Airtel Lanka Is A Part Of Bharti Airtel Marketing Essay

Airtel Lanka is a part of Bharti Airtel, Indias leading telecommunication company which currently operates in 20 countries across Asia and Africa. They brag to be the world 5th largest mobile service provider with their customer base. Airtel Lanka currently has 1.7 million customers from an approximately 21 million customer base as of Quarter 3 in 2012.

This assignment was constructed to analyze Airtel Lanka’s current marketing strategy in Sri Lanka based on Airtel’s prepaid and post paid voice plans.

A valid rivalry analysis through Porters five forces and a detailed internal and external analysis has been conducted in this report, highlighting the issues Airtel had faced since it’s launch in 2009. Airtel has secured 4th place in the market with 5 players currently playing a tough

game in the mobile telecommunication.

A detailed product analysis has been undertaken, while looking into the market share and growth through a contextualized BCG matrix. The Ansoff matrix touches on the challenges faced and the ideal strategy to improvise on the mismatch of Airtel products in the market.

Table of Contents

1.0 -Key areas of research and sources………………………………………………………………..1,2

2.0- Analysis of Airtel in the Sri Lankan Market………………………………….2,3,4,5

2.1 Airtel Internal Analysis…………………………………………………………………………………… 2

2.2 Airtel External Analysis…………………………………………………………………………………..3

2.3 Analysis of Airtel Competitors……………………………………………………….3

2.4 Putting into practice the Value proposition Builder………………………………….4

2.5 BCG MATRIX………………………………………………………………………………….4

2.6 The Ansoff Matrix…………………………………………………………………………….5

3.0- Key Conclusions & Findings ………………………………………………………………………..5,6

3.1 Internal Check up-SWOT……………………………………………………………………………………5

3.2 Knowing your external environment…………………………………………………………………….5

3.3 Creating a Value Proposition……………………………………………………………………………….5

3.4 Fierce Competition…………………………………………………………………………………………….6

3.5 BCG matrix – Analysis of Airtel’s voice plans portfolio………………………………………. 6

3.6 The Ansoff Matrix- developing a strategy…………………………………………………………..6

4.0 Critical Observations………………………………………………………………………………………..7,8

4.1- Product Development………………………………………………………………………………………. 7

4.2- Market Development…………………………………………………………………………………………7

4.3 Airtel’s Lifecycle extensions……………………………………..……………………..8

5.0 Learning outcomes from Group work ………………………………………………………………..8,9

6.0 Executive summary -Working as one team…………………………………………..9

7.0 Action points……………………………………………………………………………………………………..9

8.0 Appendices……………………………………………………………………………………. 10,11,12,13,14

List of figures

2.1 Internal analysis (SWOT)…………………………………………… Pg 2

2.2 External Environmental analysis (PESTEL)……………………. …..Pg 3

2.3 Analysis of Airtel Competitors………………………………………Pg 3

2.4 Putting into practice the Value proposition Builder……………… … Pg4

2.5 BCG Matrix…………………………………………………………Pg 4

2.6 Ansoff Matrix…………………………………………………………Pg5

3.4 Competitive Market Share of Sri Lankan Telecommunication players Pg 6

4.3 Airtel’s Lifecycle extensions ……………………………………..…..Pg8

Key areas of research

Primary Research

We have conducted a survey to judge the market awareness on Airtel voice plans available in the market. We have each identified five segments (Youth, Senior Citizen, Corporate professional, professional entrepreneur, Family member) and interviewed five candidates. The sample size was total of 35 candidates, we collected the following responses

Airtel plans confuse me

The coverage is poor

Rating Airtel in the “somewhat category”

Our Conclusion- Most of the market was not aware of Airtel products.

Secondary Research

A detailed research has been conducted with the use of academic journals, abstracts, trade publications, media reports, case studies, Interviews through the sources of Ebesco host, Harvard business review and many marketing management related text books and websites and statistical websites like the Central bank of Sri Lanka and the Telecommunication regulatory Commission.

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Internal Analysis

The research on internal analysis of a company has explained the vitality of check up’s giving a classic example of our own health check- up’s every year and the importance of conducting a Swot check up internally too with the ever-so changing environment.

External Analysis

PESTEL analysis has been used. Media articles have demonstrated the external environmental challenges that Airtel is facing. Website journals have shown me the importance of analysing the external environment before planning for a new strategy.

Competitor Analysis

A detailed competitive analysis has been done using the Porters five forces. Research has highlighted a unique observation, that competition, today looks ahead of profits and should be strategizing to compete for survival.

Value Proposition

Many journal articles and marketing websites have been referenced. The research has shed light onto the importance of having a mechanism of a strong value proposition with a customer focus with the impact of being viewed as credible. A great example of this was Celtel’s success of entering the poorest continent. (24)

BCG Matrix

I have referenced journals, text books and trade publications which has highlighted product lifecycle decisions and some of the positives and negatives aspects of the BCG such as the lack of consideration in the competitive expectations and the risk factor.

