amit kumar gupta
TRANSCRIPT
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UNIVERSITY OF MUMBAI
A STUDY ON
COMPARATIVE-ANALYSIS-ON PRICINGDECISION POLICYOF VODAFONE AND
AIRTEL
SUBMITTED BY
Mr.Amit Kumr Gu!t
SUBMITTED TO"
T#E UNIVERSITY OF MUMBAI
FOR T#E PARTIAL FULFILLMENT OF
BAC#ELOR OF MANAGEMENT STUDIES
ACADEMIC YEAR $%&'-$%&(
TYBMS- SEM (SEAT NUMBER) &%*$'&+
UNDER T#E GUIDANCE OF
MRS. DAINA RAYEN
CLARA,S COLLEGE OF COMMERCE
YARI ROAD"AND#ERI EST/
MUMBAI- '%%%(+
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ACKNOLEDGEMENT
I take this opportunity to express my sincere gratitude and deep
regards to my guide Mr0. DIANA RAYEN& also Mr. FAISAL
TANAR BMS CO-ORDINATOR/for their exemplary guidance,
monitoring and constant encouragement throughout the course of this
thesis. The blessing, help and guidance given by them from time to timeshall carry me a long ay in the !ourney of life on hich I am about to
embark.
I ould also like to thank "#$IA1AY KAUL SIRand
PRINCIPAL DR.2A#IDA S#AIK#for giving me this opportunity to
shocase my hard ork.
I am also grateful to F3u4t5 C4r,0 C644787 69 C6mm7r37 for
continuous and deliberate discussion on the topic and indeterminable
burden taken by her in helping me during the pro!ect.
I thank almighty %od, my Parents, siblings and my friends for their
constant support and encouragement ithout hich this assignmentould not be possible.
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TABLE OF CONTENTS PG NO
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I:tr6;u3ti6: 69 T74736mmu:i3ti6: 073t6r
Telecommunications of late has become the backbone of a modern economy. In
fact, the concept of a %lobal 2illage is attributable mainly to the rapid advances in
telecommunications. Today, a large country like India ith its social, cultural and
geographic diversity can seek to address developmental problems previously
considered intractable, thanks to telecommunications.
Lr870t N7tuipped capacity of 1.< million lines
and 19.: million orking telephones as on 6arch 71 this year. The long distance
transmission netork has about 9,; route kilometers of microave systems and
about 9
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Perhaps the most significant aspect of the 1;;8 telecom policy as the recognition
that telecom as a vital infrastructure, and resources re>uired to meet the
ob!ectives and targets set out ere beyond the capacity of government funding and
international generation of resources. Private investment and association of the
private sector as needed in a big ay to bridge the resource gap. This as the
beginning of the telecom liberaliAation in the country.
S!77; :; E99i3i7:35
That the government ill not leave any stone unturned in making India the hub of
telecommunications as once again made clear by the Prime 6inister, "hri -tal
ihari 2a!payee. #e has repeatedly advocated to bring speed and efficiency in
resolving the pending issues pertaining to telecommunication.
In the last six months, some ma!or decisions ere taken to hasten the groth of the
telecom industry. The %overnment extended the license period for the cellular
operators to 1 years as India as the only country ith a 1/ year duration for the
license period. This decision made the cellular pro!ects more bankable. "hort
)istance +harging -rea ?")+-@ as declared as local area from -ugust 1 this
year enabling calls to the ad!acent ")+-s, hich ere being made on "T) rates
to be charged as the local calls, at three minutes per call unit.
N7< T74736m P64i35
There are some other factors, hich necessitate the need for revie of the telecom
policy. In 1;;9, India !oined
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the %overnment of India formalised its commitment to revie 2"'5Bs monopoly
over international telecom services in //8 and revie )oTBs monopoly over long
distance services in 1;;;. The %overnment has decided to disinvest part of its
e>uity in 2"'5 and to increase the plan outlay for +ommunications by 7D as
compared to 1;;9E;:.
I:t7r:7t P64i35
In the recently announced Internet policy, the monopoly of the the 2idesh "anchar
'igam 5imited ? 2"'5 @ as the countryBs sole internet provider came to an end.
To private companies and the 6ahanagar Telephone 'igam 5imited ?6T'5@
have got licences to provide this service.The ne policy has incorporated all the
recommendations of the 'ational Task 3orce on Information Technology . It
allos private I"Ps ? Internet "ervice Providers@ to set up their on gateays,
virtually does aay ith the licence fee and extends the term of the licence to 1
years.The ban on internet telephony, hoever, continues. -t present, 89 companies
have applied to the )(T ho ill shortly get the licence.
