1

MKTG302
MAGED ABAZA

Submitted By:
Moataz Said Nagy: 900030101
Ali El Gendy: 900021955
Ahmed Abd
El Gawad: 900011681
Moataz Hamouda: 900010148

Index
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1.0 Executive Summary……………………………………………………………...3

2.0Situation Analysis………………………………………………………………...5
2.1 Industry and Our Competitors…………………………………………...5
2.2 Six Forces: Business Environment………………………………………6
2.2.1 Political and Legal Environment………………………………7
2.2.2 Economic Environment………………………………………..8
2.2.3 Socio-cultural Environment……………………………………9
2.2.4 Technological Environment……………………………………10
2.3 Market Segmentation…………………………………………………….11
2.3.1 Demographic Segmentation……………………………………11
2.3.1.1 Age…………………………………………………...11
2.3.1.2 Gender………………………………………………..11
2.3.1.3 Income………………………………………………..12
2.3.2 Geographic Segmentation……………………………………...12
2.3.2.1 People Living in Cities……………………………….12
2.3.2.2 People Living in Upper Egypt and Urban Areas……..
12
2.3.2.3 People Living or Working in Remote Areas…………13
2.3.3 Behavioural Segmentation……………………………………..13
2.3.3.1 Companies and Business Organizations………..……13
2.3.3.2 Businessmen…………………………………………13
2.3.3.3 Youth………………………………………………………....14
2.4 Targeting…………………………………………………………………14
2.5 The Positioning Table……………………………………………………15
2.5.1 Comment on Table……………………………………………..15
2.5.2 Positioning Statement……………………………………….....17
2.6 SWOT Positioning Statement…………………………………………...17
2.6.1 Strengths and Weaknesses………………………………….....17
2.6.1.1 Strengths…………………………………………….17
2.6.1.2 Weaknesses………………………………………….17
2.6.2 Opportunities and Threats……………………………………..18
2.6.2.1 Opportunities………………………………………...18
2.6.2.2 Threats……………………………………………….18
3.0 Objectives………………………………………………………………………..19
4.0 Strategy…………………………………………………………………………..19
4.1 Market Penetration Strategy……………………………………………..19
4.2 Diversification Strategy (Secondary Party) ……………………………..20
5.0 Action Program…………………………………………………………………..21
6.0 Financial Statements……………………………………………………………..22
6.1 Marketing Expenses……………………………………………………...22
6.2 Income Statement………………………………………………………...22
7.0 Control……………………………………………………………………………
23
7.1 Actual Implementation and Expenditure vs. Achievement of Objectives.23
7.2 Actual Expenditure vs. Budget…………………………………………...
24
Refrences……………………………………………………………………………..26
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1.0 Executive summary

Our newly established company, ETIASALT found the way paved to

start it giant investment in Egypt in the field of mobile services and satellite

communication. The market is expected to be segmented with respect to geographic

locations as follows as people living in the cities like Cairo, Alexandria, and Giza

where the greatest percentage of customers can be found. People living or working in

remote areas such as, oil fields, mobile phones are very vital as it is the only way of

communication that exists there. The second segmentation is Behavioural one in

which B2B is probably the most important segment that uses mobile phones.

Companies use mobile services in business to create a continuous network between

its employees. Usually business organizations are looking towards the quality of the

service. Based on the segmentation process, it was decided that the best strategy to be

used for targeting would be a custom marketing strategy, where different services are

introduced addressing the unique needs of each customer. Our assumption in the

positioning table illustrate that B2B would give the service of coverage in different

places 40% importance. The satellite service would work on filling this unsatisfied

need of very high demand for businessmen and engineers in Egypt. It is also assumed

that businessmen do not have a priority considering the Premium Price and Regular

Payment which have 18% and 17%, respectively. This is because work in detached

areas or outside Egypt is usually for high-income people. That would guarantee the

success of the satellite mobile service. Our strengths will be high capital investment:

the high capital investment will help the company provide the newest technology like

the satellite service, while our weakness is the costs would be high relative to the

revenue at the beginning in order to attract more customers.

