marketing report on idea cellular ltd

A

PROJECT REPORT

OF

MARKETING MANAGEMENT

ON

Idea Cellular Limited

SUBMITTED TO:PROF. BHAVESH VANPARIA

SUBMITTED BY:AMIN PATTANIROLL NO. 08100SEM – II, GROUP - II

TOLANI INSTITUTE OF MANAGEMENT STUDIES

Telecom Industry in India: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.

Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by the growth in demand in countries like India and China. India‘s mobile phone subscriber base is growing at a rate of 82.2%.

China is the biggest market in Asia Pacific with a subscriber base of 48% of the total subscribers in Asia Pacific. Compared to that India’s share in Asia Pacific Mobile Phone market is 6.4%. Considering the fact that India and China has almost comparable populations, India’s low mobile penetration offers huge scope for growth.

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.

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, highend 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, 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.

Introduction of Idea Cellular Limited:Idea Cellular is a part of the US $24 billion Aditya Birla Group and a leading GSM mobile services operator with licenses to operate in 13 telecom service areas in India. The company has operations in Delhi, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh (W) & Uttaranchal, Uttar Pradesh (E), Madhya Pradesh & Chattisgarh, Gujarat, Maharashtra & Goa, Andhra Pradesh and Kerala with the planned expansion into Mumbai, Bihar & Jharkhand.

Idea’s footprint will cover nearly 70 percent of India’s telephony potential. Idea Cellular had 16.13 Million subscribers as on June 30, 2007, and had a market share of 15.4 percent as on June 30, 2007 in its 11 service areas of operation.

History of Idea Cellular Limited:Idea Cellular's history dates back to the year 1995, when it was incorporated as Birla Communications Services The following year, the company entered into a joint venture with Grasim Industries and the global telecom giant AT&T. The same year, its name was changed to Birla AT&T Communications Limited. A merger with Tata Cellular Limited took place in 2000. In 2002, the company created the brand ‘Idea' and changed its name to Idea Cellular Limited. The same year it launched operations in Delhi and crossed the one million subscriber base; in 2005, it crossed the subscriber base of five million.

In 2006, the Tata Group transferred all its shares to the Aditya Birla Group and the group became the largest shareholder in the company. In 2007, Idea came with an IPO and got listed on the


bourses - the same year it reached the subscriber base of 20 million.

Environmental ScanningThe marketing environment within which a company operates is dynamic. There are two types of environment.

1. Micro environment

2. Macro environment

1. Micro environment:

The micro environment is “the forces close to the company that affects its ability to serve its customers.”

2. Macro environment:

The macro environment is “the larger societal forces that affects the whole macro environment.” The macro environment consist of six types of forces Demographic, Economic, Natural, Technological, Political and Cultural forces. A company’s marketing strategy must take into account changes and trends in this environment that can present opportunities or pose threats. A successful firm in one that regularly modifies it marketing mix and strategies to adapt to these changes.

Political Factors:Neglected area has been non-existence of any guidelines for installation of towers in every nook and corner of the country. In our endeavor to grow, proper attention is missing for safety associated with towers. Lots of towers in India have been installed on roof tops of weak and unsafe buildings. During construction, hardly anybody has planned for towers on roof tops. It is unexpected that the structure feasibility of all buildings is undertaken before towers are installed. There are cases where more than two or even three towers have been installed at a single location.


Economic Factors:1. Income group:

Now a day, lower class people also use mobile phones. And idea simcard is affordable by any class.

2. price elasticity:

Demand of idea simcard is increasing day by day so the price of idea simcard is decreasing.

Social Factors: Especially idea cellular provides many offers which

attracts customer of all age groups. For example, sms offers can easily attract youngsters. And people who are using idea simcard, can talk at very less call rate. So most of people use this product.

Idea cellular limited has many big names and good brand image so bulk of the people use idea simcards.

Good advertisement always attracts people & idea cellular limited introduces new and attractive advertisement regularly and have celebrity as their brand ambassador like Abhishek Bachchan, so it is a big factor.

Technological Factors: Initially the memory of sim card for contact saving was

less, but now a days we can get more memory in that.

Now there is facilities of GPRS is also available in Idea simcard.

Demographic Factors:1. Gender: This is used by both males and females.