A:6t>7r 4:;mr=) GMPCS
-nother landmark event in the history of telecommunications as the launching of
the Iridium system in India on 'ovember 1, by linking it to the orldBs first
satellite telephony system. This event as marked at Iridium IndiaBs "outh -sian
%ateay ith three satellite tracking earth stations erected at the 2"'5 premises
at )ighi near Pune. This gateay is one of 1 such gateays orldide and ill
manage satellite telephony traffic in the "outh -sian region. *nder the %lobal
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6obile Personal +ommunication "ystem ? %6P+"@, telephone calls can be made
and received from virtually anyhere on earth.
O:7 Mi44i6: Su?03ri?7r0
'o doubt there is a lot to be achieved for moving up the present tele density of 1.:
to match the orld average of 1/. ut then India is the first country to reach the
one million subscriber base ithin the first three years of paging. The *"- took 9
years to achieve the same. In cellular also it took +hina six years to reach ; lakh
subscribers base, something e did in to years.
-ccording to the industry estimates over the next 1 years, the telecom services
industry is expected to generate around $s.7,//,/// crore ?$s.7/// billion@ and
about /,/// ne !obs. Cith this kind of frameork and expectations, surely, a
ne telecom policy ill bring reprieve to the telecom industry and telecom ill
indeed be the engine of groth in the Indian economy.
The telecom services have been recogniAed the orldEover as an important tool
for socioEeconomic development for a nation and hence telecom infrastructure is
treated as a crucial factor to realiAe the socioEeconomic ob!ectives in India.
-ccordingly, the )epartment of Telecom has been formulating developmental
policies for the accelerated groth of the telecommunication services. The
)epartment is also responsible for grant of licenses for various telecom services
like *nified -ccess "ervice Internet and 2"-T service. The )epartment is also
responsible for fre>uency management in the field of radio communication in
close coordination ith the international bodies. It also enforces ireless
regulatory measures by monitoring ireless transmission of all users in the
country.
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ABSTRACT
- prime task of a marketer is to understand the market, his customer and the needs
of the customer and finally look for the best possible ay to satisfy the needs
of the customer.
The pro!ect undertaken is A COMPARATIVE ANALYSIS OF PRICING
DECISION POLICIES OF VODAFONE AND AIRTEL. The telecom services
have been recogniAed the orldEover as an important tool for socioEeconomic
development for a nation and hence telecom infrastructure is treated as a crucial
factor to realiAe the socioEeconomic ob!ectives in India. -ccordingly, the
)epartment of Telecom has been formulating developmental policies for the
accelerated groth of the telecommunication services. The )epartment is also
responsible for fre>uency management in the field of radio communication in close
coordination ith the international bodies. It also enforces ireless regulatorymeasures by monitoring ireless transmission of all users in the country.
The leverage of this pro!ect lies in understanding the customerFs knoledge,
aareness and perception about the telecomm +ompanies, G2odafone and -irtelH
in the telecommunication sector as accompany to subscribe the service. This ould
be done, by adopting a research based approach. It deals ith customerFs
aareness and involves direct intervies ith >uestionnaire method for market
research.This study ill help to report the scope of both the companies in the
market. It also enables the use of various marketing research instruments such as
>uestionnaires and methodologies like prototyping and articulate intervieing and
also understanding the market condition by taking hypothesis.
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This pro!ect ill help me to evaluate the perception of customer about pricing
strategy of 2odafone and -irtel. -lso this pro!ect ill give me an opportunity to
gather knoledge about telecommunication sector and customer knoledge.
The pro!ect also involves making recommendations, after comprehensive "C(T
analysis that ould help both the companies to provide better service to its existing
customers and improve its reach to potential customers. (verall the pro!ect ould
be a inEin situation for both, the companies 2odafone and -irtel.
1.
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OB1ECTIVES OF STUDY
*nderstanding the customerFs knoledge, aareness and perception about
2odafone and -irtel as a ma!or company in telecommunication sector.
To find out the share of 2odafone and -irtel in the market at )elhi.
*nderstand the target customer of 2odafone and -irtel in context to their
pricing strategy.
To understand & kno the re>uirements of the clients
The pro!ect ill help, kno and understand the target customer better and to kno
the efforts of both the companies to attract more and more customers. It deals ith
customerFs aareness and involves direct intervies ith >uestionnaire method
and check out through hypothesis method. This study ill help to report the scope
of 2odafone and -irtel at %urgaon as a choice for communication purpose. The
pro!ect also involves making recommendations, after comprehensive "C(T
analysis that ould help both the companies to provide better service to its existing
customers and improve its reach to potential customers.
