Group members

:
Yasir Waseem A Khan Mohammed Faraz Munam

Submitted to:
Prof. Farah Naz

Ranjeet Kumar Rizwan Qaiser Faizan Mujeeb

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Zubair Humayun

Acknowledgement

First and foremost, we would like to thank our teacher, Ms. Farah Naz Baig for the valuable guidance and advice. She inspired us greatly to work in this project and put exceptional effort for practically equipping us with the latest marketing insights. Her willingness to motivate us contributed tremendously to our project.

Besides, we would like to thank the interviewee from Telenor – Ms. Khadija, ABM Mother brand Telenor, for the insight she gave regarding the issues of the Telecom industry of Pakistan. Also, we would like to thank the interviewees from Mobilink – Mr. Rehman, BM Jazz, and Mr. Ahmed Mustafa, Ex-ABM Jazz, for the detailed insight regarding the issues of the largest and the oldest operational Telecom Company in Pakistan Also, we would like to take this opportunity to thank IBA for providing us with a specialized subject regarding the marketing issues in Pakistan. It gave us an opportunity to learn about the concurrent marketing scope and its pros & cons which would certainly guide us in our future careers.

Finally, an honorable mention goes to our group members and friends for their understandings and supports for us in completing this project. By the grace of God and with the support of the above mentioned individuals we have been able to successfully prepare the detailed report, best to our knowledge, regarding the marketing issues faced by the Telecom industry of Pakistan.

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Methodology

With the guidance of our teacher Ms. Farah Naz, the report is prepared through following the below mentioned research methods in the respective arrangement:

 Secondary Research  The report is initially supported by the secondary research done through internet and research journals related to the telecom industry of Pakistan. This helped us gain the currently researched information through which we drafted the information requirements we needed from the primary research  Primary Research o In-depth interviews  The interviews were taken from the Khadija, ABM Telenor Pakistan; Along with this BM Jazz, Mr. Rehman and the Ex-ABM, Mr. Ahmed Mustafa o Survey research  The sample space drawn was based on the random sampling method involving, specifically, Telenor and Mobilink users. The research was quantitatively interpreted through the SPSS research software

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TABLE OF CONTENTS

LITERATURE REVIEW ........................................................................................................................... 6
Introduction:.............................................................................................................................................. 6 Review: ..................................................................................................................................................... 9 Issues and Challenges: ............................................................................................................................ 15 Conclusion: ............................................................................................................................................. 18 Research Methodology ................................................................................................................................. 2 SURVEY RESULTS .................................................................................................................................. 20 Factors kept in consideration when buying a new connection: ............................................................... 20 „Mobilink‟ or „Telenor‟; which connection is being used more?? Why? ............................................... 22 How many users use different connections for different purposes? Why? ............................................. 23 How many respondents want to change their connections in future? And why? ................................... 24 Service quality as rated by Telenor and Mobilink users: ........................................................................ 25 Problems faced by mobilink users: ......................................................................................................... 26 Problems faced by Telenor Users: .......................................................................................................... 27 Service pricing perceived as quality indicator: ....................................................................................... 28 How many agree to pay higher for innovation / new service: ................................................................ 29 People using MNP (Mobile Number Portability): .................................................................................. 30 How many think that advertising campaigns by cellular service providers are cluttered: ...................... 31 Importance of Celebrity endorsement in Ad campaigns: ........................................................................ 32 Number of people who could recall Telenor and Mobilink Tagline:...................................................... 33 Number of people who could recall Telenor and Mobilink Ad campaigns: ........................................... 34 ISSUES ....................................................................................................................................................... 36 BLOGGERS HIRED BUT NOT PAID WELL ...................................................................................... 38 Deceptive marketing giving rise to Ethical issues .................................................................................. 36 Measures to stop illegal SIM usage ........................................................................................................ 38 YOUTH MORE OF PRICE CONSCIOUS RATHER THAN BRAND CONSCIOUS ........................ 42 „Marketing Research‟ : Biased towards price response .......................................................................... 44 Unethical Wars between Companies ...................................................................................................... 45 Corporate Social Responsibility ............................................................................................................. 47 3|Page

High-end Branding Issue ........................................................................................................................ 49 Issue of SNP: The law for supporting the competition ........................................................................... 51 Branding Issues: ...................................................................................................................................... 53 Limited Innovation: Fruitless so far ........................................................................................................ 55 Advertising issues ................................................................................................................................... 57 Recommendations ....................................................................................................................................... 59 Conclusion .................................................................................................................................................. 61 Appendix ..................................................................................................................................................... 63 Articles .................................................................................................................................................... 64 BIBLIOGRAPHY ....................................................................................................................................... 64

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LITERATURE REVIEW
Introduction:
The actual competition in the telecom industry started in 2003 with the influx of a number of companies. This competition was so intense that the prices were constantly falling rather than increasing. In response to lowering prices the customer base was also continuously expanding. The growth met a U-turn in 2008 when due to network problems and service quality the industry, which had been on the growth path, started declining. This decline started the period of losses for many. The massive increase in the customer base was the key reason for the decline. Most of the companies didn‟t have the infrastructure to handle so many customers. This current loss phase for companies has shown that now the telecom consumers in Pakistan have become more quality conscious rather than price conscious. The companies need to improve the quality of their services in order to compete in the future. The Telecomm in industry in Pakistan has been the one having record breaking growth in the past decade. Especially the last 5 years have been a honey moon for the industry where the huge un tapped market throughout the country got an awareness boost through the ever aggressive media campaigns and direct to consumer (DTC) activations, initially in the urban centers, and then in the slums and low income bracket areas. The success factor in this huge growth for this industry has been the one big word “COMPETITION” which kept growing with higher and higher investments by large tycoons and business groups of the world as they saw volume based opportunities in Pakistan. The days when a simple Mobilink Connection was available for more than Rs. 3000/- to the days when free connections of Ufone and Telenor got available with free prepaid balance for the consumer made possible for the companies to reach the lower end of the consumers. Industry with a lot of focus on the price leadership did not lose the higher end consumer as it catered them with connections like Telenor Persona – Postpaid and the Mobilink Indigo – Postpaid connections. The industry has now entered into a saturation level where the average subscription rate by the consumer for the new connections is going down very sharply. The industry has put focus on number portability now, as the consumer is not willing to change his contact number for the sake of switching to an economical connection. The consumer expectations is growing higher and higher with minimum effort to satisfy those expectations, therefore companies have set up high standard customer centric call centers that not only facilitate but also allure them to new offers and subscriptions. The wild campaigns within the urban centers is not any more resulting in higher revenues in terms of increasing the size of the pie but 6|Page

only in the change in the shares of the same pie is the industry scenario. The industry reveres the bottom of the pyramid as a potential market not in terms of making the telecommunication facility available to them but in terms effective segmentation within the rural market to target this market in a specialized manner through rural based campaigns for new connections with a new positioning specific to the rural market segments1. PTCL on one end is actively planning to use its vast infrastructure of land line connections to retain and acquire this target market through offering free dial up connections for all the land line users and minimal charges for the high speed internet over the land line2. Companies like Ufone on the other end are coming up with creativity along with their price leadership through initiatives like In-flight roaming from MiddleEast to USA from Pakistan so that they develop further value for their valued customers3. Handset market has played a very vital role in the telecom industry of Pakistan. Though it faced a little difficulty in first half of 2008 due to political uncertainty, it‟s recovering now. There was a 40% decline in the first half of 2008. Majorly, it targets the low end of the market and this is where it gets the highest volume. The market is dominated by Nokia being the market leader with its share of 48% followed by Samsung and LG. The Koreans are playing their cards really well with the success of both Samsung & LG they are really flying high. Especially the success of Samsung is very impressive with a very strong portfolio the most balance portfolio in the industry covering all price segments with good products. With more emphasis on R&D & product development the future looks bright for this giant conglomerate. LG due to its quality issues has been behind in this race. Nokia still leads in almost all price segments of the market4. Until a few years back the cellular coverage was for the elites but in 2008 the number of subscribers has jumped to 85 million due to competition among the new entrants. Pakistan is a competitive market due to easy shifting from one connection to another. The options of prepaid and post paid are available with MNP which has given the option to change network without changing the number. Mobilink has been a major market share holder with 37 % market share. Mobilink has been a market leader and a pioneer in branding with jazz and indigo. Mobilink brought in the concept of jazz girl which is now being followed by other brands. It communicates an image of newness and modernity5.

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Strategies for Success: The rural telecom marketing (BoP) PTCL: High Quality High Volume Strategy 3 Ufone In-flight Roaming Service 4 The State of Pakistan‟s Handset Market – An Analysis 5 Mobile brands connect with Pakistan

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Now the telecom advertising has taken up random noises rather than creating brand personality. The telecom industry needs to create time less and unforgettable brands rather than using random noises. The consumer earned through this noisy complain would not be loyal as he is not attached to the brand personality so the telecom companies need to consider this. Telecom industry is facing a tough time in terms of market saturation complimented with the global economic crunch reducing the buying power of the consumer and increasing the operating cost for the companies. Re-inventing the wheel through unstructured price leadership campaigns resulting in information cluttering by the industry leaders for the average consumer is affecting the brand loyalty of the consumer which is harmful for all the competitors. Therefore, coming up with creative ideas for higher level customer services yet professionally targeting the bottom of the pyramid is the need of time for the industry, delay in which might result in lowering brand loyalties and quality of demand that will force the industry to compromise quality and premium pricing in the long run.