2. Age group: mostly we see that mobiles are used by all age group from teenagers to older ones.


3. Population: we know that if the populations increase, the use of cell phone will also increase.

4. Occupation: This is used by the entire person. So occupation is not affecting on it.

5. Income: Now a day’s income factor is not affecting to this. Because it is available at very cheap price now.

Marketing Research Process


6. Make the Decision

5. Present the Findings

4. Analyze the Information

3. Collect the Information

2. Develop the Research plan

1. Define the problem, the decision alternatives, and the research objectives.

Market Research Process

Step – 1: Define the problem, the decision alternatives, and the research objectives

There are many brands available in market like Airtel, Vodafone, Tata, Reliance and Virgin. So, if any of these mobile operators give new schemes in less price then customers easily get attract from the scheme and switch over from our brand.

Step – 2: Develop the research Plan

The second stage of marketing research requires developing the most efficient plan for gathering the required information. This involves decision on the data sources, research approaches, research instruments, sampling plan and contact methods. So the research we will select questioner method i.e. we will prepare questioner and do the research.

Sampling plan: After deciding on the research approach and instruments, the marketing researcher must design sampling plan. These call for 3 decisions.

1. Sampling Unit: Who should we survey?

In Idea Cellular the target consumer is the consumer of age between 15 to 60 years.

2. Sample Size: How many people should we survey?

In this step marketer decides from which area and number of sample they take for research. For e.g. the researcher decides to take the sample of 200 respondents from the society.

3. Sampling procedure: how should we choose the respondents?

After the researcher has decided the sample unit and sample size they should decide how should be choose the respondents. There are two sampling procedure.

Probability sample: it means he gives equal chance to all the respondents.

Non probability sample: it means unequal chance to the respondent.


And for the researcher non probability sample is easy to reach to the respondents for his research process. Research will choose non probability sample and in this process he will choose convenient sample i.e. the researcher select the most assessable population members.

Step – 3: Collect the information

The data collection phase of marketing research is the most expensive and the most prostrate to error. Today is the era of computer technology and so the researcher will use computer technologies i.e. new researcher software, internet etc. and face to face methods for fill up the questionnaire and gather the information.

Step – 4: Analyze the information

The next step in the process is to extract findings by analyzing the information and developing frequency distribution. The researchers now compute averages and measures of dispersion for the major variables and apply statistical techniques and decision models in the hope of discovering additional findings.

Step – 5: Present the findings

As the last step, the researcher presents findings relevant to the major marketing decisions facing management. Researchers increasingly are being asked to play a consulting role in translating data and information into recommendations. They are also considering ways to present research findings in as understandable and compelling a fashion as possible.

Step – 6: Make the decision

The study conducted is a conclusive descriptive statistical study; the researcher comes to the decision which is precise and rational. The study is conclusive because after doing the study the researcher comes to a conclusion regarding the position of the brand in the minds of respondents of different firms groups. The study is statistical because throughout the study all the similar samples are selected and group together. All the similar responses are taken together as one and their percentages are calculated.


Thus, this conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilize to arrive at a concrete decision

Questionnaires

1) Are you fond of mobile phones?

Yes

No

2) Do you use any mobile phones?

Yes

No

3) Which company’s simcard do you prefer to use?

Idea

Airtel

Vodafone

BSNL

Reliance

4) From which sources did you get information about these simcards?

Newspapers

Television

Friends

Others

5) Are you aware of Idea simcard?


Yes

No

6) Have you seen any advertisement of idea cellular limited?

Yes

No

7) Do you use Idea simcards?

Yes

No

8) Do you want to buy Idea sim card?

Yes

No

Cant say now

9) Which factor do you considered while buying Idea Cellular Limited?

Network

Schemes

Brand image

Call Charges

If other than please specify……………….

10) From how long do you use Idea simcard?


less than a year

1 to 3 year

More than 3 years

11) Have you seen any advertisement of Idea Cellular Limited?

Yes

No

12) Do you face network problem any time?

Sometime

Never

Often

13) In which area of service in idea simcard do you want to improve?

Network

Quality

Schemes

Call Charges.

14) Do you satisfied with the service of Idea Cellular Limited?

Yes

No.


15) If not than give the suggestions for improvement.

…………………………………………………………………………………………………………………………………………

Name: …………………………………………….