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LIMITATIONS OF STUDY
The report does not take into consideration extraneous factors such as time
given by different intervieees for the intervie and the attitude toards
ansering specific >uestions such as categoriAing of commission rate into
poor, good, average etc.
The report does not also include any provision for the change in attitude of
the respondents in future.
The report does not give a single full proof recommendation for improving
the product offering and advisory services to each and every potential as
ell as existing customers.
Personality differences beteen respondents.
The persons surveyed may not give correct information as the data is
generally related ith the financial gains of the person concerned.
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SCOPE OF STUDY
The leverage of this pro!ect lies in understanding the customerFs knoledge,
aareness and perception about 2odafone and -irtel separately as an option in
mobile communication services. It ill help, kno and understand the target
customer better and ho to lure them to subscribe more. This ould be done, by
adopting a research based approach. It deals ith customerFs aareness and
involves direct intervies ith >uestionnaire method for market research folloed
by putting hypothesis to understand better. This study ill help to report the scope
of the given companies in the market of )elhi as a good company for mobile
services. The pro!ect gives an opportunity to understand the changing and varied
customer needs and the pricing strategies that should be adopted by both 2odafone
and -irtel to fulfill them. It also enables the use of various marketing research
instruments such as >uestionnaires and methodologies like articulate intervieing
and hypothesis testing.
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MET#ODOLOGY
Tr87t !6!u4ti6: People subscribing services of 2odafone -irtel
T5!7 69 0m!4i:8 +onvenient "ampling and #ypothesis testing
Sm!47 0i@7 1//
)ue to time and accessibility constraints sampling as adopted and the sample siAe
as limited to 1//.
1@ Interacting ith people ho use to subscribe the mobile services of
2odafone and -irtel, to have their vie.
@ Prepare a >uestionnaire and getting it approved by faculty guide and get it
filled by visiting customers and ith hom the meeting takes place.
7@ The analysis of the data collected through >uestionnaire has been done ith
the help of the results derived from 6"Excel.
8@ $eference to secondary sources of information hich include study of
relevant books, magaAines etc., and use of literature from Internet ?articles,
surveys etc.@
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@ )iscussion ith faculty guide and professionals has been undertaken. ased
on the interactions, secondary and primary research, the analysis and
recommendations has been made.
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COMPANY PROFILE
Airt74
Telecom giant harti -irtel is the flagship company of harti nterprises.
The harti %roup, has a diverse business portfolio and has created global
brands in the telecommunication sector. harti has recently forayed into retail
business as harti $etail Pvt. 5td. under a 6o* ith CalE6art for the cash
& carry business. It has successfully launched an international venture ith
5 $othschild %roup to export fresh agri products exclusively to markets in
urope and *"- and has launched harti -J- 5ife Insurance +ompany 5td
under a !oint venture ith -J-, orld leader in financial protection and
ealth management.
-irtel comes to you from harti -irtel 5imited, IndiaFs largest integrated and
the first private telecom services provider ith a footprint in all the 7
telecom circles. harti -irtel since its inception has been at the forefront of
technology and has steered the course of the telecom sector in the country
ith its orld class products and services. The businesses at harti -irtel
have been structured into three individual strategic business units ?"*Fs@ E
6obile "ervices, -irtel Telemedia "ervices & nterprise "ervices. The
mobile business provides mobile & fixed ireless services using %"6
technology across 7 telecom circles hile the -irtel Telemedia "ervices
business offers broadband & telephone services in ;8 cities. The nterprise
services provide endEtoEend telecom solutions to corporate customers and
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national & international long distance services to carriers. -ll these services
are provided under the -irtel brand.
V6;96:7
V6;96:7 Gr6u! is a mobile netork operator head>uartered in 'ebury,
erkshire, ngland, *K. It is the largest mobile telecommunications netork
company in the orld by turnover and has a market value of about L1//
billion ?)ecember //9@. 2odafone currently has e>uity interests in
countries and Partner 'etorks ?netorks in hich it has no e>uity stake@ in
a further 7; countries. The name 2odafone comes from 2oice data fone,
chosen by the company to Mreflect the provision of voice and data services
over mobile phones.
-t 71 0anuary//92odafone had // million proportionate customers in
marketsacross continents. MProportionate customersM means, for example,
that if 2odafone has a 7/D stake in a business ith a million customers, that
is counted as 7//,///@. (n this measure it is the second largest mobile
telecom group in the orld behind +hina 6obile. The eight markets here it
has more than ten million proportionate customers are the *nited Kingdom,
%ermany, India, Italy, "pain, Turkey, gypt and the *nited "tates. In the
*."., these customers come via its minority stake in 2ersion Cireless, and in
the other seven markets 2odafone has ma!orityEcontrolled subsidiaries.
