PEST ANALYSIS

The market environment is a marketing term and it refers to all of the forces outside of marketing that affect marketing managements ability to build and maintain successful relationships with target customers.Company, its suppliers, distributors, and its competitors are also impacted by what is happening in the world. To succeed therefore, it is necessary to continuously monitor, anticipate, and adapt, to that environment, and wherever possible, shape that environment. The market environment consists of both the macro environment and the micro environment. Micro environment This environment influences the organization directly. It includes suppliers that deal directly or indirectly, consumers and customers, and other local stakeholders. This determines the relationship between consumers, suppliers, distributors, public and dealers. Macro environment This includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws (although it is accepted that they could lobby or be part of a trade organization . It is continuously changing, and the company needs to be fle!ible to adapt. There may be aggressive competition and rivalry in a market. "lobalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology. The acronym #$%&T' is used to describe framework for the analysis of these macro environmental factors. PEST Analysis of the Mobile Phone Industry There are many factors in the macro(environment that will affect the decisions of the managers of any organisation. Ta! changes, new laws, trade barriers, demographic change and government policy changes are all e!amples of macro change. To help analyse these factors managers can categorise them using the $%&T%) model. This classification distinguishes between following factors* $olitical +legal environment %conomic environment &ocio(cultural environment Technological environment

Political-Legal Environment: This environment is composed of laws, government agencies, and pressure groups that influence and limit various organizations and individuals .&ometimes these laws create new opportunities for business. ,arious political and legal factors affect a particular industry. -y crossing the critical .// million mark, India has one of the largest mobile service markets in the world. In last two years alone, mobile phone users have 0umped from 1/ million to over .// million. 2ther than the trend of growing 3ousehold income in India, the recent mobile market e!pansion in India has been driven mainly by enlightened regulation and market innovation. 4e e!plore some of the drivers below* Enlightened Regulation The Indian "overnment has been promoting market liberalisation and simplifying regulation. nified Licensing Indian government has issued new type of unified licences to operators, enabling them to provide both fi!ed and mobile services. 5i!ed(6obile convergence makes the bundling of services easier and operators are offering much wider choice of product to consumers. The unified licences also allow interconnectivity across contiguous circles 7 it is no longer necessary to route inter(circle traffic through a 8ational )ong 9istance operator which causes delay and increases costs. Lo!ering of Interconnect "harges )owering interconnection charges has direct impact on mobile service tariff and interconnection traffic will be boosted significantly, both fi!ed to mobile and mobile to mobile services will benefit. Made Licence #ees $%&-$'& of Revenue instead of a fi!ed amount irrespective of the operators revenue. The fi!ed amount licence fee posed a serious entry barrier to smaller operators and service providers before, now with fee linked with revenue, small players can grow, evolve and diversify into different segment and offer innovative products and services to the market. Sim(lified #re)uency Allocation Process :adio spectrum is critical for mobile service, therefore if fre;uency allocation process is lengthy and bureaucratic, mobile services deployment will be delayed and it will hamper the whole industrys development. As the allocation process is getting more simplified and transparent, networks are rolled out faster. In summary, regulatory changes have lowered tariffs, bringing down overall cost of service ownership and boosted investments in the networks which enhance both mobile service ;uality and capacity, widened network coverage, which in turn will further lower the tariff, then encourage more consumers to take up services. 10 | P age