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Review:

The growing competition and the saturation of the telecom market have fostered marketing excellence in the telecom industry. These marketing practices that are now used in the industry are termed as the best marketing practices for the telecom industry. These are done to grab a huge market share there are certain things that should be taken care of to win the customers „vote‟ for your companies services which are as follows6:

   

Understand customers needs and wants at an individual level Create a learning organization that is also customer driven Be proactive and react quickly to the market dynamics Identify and offer packages that will put you ahead of your competitors

Understanding what the target audience wants is the main aim of the telecom marketing practices. Market research at all levels is necessary to monitor the user trends and tastes. A market response intelligence facility should be established by creating a learning organization and sharing tacit and explicit knowledge in the organization. Similar to a political campaign telecom companies should be flexible and dynamic in changing their marketing strategy keeping the competition in mind. Contingency plans must be established in order to reduce the time taken for decision making. Call and text packages must be offered by keeping the customer in view so that maximum benefit is achieved.

The new transformation in the media used by the telecom marketing practices is the „Social Media‟. Social media is totally online where individuals come on social networking sites and share and interact with information. The key to success for the telecom industry is to get involved in the conversation. Telecom companies are taking advantage of this transformation by putting their marketing strategies in line with the social networking sites and coming up with conversations that improve brand awareness.

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Telecom Marketing Best Practices: Rapid Response Intelligence, www.allantgroup.com

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Facebook, Youtube, Blogger, Twitter, Flickr, MySpace, Friendster, Hi5, LinkedIn, and Orkut attract about 600 million people on a yearly basis7.

The ultimate advantage of the social media marketing is that it is customer „pulled‟. Meaning, that the marketing message is generated by its participants and other individuals comment and share their experiences regarding that message. This is typically the case in Blogs, which are widely used in order to build brand awareness of a company‟s brand inside and outside of the telecom industry. Social media is so effective because it is seen as a trusted resource with no stake in the outcome of people‟s decisions. In addition, the company can also provide timely and relevant expert advice which would be highly valuable. Social marketing seeks to answer the questions in a collaborative environment in which all sides of the questions are considered.

The focus of the telecom advertising has recently tilted toward rival varies. Earlier the focus was to inform people about the coverage and value added services but now the case is different. Zong introduced the practice of leg pulling in Pakistani advertising industry. Their start was fine but then they started targeting their ads against other companies‟ ads. They didn‟t use any names which made it legally right but still it is ethically wrong8.

Ufone responded to zong with very creative and hilarious ads such as “ har pagal yeah he khehta ha mein pagal nai hon”. Ufone has taken a very different advertising concept of using humor in ads in Pakistan but they need to stop the leg pulling. Telenor is still moving on with its advertising campaigns It recently has introduced the cheapest call rates. Even though zong has places a MNP ad near its head office yet it has kept quiet and passive which is a good policy.

Mobilink has also taken up policy of Telenor to remain silent yet they have shown some disrespect in the new ad with ali zafar in it. Even if they had hired the brand ambassador of telenor they should be use innovative methods to promote their brand but they are making ali zafar say that he has changed its

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The Telecom Marketing Transformation: How the social media is changing the game, Calysto White paper, www.calysto.com 8 The State of Telecom Ads in Pakistan

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connection to a better one. This is legally right but ethically wrong. Warid has kept away from leg pulling and introduced Glow. The telecom industry needs to focus on creativity and technology rather than politics.

In several of the marketing organizations there is a detachment between the consumer management and customer relationship management. The gap is fundamentally that in processes and the inability of the organization to leverage the core competencies of the respective functions towards revenue growth. There needs to be a merger between a behavioral and attitudinal segmentation another problem is the organizational redundancy. We have seen organizations that have fragmented their marketing operations across multiple geographies or customer channels. This leads to operational efficiencies within the organization. This leads to fragmentation in the marketing tactics and leads to tactical inconsistency9

Information technology may be a facilitator but is not essential in bootstrapping productivity gains. Information technology plays an important role in the consumers‟ needs and consumers behaviors. A typical problem face is data management and integration across many data sources. Various organizations have engaged sophisticated customer data integration solutions in support of these objectives with varying degrees of success.

The common plank to improving marketing effectiveness is consolidation in organization, in processes, and in technology. The organization has to first disaggregate and then consolidate redundant non crucial processes should be out sourced. If an organization plans to outsource core functions the vendor should use the following guideline:

  

Thought leadership driven by a deep reserve of intellectual capital and resources, and supported by best-in-class technologies, methodologies, skills and practices. A willingness to share both risks and rewards. Ability to close gaps between legacy systems and new technologies and applications.

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Improving Marketing Effectiveness for the Telecom Sector

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Domain expertise to align IT strategies and applications with business and market concerns.

The actual war for the market share being fought by the companies is through advertising. The mobile firms are spending huge chunks of money on these campaign which even though seen quiet well groomed but at times are irrelevant and far from reality. These ads lack the creativity which is being used by the international media. If any of these companies want to survive in the future it has to fight on two fronts. First it has to come up with a creative advertising campaigns and it also need to compete on the basis of innovation, service quality, feasibility and attractive features rather than prices. The current prevailing trends in the telecom sector even though seem quiet bleak yet if the companies change with the changing trends the condition is likely to improve. The companies need to start focusing on attracting high value subscribers which requires planning and creative thinking. In order to attract these kinds of consumers the companies need to match the right level of spending with the right media mix. Using the correct proportion of different Medias is amongst the key factors which play a crucial role in attracting the right kind of consumers. Hap hazard investment in different Medias only leads to depletion of resources, wrong market targeting and eventually losses.

According to AC Nelson the telecom companies need to improve their return on investment for which it has specified different tool such as Market mix modeling, cross-platform competitive intelligence and media planning, Pre-launch creative testing, advertising effectiveness reporting, and real-time campaign tracking10. Competition has led to decreasing the profit margins of the telecom companies. Earlier the companies could afford to take risks without proper research but now the situation has changed a single mistake on part of any of the service provider can lead to a disaster for the company. Therefore there is a dire need for efficient measurement tool which can help to recognize the projects riskiness so that only those projects are undertaken which would eventually improve profitability. The list of above given tools is constantly evolving so the companies need to keep themselves up to date with the latest trends to have a competitive advantage over others competitors. The feasibility of each and every new innovation needs to be created and it should be made sure only profitable innovations are introduced in the market.

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Marketing ROI for the Telecom Industry

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Currently the market share of the telecom industry is shared by 5 companies namely zong, Warid, Ufone, Mobilink and Telenor. Many of the analysts feel the telecom sector has reached its maturity stage and saturation but still most of the rural market is still untapped. In 2009 as most of the telecom companies are facing losses it is expected that mergers and acquisitions would take place in the telecom sector. Huge operating cost is a tremendous burden for telecom sector which has led to cutting down profits margins. The key to success in this turbulent time is to sustain the existing customer base.

Up until now the value added service market has not been properly targeted by any of the service provider but this market has huge potential for growth. In this period of recession consumers prefer spending on these cheap services rather than using voice calls. Easy paisa is an example of realization of this fact by telenor. These value added would help in attracting new customers and sustaining the existing ones. These value added services would bring business and commerce to consumer‟s mobile phones and many of the bank transactions and other sales would be done by telecom service provider11.

Value added services contribute 20% to the telecom sector‟s overall revenue but this figure is expected to change drastically. Innovations such as ecommerce and other services have already been launched in the international markets and have been quiet successful and it is expected that in the near future these services would be introduced in Pakistan. Other than the value added services the technology is also constantly evolving so these new innovations in technology also need to be kept in mind when introducing new services12.

Another example of the value added service is the introduction of in-flight roaming service. The introduction of such a service has helped Ufone to attract business client who use want to use mobile phones during flight. The service even though has been introduced for the post paid customers in the start but it has provided Ufone with the competitive advantage over all other competitors. The introduction of such value added services proves that the companies have realized the potential in the value added market and there is a need that other companies should also follow Ufone and telenor. This move by these two

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Pakistan’s mobile Industry: On the growth path Telecom industry to take new shape

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undoubtedly implies the active growth and creativity that the telecomm industry is experiencing due to the tough competition and growing customer expectations13.

In order to reach out new market and to keep intact the existing market PTCL has come up with initiative such as free dial up connectivity to the internet for all the existing land line customers without any charges from 18th October 2009 which will ensure that small scale internet users are intact with the company and speed dial up cost will also be reduced. Service such as this would reduce the demand for mobile firms services such as GPRS.GPRS services in Pakistan is amongst the most expensive in the world as opposite to the voice call prices which are amongst the lowest in the region.

