SUBMITTED TO: Prof. S. Panda

SUBMITTED BY: Roshan Kanoo




This is to certify that ROSHAN KANOO was assigned the project titled “How to Get New Customers in a Matured Telecom Market”. H e has submitted the project report in accordance with the guidelines. To the best of my knowledge this is his o riginal work and this has not been submitted elsewhere for reward of any degree or diploma.


Project Guide

This research project provides an opportunity to a telecom service provider, which is a new entrant in a existing matured telecom market to gain valuable insight as to what are the various factors and analysis which are to be taken into account while formulating its strategies a nd detailed plan of action as how to attract new customers. The research is on the topic of “How to Get New Customers in a Matured Telecom Market”. Although I hav e tried my lev el best to prepare this report an error free report, every effort has been made to offer the most authentic suggestions with accurate findings.

This report is an outcome of mutual support and guidance of many persons towards whom I am indebted. My support. I express my profound reverence and heartful gratitude to Prof. S. Panda who sugg ested me proper guidelines towards the project. special thanks to Mr. Vishal Kumar Shah (Senior Sales Executive, Vodafone) for his kind

I hereby declare that the following project on “How to get new customers in a matured telecom market” is an authentic work done by me. This is to declare that all my work indulged in the completion of this project report such as analysis, and suggested plan of action is a profound and ho nest work of mine.

Date: 14/04/09

Roshan Kanoo

SL. NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 HEADINGS Introduction Terminologies Project Objectives Understanding the Project Methodology Analysis List of Existing Players Consumer Need Analysis Challenges The Opportunities Consumer Churn Strategy for New Entrant Action Plan Findings and Suggestions Bibliography, Webliography & References PAGE NO. 1 1 1 2-3 3 3-6 7 7-8 8 8 9 9 9-14 14-15 16

The current telecom market in Orissa has got many players like: 1. 2. 3. 4. 5. 6. BSNL. Idea Reliance Vodafone Aircel Airtel

And that is why we say that the current telecom market is a matured one. When we say that this market is matured one it basically implies that it has got two essential parameters • • Market penetration is to the size of 60% - 70%. There are multiple operators operating in the market.

Now when a new telecom operator (player) wants to enter this kind of matured market he faces a lot of challenges in grabbing the already held market share by the existing players. So with the help of this project I tried to gather as much information and strategies which will help a new player to enter this market and for that reason a detailed plan of action has been put forth.

• • • • • • • • Evolved/matured market: Market penetration to the tune of 60% - 70% and presence of multiple operators that is more than 6 -7 operators. Green field/land grab market: Comparatively a new market where the penetration is only about 15% – 20%. Competition churn: Switch over of customer from one operator to another operator due to competition and basically loss of clients and customer. ARPU: (Average revenue Per Unit), it is a measure used by customer communication and net working companies. It is total revenue divided by number of subscribers. AVCV: Address verification and credit verification. COAI: Cellular Operators Association of India is the main telecom lobby group of India. CUG: Closed User Group. VAS: Value Added Services.

By this project what we are trying to find out are the challenges for a new player to establish itself in the market and gain market share. The basic challenges it is likely to face are regarding:Segmentation Target Customers Positioning Distribution channel Marketing and sales strategy Product and services Pricing strategies Value (creation, capturing and sustaining) Customers(acquisition, satisfaction and retention) 1|Page
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

Through this project, I have tried to develop a marketing plan which would help a telecom firm to establish itself by overcoming the above challenges.