(n 7/ 6ay//
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from continuing operations as L19. billion and the bottom line loss for the
financial year as L1.: billion. The company as pushed into loss by
impairment charges of L7. billion, hich related to the ac>uisition of
6annesmannseveral years earlier, and losses of L8.< billion in relation to its
discontinued business in 0apan. -t an operating level it remained highly
profitable, ith an operating profit on continuing operations of L;.8 billion
before impairment costs.
Curr7:t r7!6rt i: r74ti6: t6 V6;96:7 Airt74
2odafone to invest approximately $s.
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History of Cellular Telephony
1947 Bell Laboratories introduced the idea of cellular communications with the police
car technology.
1947 The basic concept of cellular phones began, when researchers looked at crude
mobile (car) phones and realized that by using small cells (range of service
area) with freuency reuse they could increase the traffic capacity of mobile
phones substantially. !owever at that time, the technology to do so was
none"istent.
1947 #T$T proposed that the %&& allocate a large number of radio'spectrum
freuencies so that widespread mobile telephone service would become
feasible.
1947 The %&& decided to limit the amount of freuencies available, the limits made
only twenty'three phone conversations possible simultaneously in the same
service area.
1968 #T$T and Bell Labs proposed a cellular system to the %&& of many small, low'
powered, broadcast towers, each covering a cell a few miles in radius and
collectively covering a larger area. ach tower would use only a few of the total
freuencies allocated to the system. #s the phones traveled across the area,
calls would be passed from tower to tower.
1968 The %&& reconsidered its position by stating *if the technology to build a better
mobile service works, we will increase the frequencies allocation, freeing theairwaves for more mobile phones.*
1973 (April) The first call on a portable cell phone is made by +r artin &ooper, a former
general manager for the systems division at otorola, who is also considered
the inventor of the first modern portable handset.
1977 #T$T and Bell Labs had constructed a prototype cellular system. # year later,
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public trials of the new system were started in &hicago with over - trial
customers.
1979 The first commercial cellular telephone system began operation in Tokyo.
1980 #nalog cellular telephone systems were e"periencing rapid growth in urope,
particularly in /candinavia, 0nited 1ingdom, %rance and 2ermany. ach
country developed its own system, which was incompatible with everyone
elses in euipment and operation
1981 otorola and #merican 3adio telephone started a second 0./. cellular radio'
telephone system test in the 4ashington5Baltimore area.
1982 %&& authorizes commercial cellular service for the 0/#.
The &onference of uropean 6osts and Telegraphs (&6T) formed a
study group called the 2roup /p7cial obile (2/) to study and
develop a pan'uropean public land mobile system. The proposed
system had to meet certain criteria8
2ood sub9ective speech uality
Low terminal and service cost
/upport for international roaming
#bility to support handheld terminals
/upport for range of new services and facilities
/pectral efficiency
:/+; compatibility
1983 The first #merican commercial analog cellular service or #6/
(#dvanced obile 6hone /ervice) was made available in &hicago by
#meritech.
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1987 &ellular telephone subscribers e"ceeded one million and the airways
were crowded.
1989 2/ responsibility was transferred to the uropean Telecommunication/tandards :nstitute (T/:),
1990 6hase : of the 2/ specifications were published.
1991 &ommercial launch of cellular service based on 2/ standard in
%inland.
History of Cellular TelephonyHistory of Cellular TelephonyHistory of Cellular
Te
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#i0t6r5 69 C744u4r T747!>6:5 i: I:;i
&**$ Telecommunication sector in India liberaliAed to bridge the gap
through government spending & to provide additional resources
for the nationFs telecom target. Private sector alloed participating
&**+ The telecom industry gets an annual foreign investment $s /.uire mobile for their official purposes. The next category is
the households, ho are either houseife, small units hich operate from their homes etc. They
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OCC!AT"O#
1$%
$$%
20%
10%
&T'(#T& ()(CT"*(& HO&(HO+'& OTH(,&
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are /D of the hole. The next segment is the students. They are 1D of the hole. -nd 1/D of
the hole is categories ho are the professionals.
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S7ri37 Pr6i;7r Gr!>
These are the total market share of mobile user or people captured by the mobile provider
company. There to ma!or company in mobile phone service sector 2odafone and -irtel ho
respectively hold the market share ith other company as 19D and /D of total market user
segment of mobile customer.