E"*+*MI" E+,IR*+ME+T 6arket re;uires not only people but purchasing power also. The available purchasing power in an economy depends on The state of the economy + &tate of the economy related to the category of economic status of that country either is developed, developing or underdeveloped economy. -asically developing economy is the potential market of handsets as these countries have many of service providers so the demand of reliable and efficient handsets as well.... India in spite of the recession had a growing economy and hence this contributed to increased sales of handsets in these years. Income distribution( Income distribution basically related to the section of the society, high income group, high middle class group, middle class group, low middle class group < low class group. The preference of handset varies according to the income groups. As per the survey done by 8okia 6obile main focus of high income group is in the price range of =.>///, 6iddle class group 1/// to .1/// and lower class group ?1///. Mar-et innovation has contributed to the reduction of the cost of ownership and made services more accessible for low income groups which are very price sensitive. To overcome this hurdle, Indian operators boost the penetration in low income groups with use of innovative tariff plans, offer very cheap handset to the public and e!ploring attractive ,A& which are appealing to different segment of customers. Innovative tariff (lans The following tariff plans are e!amples of how they have boosted handset sales* @ Incoming(only plans ( employers got phones for chauffeurs and domestic staff7 companies keep in touch with mobile work force @ 2ne India tariff plan (. :upeeAmin anywhere in India + simple to grasp @ )ifetime prepaid plan + no obligation for regular recharging @ -arter of talk minutes for e!tension of account validity @ Affordable (e.g. ./ :upees top(up values for prepaid accounts Affordable .andset @ The availability of low cost models from handset manufacturers + price as low as :s., B// to .,C// (D&E FG to BF @ An active second(hand handset market + handsets selling at as low as :sB// to C// (D&E H to G Attractive ,A& that is compatible with less sophisticated handsets /EM*0RAP.I" #A"T*RS $eople make up markets. 6arketers would therefore like to know the &ize of population , "rowth rate of population, Age distribution of population, :egional distribution of population, %thnic mi!, %ducation levels, and 3ousehold patterns. In 6ay F/// Indias population had 11 | P a g e

reached the billion marks ( only the second country to do so. There are only four countries in the world that have a population e!ceeding that of Dttar $radesh (.>> million .India adds roughly .I million people, the population of Australia, every year. 9emographic factors have an influence on the evaluations of different attributes related to mobile phone choice. &pecifically, gender and social class will impact on the evaluations of the attributes as men belonging to higher social class seem to be more technology savvy. Consumers value in smart phones features that enhance their personal time planning (e.g., Jones, F//F . These high(rated features include calendar and e( mail services. 8ew technology features such as built(in cameras, better memory, radio, more developed messaging services, and colour displays are influencing consumer decisions to ac;uire new models, which depend on the different age groups. 9ifferent age groups prefer different cell phones. Teenagers mostly prefer cells which are attractive, look trendy and have attractive features whereas people of age group i.e. between C/( 1/ use mobiles for communication purposes mainly. &ize and brand play to some e!tent an important role in decision making. 4hen choosing between different mobile phone models, consumers value familiar brands .4hen choosing between different mobile phone models, consumers prefer handsets which are user friendly. &till after so many brands entering into the market, a ma0or portion of the population still prefer familiar reliable brands like 8okia. -ecause it is user friendly as compared to brands like &ony %rickson, 6icroma!, )", and &amsung and so on. $rice of the phone has been identified as a critical factor in the choice of the mobile phone model, especially among the younger generation .It has been found that besides new technological advances price is the most influential factor affecting the choice of a new mobile phone model. &till large chunks of the population prefer the middle price range of cell phones. That ranges between 1 to .F thousand Indian rupees. In fact value for the money is most important factor that influences consumer choice for a cell phone.

S*"I*-" LT RAL #A"T*RS 2ne of the greatest socio(cultural factors affecting the handset market is the increasing need of social recognition among the masses, which is further fuelled by lowering of tariff rates by the service providers. 6oreover with higher spending power among the masses, festivals and marriages and other socio cultural factors affect handset sales. &ocio(cultural environment shapes customers beliefs, values, and norms. The social and cultural factors that influence the buying behaviour of consumers are inclusive of culture, social class, reference group, family, demographics and geography. Culture is an amalgam of tangible factors and intangible traditions that enunciate the lifestyle of a particular group of people. As for social class, it defines the income group the individual belongs too and that, in turn, is heavily dependent on the income earned, which is a great factor in determining buying behaviour. The third factor is the reference group. As is obvious from the name it is the group from whom the consumer seeks reference. It could range from people like oneKs parents, members of the family whom the individual feels close to, close friends, celebrities who endorse the brand etc. $eople whom we trust, their opinion means a great deal to us and affects many decisions of ours including buying behaviour. :egarding family, this determinant is totally different from the erstwhile one as this one focuses on the norms and preferences of the family in which the individual lives and is brought up. 6oreover this determinant is on a collective and unconscious basis as the individualKs buying decision is taking effect from the ambience of his family and the unconscious way he has grasped the values that have been given to him by his family. Coming to demographics, these are small and specific details about the individual such as age, gender, education, income, occupation etc. Also the geographical location in which the consumer resides also determines the buying behaviour depending on sub(factors like climatic conditions, availability of resources, surroundings etc.