PTCL not only has government support but also has the largest land line network within Pakistan so competing with such an organization not only difficult but also impossible at times. The market penetration of PTCL is parallel to none and its infrastructure setup cannot be setup by any other company in less than 10 years and no domestic firm has enough capital to bear such huge fixed costs. All the telecom companies are dependent on PTCL for different Services. So PTCL itself pose a threat to all other communication companies including cellular companies in Pakistan14.

PTCL has plans to develop and brand its value added service as the prime USP for their company and customers in this competitive telecom industry for retaining the huge customer base and attracting new customers for this value. After privatization PTCL has become an active competitor so the cellular companies not only have to face each other in the cut throat competition but also an experienced and known brand name PTCL.

The concern for providing consumers with value for money and remaining profitable while doing this has led the companies to go to great length to fulfill the needs and creating demand for new products. The service providers have realized that cost leadership strategy already under taken has run obsolete and needs to be replaced with such a strategy which focuses on improving the quality of service as well as innovation.
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Ufone In-Flight Roaming Service PTCL: High Quality High Volume Strategy

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Issues and Challenges:

Over the past 8 years we have seen tremendous growth in the telecom sector of Pakistan. But now “the golden period has ended due to excessive and concentrated competition”15, this shows that the profit margin has decreased due to higher operating costs and increases in the number of competitors. New packages are introduced in the industry more frequently to remain competitive and attract more customers. This strategy has also lead to deceptive marketing that is misleading customers.16 In addition, with the growing base of the customers the telecom companies are facing structural issues and are not totally successful in satisfying their customers by providing them with basic communication facilities.

Some issues in the telecom sector are related to the company strategy. “The companies with unstable objectives and those with greater risk on the part of future market expectations faced huge losses and have suffered”.17 This shows that some of the telecom companies are facing lack of strategic direction, they are confused with what are their long-term objectives are. Warid is a pertinent example in this case, when it came in Pakistan it primarily focused on pricing strategy and normally provided services on reduced cost comparatively to others. But this strategy failed because it started to make huge losses apart from being one of the largest foreign investors in Pakistan. One thing clear is that the telecom sector is far away from what used to be its golden stage, right now Mobilink is the market leader followed by Ufone and then by Telenor.

Some of the market participants are confused at the future of the telecom industry, there is a lot of discussion over what the customer want; does he wants low cost solutions? Or does the customer focuses on value added services? The answer lies in both of them. Keeping Ufone in mind, Ufone has been the only service provider which has introduced in-flight roaming service to its customer. “The competitors consider not only the cost leadership but also value addition as the core objective of their services”18, this shows that the consumers are looking at more and more value added services that would make their lives easier. In addition, Telenor has provided the facility of „Easypaisa‟ that lets the customer pay the bills

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Article on: Pakistan telecom Industry: Is the honeymoon over Pakistan telecom industry: is the honeymoon over 17 Who will be the no.1 in telecom? 18 Ufone’s In-flight roaming service

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easily. These value added services are bound to do wonders for the telecom industry participants in term of greater loyalty from the customer side.

As stated previously as well that the telecom industry has been facing increased operational cost, this had lead to the downsizing and cutting of jobs in this sector. “Even the permanent employees of the industry are suffering from the downsizing.”19 The downsizing is not a threat to the contractual employees but also to the permanent employees, as the permanent employees are given lower salaries than before. The top executives blame on the international financial crises and high inflationary pressures for the downsizing in the telecom sector.

“The growing concerns of the telecom industry regarding the saturation level of their target market, has certainly drawn its attention to the Bottom of the Pyramid”20. With the urban market being cluttered with everyone marketing to its fullest on the target market, the attention has now been drawn toward the bottom of the pyramid approach. If this was considered before then it would have been a golden opportunity but now the telecom companies are doing it because they are not left with many options. Companies should now develop rural marketing strategies in order to get the most out of the rural areas, Mobilink Jazz has been making advertisements featuring people from the BoP to make the advertising effective and are coming up with all-nighter packages focused on the „urban-rural‟ telephonic communications.

As far as the TV commercials are concerned every service provider is coming up with new ads almost every week. Every company makes best possible use to grab attention and attract customer.21 One issue in attracting the customer is that the companies are using deceptive marketing in order to grab the customer, one main reason behind this is that they have become quite desperate to hold on to their market share. Using false information and techniques is not the way to deal with the customers and PTA should take measures so that this un-ethical practice is not continued anymore. Customers deserve the right to be told the right thing with out any cover-ups or deceptive techniques.

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Telecom industry starts cutting jobs, By: Jawwad Rizvi Strategies for success: The rural marketing telecom marketing (BoP), CKS Consulting 21 Are mobile companies using deceptive marketing in Pakistan?

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Pakistan has the largest growing telecom sector in the whole World, which is the major reason why so many international companies have invested in Pakistan. The customer base is huge and it has a lot of potential in the future as well. “Higher taxes and lower average revenue per user (ARPU) is forcing these companies to increase their service charges which will directly affect consumers.”22 This issue refers to the fact that the Government of Pakistan has increased its GST by 1% and also put a FED to the call rates, this increase in the taxation would be passes on to the customer and that in too in these critical times where the consumer spending has decreased due to high inflationary pressures. This is in turn one more challenge that is going to faced by the telecom companies, as this would lead to lower credit usage by the customers.

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Pakistan Telecom Industry: SWOT Analysis

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Conclusion:

The literature review of the telecom industry of Pakistan has given us different dimensions to look upon as far as the marketing practices undergone by the industry are concerned in this competitive market of Pakistan. The issues are somehow restraining yet giving challenges to the industry and some companies have responded them well in a creative manner and others are about to. The growing customer expectation and needs have certainly been the true essence of a perfect competition which breeds creativity and market intelligence and the player who does it the first ensuring that the value addition remains its competitive advantage for a longer period of time grabs the bigger piece of the pie.

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SURVEY RESULTS
(Note: the survey was conducted by all of the group members with a sample size of 57. Questionnaire has been filled by the respondent in front of the group member, to avoid any possible chances of error. A copy of Questionnaire is given in Appendix.)

Factors kept in consideration when buying a new connection:

Factors while choosing new connections
250 200 150 100 50 0 Network Tariff Easy Packages Availability Services Points

An overall obvious conclusion can be seen from this aspect of this questionnaire. According to the analysis, the most important factor that a potential user tends to consider when choosing for a new connection is its network coverage and quality. Majority of respondents rank this factor as the most important out of other 5 factors. According to the comments received by the respondents, potential users think that a product is mainly judged by the extent of the satisfaction that it is built to provide. Such as, engine power and performance in case of cars. In this case, network service providers are mainly built to provide smooth and expanded network coverage. And one with a poor network quality is considered as a poor connection, irrespective of the variety of services it offers. There are also some respondents that rank the „Tariff‟ factor as most important. As per their comments, they think that the main thing to be considered when buying something is its cost. And therefore the tariff charges are very important for the potential users to consider. But the
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overall responses say that the potential users generally take it as a second most important thing to consider. Same is the case with packages, as packages are linked with tariffs. Most of the packages offered by the telecom companies are distinguished from each other on the basis of Tariffs. Most respondents consider Packages to be the third most important factor when buying a new connection. But according to the combined analysis of all responses, packages are third most important factor to be considered when making a buying decision for a new connection. „Services offered‟ is the fourth important thing to be considered by the potential user when buying a new connection and „Easy availability‟ has the least priority according to the survey analysis. Potential users (respondents) are of the view that they have no problem to go to distant areas is they are getting a better connection. Their decision is least influenced by „Easy availability‟.

Another interesting thing to note which is evident by the above mentioned graph is that the respondents „ tend to give Network tariff and Packages almost same amount of priority when making purchase decisions. So they are almost equally important factors for the Network service providers.

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‘Mobilink’ or ‘Telenor’; which connection is being used more?? Why?

Connection Frequency Valid Telenor Mobilink Total 38 19 57 Percent 66.7 33.3 100.0 Valid Percent 66.7 33.3 100.0 Cumulative Percent 66.7 100.0

As it is evident form the above graph, most people use „Telenor‟ as their network connection for their cell phones. According to the table, about 66.7% of respondents (38 out of 57) use Telenor as their service provider. And the rest (about 19 out of 57) use mobilink as their service provider. According to the reason mentioned by the respondents, they are using Telenor mainly because of the packages that it is providing and the tariff rates that it is offering. This proves that most of the potential users and current users of today are mainly price conscious. Although mobilink has a better and expanded network coverage, most potential users are of the view that it is very much expensive and it makes it less preferred service provider for today‟s users, who are affected by the recession.

Therefore, mobile companies need to focus on price based factors, rather than services and other factors.
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How many users use different connections for different purposes? Why?

As it can be seen from the above mentioned Pie chart, less than 25% of the respondents use different connections for different purposes, the main reason being „convenience in using one connection‟. This section of respondents mainly constitutes of youngsters, from the age bracket 15 to 25 years of age, who are more active and who readily switch between connections in search of a better package and tariffs. This group of respondents is least concerned with convenience and also the Network quality.