Sex: ………………. Age: ……………………..

Qualification: …………………………………….

Contact No.: ………………………………………


Forecasting and Estimating DemandOne main reason for undertaking marketing research is to identify market opportunities for our product. Once the research is completed, company must forecast size, growth and profit for market opportunities.

1. Measure of Market Demand:

Potential Market:

Potential market is the set of consumers who acknowledge a sufficient level of interest in a market. So many people use mobile phones and have interest in purchase of new simcard for new mobile phones as well as old mobile phones for experience a new services and schemes. So the potential market of idea cellular is large.

Available Market:

Available market is the set of consumers who have interest, income, and access to particular offer. The price of idea simcard is reasonable with lower call rates and new schemes. So that customers attract from idea simcard and so the available marker of idea simcard is large.

Qualified Available Market:

Qualified available market is the set of consumer who have interest, income, access and qualification for the particular product. As the idea simcard does not require any such qualification so there is no need for the idea simcard for this market.

Target Market:

Target market is the set of qualified available market the company decides to pursue. The Idea Cellular Services might decide to concentrate its marketing and distribution effort on particular area or particular villages where the network of idea cellular is not available. So the Idea Cellular decides to put its effort for Idea Cellular Services in particular areas or villages.


Now a day Idea Cellular has started to give a new network towers in small villages for choosing their target market.

Penetrated Market:

Penetrated market is set of consumers who are buying the company’s product. As the Idea Cellular made its effort on small villages and some particular areas and in India most of the people especially young generation wants new schemes and less call rates and also new sms schemes and Idea Cellular provides all these facilities in lower cost as compare to other one. So the penetrated market of the Idea Cellular is also large.

2. Estimating Current Demand:

Researcher is now ready to examine some of methods for estimating current market demand. Marketing executives want to estimate total market potential, area market potential and total industry sales and market share.

Total Market Potential:

Total Market Potential is the maximum amount of sales that might be available to all the firms in an industry during a given period, under a given level of industry marketing effort and environment conditions. A common way to estimate total market potential is as follows:-

Total Market Potential = Potential No. of Buyers X Average Quantity Purchased By a Buyer X Price

For e.g.:

Total Market Potential = 20000 buyers X 1 simcard X Rs. 30

= Rs. 6,00,000 Total Market Potential


Area Market Potential:

Companies face the problem of selecting the best territories and allocating their marketing budget optimally among these territories. Therefore, they need to estimate the market potential of different districts, towns, cities, states, and nations. Two major methods of assessing area market potential are available: the market builds up method, which is used primarily by business marketers, and the multiple-factor index method, which is used primarily by consumer marketers.

The marketer has decided to use Market-Buildup Method as this method gives accurate result.

Consumer Buying Behaviour Factor

Affecting To ProductConsumer behavior is the study of how individuals, groups, and organization select, buy, use and dispose of goods, services, ideas or experience to satisfy their needs and wants.

A consumer’s buying behavior is affected by cultural and social factors.

Cultural Factors:

Culture: As in Idea Prepaid Simcards, the cultural factor is not affecting much.

Social class: Social class includes lower class, middle class and upper class. This sometimes affects the demand of the Idea Prepaid Simcard, because these all categories people mostly prefer Idea Prepaid Simcard because of lower call rate in reasonable charges. So it affects to the demand of the Idea Prepaid Simcard.


Social Factors:

Social factors such as reference groups, family, and social roles and statuses affect consumer buying behavior.

Reference group: The reference group is that who connected or daily communicate with each other like family, friends, neighborhood, relatives etc. So because of this reference group they provide the information of Idea Prepaid Simcard like services and other facilities, by knowing some of the good features and services by reference group of this product person can easily influenced by them and so that the demand of the product also increase.

Family: The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. In family if some one using the service of Idea Prepaid Simcard than the other members is influenced by the family members and also use the service of Idea Prepaid Simcard.

Status: One of the advertisement campaign is “Aaj Se Koi Bi Apne Nam Se Nahi Jana Jayega”. From this campaign many high level people and also politicians using Idea Prepaid Simcard because of adding value in their status. So status also affect in increasing in demand.