Before moving ahead with the project, it must be understood as to what matured telecom market is all about, and what are the various conditions and situation that prevail in this market. The primary criteria for a matured market are the following: There is 60%-70% market penetration already done by the existing players. Any sort of penetration by a new player is pretty difficult, because majority of the market share is held by existing players. Another important feature of a matured market is the presence of multiple operators i.e. 8 to 9 players. High industry standards or use of advance technology. Nowadays cutting edge advance technologies are used by telecom operators which gives various advantages to the subscribers as well as it is a source of additional revenue for the operators. Various value added services (VAS) are being provided to the customers like MMS, E-Mail, GPRS, and 3G etc. A matured market is also classified by the fact that there are well established brands like Vodafone, Airtel, BSNL, Idea, BPL, Reliance etc. Moreover customers in a matured market are very literate, educated and smart. They know the ins and outs of the various products being offered to them. Consumers in a matured market are very cost sensitive also, as in a matured market there is much competition, so every firm offers the best it can to the customers at the cheapest possible terms as competition forces it to happen. So customers become more and more price sensitive. As there is every possibility that a slightest of change will force the customers to churn away or to switch over from one operator to another, as because they have lot of options with them. In a matured market, price war also prevails a matured market may be very price sensitive as each operator tries to maintain the lowest price possible in order to attract the customers and get a chunk of market share from the rivals. So a new player needs to play in the pricing strategies as well. In a matured telecom industry, there is much consumer churn also, which means as the customer has got many options with him, he hardly remains loyal to any brand and there is every possibility that he may shift from one operator to another whichever seems attractive. So, these are the various conditions of a matured market, but any telecom operator who can control the above mentioned conditions and forces can penetrate into a matured market. Whenever a telecom operator tries to get new customers, there are basically two groups of customers to be attracted. One is the new customers i.e. those who are graduating to a mobile like students entering colleges. These are first time users .second group are the shifting customers i.e. those who are planning to switch over from one operator to another i.e. by the way of customer churning. But it is fact that it is very difficult to gain customers in a matured telecom market due to the penetration already made by existing players of telecom industry. 2|Page
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

The biggest challenge for any new entrant in a matured market is selecting the target customers. This question can be well settled when the company goes by its vision and mission. Like Virgin mobile never went out to mass marketing or mass standardization since their strategic aim was to target the youth and a s such they do not compete with other telecom players since they have a distinct segment i.e. youth aged between 14-25. Once the target customers are determined, the company can move ahead with preparing their own strategic plans to enter the market.

For the purpose of the project, I have taken Orissa as the market place and the following methodology is taken into account:STEP 1: PEST ANALYSIS PORTER 5 FORCES ANALYSIS. COMPETITIVE SWOT ANALYSIS VALUE CHAN AND COMPETITIVE VALUE CHAIN ANALYSIS STEP 2: Before entering into a matured market, the vision should be very well established and what value can the new entrant can introduce to the customers, and how it will be introducing it in the 4 p’ s tactics. What are the various? Marketing strategies Selling and distribution and Support service technologies STEP 3: Make a complete action plan STEP 4: Monitoring the strategy with continuous performance appraisals.

Now for the purpose of the project I took into account the PEST analysis, Porter’s five forces analysis, Competitive SWOT analysis and Competitive Value Chain analysis and tried to find out as to what are the challenges and opportunities lying ahead.


“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

PEST ANALYSIS: Political Environment: Orissa is a politically stable state in India. Govt. of Orissa is also trying its level best to invite various telecom companies to invest in the state. Cheap as well as professional labor is available here. Economic environment: On an average, 4 % growth in the subscriber base every month. Total revenue growth is also satisfactory. Social Environment: Out of the total population of Orissa, people between age group of 18-45 are about 30%. A lot of demand is coming from rural area as 80 % of people live in rural area. Growing middle class and youth with an increasing fascination and need for mobile. Technological environment: Growing awareness for advanced mobile technology and services like MMS, GPRS, 3G, EDGE, Mobile TV and other VAS. PORTER’S FIVE FORCES ANALYSIS: In the project, I have also tried to make use of the Porter’s five forces analysis which include three forces from horizontal competition, i.e. threat of substitute products, threat of established rivals, and threat of new entrants and two forces from vertical competition i.e. the bargaining power of suppliers and bargaining power of customers. BUSINESS ANALYSIS High barrier to entry -dominated by large, well established companies -high capital requirement to enter sector -mature industry with strong brand entities -difficult to create wide distribution network High buyer’s power -undifferentiated product equates to low switching cost Low supplier power -long term contracting/agreement common Low threat of substitute -wireless dominant, no real alternative


“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

High threat of competition -consumers are price sensitive, undifferentiated product. We have tried to entail and enlist this analysis in our plan of action.