Thus, it is suggested for the service providers to keep the majority in mind, instead of minority, who end to rely on one connection and rarely switch between connections. These are people who buy connections after a proper research and usually search for connections which as an overall connection, is relatively better than other connections, when each and every factor is considered. It is a connection that provide a balanced between Network quality and coverage, Services offered, Tariffs, Packages and Easy availability.

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How many respondents want to change their connections in future? And why?

Change Connection Cumulative Frequency Valid Yes No Don't Know Total 11 35 11 57 Percent 19.3 61.4 19.3 100.0 Valid Percent 19.3 61.4 19.3 100.0 Percent 19.3 80.7 100.0

It can be seen from the graph that most of the people are satisfied with their existing connection and do not want to change their connections in future. From the table, we can see that about 61.4 % ( 35 out of 57) of the respondents are not interested in changing their connections in future. And about 19.3 % of people want to change their connections and to move on to different connections due to some reasons. And same percentage of respondents also thinks that they do not know whether they will be changing their connection in near future.

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Service quality as rated by Telenor and Mobilink users:

Service Quality

39% 61%

Telenor Service Mobilink Service

Telenor Service N Valid Missing Sum 57 0 161

Mobilink Service 57 0 104

From the above graph, it can be seen that Telenor users are more satisfied with their connections. Respondents are said to rank their respective connections on a scale of one to 5. 5th rank is the highest with 5 points and 1st rank is the lowest with 1 point. Out of a total of 265 points received, Telenor users give 161 points to their connection and mobilink users give just 104 point to their connection. This tells that Telenor get 61% of the total point received.

The results concluded that Telenor users are more satisfied by the service that Telenor offers and most of them give it a better rating, compare to mobilink users. Mobilink users are of the view that although mobilink has expanded network coverage, they have to face problems such as heavy network traffic, busy networks, slow connections and call drops. Thus they are not satisfied with service quality. Whereas Telenor users think that it is far better than Mobilink in terms of service quality, with little or no problems such as network traffic and call drops.

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Problems faced by Mobilink users:
Mobilink Problems Cumulative Frequency Valid Call Drop Service Down Over Charge Network Coverage Total 32 10 5 8 2 57 Percent 56.1 17.5 8.8 14.0 3.5 100.0 Valid Percent 56.1 17.5 8.8 14.0 3.5 100.0 Percent 56.1 73.7 82.5 96.5 100.0

From the table, we can see that about 17.5% of the mobilink users are disturbed by the call drop problem, about 14% of the mobilink users are facing problem because of overcharges, about 8.8% of the mobilink users are dissatisfied because of service down and about 3.5% of the mobilink users are not happy with the network coverage.

So the main problems that Mobilink customers have faced as displayed in the table is the call drop, service down and overcharge. This is true and as according to the comments of the respondents, mobilink faces a problem of heavy network traffic and slow and busy network, which results in service down and call drops at many times. Overcharge is also a major problem with mobilink as Mobilink currently has the highest call rate compared to other network service providers of Pakistan, according to the comments made by respondents.

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Problems faced by Telenor Users:

Telenor Problems Cumulative Frequency Valid Call Drop Service Down Over Charge Customer Service Network Coverage Total 23 10 13 6 1 4 57 Percent 40.4 17.5 22.8 10.5 1.8 7.0 100.0 Valid Percent 40.4 17.5 22.8 10.5 1.8 7.0 100.0 Percent 40.4 57.9 80.7 91.2 93.0 100.0

From the table, we can see that about 22.8% of the Telenor users are disturbed by the Service down problem, about 17.5% of the Telenor users are facing problem because of Call Drop, about 10.5% of the Telenor users are dissatisfied because of overcharge, about 7% of the Telenor users are not happy with the network coverage and about 1.8% of the Telenor users are not satisfied by customer service.

Service down, call drops, over charge and network coverage is the major problem with Telenor customers. Most of the Telenor customers does not have an expanded network coverage and due to the heavy network traffic, it gets overloaded which results in call drops, service down and network coverage problems. Most of the Telenor customers think that Telenor network is still limited to few destinations and does not work in remote destinations. Many of them also think that Telenor overcharge in terms of hidden charges. Many Telenor users are also of the view that customer service of Telenor is poor and slow and take much time to deal with the customers‟ problems.

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Service pricing perceived as quality indicator:

Majority of people think that service pricing is one of the quality indicators fro any given connection or service. Most of the people think that their decision to buy a new connection is influenced by the service pricing of that connection. But there are also many respondents who think that service pricing is not that much important and they are more concerned with service quality and performance, rather than just pricing. They think that their decision is more influenced by service quality, performance and type; rather than just service pricing. It is suggested that service providers should take service quality seriously as majority tend to take this in their decision making process when buying or choosing between a network connection.

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How many agree to pay higher for innovation / new service:

From the above graph, it is evident that most of the respondents prefer new and differentiated service and they are interested in innovation, thus they agree to pay more for these kinds of innovative services. According to the responses, they think that new and innovated service will be a new experience and will be a sign of style and modernization. These are people who like changes and are adaptable to uniqueness and changing trends.

But there are still many people who are not ready to pay higher for new service. These are those people who are either price conscious, or who are not ready to accept changes and does not like innovation. Many of these people are price conscious, who say that they do not want the costs to rise at any cost. But they are ready to accept these changes if they are offered for free of costs, which is impractical.

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People using MNP (Mobile Number Portability):

MNP is the service that enables you to retain existing mobile subscriber number along with operator code, while shifting connectivity from one operator to another.

From the above graph, it can be seen that less than 10% of the total respondents are using MNP service and over 90% of the respondents have not used the MNP service ever. The main reason being these results are that most of the people are unaware of this service and they have hard it for the first time. And those that are using are quite happy with it. So I would suggest that Network service providers should create awareness among their customers about MNP and its benefits.

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How many think that advertising campaigns by cellular service providers are cluttered:

More than 80% of the respondents are of the view that advertising campaign by mobile companies is cluttered and are difficult to interpret. Many people think that advertising campaigns by mobile service providers are very much loaded, with too much rubbish and needless stuff that makes it difficult for normal viewers to understand what the campaign is all about. They think that ad campaigns need to be simple and attractive, and should clearly explain what it is intended for. They also think that mobile advertisement campaigns should not be too lengthy and should have appropriate time limits.

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Importance of Celebrity endorsement in Ad campaigns:

From the above graph it is clearly visible that people mostly don‟t give a damn about celebrities. They do not consider it to be important and their decision I not influenced by the celebrity endorsements. They do not think that associating a brand of any network service provider will have any effect on their decisions. As we have discussed before that consumers of today are more price conscious, they are more concerned about price and are least concerned about these meaning less things. But there are still some people whose decisions are influenced by celebrity endorsements to some extent.

Mobile service providers are overly using celebrity endorsements in their advertisements, and should limit them. They should make a very limited use of celebrity endorsements and should stop using celebrity advertisements in all of their advertisement, as what they are doing these days.

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Number of people who could recall Telenor and Mobilink Tagline:

From the above Pie charts, we can see that most of the respondents are aware of Telenor tagline, rather than Mobilink Tagline. About 45% of the respondents are ware of Telenor Tagline, whereas only 25% of the respondents are aware of mobilink tagline. Thus, we can conclude that Telenor Advertisements are more visible and more clear, and they are better able to communicate with the people their values and symbols.

But mobilink, in contrast with Telenor, has weaker communication channels and is less involved in ad campaigns and communicating with customers about their values and symbols. A reason could be that mobilink is the oldest network of Pakistan and is in the maturity stage, it has the largest subscriber base of all network service providers in Pakistan. So may be they are of the view that they do not need all these marketing and communicating activities, but with the changing conditions and trends, they will soon realize the importance of all these activities.

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Number of people who could recall Telenor and Mobilink Ad campaigns:

Telenor Ad Campaign Cumulative Frequency Valid Yes No Total 26 31 57 Percent 45.6 54.4 100.0 Valid Percent 45.6 54.4 100.0 Percent 45.6 100.0

Mobilink Ad Campaign Cumulative Frequency Valid Yes No Total 13 44 57 Percent 22.8 77.2 100.0 Valid Percent 22.8 77.2 100.0 Percent 22.8 100.0

From the above Pie charts, we can see that most of the respondents are aware of Telenor ad campaigns, rather than Mobilink Ad campaigns. About 46% of the respondents are ware of Telenor Ad campaigns, whereas only 23% of the respondents are aware of mobilink ad
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campaigns. Thus, we can conclude that Telenor is more active in their Ad campaigns and their advertisements are more attractive and eye-catching.

Reasons are the same as discussed in previous part that mobilink has week communication channels and is not taking these issues seriously as it is already in the maturity stage enjoying the largest subscriber base. But it will soon realize the importance of these issues with the changing trends and conditions.