Personal Factors:

Age and stage in the life cycle: This affects much when a student’s in their schooling they don’t want much services and schemes in prepaid simcards, but after passing their schooling they entered in college and so that at that time they wants more services and schemes in reasonable price for connecting with friends and relatives or increase their contacts. So this factor is much affects on demand of Idea Prepaid Simcard.


Occupation and economic circumstances: This also affects the demand because in any occupation company have a more contacts with customers, suppliers etc. so that they wants to connected with their suppliers and customers and so that they want less call rate in reasonable price. So occupation and economic circumstances are also affects the demand of the Idea Prepaid Simcard.

Personality and self concept: This has also affect on the demand of the Idea Prepaid Simcard because a person has its own view point of selecting the product and if does not like the Idea Prepaid Service he may switch over to the other prepaid simcard.

Lifestyle and values: It also affects the demand of the Idea Prepaid Simcards because person’s lifestyle and its value play a great role in choosing any product.

Identify Market Segment of the ProductWe can segment any product into Geographic, Demographic, Psychographic and Behavioral. So the market segment of Idea Prepaid Simcard is as below.

Geographic:

Region: Idea GSM services are licensed in 13 circles of India, so that these services are used by people in different circles and also used by different region people.

City: Idea Prepaid Simcard is used in metro city, mega city and also in small villages because of reasonable prices and also offered many schemes for people in less monthly rental.

Demographic:

Age: Idea Prepaid Simcard is used by age group of 15 to 55 years. Now-a-days this prepaid service is also used by below this age group.


Family size: We can also segment our product based on family size because if the family size is large and if they are using more mobile phones in family for connected with each other then they also using prepaid services.

Income: Income is not much affects in segmenting the market because price of Idea Prepaid is reasonable and the lower class people also afford it.

Occupation: Occupation also affect in segmenting the market because Idea Prepaid simcard is only not used by lower class and middle class people but also used by higher class people who have their own business.

Education: Education does not affect the segment of the Idea Prepaid Simcard because Idea Prepaid Simcard has been used by educated people as well as uneducated people.

Psychographic:-

Lifestyle: Lifestyle also affects in segmenting the market. So the marketer while segmenting the market of Idea Prepaid should keep this in his mind, because high class people also using this service.

Personality: Personality does not affect the Idea Prepaid Service in segmenting his market.

Behaviour:

Behviour does not affect in segmenting the market.

Select Brand Element for ProductThere are six main criteria for choosing brand elements. The first three-Memorable, Meaningful, and likeable are “brand building”. The latter three are Transferable, Adaptable, and Protectable are “defensive”.


Memorable: How easily is the brand element recalled and recognized? Idea Cellular is having a reputed telecommunication service, and having a good logo. Idea Cellular Service has a good punch line “An Idea Can Change Your Life” and “For the People, By the People” which is very easy in recall it.

Meaningful: Is the brand element credible and suggestive of the corresponding category? Idea Cellular Service is having a punch line “An Idea Can Change Your Life” means new ideas gives you new life for enjoyment and success.

Likable: Idea Prepared simcard liked by most of the people and most of the people wants to use it because of good service provide by them in affordable price.

Adaptable: Idea Cellular Service is providing two services i.e. prepaid and postpaid. So when people can here these two services of Idea Cellular then they easily recall the name of Idea Cellular Service.

Develop Product Life Cycle


Introduction: In the initial stage Idea Cellular was introduced in all the major cities of India. There were many competitors in the tele-communication business, which provided the line-based connection and wireless connection whereas Idea Cellular provided the wireless connections to the customers. So profits are nonexistent because of the heavy expenses on giving schemes of service introduction. In the case of Idea Prepaid Service as it was introduced in the year 1995 so it was the introduction stage.

Growth: In the growth stage, the Idea Cellular sales started growing. And the profits also started rising. Idea Prepaid Service growth stage was year 2002 because by the 2002’s, Idea Prepaid got the 1 million subscribers, and in 2005 it crossed 5 million subscribers.

Maturity: Idea Cellular is right now in the maturity stage, because they have got most of the market share. There has also been an increase in competition; new companies like Reliance GSM, Aircel etc. also enter into the market. The Idea Cellular had made not only the service modification, but also extend their market.

So, we can say that Idea Cellular is today on its maturity stage of its product life cycle.