TE".+*L*0I"AL E+,IR*+ME+T 2ne of the most important factors that affect our lives is #Technology.'It is the most important force that keeps on changing our day to day lives, which not only affects individuals but can also affect economy as a whole. Technology is a dynamic force which shapes people and industries lives and even wipes out entire industries. 4e live in an age in which the pace of technological change is pulsating ever faster, causing waves that spread outward toward all people, and all industries. Cell phones have no longer been limited to communication but also have indirectly emerged as a means of reducing face to face social interaction as people can listen to music, can watch movie on their cell phone and so on. &o, it has become very essential for marketers to have a look on dynamic technological environment, so that they can actual find out customers needs and aspirations. 6arketers should monitor the following three trends* Accelerating the (ace of gro!th : The pace of change is accelerating as a conse;uence of two primary factors. 5irstly, consumers are adopting new technologies faster than ever before, as a result of* widespread, ultra(fast wireless broadband7 increased choice of platforms and providers7 and a vastly increased level of trust in technology generally (versus the hesitant adoption of new technologies 0ust a few years ago . &econdly, the recession is proving to be a catalyst for powerful organisations to look beyond their narrow field of vision for incremental future growth opportunities. . Technology has created a society which e!pects instant results. This technological revolution has increased the rate at which information is e!changed between stakeholders. A faster e!change of information can benefit businesses as they are able to react ;uickly to changes within their operating environment. 3owever an ability to react ;uickly also creates e!tra pressure as businesses are e!pected to deliver on their promises within ever decreasing timescales. 5or e!ample the Internet is having a profound impact on the marketing mi! strategy of organisations. Consumers can now shop FC hours a day from their homes, work, Internet cafes and via B" phones and B" cards. &ome employees have instant access to e(mails through -lackberry but this can be a double edged sword, as studies have shown that this access can cause work to encroach on their personal time outside work

 Increased regulation of technological change ,arious agencies have been e!panded to investigate and ban potentially unsafe products. 2ne such agency is 6%5. The 6obile %ntertainment 5orum is the global trade association of the mobile media industry, working on behalf of its diverse membership to drive mobile entertainment adoption, shape regulation and deliver competitive advantage to its members 6%5 engages stakeholders across the industry at a local < international level, to shape regulation < raise awareness of its effective implementation with the aim of protecting revenues < ensuring a positive consumer e!perience. This ongoing activity looks at the development of new and e!isting regulations affecting the market for mobile entertainment services. 6%5 $olicy < :egulation achievements include* %stablished the %6%A :egulatory Committee to discuss the effective implementation of policy codes Completed a regulatory tour of Asia, covering &ingapore, 6alaysia, Indonesia and India, to meet with the industry and regional regulators to provide thought leadership, foster collaboration and create an environment conducive to continual industry growth )aunched the first ever interactive resource for sweepstakes promotions in the D& )aunched the first ever practical guide to the A,6& 9irective for the mobile entertainment industry. Co(produced a %uropean 5ramework for &afer 6obile Dse by Lounger Teenagers and Children 4as mentioned in the Ayre report on T, broadcasters use of premium rate telephone services in programmes as a body developing is its own voluntary Mframework for good practice in participation T, services in the DN. Another law which looks at regulation is 6obile Telecoms :egulation and Competition )aw.