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Cu0t6m7r S7ri37 At Airt74 Gr!>
-s the above graph clearly shos that customer services at -irtel seems poor. .uite popular among the people intervieed. :D of the total mobile users
ere having cash card connections. This means that the cash cards should be easily and readily
available in the local markets. -irtel should make sure that 6agic is available in each and every
nook and corner of the market. 1D of the people ere having sim connections hich is the
regular bill.
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M6:t>45 7!7:07 8r!>
People on an average spend $" // per month as their mobile phone expense.
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A
C55 seemed to be a ne ord for many of the people. 8D of the people ere not at all aare
of such a technology. "o, in order to get the anser for this >uestion they ere first explained the
concept. (nly, D people kne hat C55 is all about.
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Awareness of WLL Players Graph
2odafone as the brand hich as popular amongst the intervieed people. -s 2odafone had
done so much advertising and has it banners and hoarding spread all over 0aipur. "o, this could
be one the reasons of its popularity. Tata as hardly a knon brand in this ne field. Possibly,
because of less promotions done by them as compared to 2odafone.
(n the basis of analysis of the >uestionnaire I have found that the maximum no. of people ho
use mobile phones is in the age group of / to :. Cho are the young executives and other office
goersN
They spend a maximum of $" // as their mobile expense.
There is more no. of prepared cards than post paid cards. The mobile users ant to spend money
side by side than to spend money at the end of the month on a big bill.
'o hen I compared -irtel ith its competitor from the point of vie of the consumer I
found that on the basis of Tariff plan, value added services and billing accuracy -irtel is at par or
ahead of its competitor but in the case of customer care and availability they lag behind there
competitors. -s, -irtel has a hold in the market because it has the maximum no. of connections,
so it must improve upon it customer services. -s far as C55 is concerned people are aare
about it but not many people are aare about Tata. They only kno more about 2odafone.
People at this point of time are not interested to sitch over from %"6 to C55
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#O TO DEVELOP A PRICING PLAN
E0t?4i0> Pri3i:8 O?73ti70
The first ma!or step in the development of a pricing plan is to establish your
pricing ob!ectiveEhether you intend to implement a loer, higher, or parity
pricing approach relative to the competition. -ll other ob!ectives, such as increased
sales, higher margins, etc., are overall goals of your business or marketing plan to
hich pricing contributes.
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as ell as non product advantages such as service, guarantees, location for
retailers, or additional distribution channels. Interestingly, it is also utiliAed hen
product differentiation is lo and price is the basis of competition. In mature
categories ith fe competitors and little differentiation, such as the airline
industry, parity pricing is the norm. If one carrier ere to raise prices, demand
ould shift to the competition ith loer prices. If one airline loers prices, the
others ould be forced to loer theirs in response, hich ould loer profits for
all in the industry and create a price ar. (ften, in such industries, one ma!or
player, typically the market leader is considered the price leader. (thers in the
industry atch this leader for price activity.
L6uires appropriate capacity and distribution channels to support
the volume re>uirements. The reasons for a lo price ob!ective are usuallyO
To expand the market, alloing ne consumers ho couldnFt
purchase at higher prices to become purchasers.
To increase trial and or sales due to price incentives.
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To take advantage of a strong priceEelastic product for hich a lo
price generates increased demand. The result is loer margins but
increased profits because of the increased volume.
To preempt competitive strategies, helping to steal market share. This
is often necessary in a mature market.
To remain competitive ith your competition. If a ma!ority of the
competitors have reduced their prices, oftentimes you ill need to do
so, especially if you are in a priceEsensitive product category. If a
strong competitor is also offering an attribute such as service ith
hich you cannot compete, you mayF need to loer your price to
counter the service offering.
To keep competitors from entering the marketplace by having a price
that is difficult for a ne company ith high initial investment coststo match. This E policy of expanded market pricing allos a company
to develop a large, loyal consumer base hile keeping competition to
a minimum.
#i8>7r Pri3i:8
-s e have discussed many times, a premium priceEa higher prices relative to the
competitionEsupports a >uality positioning and provides high margins to support
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higher product and promotional expenditures. The reasons for a high price
ob!ective are usuallyO
- need for a fast recovery of the firmFs investment.
- need for faster accumulation of profits to cover research and development
costs. The profits can then be used to improve the product and to sustain
competitive marketing tactics once competitors enter the market.
To substantiate a >uality image positioning.
The product is price inelasticEthe demand or sales decrease only marginally
ith higher pricing.
The product or service is in the introductory phase of its product life cycle
and represents a substantial innovation ithin the product category. -lso, the
company may ish to skim profits hile there are no substitute products to
force competitive pricing.