Differentiate your Product from Competitors in the market

Differentiation is actually differentiating the market offering to create superior customer value, once a company has chosen a desired position it must take strong strips to deliver and communicate that position to target consumers. The company entire marketing program should support the chosen positioning strategy. Idea Cellular has differentiation its products by doing different activities as follows:

• Price affordability

• Hire famous personalities

• Only company offers package for ladies


• Roaming facilities in affordable charges

• Idea Cellular PCO

Now we can differentiate Idea Cellular from competitors in the market as below.

Brand Name: As compared with its competitors Idea Cellular is having good brand name in the market and they can easily attract their target customers by their name and which is most important for differentiate brand from competitors.

Preferences: As prepaid simcard users uses the simcards as per their convenient. Most of the people want more schemes and less call rates in reasonable prices. So that customer can choose services as per their choice and preference.

Promotion: Idea cellular Ltd. is using promotion strategy for increase the sales and demand of the product. They are giving schemes like free sms services, GPRS service, less call rates etc. in reasonable monthly rental so that customer can easily attract from this promotional schemes.

Classify the ProductMarketers have traditionally classified products on the basis of durability, tangibility and use (consumer or industrial). Each product type has appropriate marketing-mix strategy.

Durable and tangibility:

Durability: Idea Prepaid Simcard is durable goods because it is not purchased by the buyers on regular basis.

Services: Services are intangible, inspirable, variable and perishable products. As a result they normally required more quality control, supplier credibility and adaptability. As in Idea Prepaid Service they provides VAS (Value Added Service), Roaming facilities etc.


Consumer Goods Classification:

We classify the vast array of goods consumers buy on the basis of shopping habits. We distinguish among convenience, shopping, specialty and unsought goods.

Convenience goods: In convenience goods the Idea Prepaid Simcard is impulse goods because it is purchased without any planning and such efforts.

Long Term Pricing Strategy

a) At what stage in the life cycle is the product?

Idea Cellular is right now in the maturity stage, because there has also been an increase in competition; new companies like Reliance GSM, Aircel etc. also enter into the market.

b) What is its current price?

The current price of Idea Prepaid Simcard is Rs. 30. In this price they gave Rs. 10 talk time and life time validity because of more competition in market.

c) What price do its competitors charge?

The competitors of Idea Prepaid are also giving this all facilities in same price of Rs. 30. Competitor like Vodafone is giving free prepaid simcards with Rs. 10 talk time and lifetime validity for increasing in users of their services.

d) What prices will you charge in the remaining stages of the product life cycle?

Right now Idea Cellular is in the stage of maturity, but if this fall into decline stage than I have also reduce the price as per the competitor’s price and give more schemes. Because of this price I will increase my sales and users of our product.


e) What objectives will be accomplished this way? How?

To increase the market share

To achieve high return on capital

To increase awareness of the product in market

To fight with competitors

Marketing Channel

The marketing channel of Idea Cellular is as below.

In this channel first manufacture produce the simcards and then they sent to the wholesaler as per the order. Wholesalers send to the retailers and shopkeepers and then lastly retailer sales to customer.


PULL Strategy is develop by the Idea Cellular. As Idea Cellular is very known brand and is punch line is “For the People, By the People” and “An Idea Can Change Your Life” which is very good that’s why Penetrated Market consumer know about that and they ask about Idea Prepaid Simcards.

Distribution Strategy

There are three types of distribution strategies.

1. Exclusive distribution2. Selective distribution3. Intensive distribution

Exclusive Distribution: Exclusive distribution means severely limiting the number of intermediaries. It is appropriate when the producer wants to maintain control over the service level & outputs offered by the resellers & it often includes exclusive dealings arrangement by granting exclusive distribution, the producer hope to obtain more dedicated & knowledgeable.

Selective Distribution: Selective distribution relies on more than a few but less than all of the intermediaries willing to carry a particular product. It makes sense for established companies seeking distributors.

Intensive Distribution: In intensive distribution the manufacturer places the goods or services in as many outlets as possible. This strategy is used for items such as snack foods, soft drinks, newspapers, candies etc.


Distribution Strategy for Idea Cellular: We will use selective distribution. It involves the use of less intermediaries who are willing to carry the particular product. It can gain adequate market coverage with more control and less cost.

Advertisement of Idea Cellular Ltd.


marketing report on idea cellular ltd

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