Marketing Strategy Comparison AirTel & Hutch

Rahul, Priyanka, Zardar, Rashmi Indian Institute of Planning & Management Ahmedabad

Project Introduction

Telecoms are rolling out like never before. And that 100-million mark doesn't look too far away. The mobile subscriber base crossed 65 million in September 2005, an over-30 per cent increase over the previous year

Project Introduction
Contd
Indian Cellular Industry will touch $24 billion by the end of 2006. Airtel (22 per cent market share, over 15 million mobile subscribers, source: Cellular Operators Association of India) witnessed its highest-ever net addition of 1.8 million mobile customers in a single quarter.

Project Introduction Contd

Hutch, with over 10 million subscribers (15 per cent market share) may be No. 4 (behind Reliance and BSNL) at present, but it has the highest average revenue per user.

AirTel Marketing Strategy

Business Process Management

Process Innovations and Continuous Improvement through People Involvement

Problem Investigation by "Fact Based - Root Cause Analysis"

Contd
Customer-Defined Business Processes
Based on Customer Specifications, AirTel have webbed many business processes on the following concepts: Delivery time Turn around time Lead-time Time to market Other performance indicators

AirTel Marketing Strategy Contd

Result Oriented Approach
Each process has been designed by first planning the desired result. The targeted results are then arrived at through identification of the following: The next-customer and end-customer expectations. Quantifiable purpose of the process and key result areas. Past experience of "What went wrong and can go wrong".

AirTel Marketing Strategy Contd

Naturally, the target customer was clearly defined: elite, up market professionals and entrepreneurs.
"We positioned AirTel as an aspirational and lifestyle brand, in a way that trivialized the price in the mind of the consumer. It was pitched not merely as a mobile service, but as something that gave him a badge value, recalls Hemant Sachdev, chief marketing officer (mobility) and director, Bharti Tele-Ventures.

AirTel Marketing Strategy Contd

In 1999, the rules of the game changed. The New Telecom Policy came into effect, replacing licence fees with a revenue-sharing scheme and extending the licence period from 10 to 20 years. Now, cellular service operators could drop their prices and target new customer segments. As SEC B became part of the catchment area, Airtel's communication changed from "power" to "touch tomorrow".

AirTel Marketing Strategy Contd

In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live every moment": Rahman's signature tune for Airtel is, perhaps, the most downloaded ringtone in India. But that was just part of the ongoing communication.

AirTel Brand Review

AirTel has the most recognizable brand in the Indian operator space, with 30.8% of our respondents able to identify it as a mobile brand unaided. While this is lower than many of its competitors, examination of the various brand strength indicators shows AirTel has a much stronger brand than its competitors do.

Source: IE Market Research Corp. 30th Oct 2006 - 14 Pages ID: IEMR1370648

AirTel Brand Review contd

Of respondents, 27.4% identified AirTel with cool, 26% with creative, and 22% with technically advanced. Only 8.6% of respondents identified AirTel with cheap. Between 2004 and 2005, it has increased its market share from 20.5% to 21.5% of the market.
Source: IE Market Research Corp. 30th Oct 2006 - 14 Pages ID: IEMR1370648

AirTel Ad Campaigns

Hutch Marketing Strategy

A big success factor was how aspirational overtones in brand imagery stayed, even though price wars had started. Again, the colour orange was a seminal attribute; the brand's slogan was 'The future's bright, the future's orange'

Hutch Marketing Strategy Contd

The new brand name also heralded the arrival of a new mascot, the "Hutch" pug. When Hutch launched the Abby-winning "Wherever you go our network will follow'" ad, viewers believed that was Hutch's new slogan, but it was just one brand attribute

Hutch Marketing Strategy Contd

Value-added services "Privileges" (discount coupon booklets), cricket scores and stock market information - have formed as critical a part of Hutch's marketing efforts as its advertising.