The company is stressing profits rather than sales thus margins must remain
high.
The product has a short life span. -n example ould be fad products hich
last for a relatively short time. This necessitates a high price policy hich
ill help recover the firmFs research and development costs in a short time
period.
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The product is difficult to copy and reproduce or has patent protection.
Curr7:t r7!6rt i: r74ti6: t6 V6;96:7 Airt74
2odafone to invest approximately $s. 4i8>t0)
The largest single foreign investment ever in the history of India
The largest investment in the Indian telecom sector
harti establishes its supremacy in the Indian telecom market, having
attracted -siaFs best Q "ingTel, and no orldFs best Q 2odafone.
harti set to gain global leadership in the telecom sector.
harti nterprises continues to hold shareholding and management control
in harti TeleE2entures.
N7< D74>i" O3t6?7r $" $%%()The orldFs leading mobile telecommunications
company, 2odafone %roup Plc. ?2odafone@ has secured around 1/D interest in
harti TeleE2entures 5td. ?T25@, IndiaFs largest private sector telecom company.
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2odafone, through 2odafone 6auritius 5td., has contracted to subscribe shares in
harti nterprises, giving it a beneficial stake in T25 of 8.8D. In addition
2odafone, through 2odafone International #oldings 2, has also picked up .irm: Gr6u! M:8i:8 Dir73t6r 69 B>rti said RCe are
delighted that 2odafone has made a call on the Indian telecom sector and has
chosen T25 to be the vehicle to develop its continued interest in the -sian
region. harti has had the privilege of tying up ith Gbest in classF, blue chip
companies, from around the orld ho have come and !oined hands ith harti, at
different stages, to develop the telecom sector in India. -t the time hen the
estern orld started hanging up on India, it brought in -siaFs telecom
poerhouse, "ingTel, to replace Telecom Italia and ritish Telecom. "ingTel
helped harti ith the capital and strategy to gro from a midEsiAe telecom
operator into IndiaFs largest telecom company. Carburg Pincus, making its second
largest investment in the history of the firm, supported the company in developing
the strategy and investor focus, in its public listing and in the process making
harti one of the best investments ever undertaken by Carburg Pincus around the
orld. Today, hen harti stands on the threshold of being an -sian telecom
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poerhouse, it has tied up ith 2odafone to take the company to the next level and
to support harti in achieving its vision of making -irtel the most admired brand
in India. harti is fortunate to have four strong pillars to achieve its vision. The
entrepreneurial leadership of harti nterprises, the -sian telecom poerhouse Q
"ingTel hich ill continue to be our leading partner, the orldFs largest telecom
operator Q 2odafone and, the most important one, a orldEclass management
team.H
C>i79 E73uti7 O99i37r 69 V6;96:7 Gr6u! P43." Mr. Aru: Sri: , speaking on
the occasion, said RI am delighted to announce this strategic partnership ith
T25, the leading national mobile operator in India. Together e ill take this
venture to a ne level as clear leader in this market. Ce are entering a relationship
ith a ma!or company, hich shares our vision and values and understands, as e
do, the enormous potential of mobile telephony in society. This transaction is
consistent ith 2odafoneBs strategy of developing our global footprint in groth
markets, here e can create value for shareholders.H
C>i79 E73uti7 O99i37r 69 Si:8T74" Mr. L77 #0i7: Y:8, speaking on the
occasion, said RCe entered into India through a partnership ith harti nterprises
at a time hen many ere skeptical about IndiaFs telecom story. Ce are delighted
that harti, ith "ingTelFs support, has successfully executed its groth strategy.
hartiFs entrepreneurial spirit and innovative culture continue to drive the
companyFs groth. Today e are pleased to elcome 2odafone as our partner to
further develop the Indian telecom market and to take harti to greater success.H
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+ommenting on the transaction, r?ur8 Pi:3u0 C6-Pr70i;7:t C>i! K57 saidO
RCe are proud to have been part of one of the most compelling groth stories in
IndiaFs history. #aving invested in harti in 1;;; and orking closely along the
ay ith a orldEclass management team and a leader of the caliber of "unil
6ittal, it is gratifying to see the company take this step toard its next phase of
groth.H )alip Pathak, the Carburg Pincus senior partner ho oversees the firmFs
Indian investment portfolio, addedO Rharti is no truly a orldEclass company
and as e depart, e ish the company ell and are confident that it ill continue
to attract interest from investors around the orld.H
A?6ut B>rti T7477:tur70
harti TeleE2entures is one of IndiaBs leading private sector provider of
telecommunications services ith an aggregate of 1.17 million customers as of
end of "eptember B/, consisting of approximately 18./9 million mobile customers.
