblance with the Indian tradition and
culture.

The marketers may also consider depending more on traditional media when
marketing for Delhi consumers. This unconventional method acts as an
effective way to create awareness as mass media is unreliable as it is too
glamorous and interpersonal for the Delhi market. Uses of skits, magic shows,
and education by NGOs are some of the most preferred traditional media
which the marketers can usually use as it goes well with the tastes of the
Delhi consumers
 85
According to our sample size 300 here are the question would gives the
insight Study on buying behaviour of Delhi consumer indicates that the Delhi
retailers influences 35% of purchase occasions. Therefore sheer product
availability can affect decision of brand choice, volumes and market share.
Some of the FMCG giants like HLL took out project streamline to significantly
enhance the control on the Delhi supply chain through a network of Delhi sub-
stockists, who are based in the Delhis only.

Form our survey result it is showing that 31% of says that Vodafone
connection or recharges are easily available in their respective area and they
are strongly agree with this.

Now the segment of people where they not strongly agree with the statement
that Vodafone product reached their respective area 27% respondent said yes
some time they will get and some time not also they suggested that some
time new connection is not available. Also 34% respondent responded that
they either strongly disagree or disagree with the statement that Vodafone not
reached their respective area so far. Only 8% respondent says that they have
neutral opinion on this.

Recommendation for Vodafone would be company can target first 34% people
those who are disagree and not satisfied with the product availability of the
Vodafone so at least Vodafone have more than 60% market share of those
people who at least knew the product is available near store so they can
easily bought them.

CONCLUSION
India that has lot of money with it definitely offers a great potential for the
companies where the chances of outnumbering the urban areas in all aspects
are very high. But only those companies would survive at these places and
 86
win over the Delhi consumers who can spend time and money on
understanding the needs of them and come up with innovative ideas.

The companies should also strive to give more focus to the Delhi market in
order to make it a market leader. This can happen only with the firm
commitment of the top management and extension of full support to the
marketing personnel by each and every department of the organization. In
most of the Delhi areas of Delhi in different parts of the country, there is
considerable awareness on various latest products that are available in the
market. This has been possible due to the penetration of cable and satellite
channels that have brought down the world at the finger tips of the common
man. The media influenced the mindset of the Delhi consumer to such an
extent that people who had money started purchasing the products unmindful
of the costs, just to satisfy their needs as well as their ego. But, the growth of
Delhi market could be attributed to many other reasons that in one way
increased the sales as well as the profits of the companies. Some of the
important causes for the growth of Delhi as a Delhi markets are –

* The rise in disposable income of the Delhi families

* The economic boom

* Timely rains

* Delhi population involved themselves in business other than agriculture

* Increase white-collar jobs in nearby towns

* Commercialization of agriculture

* Saturation of the urban markets

* Media penetration in Delhi areas (particularly satellite channels)

* Globalization

* Economic liberalization

* Revolution in the Information Technology

 87
* Women empowerment

* Improving infrastructure

However, there was a significant role of the corporate enterprises

simultaneously in the development of Vodafone market in Delhi. Their timely
intervention into the Delhi areas, their appropriate planning, their perception
and identification about the growth of Delhi markets and the use of marketing
strategies all have equally contributed for the progress of Delhi markets. Even
though corporate houses were hedged with so many problems in the Delhi
areas, they saw a galore of opportunities in the Delhi market and converted all
the pessimistic characteristics of the Delhi market into affirmative attributes.
They satisfied themselves with the availability of limited infrastructure, saw a
sign of prosperity rather than fear during the entry of competitors into the
Delhi markets, showed excitement at the availability of satellite channels in
the Delhi households, visualized their cash bells ringing with the increase in
purchasing power of the Delhi masses that came equivalent to their urban
counterparts. They traced a constant rise in the demand for those products
that were once confined mostly to the urban houses. But, blame it on the kind
of awareness created by the companies – people started using the products
for other purposes as seen earlier.

Out of 300 sample size we consider to choose first strongly agree respondent
who believes that Vodafone product is affordable for him/her 25% respondent
out of 300 says Vodafone product is affordable in comparative of other
competitor. While 33% are only agree with this statement that Vodafone has
much affordable price of their respective product. Now moving ahead 28%
respondent are still not agree or strongly disagree with this question they
thought Vodafone products are much costlier than the other mobile service
provider companies product.

14% respondent said they have mixed view about the affordability these
people are those who are richer in Delhi region.

Recommendation for Vodafone would be target 28% people also to provide

much more scheme and plan so they comes under the pie of affordable range
88
 89
BIBLIOGRAPHY
Book & Research Paper

(1) Philip & Kotler: Marketing management

(2) Wharton business review

(3) HBS (Harvard business review)

Internet

(1) Company website

(2) www.marketingtimes.com

(3) www. Airtel.com

(4) Www. Idea.com

 90
APPENDIX

Que1: How did you come to know about Vodafone ?

 Friends/relatives
 Newspapers/magazines stalls
 Internet
 Advertisement
 Hoardings

Que2: Why do you prefer this brand?


 Price Brand name
 Quality Sales promotion
 Easily available Schemes/offers
 Packaging Others

Que3: Would you recommend company’s products to others?

1 Yes
2 No

Que4: Which promotional activities influence your decision to go for

Vodafone rank in a preference order

Discounts

Coupons

Extra talktime

Free Gifts

ContestvOthers (Plz specify)

Que5 : Which promotional activities do you want in near future from

Vodafone rank in a preference order?

1. Price-off Promotion
2. Premium offers
3. Couponing
4. Loyalty schemes
5. Guarantees
6. Welcome-Cocktail
 91
Q6. Quality of Products & Packaging please rank in order of preference
Range of products catering to all types of consumer preference
Attractiveness of consumer packaging
Competitiveness of the product in the market/Ease of selling
Promptness in dealing with products complaints
Proper labeling (way of using)

Q6. Quality of Products & Packaging please rank in order of preference

Range of products catering to all types of consumer preference
Attractiveness of consumer packaging
Competitiveness of the product in the market/Ease of selling
Promptness in dealing with products complaints
Proper labeling (way of using)

Q7. Quality of Sales Promotion and schemes

Frequency of sales promotion/schemes

Attractiveness of sales promotion/schemes

Innovativeness of sales promotion

Promptness of response to competitive sales schemes

Sufficient supply of stocks provided with schemes/offers

8. Do you find that the government’s telecom policy has had the most

radical impact on the development of mobile service providers?

9. Do you believe that one of the challenges facing mobile operators in

India is the diversity of the coverage regions?
10. To what extent, does you find that mobile service providers is a very
complex standard?
11. Do you believe that mobile service providers comes close to fulfilling the
requirements for a personal communication system?
12. Do you find that mobile service providers as the most exciting and
satisfying mobile standard?
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13. Do you believe that your service provider has a genuine commitment to
creating a modern and efficient communications?