SWOT AND COMPETATIVE SWOT ANALYSIS: A new entrant should take into account the various strength and weakness, opportunity and threat of itself and as well as that of competitor also. Now taking into account the market of Orissa it can be said that the strength of Airtel is its network and billing, but its weakness is its tariff plan which is not suitable to most user. Similarly if we take into account Reliance its weakness is its network which is not at all reliable. For Vodafone its strength is its billing procedure and tariff plan. Again if we take BSNL its strength is its network all over Orissa and in other states for those who frequently use roaming but its weakness is its customer care and selling and distribution channel. Regarding AIRCEL its weakness is its network in both home circle and in case of roaming also. So a new entrant should thoroughly check what are its strength like_what are the advantages? -what are the core competencies. -where the company is making the most money -what are the field in which the company is doing well.

Regarding weakness it must find out – -what is the area it is avoiding? -what are the areas that it lacks? -what are the areas in which it is doing poorly?

Regarding opportunities the new entrant must see-is there any beneficial trend? -what are the niches that the competitor is missing? -what are the new needs of the customers? -what are the new technologies that are in demand and the competitors are not able to provide ?


“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

Lastly regarding threats the new entrants must find out-what are the obstacles it needs to overcome? -who are the most aggressive competitors? -who are the most successful competitors? -what are the negative economic conditions? -what are the Government regulations? -what is the changing business climate? -what are its vulnerabilities?

VALUE CHAIN ANALYSIS With the help of value chain analysis a new entrant should analyse the competitive strength of the business. To do this the activities of a business could be divided into two heads-primary activities -support activities

PRIMARY ACTIVITIES It relates to those activities which are associated with getting the finished goods and services to buyers, informing buyers and consumers about the product and services its benefits ,price etc, and essentially all those activities which are associated with maintaining product performance after the product has been sold.

SUPPORT ACTIVITIES These activities are not directly related to the production of services but these support activities increase the effectiveness and efficiency of the primary activities such as the human resource management. So value chain analysis help a new entrant to identify which activities are best undertaken by a business and which are those activities which can be outsourced. Now if the new entrant wish to go for differentiation then it will have to perform its value chain activities better than the competitors, in contrast if the new entrant wants to achieve cost leadership, then its required to reduce its cost associated with the value chain activities or in other words a reduction in the total amount of resources used. While moving ahead with the project all these analysis have been taken into account and an action plan has been derived .


“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”


DATA REGARDING MAJOR PLAYERS (Data collected from COAI website for the October – December 08Q for Orissa)

AIRTEL: Percentage change of revenue from previous quarter is 15.34% Percentage change of ARPU from previous quarter is 0.84%

AIRCEL: Percentage of revenue is 30.22% Percentage of ARPU is 5.93%

RELIANCE: Percentage of revenue is 3.08% Percentage of ARPU is 13.66%

Consumer segmentRural and urban population Total population- 36804660. This is 4% of total Indian population. Under urban segment (Further segmentation) Total population- 5517238 Male- 2911600 Female- 2605638


“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

Under rural segment Total population- 31287422 Male- 15748970 Female- 15538452 Orissa has a teledensity of 20.3% compared to the national average of over 35%. A vast potential lies to tap this segment i.e.. Youth, students, urban middle class, low income earners etc. keeping in view the demand of various segments. As such consumer need analysis has been taken care in the plan of action.