The company is the only operator to provide mobile services in all the 7 circles in
India. The company also provides telephone services and Internet access over )"5in 1 circles. The company complements its mobile, broadband & telephone
services ith national and international long distance services. The company also
has a submarine cable landing station at +hennai, hich connects the submarine
cable connecting +hennai and "ingapore. The company provides reliable endEtoE
end data and enterprise services to the corporate customers by leveraging its
nationide fiber optic backbone, last mile connectivity in fixedEline and mobile
circles, 2"-Ts, I"P and international bandidth access through the gateays and
landing station.
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Pri3i:8 Strt785 69 V6;96:7 :; Airt74
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Pr7!i;/
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PRICING STRATEGY OF VODAFONE
At I:tr6;u3ti6: St87 69 t>7ir 6!7rti6: i: I:;i)-
They are setting price because they have a ne product, and they are
entering into a ne market ith an existing product.
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6arket share grothO -long ith profit and sales maximiAation,
groth in market share is also a bigger part of the business for
the company.
(ther ob!ectives e.g.
6atch competitorsF priceO (ne of the main ob!ectives of
2odafone at the recent time is to maintain !rit5 !ri37 taking
care of the pricing strategy of the competitor companies.
'onEprice competitionO being a ne company in Indian telecom.
"ector it is basically necessary to improve their image and
goodill in the market ith comparison to the image of the
competitors and that comes in nonE price competition.
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D7m:; A:450i0 0 !rt 69 !ri3i:8 0trt785
M70ur7 t>7 im!3t 69 !ri37 3>:87 6: t6t4 r77:u7OE
-t the initial stage of the company in the Indian origin, it is important
to find out that hether the pricing strategy of the company has any
impact on the customers or not. It is very much important to analyAe
the demand of the product of the company by various levels of the
customer.
Pr7;i3t0 u:it 0470 64um7 :; t6t4 r77:u7 96r ri6u0 !ri37
47740OE
-fter setting the price, it became important for the company to forecast
the sales volume and total revenue needed for future.
)ifferent customers have different price sensitivities and needsOE
It is important for the company to understand the fact that in India,
various customers have their different tastes and priorities. "o, the
company is emphasiAing on understanding the demand, taste and need
of the customers to standardiAe the products of the company .
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Im!3t 69 6t>7r 93t6r0 67r t>7 !ri3i:8 0trt785 69
V6;96:7
+ustomersF ability & illingness to buyO
The ability and illingness of the customers has a great impact over
the demand of the product hich in turn influence the pricing strategy
of 2odafone.
+ustomer lifestyleO
Pricing strategy of 2odafone greatly varies as per the lifestyle as ell
as location of the services of the company.
enefits soughtO
Chere there is benefit, customers run toards it. "o 2odafone is trying
to serve maximum benefits to the customers in the form of various
schemes both postpaid and prepaid.
+haracteristics of the product OTo fight ith the competitors, the
company is trying to add maximum characteristics to each product.7/
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PRICING STRATEGY OF AIRTEL
S=immi:8 !ri3i:8
+harging a high price initially and reducing the price over timeOE
R-irtel has reduced the price of its starter pack in the prepaid segment
in +hennai. It ill offer a student prepaid starter pack at $s 18; S cost
reduced from $s 8H.
(ne time hen -irtel as a leader in telecomm sector, it had high costs
of its product but after the entrance of various other competitors in the
market, it significantly reduced its price of the product hich has ma!or
impact over the services of their product.
Mi:ti:i:8 Ju4it5
y maintaining >uality of their products and services they became able
to maintain their introducing price over a long time.
P60iti6:i:8 Airt74 0 : 0!irti6: :; 4i970t547 ?r:;
The target customer as clearly definedO elite, up market professionals
and entrepreneurs. RThey became able to position -irtel as an
aspiration and lifestyle brand, in a ay that trivialiAed the price in the
mind of the consumer. It as pitched not merely as a mobile service,
but as something that gave him a badge value. In a service industry like
telecom, people live a brand 8J9. ItBs all about experience and for
-irtel Bbrandcustomer experience.
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Pri37-F47i?i4it5 Strt785
3lexibleEprice policySsetting different prices in different markets
based onO
%eographic 5ocationOE -irtel is trying to put price flexibility as per
5ocation.
Time of deliveryOE )elivery of services matters a lot to improve image
of the company, so -irtel believes in providing correct product at
correct time.
The complexity of the productOE Pricing of -irtel also depends on the
complexibility of its product and span of availability.