The Ansoff Matrix

Research into journals and websites have demonstrated on how to develop a strategy through managing new technology innovations with the Ansoff matrix strategies along with a new concept of reverse innovation conducted by Airtel in India.(47)

Analysis of Airtel in the Sri Lankan Market

Airtel’s Internal analysis

Threats

Competition high

High start up cost

Free Internet calling

Imposed Floor pricing for mobile providers.

Strengths

Recognized brand

Capital investment from India

5th largest mobile operator in the world

Strategic Partners around the world

CEO well known business personality

Weaknesses

Lack of local knowledge & Experience

No coverage in rural areas

Poor quality congestion and dropped calls

Opportunities

Very lucrative market

Untapped Segments

Legal Airtel set flow rates in Sri Lanka 2.2 Airtel External Analysis

PESTEL

Political Stability after the civil war

Ecological Effects of their towers on the community health.CSR projects.

Economic- Sri Lankan Rupees fluctuation & Fuel price, Inflation

Social

Buying behaviors

Technological- Adaptation from consumers

2.3 Analysis of Airtel’s Competitors

Threat of New Entrants

The set flow rate that is imposed from the government on calling rates makes it difficult to enter and compete.

The Porters 5 forces

Low Bargaining power of suppliers

There are many mobile handset providers. Eg.Nokia Motorola, Sony Ericsson

High Rivalry amongst existing players

Customers have many choices

High Bargaining power of Buyers

There are 5 key mobile provides in Sri Lanka, Dialog Axiata, Mobitel, Etisalat, Airtel & Hutch.

Cost of switching is not high.

Threat of Substitutes

Fixed telephone lines, Internet calling.

.

2.4 Putting into practice the Value proposition Builder

3.Offerings

Corporate plans, Family packages, Special tourist plans.

Value for money

2 .Value Experience

Clear coverage, Best rates with value added services

1.Market

Families, couples, Children, University students, Travelers & Corporate businesses

Value Proposition

4. Benefits

Great packages for target the market .

Rs 200 package included with free 200 MB, 200 sms

6. Proof

Success stories to be highlighted through advertising to gain credibility.

5. Alternatives & Differentiation

Great Coverage, Unique plans.

Adapted from : Greener consulting Ltd T/A Future curve (2003-2001) The value proposition builder. [Online]. Available from: http://www.ronholt.es/prensa/2011_Winning_Value_Propositions.pdf [Accessed September 29th,2012

Market Share

High

Low

Problem Child

Stars 2.5 BCG matrix

Pre paid & post paid

Value added services

High

Market Growth

Cash Cows

Low

Dogs

2.6 Ansoff Matrix

Existing Product New Product

Airtel

Existing Market

Product Development

Market Penetration

Diversification

Market Development

New Markets

3.0 Key Conclusions & Findings

3.1 Internal Check ups-SWOT

Just as we conduct check- ups on for health, A SWOT is required with the changing market trends. The strong financial backing can be used to increase its investments and expand rural coverage. Their strategic partners can assist in improving credibility & local market knowledge.

3.2 Knowing your external environment

The government imposed flow rate makes it harder for Airtel to compete. Mr Mittal explained that this could be played with in India which makes competition easier. (39)

3.3Creating a value proposition

Creating a value proposition is essential for a company trying to reach its target market. A value proposition is not about listing all Airtel’s benefits but selecting the core benefits. Sunil Mittal chairman of Bharti Enterprises, had introduced a concept of “reverse innovation success” where he outsourced key IT functions and left concentration on core strengths of understanding customers’ and building brand in India. (47)

http://www.airtel.in/wps/wcm/connect/7f2d9c004622c34386769613a14a5b1e/bharti-mittal.jpg?MOD=AJPERES

3.4 Fierce Competition

Porters Five forces acts as a helpful tool in devising a strategy based on competition. I have identified that rivalry is high with 5 large players in a market of 21,699,591 mobile subscribers in Q3 2012.

Competitive Market share of Sri Lanka Telecommunication player

(Author 2012)

3.5 BCG matrix – Analysis of Airtel’s voice plans portfolio

There is a growing telecommunication market share of approximately 95 % as mobile users. Airtel needs to adapt is product lifecycle to uplift its matured products and implement proper segmentation to gain market share.

3.6 The Ansoff Matrix- developing a strategy

Airtel is adopting a low cost mass market strategy. (Market penetration) Airtel needs to rejuvenate their product and conduct proper segmentation to develop it’s market and look into a strategy of Market Development and Product development.

4.0 Critical observations

4.1 Product Development

Balanced portfolio

We need to understand that using BCG to analyse its market share and growth and cash flow could be ineffectively measuring performance. Airtel needs to differentiate and localise their product portfolio and ensure customers are knowledgeable about the differentiated value offered. Eg Rs 100 package, Rs 300 package.