Various researches indicates that first entrants are also market leaders in most markets Pioneers in cellular service establish a presence in the marketplace, build brand equity and create an excellent distribution network. Also, a peculiarity of this industry is that the quality of service is primarily determined by coverage. Having evolved over time, the first entrant's network usually has much better coverage. The customers become used to enhance coverage over time. So, new entrants have to invest significantly to achieve this same coverage -- an effort that is capital intensive and time consuming. All new networks have initial bugs that take time to fix. Subscribers are just not willing to go through another learning curve, when there is already a robust supplier of service. Another frequent constraint is access to property to build the towers, since the first entrants have already seized the ideal sites for coverage. This, in turn, may require the later entrant to invest larger amounts in network infrastructure to gain similar coverage. In addition to coverage and related quality of service, another huge barrier to entry for new entrants is the issue of number portability. Customers would have to get a new cellular number when they switch carriers since they cannot take the same phone number with them as is done in land line networks. In general customers do not like to change their phone number. Thus, we see the inherent advantages to being first in the market in the wireless industry: control of ideal sites; freedom to evolve and fine-tune network coverage; building of brand loyalty by offering superior customer service; locking in customers by subsidizing equipment for an extended period under fixed-service contracts, and gaining control of key channels of distribution.

Rural Orissa Mobile affordability not really an issue anymore. Lifetime prepaid a great success. Rural customers waiting to be connected. Greenfield market now outside urban Orissa. New entrant should emphasize in ‘Rural Chalo’ mobile scheme to attract majority of new rural subscribers.
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

As there is competition in the market consumer churn is a very visible in this kind of market. So a new entrant must make use of this churn in its favour to the full extent. The action plan contain as to how to do this.

Target segment- Both urban and rural population Sales and distribution objectiveCreation of more outlets. Outlet expansion Innovative marketing techniques Majority market share in existing market. Use of innovative promotion and advertising techniques.( using cost efficient IMC models). Establishing brand name. Product differentiation by providing value for money product, and flexible tariffs. Providing VAS for those who need it.

• •

MARKETING STRATEGY: The new entrant should come up with innovative products. VAS for those who are sophisticated users of modern mobile technology. Listening to customer demand. Constantly upgrading and developing new products. Continue to develop brand. For financial success should try to keep the cost of delivery to lower limit. Increased penetration. More outlet creation and expansion.

Now taking into various analysis into account a detailed plan of action has been formulated which enlist in itself as to how a new entrant should penetrate into a matured market where already the existing players are there who are having a large chunk of market share. These action plan details as to how a new entrant will be able to get new customers or will be able to do consumer churn in its favour so as to enter and penetrate into the mature market and get customers .In this action plan I have listed various probable steps that a new entrant should take, keeping in view the condition of Orissa. TAPPING EXISTING RETAILERS CREATING NEW RETAILERS CONSUMER CHURN IN ITS FAVOUR INTRODUCING NEW SERVICES INCREASING NEW SERVICES 9|Page
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”


TAPPING EXISTING RETAILERS The first step for a new entrant should be to find out approximately as to how many retailers are there in the market who sell the sim card, recharge vouchers of other competitors .The new operator should convince these retailers with lucrative business proposal so that they sell the sim card and recharge voucher for the new entrant too. The new entrant should make a full proof plan to tap these retailers because they are the one who has got direct contact with the customers and they in fact be willing to convince the customer on the behalf of the new entrant .This is the first way to penetrate into the Market. The new entrant should come up with profitable schemes and build a good relationship with them.

CREATING NEW RETAILERS: The next step would be to create a total set of new retailers totally devoted to this new entrant. Earlier in the telecom market it was not possible to create new retailers and the sim cards and recharge vouchers were sold only by those retailers who were dealing in telecommunication product, mobile handset and accessories only. But now a day’s even small retailers can deal in these products, as because there is no such regulation. So the new entrant should try to educate these new retailers who will push its product. As because the initial investment is very low even small retailers dealing in any sort of business can sell this sim cards and recharge vouchers to earn a handsome amount of revenue as a secondary source of income in their existing setup. The new entrant should try to build good relationship with these new retailers. Today starting from a barber shop, to a tyre repairing shop, to a medicine shop can deal in these products. These new retailers will do a good business for the new entrant because they will be dealing with the products of this new entrant only.