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DATA ANALYSIS
+ustomers are more sensitive to price changes if the products cost a
lot andor are bought fre>uently
+ompetitors may see each of price change as a fresh challenge and
react according to its selfEinterest at the time. 'eed to estimate each
close competitorFs likely reaction.
oth the companies trying to measure the impact of price change on
total revenue.
The 2odafone has an idea is to maximiAe the profits of the entire
organiAation rather than that of a single product or a single line
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FINDINGS INTERPRETATION
6a!ority of the people has been subscribed to 2()-3(' due to its
various value added features. -I$T5 is not a ne company in India,
ut it needs span of time to stand in that level.
-irtel is trying its best to increase its market share through parity
pricing and penetration strategy. ItFs offering reduced price for the
products through various schemes to attract various levels of
customers. (n the other hand 2odafone hich had fixed and high
strategy of pricing, also trying to reduce its cost to expand the level of
customers.
-irtel is trying to expand its span through efficient promotion andstimulated reduce pricing here as 2odafone is trying to standardiAed
its services through flexible rating at various locations of India.
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CONCLUSIONS
2odafone seems to have consciously decided to go for the belly of the
market and aggressive market expansion, hile -irtel seems to be
pursuing a relatively more sophisticated consumer. There isnBt a great
deal of differentiation in terms of pricing, services, schemes and so on,
but there are differences in approach. (verall, 2odafone is focused on
functionality and efficiency, hile -irtel has veered toards armthand emotions.
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SUGGESTIONS
'o a days -s ma!ority of people ere aare of 2odafone, but after
ac>uisition by ne companies like tata & reliance, -irtel needs to
evolve through its balanced pricing strategy.
It should try to attract customers by offering flexible pricing. (n the
other hand 2odafone is already a established company ith a big
expansion. ut to stand the competitions from the companies, it
needs to reduce its price to come more close to the customers.
lectronic media#oardings are the ma!or medium hich attract
ma!ority of people toards the company. "o company should focus
on these to medium to attract more and more people toards the
company.
People of young age attract more toards the ne offers provided
by the company. "o the companies should focus more on youthFs
segments.
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+ompany should also concentrate more on >uality of services to
grab ma!or segments.
To understand the customers and their re>uirements, they should go
for market research after every duration of time.
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JUESTIONNAIRE
)ear "ir6adam,
I Amit =umr 8u!t 0tu;7:t 69 BMS 69 CLARA,S COLLEGE OF
COMMERCE I am doing my pro!ect onC6m!rti7 :450i0 69 !ri3i:8
;73i0i6: -!64i3i70 69 V6;96:7 :; Airt74. Please give your precious time for
filling these details.
=.1 'ame those companies hich provide telecom services no a daysN
-irtel
V6;96:7
T-T-
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=. Chich mobile company services you using no a days
-I$T5
2()-3('
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I)-
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=. 7 -mong them, hich rand you, prefer mostN
-irtel
2odafone
T-T-
Idea
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=.8 #o long you have been using this ProductN
/E 4ears ?T-T-@
E 4ears ?I)-@
E1/ 4ears ?2()-3('@
6ore than 1/ ?-I$T5@
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=.-re you using other product instead of -irtelN
4es
'o
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=.< )o you collect any information search before making purchaseN
4es
'o
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=.9 Chat are the features you look for in a product before making purchase
decisionN %ive preferences ?1E#ighest,
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=.: If you have to purchase a ne connection or product in near future, hich
rand ill you go for and hyN
VODAFONE ,B73u07 t>75 !r6i;7 9t7r 047 07ri37 :;
t>7 VODAFONE,0 :7t
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=.; -re you aare of various promotional activities being run by -irtel, if yes
then hoN -re you satisfied ith these promotional activitiesN
2ery "atisfied "atisfied "omehat "atisfied 'ot satisfied
+ustomer +are
y -d 3ilms
y +amp
8 hrs call center services
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=.11 Chat are you suggestions for improving the product >uality, service
availability and parts availabilityN
It should try to attract customers by offering flexible pricing. (n theother hand 2odafone is already a established company ith a big
expansion. ut to stand the competitions from the companies, it
needs to reduce its price to come more close to the customers
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BIBLIOGRAP#Y
7?0it70)-
.bharti.com
.vodafone.com
.google.com
.Cikipedia.com
M8@i:708'
usiness orld
B66=0)-
6arketing "trategies ?"udhir +hala@
$esearch 6ethodology ?+.$ Kothari@
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http://www.bharti.com/http://www.vodafone.com/http://www.google.com/http://www.bharti.com/http://www.vodafone.com/http://www.google.com/ -
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6arketing 6anagement ?Philip Kotler@