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ISSUES

Deceptive marketing giving rise to Ethical issues

Telecom companies are being increasingly involved in deceptive marketing strategies and are charging hidden prices and tariffs to customers, which are not being disclosed properly. Deceptive marketing by telecom companies is creating frustration in customers as they are being fooled by advertisement campaigns of telecom companies which says that lowest rates are being offered, but instead when the customer actually uses that service he has to bear a load of other hidden costs that makes the service much expensive or equal to the rates charged by competitors offering similar services. PTA has taken a serious notice of these activities of the telecom companies and they are planning to revise their policies regarding deceptive marketing campaigns. They have imposed limits on the hidden charges to prevent deceptive marketing. In an interview taken by Ms. Khadija, Asst Brand manager Telenor, she mentions that deceptive marketing has been clearly visible and is becoming evident to customers. She also mentions that PTA has taken serious notice of this act and now policies are being revised by PTA and advertisements are being monitored now and should be approved and cleared by PTA, before it is to be displayed on television or other media. She said that after PTA imposed the regulation for disclosure of hidden charges and request mobile service providers to show all conditions is their advertisements, Telenor started showing liners in their advertisements which were not shown previously. According to her, PTA is playing a major role in eliminating Deceptive marketing activities by telecom companies and is getting involved with the marketing divisions of telecom companies for the purpose.23 Mr. Ahmad Mustafa, Ex- Asst brand manager Mobilink Jazz, said during an interview that Deceptive marketing strategies are not wrong and are carried by many companies around the globe.24

23 24

Source: Ms. Khadija, ABM, Telenor ; Interview taken by the group on 9th December, 2009 Source: Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group

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Aggressive marketing approach is getting popular among service providers with increasing competition and price-based war. Customers are more price conscious which makes telecom companies to adopt price based marketing strategies. These price based marketing strategies has given rise to deceptive marketing. The advertisements involved in deceptive marketing stresses on lowest possible tariffs just to attract potential customers, but in fact there are many hidden charges and conditions that are either not shown or is shown in a very fine print, that viewers are normally unable to catch. According to Babar Bhatti, “I think this is unfair to the customers and we need to characterize this trend which some may characterize as deceptive marketing”.25 Advertisements by many cellular service providers; such as „3 paisa per second‟ of Telenor Talkshawk and „Friends and Family‟ package of Warid Zem prepaid; have the conditions and Hidden charges written on any one side of these advertisements in a very fine manner, Which is not visible to a normal viewer. Our media is full of these kinds of deceptive advertisements by telecom companies. Mobile packages are now more complicated with advertisements usually having certain time and other limits. It seems that mobile companies are making unfair use of the stressful and busy schedule of people that makes them unable to interpret the advertisements completely.26

25 26

Source: published material by Babar Bhatti ; Oct 5,2007 Source: http://telecompk.net/2007/10/05/are-mobile-companies-using-deceptive-marketing-in-pakistan/

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Bloggers hired but not paid well

Blogs are basically abbreviation of the word „Web Logs‟. It provides a forum where people can provide their opinions, passions and can comment on other personal topics. For marketers, it is an effective way to market their product/services. It is a way to attract clients and customers and can be used as an organized marketing campaign.27 These bloggers are also hired by companies for marketing their product/services. But the issue over here is that bloggers hired in Pakistan are often not paid well and are also not hired permanently, which result in the bloggers performing far less than what is expected.

We have a lot of examples in front of us showing the importance of blogging in marketing. Recently, two women of UK, who are just normal UK citizens, have used blogging to market the newly launched Hollywood movie. The movie managed to generate the revenues worth of about 100 million dollars, after which, the Producer of that movie admitted during his formal address to the public that 25% ($25mn) of the total revenue generated by the movie are because of the efforts of those two UK ladies. And he awarded her their share in revenue.28

In another example, a boy named Umair was facing a problem with mobilink and had tried many times to call the customer service centre to get the problem fixed, but every time the customer service guy on the other side used to tell him that his problem will be fixed in an hour, but of no use. He keep on doing this for about one month, but the problem still remains. Then he used the blogging technique and post blogs of mobilink frauds on cyberdera.com, and within a week, he started getting phone calls from the mobilink representatives requesting him to stop and delete all his posting and he got his problem fixed within one week after that.29

So these all examples highlight the importance of blogging in marketing and its possible impact on the corporate world. When interviewing Mr. Ahmad Mustafa, Ex- Asst brand manager Mobilink Jazz, he mentions about the mobilink Zuej, the famous blogger sponsored by mobilink
27 28

Source: http://www.bloginsider.com/marketing/ Source: lecture by Prof. Zafar Siddiqui 29 Source: Umair, IBA student ; sharing his personal experience

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who work for mobilink by posting blogs in favor of the mobilink. His blogs are very successful in terms of the degree to which they influence the potential customers and the feedbacks that were experienced. This blogger was a real opportunity for mobilink, but it also did not show up with expected results due to the same problem of the low payment to bloggers. He told that it is the major problem in the entire Pakistan which needs to be solved. He told that blogger are an important contribution to the marketing activities as blogging is the next generation marketing strategy and a medium for marketing campaigns that are more interactive, instantaneous and attractive. He told that the marketing and sales manager over here does not realize the importance of blogging and they tend to take it as a useless thing.30 “Profiting from paid blogging is rewarding not only for bloggers, but for advertisers as well”, says Daniel McGonagle in his article „Paid Blogging: Is this a scam?‟.31 Therefore, the marketing and sales manager need to understand the importance of blogging and the bloggers should be given compensation and job security depending upon their contributions, so that they show their full interest in blogging for the company and produce expected results.

30 31

Source: Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group Source: http://ezinearticles.com/?Paid-Blogging:--Is-This-A-Scam?&id=574736

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Measures to stop illegal SIM usage

Illegal SIM usage have alerted the concerned authorities when it was found that most of the terrorist activities going on in the country are being supported by a huge amount of unregistered SIMs that are found in the possession of these terrorists. After this, government has revised all its policies regarding prevention against illegal use of SIMs and has strictly instructed all service providers to follow the regulation.

In an interview with Ms. Khadija, Assistant brand Manager Telenor, biggest issue faced by service providers these days is dealing with the problem of Illegal SIM usage. According to her, Telenor is doing its best to stop illegal SIM usage. Heavy investment is made by Telenor to counter the problem of illegal SIM usage. Two of the main steps taken against the problem of illegal SIM usage, as pointed by the Assistant Brand Manager, are:32

I.

Stopping the sales of pre-activated SIMs: As a part of this step, Telenor has started selling SIMs that needs activation before using them. This helps them in confirming whether the SIM is correctly registered, or not. SIM can be activated by dialing 789.

II.

Multiple SIM owner verification As a part of this policy, PTA has provided a facility by which customers can know the number of SIMs that are registered under their name and CNIC. This is done by simply sending a message on 668.

According to Mr. Ahmad Mustafa, Ex- Asst brand manager Mobilink Jazz, companies often have to burden the liabilities and heavy fine, when terrorists are being caught using the SIMs of that specific mobile service providers. He also gives an example of WARID that launched its new policy of disconnecting the service, when the SIM is not in use for 90 days. This is because
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Source: Ms. Khadija, ABM, Telenor ; Interview taken by the group on 9 th December, 2009

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the SIMs that are stolen are often thrown away and the users do not bother to report the complain to their respective service providers.33

By October 24, 2009, about 1.75 lacs of complains were received from all over Pakistan by the customer service centers of concerned mobile operators, and about 4 lacs of illegal SIMs have been blocked. PTA has received about 3.82 million requests of mobile subscribers through their policy of „Multiple SIM owner verification‟. PTA has also been involved in conducting research and surveys and has determined that customers are concerned that how their CNICs are used to register the SIMs without their knowledge. They survey results have shown that the illegal registration of SIMs can be attributed to following facts:34

a) Customers buy SIMs from unauthorized sales points b) They do not fill the CSAF (Cellular Service Agreement Form) agreement properly c) Negligence on part of customers when making the copies of their CNIC at photocopy shops

33 34

Source: Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group Source: http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/24-Oct-2009/175-laccomplainants-visit-CSC-for-SIM-data-correction ; DAWN ; 24 Oct, 09

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YOUTH: Highly Price Conscious rather than Brand Conscious

The youth today in Pakistan is more of a price conscious youth, who buys and values the product/service with the lowest price. There is no such thing found in today‟s youth by the name of brand loyalty. They are not at all concerned about which brand does a particular product/service belong to. They are just concerned about the content and price. That is why major brands in Pakistan are shifting towards „Branded House‟ from „House of Brands‟, and competing based on purely price factors.

In an interview with Ms. Khadija, Assistant brand Manager Telenor, she responded that the Telenor is successfully using its „House of Brands‟ strategy and has no issues with it. She seems to have satisfied with this strategy of Telenor, although it is against the values of today‟s youth of Pakistan.35

According to Mr. Ahmad Mustafa, Ex- Asst brand manager Mobilink Jazz, there is a lot of difference between Pakistan and other developed countries of the world. Pakistan is still considered as a developing nation with its citizens also on the developing stage. The youth over here is more of a price conscious and tend to prefer things with lowest possible cost. According to him, the youth will soon move to the next stage which is coverage war. In this stage, the service providers will compete based on their network coverage and the one with greater amount of coverage will enjoy more benefits and will reap more profits. Then there will be the third stage, which is the main stage known as „Branding war‟. At this stage, the real fight will begin and the service providers will start moving again to the „house of Brands‟ concept.36 Although the Telenor Assistant brand Manager seems to be quite satisfied with her company‟s policy of „House of Brands‟, its overall profitability is low relative to that of Ufone, which has a „branded House‟ strategy and focuses more on prices rather than brands. This low profitability is likely to be linked to the „House of Brands‟ strategy that Telenor follows which is against the values of today‟s youth and that the Asst. Brand Manager ignores. Part of today‟s consumers‟
35 36

Source: Ms. Khadija, ABM, Telenor ; Interview taken by the group on 9th December, 2009 Source: Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group

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indifference to the brand and being more price conscious can be attributable to the major recession that the world has faced in past two years. Therefore, the youth today are more price focused and will tend to buy things with lower prices. They hardly value brands today.