10 | P a g e

“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

CONSUMER CHURN IN ITS FAVOUR: The new entrant should try to churn consumers in its favour by working on the weakness of the other competitors. As if we take the case of Reliance and Aircel in Orissa, there is always a problem related to their network which is always congested. If we take the case of BSNL in Orissa, they lack in selling and distribution of their recharge vouchers. Moreover the billing process of Reliance is not trusted by a lot of customers. So the new entrant should try to churn these set of dissatisfied customers in its favour by educating them on this factors. The new retailers will also help in churning out to a great extent.

INTRODUCING NEW SERVICES: The new entrant should develop and introduce new services which the competitors have ignored and which are demanded by the customers. They should also try to work out on the niches that the competitors are missing or any beneficial trend that are still not introduced by the competitors. Now in case of Orissa value added services are still left untouched by the competitors. So the new entrant should try to come up with various value added services (VAS) like 3G, email on the go, GPRS, internet etc.

ADDITIONAL SERVICES: The new entrant in order to attract and grab the existing customer of other operator should come up new additional services. As there are lot of customers of other operators mostly businessman or high end users who are not satisfied with the services of the existing operators and are willing to shift to other network but because of certain constraints are not able to do the same. Example a businessman whose existing no. is circulated to a lot of other people so as because the mobile no. will change may not be willing to do so. In this case the new entrant can offer him that the previous last five digit of the number will remain same and can ask customer to use the services of the new entrant simultaneously with the old number. In this case when the customer simultaneously uses both the number in the mean time will distribute the new number to other people in a span of 3-4 month and then can shift to the new entrant (operator). After 3-4 month that customer can stop using the services of the old operator. For this the new entrant can even offer him low rental for this period so that the customer can use it in a trial basis and ultimately when satisfied the sale take place.

INCREASING CREDIT LIMIT: The new entrant can also increase the credit limit of a new customer so as to provide them with the opportunity to use their services and earn more revenue. In case of prepaid the question of credit limit does not arise, but in case of post paid most services provider provides credit limit to the extent of security deposit taken, and at times some what more than the security deposit, as a method of avoiding risk. But the new entrant by way of strict compliance to AVCV can increase the

11 | P a g e

“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

credit limit more than what the competitor is offering for example Airtel offers Rs. 800 credit limit where the security deposit is Rs. 500. But the new entrant after strictly complying to AVCV and when totally satisfied with credit worthiness of the customer can increase the credit limit to even Rs. 2000, which will give more freedom to the customer to use the services of the new entrant and services will be used more, in turn revenue will be automatically be generated. And when a customer is satisfied by word of mouth of those customers, new customers will also be attracted to use the services of the new entrant.

PROVIDING LOW COST ROAMING There are number of customers who use roaming facility to a large extent, and depend on roaming facility for most of their business purposes. As for roaming facility from home network to other network, the service provider charge a lot from customers and ask to pay more security deposit. Moreover when roaming is not activated even takes 24 hours to get activated. So the new extent can works on this factor and introduces roaming as a facility without taking any additional security deposit. Mostly service provider charges Rs. 1000 as security deposit, but the new entrant can provide roaming without any additional security deposit. They can ask to the customer to use roaming to the extent of the initial security deposit and as when the amount of security deposit is exhausted can be directed to pay the amount in roaming where it is possible and regain the facility. This will also attract new customers to shift to the services of the new entrant. HOME CIRCLE ISD FACILITY The new entrant can also bring innovative products to attract new customers. As for now in Orissa in order to get ISD facility activated most of the service providers charge Rs.2000 as security deposit. But the new entrant can provide ISD facility in home circle without taking any additional security deposit. By doing so the new entrant will not incur any risk because he can provide the service at initial security deposit. Though the customer will not be able to make more calls but then also he can make use of ISD facility without incurring any additional cost. In this way the new entrant can both attract new customers at the same time without incurring any additional risk. INCREASED WORKFORCE As discussed earlier, that by tapping the existing retailer and creating new retailers the new entrant can increase its workforce to a large extent. As for example by tapping the existing retailers the new entrant can penetrate into the existing set of sales and distribution channels moreover by creating new retailer who are dedicated to the new entrant only can increase the total workforce more than what competitors do have. If the existing retailers are 1000 and new retailers created are 300 then the total retailers for the new entrant would be 1300 whereas for competitor it will be only 1000. MODERN TRADE This is a innovative idea of entering into a matured market where competitors have got an edge in selling and distribution channels. The new entrant can make strategic tie-ups with big shopping malls ,showrooms and chain retailers so that they can open dedicated stores which will help fetch new customers as well as promote the brand too. For example in Orissa, the new entrant can make strategic tie-ups with Mobile store or Reliance Fresh, who have got chains of store in and around big towns which can help get new customers and promote the brand. 12 | P a g e
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