Hutch World (GPRS service),

Hutch Alive (non-stop, streaming action) Hutch4Help, a unique dial-in 'convenience' service, all emphasize the premium attributes of the service. Chhota Recharge, small value recharge cards (starting at Rs 10), which will also help mobilize small spenders.

Hutch Mobile Shop - A great initiative

Hutch Ad Campaigns

Marketing Research Analysis

Which card is used.
21% 0% 50% 29% HUTCH AIRTEL BSNL TATA INDICOM IDEA

Marketing Research Analysis Contd

Service provided by the customer care

4% 4% yes, I m satisfied. no, not satisfied. can't say 92%

Marketing Research Analysis Contd

network connectivity

yes, I m satisfied. no, not satisfied. can't say

Marketing Research Analysis Contd

Quality provided by Service Provider
0% 39% 61% can't say

yes, I m satisfied. no, not satisfied.

Marketing Research Analysis Contd

Billing System

21% yes, I m satisfied. 49% 30% no, not satisfied. can't say

Marketing Research Analysis Contd

Card do you prefer

48% 52%

prepaid postpaid

Marketing Research Analysis Contd

Cost satisfaction

10% yes, I m satisfied. 33% 57% no, not satisfied. can't say

SERVQUAL model
The Measurement and Evaluation of Service Quality - SERVQUAL model: Service Quality = (Performance Expectation) The word SERVQUAL is an abbreviated form of service quality. The measurement was developed by Parasuraman, Zeithaml, and Berry (hereafter, PZB) in 1985.

Five Dimensions of SERVQUAL Model

(Revised from Kotler, P 1999 Marketing Management, Millennium Edition Prentice Hall)

Dimensions Tangibles

Descriptions The appearance of Physical facilities, equipment, personnel and communication materials. The ability to perform the promised service. Dependably and accurately .

Reliability

Responsiveness The willingness to help customer & provide prompt service. Assurance The knowledge & courtesy of employees and their ability to convey their trust and confidence. The provision of caring individualized attention to customers

Empathy

SERVQUAL Model Methodology

The raw data used in computing coefficient alpha were in the form of difference scores. A difference score for each item Q, representing perceived service quality was found by subtracting the expectation score from the corresponding performance (or perception) score (Q = P E)

Research Findings
GSM service providers (cellular), customers seem satisfied with the 'ability to make and receive calls in any part of the city', however, the service providers have fallen short in meeting customers expectations when it comes to coverage within buildings, in basements or in lifts.

Research Findings Contd

The corporate image of the service provider continues to be an important aspect in driving retention and most service providers have been successful in building a positive and favorable image among the subscribers.

Research Findings Contd

The study also revealed that 'Error free' and 'accurate' bills, being promptly delivered is something that the customers seem to be taking for granted and have little impact on retention. On the contrary, non-delivery on these could cause a lot of disgruntlement and unhappiness with the service provider.

Research Findings Contd

Another revelation was that customers seemed very peeved with the amounts they had to pay for local and STD calls.

Research Findings Negative Outcomes

The cellular industry has performed below average in various aspects related to 'customer care / helpline'. These include 'time taken before someone attends to you', their 'ability to resolve complaints/ queries in the first instance'

Research Findings Negative Outcomes Contd..

'overall time taken to resolve complaints', call center personnel's ability to take decisions. 'knowledge of customer care personnel about tariff plans and schemes' and 'the promptness in taking action on complaints'.

Samit Sinha, Managing Partner, Alchemist Brand Consulting

..There isn't a great deal of differentiation in terms of pricing, services, schemes and so on, but there are differences in approach. Overall, AirTel is focused on functionality and efficiency, while Hutch has veered towards warmth and emotions

Meenakshi Madhvani, Managing Partner, Spatial Access it would not be right to conclusively say that Brand A is stronger than Brand B. However, if you consider adoption of the service by consumers as an indicator of brand strength, then AirTel would rank reasonably high

..What matters is
what the customers want.."
- Mittal, CEO Bharti Teleservices

Other Indian Cellular Service Providers

Thank You