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‘Marketing Research’: Biased towards price response

As it is already been pointed out in this report that the Pakistani youth today are more price conscious, they tend to value things based on just price factor. This is a serious issue for Marketing Researchers, because the responses that they get are often just price biased and ignore other factors that customers might value after price.

In an interview with Mr. Ahmad Mustafa, Ex- Asst brand manager Mobilink Jazz, he pointed out that consumers tend to be price biased and what they respond ignores other aspects of consumer values, thus the target of obtaining real behavioral insight is not achieved.37

Consumerism in Pakistan is not yet on the maturity level. Although the consumer values price based factors apparently, but still there are other factors that they might value in their unconsciousness (such as standard, cultural values) and are not ready to disclose that. The major reason behind this is that consumers concern about price factor far outweighs their concern about the other factors. These factors may not be very important for the consumers and survey respondents, but they are of very much value to the Marketing Researchers and Analysts as they want to know each and every factor that affect the buying patterns of the respondents and their real behavioral insights, no matter they have a very low magnitude of contribution to the behavioral patterns of respondents with respect to the product/service.

37

Source: Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group

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Unethical Wars between Companies

There has been growing concern among the industry experts who claim that many companies are behaving in unethical ways. Their operations sometimes are highly unethical. In this regard Mr. Ahmed Mustafa told us the example of “Ufone‟s Blackberry smuggling case”. Mobilink was planning to launch Blackberry in Pakistan, they were almost done with all the steps required to launch Blackberry in Pakistan. When Ufone got to know that their competitor will capture a market that is untapped but sufficient enough to go into. Then Ufone started smuggling Blackberry and before Mobilink could launch, Ufone smuggled and launched here in Pakistan. This shows how unethical operations are conducted by the companies.38 Such unethical activities are also carried by companies in their ad campaigns. Rather than being creative in their ads they make fun of their competitor‟s commercials, tear their competitor‟s image, try to create perception that their packages are far better than their competitors‟ by looking down upon their competitors‟ packages rather than only telling about their own packages. Being a professional telecom industry, doing such unethical activities is highly unethical, unsophisticated and unprofessional. For example, Ali Zafar was a brand ambassador for Telenor but when Mobilink hired Ali Zafar as their brand ambassador, they started airing such aids which were intended to daunt telenor‟s image. In the ad Ali Zafar says “Main to ek behter connection ki taraf shift hogaya hun, ab aap bhi ek behter connection use karain”. This was a direct hit against telenor because people were connecting him with telenor and when he joined Mobilink and said Mobilink was a better connection, this created confusion among the people. In this regard Pakistan Telecom Authority (PTA) has to take some urgent steps as such unethical activities not only create problems and confusion for users but also for the telecom operators. They shift their focus from creating healthy and competitive environment, providing cheap and quality services to the customers towards engaging themselves in leg pulling of their competitors. In such a way Companies aren‟t willing to expand by improving their services rather they want to expand by showing their competitors as worse than themselves.
38

Mr. Ahmed Mustafa, former ABM Jazz

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Other unethical activities carried out by the telecom companies are that they are being deceptive in their advertisements. There is a whole list of deception (prepay/postpay, friends and family, 1 min rates v/s 30 sec rates), tariffs and conditions and rates which are vertically published. This is very unfair to consumers because our consumers are not very educated39.

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Quit deceptive marketing or face severe penalties - PTA

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Corporate Social Responsibility

Corporate Social Responsibility is about giving back the society in form of development of human capital, sustainable economic development of the community/country, improving the lives of the people of the society in which it operates. It is more than just a philanthropic activity. In Pakistan CSR related laws and policies aren‟t formulated the way they are followed in other countries. In this regard Pakistan is moving ahead to establish well organized code of conduct for CSR practices. One of the important points mentioned by Ms. Khadija in this regard was that people here in Pakistan feel that the CSR activities that they carry are just charity works which is the reason why CSR practices in Pakistan are not followed particularly well. She said, for Telenor corporate responsibility is a way of doing business, so they integrate responsible practices their business processes and their initiatives are aimed at maintaining a balance towards all stakeholders. They have also carried CSR practices in Pakistan like “Khuddar Pakistan” the purpose of this initiative is to create employment and contract based working opportunities for the disabled people. It is about making them feel independent. But the issue with this and all other CSR activities is that they are perceived as a favor or bheek by the needy and poor people and is not really translated into social services. This, in the end, doesn‟t yield objective achievement and business profits.40 Telenor‟s purpose is to provide high quality services in all parts of Pakistan and enable accessibility and communication for all. In this regard telenor came up with the initiative of providing emergency services in the earthquake areas of Pakistan. Within hours they set up the emergency stalls which provided free communication services to relief workers, National crisis management center, local NGOs and affected families. It also announced Rs. 65 millions relief package for the Red Cross and President‟s Earthquake Relief Fund and Rs. 30 millions for food items and other necessary things for affected people.41 Other CSR activities carried by Telenor include: helping cancer patients at Shaukat Khanum Memorial Trust, fund raising for the
40 41

Ms. Khaidja, ABM Brand Telenor www.telenor.com.pk

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restoration of Rohtas Fort, flood relief efforts for the people of badly-hit areas of Sindh and Balochistan, blood donations for Pakistan Red Crescent Society. Mobilink is also engaged in CSR activities since its inception and they have a set of mission statement for their CSR practices which include their customers, employees, investors and suppliers. Their aim is to support the local communities through programs which increase accessibility and use of mobile technology in community health, education and employability. It is also aimed at promoting diversity of the workforce, human capital development, protecting environment, sharing benefits as widely as possible and promoting sustainable practices in business value chain. In this regard Mobilink‟s on-going activities include Roshni Homes Trust, Shaukat Khanum Memorial Trust, Zindagi Trust, Layton Rahmatullah Benevolent Trust (LRBT), Al-Shifa Eye Trust, Charity and community involvement initiatives with The Citizen‟s Foundation and Lahore Businessmen Association for the Rehabilitation of Disabled (LABARD). Like Telenor, Mobilink also raised money worth Rs. 5 million through SMS donation for the earthquake victims. Also the company donated 5 million for the same cause. Mobilink, with the collaboration of Pakistan Myasthenia Welfare Organisation (PMWO), completely funded and established the Plasmephersis ward in Pakistan Institute of Management Sciences (PIMS) hospital.42 Historically we have seen companies helping the poor people for food and distributing scholarships to children or some organizations give Hajj tickets to employees but establishing new schools, hospitals or doing income generating programs are uncommon. So Mobilink, in November 2006, donated Rs 20 million to The Citizens Foundation (TCF) to set up two schools in Lahore and Karachi. It also introduced a CSR function in the marketing department and in December 2007 it launched a new CSR website.43

42 43

www.mobilinkgsm.com Mr. Ahmed Mustafa, former ABM Jazz

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High-end Branding Issue

Lack of branding is considered to be a big weakness in the successful marketing in Pakistan and identification of a brand‟s target market is one essential part. For a successful brand it is necessary to know who the target market is, based on which company positions its brands. If a company fails to define and identify its target market, it will face problems in the long run. Even if the brand is successfully launched but the target market is unidentified then the brand will eventually fail and all the efforts will go into vain. So the company has to make sure that its positioning is based on its target market and vice versa. And if you want to save your brand you cannot sell it to everyone. Also the real objectives of the company i.e., revenue generation must be the top priority in whatever steps the brand manager may take. The balance must be maintained between volumes and price in order to generate sufficient revenues from the brand.44 A company must know that target audience can not only be a limited number of people nor the target audience can be every individual in the population, because in both the cases the revenues of the company may be badly hit. Mobilink Indigo and Telenor Persona faced such problems. Mobilink Indigo showed a corporate image of its brand which targeted the high end of the market. They invested a lot in their ad campaigns and build a nice image of its brand. But the problem it faced was that it was unable to generate volumes which in turn affected its volumes. Although the personality of the brand was rich but due to its inability of capturing high number of people its revenue was quite low as compared to its investment. The Return on Investment (ROI) was low. On the other hand the problem that Telenor Peresona faced was that although the brand positioning was right and it gave a nice and soft image of the brand, it was available everywhere. The brand was thrown away everywhere which made it a “Sadak Chhap brand” and the audience faced problem in relating the brand, eventually creating confusion in the consumers‟ mind and hence quitting the brand. Although it generated volumes in the beginning but since the target audience was not well defined, the brand became everyone‟s. it was available in every area for

44

Mr. Akhter Mahmud, CEO Brand Image

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all categories of people. So all the efforts that gave a positive image of the brand went into vain and the brand eventually lost its share in the market.