EDUCATING ROI (return on investment) FACTORS: The new entrant can also create more dedicated retailers by educating the retailers about the return on investment factor and convincing them. The new entrant can convince the new retailer by explaining him as to how to make maximum utility of his existing setup and earn more revenue by explaining him how he can get more return from a very small initial investment. Another advantage of telecom product is that it is non perishable in nature. The ROI can be explained to the retailer in this way: Suppose a small retailer invests RS 1000, which he can sell in a particular day similarly the next day he will again purchase the recharge voucher with that RS 1000 so, in a month his total turnover would be RS 30000. If the margin is 4% then he makes a profit of RS 1200 in a month, where as his initial investment was only RS 1000, so the total return on investment was 120% which is extremely high, and not possible in any other business, because even the bank do not provides such a high interest rate. So most retailer find it a very lucrative business option. Moreover in addition to this the retailer also earns additional revenue by selling new connections. So in this way the new entrant can create more retailers who in turn convince customer and get them for the new entrant. CORPORATE STRATEGY: Another avenue for the new entrant is to chalk out innovative corporative strategy. This is basically institutional sale for the new entrant. They can customize a suitable CUG plan with customised tariff and can approach private sector companies and can materialize the deal, which will fetch them bulk customers. As in case of most of the service providers, in case of post-paid connection 20% of those are institutional customers. Such institutional sale provides bulk revenue and moreover it is very easy to materialize such deal in a short span of time with lucrative proposals. Orissa as state is developing very fast and most companies are setting up their regional head office here, so the scope of institutional sales via CUG plan is very high, which in turn will help a new entrant to get more customers. PREPAID CUG The new entrant can also bring an another very innovative product in the form of CUG. It will be a very unique innovation in its own, because till now CUG is available only in post-paid connection. The main target audience (customer) for this product will be the small scale industries or likewise. In order to penetrate into the rural sector this can prove to be very ideal product in Orissa. The key feature of this product is that it can be given free of cost, because in order to fetch new rural or low earning customer, an initial free of cost distribution will prove very helpful, because ones the habit of use of telecom product is installed in the customers, they will surely use it more and in turn more revenue will be generated. Competitor firm provide a validity of 1 month at the cost of Rs 200, which provides validity of 1 month and talk time of Rs. 50, but the new entrant can provide 3 month validity at Rs. 250 and talk time of Rs. 100. So now at Rs. 150 the user can use it for 3 month .The new entrant can provide subsequent validity of 1 month at Rs. 10, so that even the low earning customers can make most use of it. And this will definitely churn no. of customer from competitor firm. Moreover the prepaid CUG call rates can be put to as low as 10 paisa /min, this will be very innovative product which the low earning group or people working in SSI can use at affordable cost as a result of which the customer can afford connectivity at as low as Rs. 10 whereas earlier he used to spend Rs. 150 for the same. 13 | P a g e
“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