Wider Network Coverage & Clarity

Airtel pleas from the Sri Lankan government to allow tower sharing which will reduce overall cost, improve quality and minimise environmental concerns. The usage of Satellites will improve connection quality.

Value proposition develops the product

Airtel needs to uplift its image in mobile technology sector with its Indian expertise. Retail partnerships can be used such as banks and food retailers to align credibility. Adding value for money and reducing cost..

4.2 Market Development

Move from Mass market Low cost strategy and establish value for money

Airtel is lowering rates and using a penetration strategy. Mittal explained that Tariffs could be played with in India which makes competition easier. So Airtel should adopt packages with value added services as opposed to low cost which will be valued by its markets. (39)

Develop untapped markets

Kiddies Plan – Parents will see this as a security to be able to contact their children and have restrictions on internet and calling features in place.

Welcome to Sri Lanka- Tailored to the tourism in Sri Lanka. With application forms on the tourism website and they have a connection ready when arrive at the airport.

Corporate packages

Offering great bundle packages with Internet, corporate mobiles services, Dialog is treating its high spenders with a key client relationship club offering receptions and freebies and points system. Airtel should adopt a similar strategy to attract the top spenders and sustain their loyalty.

4.3 Airtel’s Lifecycle extensions

Marketing Mix adjustment

-Add value rather than reduce price

After sales service

-Better

Communication to public

Product adjustments

Better coverage with towers and satellites

Improvement with more value added services

Increase Usage of Airtel bu current customers

-Develop great packages

Increase Number of Airtel Users

Convert non users in new Segments

-Grab Competitor’s Customer

.

Kotler,P. And Keller,K ( 2009) — (19)

5.0 Learning outcomes from group work

Master Market penetration before moving on

The group identified that Airtel’s current strategy undertaken is market penetration. Airtel is not currently performing in their markets or their products. They need to perfect this before moving on. A differentiated market penetration strategy is what the group has decided. It was identified that Airtel has already many registered & segmented products with the Telecommunication regulatory commission, the underlying issue is the clutter in advertising of Airtel packages that it is not marketed properly.

Trail offers

This was a new idea brought up by one of our team members to offer 1 month trial offers and let customers experience Airtel’s product. This will help to capture market share from competitors.

We have identified Product “P” from the marketing mix and that for successful implementation it requires a synchronization of the other 3 P’s

Evolving Technology

Discussion went that Airtel should always keep a high priority on evolving technology despite its penetration strategy to stay in existing markets and existing products.

Retail Partnerships

My assignment identified for retails partnerships to enhance the value of the overall product but our team has looked at it as an opportunity to meet target markets and to establish credibility in their markets.

6.0 Executive summary -Working as one team

The team got along well there was active contribution from all business backgrounds by each team member. We worked well to stick to our time plan. We got a good competitor insight from a team member who worked for the competitor, Dialog Axiata and another who had foreign exposure had brought forward technologies like tower sharing.On the flip side our group was very opinionated but we always battled out the contradictions and came to an agreeable solution. Individually I learnt a lot about the industry insights and the facts and figures brought by team member has enhanced my knowledge in the telecommunication industry.

Action points

The group started early to choose a company and Individual research was conducted on “Product” from the marketing mix.

An active email group was set up where we had online discussions as well.

Second Meet up was to discuss ideas so far and our progress

Once we completed our individual assignment we discussed our findings along with the survey results (see appendix) and battled out the best points to put in our power point presentation.

We finalized the slides with layout and discussed out talking points

We are now practicing our presentation.

8.0 Appendix

QUESTIONNAIRE

This survey is about the Airtel and their product offering. Please spend some valuable time of you on this survey and information which collected through this survey would be kept confidentially.

Male

Female

1. Gender (√)

2. Age – (√) 20 – 25 26 – 35 36 – 45 45 – 50 51-Above

3. Rate the following mobile phone suppliers according to your preference.

Very good

Good

Average

Some what

Dislike

1

2

3

4

5

Airtel

1

2

3

4

5

Hutch

1

2

3

4

5

Dialog

1

2

3

4

5

Mobitel

1

2

3

4

5

Etisalat

1

2

3

4

5

4. Have you ever used an Airtel connection? (√)

Yes No ………………………

5. If the answer is “yes” for the above question why did you switch to another connection? (√)

Airtel Product range confused me

Price levels are didn’t meet up my requirement

Coverage is not sufficient

Marketing campaigns makes me complex

Value added services are not sufficient

6. You use your device mostly on; (√)

Voice

SMS

Data

7. Whose product range fulfil your mobile connection requirement (√)

Airtel

Hutch

Dialog

Mobitel

Etisalat

8. Your most favourite marketing campaign is from… (√)

Airtel

Hutch

Dialog

Mobitel

Etisalat

Thank you