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Issue of SNP: The law for supporting the competition
The telecom industry has been facing a lot of issues and resistance from PTA regarding its marketing practices and the consumer right concerns. The legal issues took its toll when the legal concerns came up with the SNP law. This law has a lot of repercussions for the industry in the long run. The SNP law implies that: ‘Any telecom company within the jurisdictions of Pakistan, if has the market share of 25% or above, shall not decrease the consumer rates to the level that of the new entrants or of those companies having lesser share than 25% in the said industry’ The law stated above is clearly an impediment for the market leader(s) if they hold share greater than 25% within the telecom sector of Pakistan. This law is justified from the end of the new entrants of the telecom industry namely Telenor, Zong & Warid, but the company with the greatest share faces the drawback till the new entrants stand with the 25% or greater share. This issue became the core concern for Mobilink as they stood strong in the market with share more than 25% initially. Yet, the company (Mobilink) wasn‟t able to lower its prices to compete with the new entrants. This is entirely done to support the new investments by the new telecom companies, which is somehow an ethically unacceptable law in true business definitions. The effect of the SNP law has pronounced itself strongly in favor of the new entrants and has badly hurt Mobilink‟s market share. They have been unable to reduce their service rates lower or competitively in relation to the competitors. They have the right quality and the coverage USP which they couldn‟t communicate effectively as the rates stood as the major impediments. Now this is an important aspect for the telecom industry, as whenever any company becomes the market leader because of its efforts, it will have to bear the pay off in terms of not being able to competitive rate its service which again leads to reduced market share. Therefore, the law made to ensure that the telecom investment stays in the country will actually become a drawback for all the investors as soon as they reach their business potentials in the long run.

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Therefore, the industry as a whole will suffer a glass ceiling in terms of the maximum possible return on investment (ROI) that any given company achieves. The investments will also be restricted as a result, as the additional investment won‟t be able to reap the required or acceptable returns after a certain level of market share achievement. According to AC Nelson the telecom companies need to improve their return on investment for which it has specified different tool such as Market mix modeling, cross-platform competitive intelligence and media planning, Prelaunch creative testing, advertising effectiveness reporting, and real-time campaign tracking45. Yet, the law diminishes all the above tools in the long run. The SNP law is a serious issue for the leading telecom companies which are growing closer and closer to each other in terms of the market share, as they‟ll soon encounter the problem once they become dominant players in the industry. The long term effects of the SNP law will restrict investment and marketing efforts by the companies and will cause harm to the industry as whole.

45

Marketing ROI for the Telecom Industry

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Branding Issues:
The telecom industry initially was a brand oriented industry. It was the industry where the brands were valued and recognized by the people. The certain high investments of the new entrants and the price war approach through reducing the tariff rates for the customer started altering the consumer behavior. Mobilink has been a major market share holder with 37 % market share. Mobilink has been a market leader and a pioneer in branding with jazz and indigo. Mobilink brought in the concept of jazz girl which is now being followed by other brands. It communicates an image of newness and modernity46. But the current consumer‟s subscription decision is now very much prone to the price changes as the industry has positioned mobile communication in the same way. The consumer is now highly concerned about the rates any service provider provides and not about the emotional connect or association that a brand holds for him as a loyal customer. The decision for any service use is price dependant now and the consumer values it as a core determinant for his service subscription decision. Therefore, the investments and the resources put into branding the services with emotions and values; even with associations (i.e. Ali Zafar as a brand testimony) are diminishing in terms of value for marketers. There is a high concern shown by both the interviewees regarding the brand architecture or spectrum they hold and their relative success and relevance. Mobilink and Telenor both have a house of brands architecture. Both have sub brands and are positioned to the specific target audience. The Telenor house of brands does not face strong issues in terms of the clarity of positioning that it conveys, but has a certain diminishing pattern of returns for each brand. The Djuice service is specific to the youth which is the only brand with extensive growth as it tapped the ever growing generation „X‟ market with sharp specificity. Yet, on the other hand the „Talkshawk‟ positioning for the masses which has resulted in the issue of over lapping of the target audience for both „Djuice‟ & „Talkshawk‟ brands between the age group of 25 to 30. The main issue still remains that the competitors like Ufone and Warid who have strict one word communication of the mother brand – a strong branded house strategy, have developed a strong

46

Mobile brands connect with Pakistan

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recall and have good returns. Whereas, Mobilink with its „Indigo‟ and other brands has not been able to generate the same scale of returns with the house of brands strategy like others. Putting it in simple terms; the consumer has become more price sensitive and considers the tariff & service rates as the prime and sometimes the soul determinant of his/her purchase of the service. This behavioral change, due to price war in the industry, has withdrawn attention of the consumer from the branding connect or emotional loyalty that should be driven through effective branding strategies. The example of early recognition by one of the telecom companies regarding the simple and single word-oriented branding strategy (Branded House) is of Warid – „Zahi‟. The „Zahi‟ brand was a brand allocated for the postpaid connections. It lost its recall and the place in the consumer‟s mind due to the industry price-war driven branding strategies. Therefore, the brand was dissolved and the branded house structure was followed with the simple one word idea – „Warid postpaid‟, for developing a recall at least. There has to be an end to this price war as the companies won‟t be able to go down from the certain level of tariff rates and brands‟ emotional connect will bring value. This stage is very near and the companies having depth in their brand architecture will benefit the most in the long run.

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Limited Innovation: Fruitless so far
According the ex-ABM Mobilink Jazz, Ahmed Mustafa Mobilink was the first one to practically come up with telecom service innovations. The first to be mentioned is a BTL activity in which they developed JAZZ zones in one of the business schools of Lahore, entering which will automatically lower the charges of the JAZZ users operating within the territory. This was an innovative idea to go in terms of BTL but could not cover the masses of the target audience because of infrastructural problems accompanied by the lack of consumer behavioral understanding of the activity. Following the JAZZ zone, Mobilink came up with „Mobilink Genie‟. It was the first ever mobile utility payment and transfer facility for the consumers of Pakistan. The innovation suffered huge loss and the brand got buried for ever as the market was not mature enough to accept such a facility. Innovation has been the core of Mobilink since beginning, but the market maturity and the related acceptability has been the issue. The same story is reborn with the „Easy-Paisa‟ brand of Telenor which provides about the same service as of „Genie‟. The 2 months old brand has already started facing acceptability and usage issue in the market, not only by the customers but the retailers and the utility providers. Such issues related to the failures of innovation have also been the factor responsible for the lack of innovation in terms of services, and thus, has left the pricing as the only differentiating factor. The process of innovation is still being considered by the business planners in the industry. Companies with strong share like Ufone have started the innovative product differentiating through its innovative In-flight roaming service for the post-paid customers. The introduction of such a service has helped Ufone to attract business client who use want to use mobile phones during flight. The service even though has been introduced for the post paid customers in the start but it has provided Ufone with the competitive advantage over all other competitors. The introduction of such value added services proves that the companies have realized the potential in the value added market and there is a need that other companies should also follow Ufone and Telenor. This move by these two undoubtedly implies the active growth and creativity that the

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telecomm industry is experiencing due to the tough competition and growing customer expectations47 The value-added based differentiation is a positive sign towards a better industry future. This is yet to be marketed and correspondingly to be supported by the target market to encourage such differentiation and innovation to motivate the companies to start a new journey. The future, if the price-war situation remains, will put a bar to the lower pricing as there is a limit of doing so. After the glass-ceiling effect of the price war in the near future, the companies with in-depth branding and innovative solutions for service differentiation will reap profits at a much higher scale.

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Ufone In-Flight Roaming Service

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Advertising issues
The most dominant and expensive advertising medium used within Pakistan is television. Even though most of the telecom giants within our country are making loses yet they are inclined towards using this media rather than cutting costs. Newspaper and radio even though have lost their importance yet they still are vital as cheap and successful mediums of advertisements. At present about 70 % of the television and print ads are of telecom companies which show the extent these mobile companies spend on wasteful advertisement. . The mediums such as televisions and print have become cluttered which has led to reduced effectiveness of advertisements. A recent research by burst media has proven that clutter not only reduces effectiveness but also can be a cause to annoy the consumer. As the time available to the consumers is getting lesser and lesser and with the availability of internet services throughout the country most of the people prefer downloading programs and watching then rather than watching them on TV48. According to Mr. Ahmed Mustafa, ABN Mobilink Pakistan is a market which is not mature yet. The consumers haven‟t yet reached the level of brand loyalty that exists in the foreign market. This issue makes the job of marketer even more difficult to sustain such a consumer base which is very much price conscious. . Another problem faced in Pakistan is the lack of techniques of measurement of data. Measurement tools for television viewership have just come in but are not used widely to collect data. Radio and new paper which come next to television as mediums to advertise have no tool to measure how many people heard a particular ad or seen an ad in newspaper. The Return on investment (ROI) of these types of mediums is almost impossible to measure. If measurement techniques for these mediums can be improved many companies would start using them. Internet had recently emerged as a very effective and measurable medium for advertisement49. The number of clicks is usually used as measure to pay for advertisement this helps in measuring how successful or unsuccessful an ad campaigns have been on a particular web page. The increased used of internet and improvement in IT has increased the number of people who are