PENETRATING INTO GOVT SECTOR The new entrant can also make a strategic planning so as to penetrate into the govt sector offices by providing free of cost connection to the Govt. employees as there is low amount of risk in case of Govt. sector employees and getting the deal materialized from govt sector office is also not that tough. So the new entrant can fetch bulk amount of customers from this sector. The new entrant can introduce customized CUG tariff for Govt. employees moreover regarding the AVCV it would not be a very risky proposition because of job security of Govt. employees. It will act as a source of institutional sales which will consists of 20% of post-paid business for the new entrant SHOWING BENEFIT TO RETAILERS As all the existing retailers will be having target from the existing competitors so the new entrant in order to penetrate into the already existing sales and distribution channel i.e. the existing retailers must show the monetary benefits and return on instrument to these existing chain of retailers .If a particular retailer is getting Rs. 50 per connection from an existing competitors the new entrant can offer him Rs 80 per connection provided he fulfils a target of getting 100 new customers and once the dealer is convinced then he should be provided with enough stock. It is possible that other competitors will again try to attract him with more lucrative offer but then retailers wouldn’t be having enough capacity to invest .And the new entrant should try to modify the scheme for the existing retailers more profitable and lucrative. EFFICIENT ADVERTISING As advertising plays vital driving force behind any buying decision of buyers, so the new entrant should try to do cost effective yet efficient advertising and promotion. Making prospect aware of brand and promoting the brand is very essential so the new entrant should try to select place wise advertising strategy. As in case of cities and towns the advertising strategy should be tailor made accordingly and similarly for rural areas a tailor made advertising and promotion strategy should be used.

Market Entry Strategies: New Entrant
New entrants can take advantage of gaps in the offerings of these aging pioneers, or find innovative ways to market their product or service. Reduce price to penetrate an existing market. By introducing a product at a lower price than the pioneer's, a latecomer can attract new customers who would not have otherwise purchased such a product in effect expanding the total market. Reduced price can also induce the pioneer's current customers to switch. Still, this strategy is likely to result in reduced margins for the new entrant compared with other players in the market, unless the new entrant's cost of production is relatively cheaper. Improve a product or service, with focus on a niche market. Companies can compete by being innovative in the marketplace. The innovation may be radical or incremental. One example of incremental innovation is an enhanced version of an existing product. The enhanced product can compete directly with existing products, or it can be positioned to attract a smaller segment of the

14 | P a g e

“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

existing market. In addition, the improved product or service can sometimes attract new customers that are not the current target for the existing product or service. Target new geographic markets for existing products. As markets mature in the home base, companies traditionally look outside to more lucrative markets. Develop new channels of distribution to access new markets or better penetrate existing ones. In addition to choosing the appropriate marketing strategy, it is crucial to determine the timing of the introduction of any new product. Another strategic option for the later entrant is micro-segmenting the customer base -- that is, targeting high-value customers who are able and willing to pay a higher price for the product or service relative to the cost incurred in catering to that segment.

A new entrant can pose serious challenge for other existing competitors and this may happen owing to various reasons such as:An entrenched pioneer may not be offering a superior level of customer service. A new technology may have changed the cost equation, so that a new entrant can offer similar or better service at a lower cost. The new entrant may have developed a new way to access the market, with an innovative distribution strategy. The latecomer may simply be pricing aggressively, targeting selected segments by taking advantage of the incumbent's tendency to average pricing across all segments.

It is important to note that in the case of the telecommunications industry, pioneering advantage can be sustained only through continuous investment in building network infrastructure and the offering of superior customer service the two key sources of differentiation. In the wireless industry, customers are repeat purchasers, since their contract terms typically last for only one year and the cost of handsets is dropping rapidly. This situation could enable a late entrant to compete effectively by developing a good network infrastructure and by gaining access to good distribution networks.


15 | P a g e

“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”


• • • • • • •


16 | P a g e

“H ow

to g et n e w cu sto m er s in a m atu r ed t el ec o m ma rk et”

Sign up to vote on this title
UsefulNot useful