48 49

Newsline may 2001 Blurit.com

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audience to ads on the internet. This venue can further be explored as more and more new techniques such as “chitika” are coming up. The Pakistani telecom sector needs to reduce focus on television and start focusing on other cheaper and less cluttered mediums of advertisements as using a cluttered medium can be harmful for the brand personality. Most of the primary research that we conducted showed that due to monotonous slogans and advertisements majority of the people even can recall them. There is lack of innovation and creativity. The ad agencies which are thought as successful advertisers lack the technology and expertise. According to Ms Khadija, ABN Telenor unsuccessful ad campaign is a very relative term. Even though most of the people say that the telecom ads are too monotonous and have no differentiating factor but it still is working for the telecom companies. So until and unless a particular ad campaign is producing result it can‟t be called unsuccessful because there is no set rule to determine what is wrong or right. Pakistan lacks the technology for telecene for which even the ads shot within Pakistan have to be taken to Thailand or India to be developed which adds a lot of cost 50. The people in Pakistan are a lot more creative but within the limited resources and technology it becomes very difficult to bring these creative ideas forward. Even though the telecom companies have brought in new concepts such as humor into the ad campaign but they are not ready to leave the outdated ideas and are following them religiously. In order to cut out of the clutter these companies have to come up with something new which appeals to the consumers and can differentiates them.

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The news 19 December 2009

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Recommendations
The telecom sector has evolved a lot but there still is a long way to go. The technologies such as 3G and 4G will completely revolutionize the whole market scenario. The company that would be quick to take up change would have a competitive edge and would be able to survive in the long run. Recently the concept of customer relationship management has come up. Companies are trying more and more to create long term relationship with the customer. For this purpose they have given the relationship managers authority to uses the budget freely and take necessary steps create lasting relationships. As Pakistani market is more of price conscious the concept of brand loyalty is rare in order to create a more brand loyal consumer base customer relationship building id necessary. Small gestures such as sending birthday card or sending flowers on marriage anniversary can add a lot more value which no advertising can add. Mr. Ahmed Mustafa, ABN Mobilink said that in order to retain the top rank that Mobilink currently holds it has hired a number of creative teams who keep on tracking detail about the most revenue generating customers and come up with new innovative way to create long term relationship with them. According to him personalized service can help companies a lot. So it is necessary for all the telecom companies to start focusing on it so that they can create a loyal customer base rather than face the problem of price conscious customer. Research and development needs to be made an in-house activity rather than out sourced. Research can help to predict the future trends which are not visible51. The companies need innovation to keep the competitive edge they have and in order to bring in innovation research is the key factor. Research methods need to be developed and such methods should be developed so that the price bias that exists is removed. According to Mr. Ahmed currently this is a war on the bases of prices but it won‟t last for ever as eventually the prices would come to a level where it won‟t fall any further and then the competition would start on the basis of coverage. All the companies would start focusing on increasing coverage. This competition also won‟t last long and eventually all the companies
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Ms Khadija ABN Telenor

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would compete on the basis of brand value or brand equity. The consumer would become loyal to the company which would promise and deliver its promise. In the long run brand would be the key differentiating factor for any organization in the telecom sector. For any company with a long term focus, it needs to start building brand name and image so that it can remain competitive in the long run. The companies need to start focusing on and invest in in-depth house of brands architectural branding as sooner or later the industry would face a glass ceiling in terms of service rates and all will be equal in this term. Therefore as soon as the price war ends the organization with a strongly positioned brand with a very specific idea to convey and emotional connect will be able to charge a premium. Currently Ufone and Warid are trying to generalize the brand name post paid, post pay and prepay which in the long rum will cost them dearly as the war would be on the branding front. So the companies need to start focusing on brand positioning, brand image and brand creation before the price war ends. The companies need to change their focus from only print and TV marketing to internet marketing. According to BBC, the internet marketing has shown a growth of approx 9 percent while on the other hand traditional marketing medium usage has shown a decline of 23 percent 52. Internet has recently sprung as a media to advertising with the greatest penetration. More and more people are becoming internet users with the IT revolution that has come in. Many companies have already started using the concept of viral marketing on the internet. Ufone has already made some ads which were only shown on the internet and they have been quiet successful in delivering their message. The ad agencies that we have don‟t have the necessary skills, expertise and technology to implement innovative concept. This is the reason that most of the ads are copied from the international campaigns and eventually all these ads become part of the clutter as they are not specifically designed for our region. The telecom sector has been using a very monotonous type of ads which basically focus on dancing but don‟t provide a specific message. Ms Khadija said that until and unless something is working it can‟t be labeled a failure. In ads there are no said rules if u can sell your brand by dance there is no harm in doing it. In the long run as our market is becoming more and more conscious and mature the quality of our advertisement need to be improved. Only that company will survive which will keep up the pace with change.
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www.bbcworldnews.com/

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Conclusion
The main issue identified from the interview and literature review was the price issue. Pakistani market hasn‟t reached the maturity level where they would prefer quality over prices. The primary research that we conducted also showed the same result but it also identified another reason for selecting a particular company and that is network coverage. This clarifies why Mobilink has been a market leader. It even covers the most remote areas of Pakistan where no other company has even reached. So other companies also need to focus on improving the network coverage so that they can be able to compete the market leader.

One of the deviations that our primary research showed from the market research conducted by others market research organizations is that most consumers used Telenor. The actual reason for this inconsistency is that the consumer base from which we researched belonged to Karachi and mostly consisted of younger people who feel that Telenor is trendier and fit the personalities of the youngsters. The Primary research showed that very few people plan to change their mobile connection in future.

The main problem being faced by the consumers due to which they change their connection is service quality. On the other hand companies feel that war is on the price front which is not true. Even though price is an important factor still, if the telecom companies want to create a loyal and long term relation with consumers they should start focusing on the quality of service they are providing. The number of call drops and service drop issues need to improved as the research showed that these two are the main problems that the consumers are facing

Telenor and Mobilink have been investing huge amount on advertising especially celebrity endorsement but primary research has shown that celebrity endorsement isn‟t the most important factor in changing the decision of a consumer who is buying or using a particular company‟s

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sim. Mobilink has far more brand ad and tagline recall then any other company. This is also an important factor which helps Mobilink to a market leader.

The future is of branding. When the market will reach a saturation point and differentiating factors such as coverage and price would almost be removed at that point in time only that company would survive which has the strongest brand position and brand essence. Such brands need to be created which can act as differentiating factor and to which people can relate.

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Appendix
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Articles

BIBLIOGRAPHY
1. Article: PTCL: High Quality High Volume Strategy 2. Article: The State of Pakistan‟s Handset Market – An Analysis 3. Article: Mobile brands connect with Pakistan 4. Article: Telecom Marketing Best Practices: Rapid Response Intelligence, www.allantgroup.com 5. Article: The Telecom Marketing Transformation: How the social media is changing the game, Calysto White paper, www.calysto.com 6. Article: The State of Telecom Ads in Pakistan 7. Article: Improving Marketing Effectiveness for the Telecom Sector 8. Article: Marketing ROI for the Telecom Industry 9. Article: Pakistan‟s mobile Industry: On the growth path 10. Article: Telecom industry to take new shape 11. Article: PTCL: High Quality High Volume Strategy 12. Article: Pakistan telecom industry: is the honeymoon over 13. Article: Who will be the no.1 in telecom? 14. Article: Ufone‟s In-flight roaming service 15. Article: Telecom industry starts cutting jobs, By: Jawwad Rizvi 16. Article: Strategies for success: The rural marketing telecom marketing (BoP), CKS Consulting 17. Article: Pakistan Telecom Industry: SWOT Analysis 18. Link: http://www.bloginsider.com/marketing/ 19. Lecture by Prof. Zafar Siddiqui 20. Umair, IBA student ; sharing his personal experience 21. Mr. Ahmad Mustafa, Ex-ABM, Mobilink ; Interview taken by the group 22. Link: http://ezinearticles.com/?Paid-Blogging:--Is-This-A-Scam?&id=574736 23. Ms. Khadija, ABM, Telenor ; Interview taken by the group on 9th December, 2009 24. Published material by Babar Bhatti ; Oct 5,2007 25. Link: http://telecompk.net/2007/10/05/are-mobile-companies-using-deceptive-marketing-inpakistan/ 26. Link: http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/24-Oct2009/175-lac-complainants-visit-CSC-for-SIM-data-correction ; DAWN ; 24 Oct, 09 27. Article: Are Mobile Companies Using Deceptive Marketing In Pakistan? 64 | P a g e

28. Article: Quit Deceptive Marketing or Face Severe Penalties: PTA 29. Link: www.telenor.com.pk 30. Link: www.mobilinkgsm.com 31. Mr. Akhter Mahmud, CEO Brand Image 32. Newsline may 2001 33. Link: Blurit.com 34. „The News‟, 19th December 2009 35. Link: www.bbcworldnews.com/

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