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The opportunities that may encounter our company are can be summarized as the
increase in number of out-of-towns jobs; the skilled workers, the importance of
mobile phones to Egyptians; the political stability in Egypt and the welcome of the
Egyptians to third company that may break the duopoly. On the other hand, our
company may undergo some threats such as the low purchasing power of Egyptians;
the coalition of the competitors and the economic recession in Egypt. Our Objectives
are to be the company of the highest share in cellular phone network coverage
business in Egypt with five year and achieve profit of 500 million pounds. Strategy:
Market penetration strategy (prime product). We should enhance a price promotion
tactic for the prime product to gain substantial market share. The company has a
huge capital to establish its brand. To offer low price ill attract consumers. This
strategy will help the company gain the highest market share. Diversification
strategy targets specific stratum to promote our secondary product of satellite
connection which is not ordinary in Egypt. It will be offered for limited at higher
prices. This offering has direct impact on sales as our company is the only provider
of this service and indirect psychological one as the company is the only one to offer
this service which undermines the value of its competitors. This will help us achieve
500 after 5 years. In order to follow up the improvement of our company we have to
implement a controlling scheme on our performance. One of the most important
aspects to follow up is the percent achieved of the stated objectives. A numerical
figure has to be assigned to the objective and then continuously referred to in order to
know the performance of the company. In order to know how far (Etisalat) gained
from the market share it is suitable to calculate the value of our company at the end of
each year and compare it with the value of our competitors. If we have more value
than our competitors then we have highest market share. The amount of sales can be
calculated by knowing the number of our clients and compare that number with the
estimated number clients in our target market(s). After doing that we can know our
sales and our sales relative to the market.
The amount of profit is obtained by subtracting the costs and expenses from the net
sales. This is beneficial in controlling the objective related to amount of profit.
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2.0 Situation Analysis

Accordingly, our newly established company, ETIASALT found the way paved
to start it giant investment in Egypt in the field of mobile services and satellite
communication. The company started to
study the environment where it will open its
project. Egypt is located in Northern Africa,
bordering the Mediterranean sea. It possesses
one of the most important water passages in
the world which is the Suez Canal. This canal
represents an international way passage for
world trade. The population in Egypt reached
78 million. Egypt is developing country. Most
of Egyptians are belong to the medium class.
The medium category represents the majority
of the Egyptian society. People in this category are educated people working for
companies in the private or governmental sector, or owners of very small projects
like grocery shops, mini-markets. Most of customers falling in this category are
having mobile phones; yet, their usage of mobile phones is very limited. Egypt is
considered a right place to start such project as it is politically stable.

2.1 The Industry and Our Competitors

MobiNil and Vodafone are functioning at the present time as they are the two

competitive cell phone companies to ETIALSAT. Now, MobiNil phones are

becoming an essential part of the daily life and are considered to be a necessity. It is

known that MobiNil is a national company, while Vodafone is a multinational

operating in Egypt.
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In late 1996, MobiNil started operating under the name Arento Telecom

Egypt. The company was owned by the government for a few months then it was

privatized and became the first mobile operating company in Egypt. MobiNil was

considered a monopoly at that time as the government gave it the exclusive right to

produce; moreover it was the only producer, owner of a key resource (mobile

technology only at that time) and a price maker. MobiNil has proved its leadership in

marinating Mobile services in Egypt to the extent that it has even able to acquire the

trust of huge number of customers. It is main objective is providing quality service

for its customers. It is a pioneer in meeting customer's diverse needs. MobiNil is the

first telecommunication company to develop EDGE that has five times speed than

GPRS. Its network covers 98% of Egypt.

In 1998, Vodafone started its investment in Egypt. Since then, the investments

of Vodafone have reached l.E 4.5 billion. It is estimated that Vodafone has many

products, such as, pre-paid lines, SMS, wireless fax. In 2003, Vodafone launched the

first GPRS network which was the base of Vodafone line. The mission of Vodafone is

to help people around the world enjoy communication technology developments,

preserve the environment and support the local communities. Its network covers 98%

of Egypt.

2.2 Six Forces:

Business Environment
For our company to enter the Egyptian market and to position our product well it
becomes of extreme importance to study the external environment (climate) in which
ETISALAT is going to work in. The external climate for our company has several
dimensions which include political and legal environment, economic environment,
socio-cultural environment, and technological environment.
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2.2.1 Political & Legal Environment:

For a foreign company like ours wanting to establish a new market for itself in
Egypt, it is important to know the formal and informal rules under which a firm must
operate. Government regulations and legal issues of importance to our case include:
tax policy, employment laws, environmental regulations, trade restrictions and tariffs,
and political stability.

Regarding tax policy, the Egyptian government does not follow a stratified system of
taxation (i.e. a tax rate for every stratum); however it follows a fixed taxation system
which obliges all the corporations working in Egypt to pay a fixed percentage (20%)
of its income as a tax on its business. ETIASALT will have to account for a fixed
portion of its income as a tax for the Egyptian government regardless of the
performance of the company. This is an edge from the point of view of our company
because this is considered a moderate and fair tax rate so it will not break our back!!

Egypt offers very skilled workers, computer scientists, IT specialists, and engineers
for much lower wages than their counterparts in Europe or the Untied States.
Therefore, it is considered advantageous for ETISALAT to establish a business in
Egypt and make use of this fact. However, it should be noted that the Egyptian
government sets strict laws for employment which dictates that no person should
work manually more than 8 continuous hours, and has the right to have one day off
per week in addition to the fact that overtime is not mandatory but optional. Although
employment laws are not firmly enforced in Egypt, it is strongly recommended
(especially to multinational companies) to follow these laws in order not to affect our
stand and reputation in the market.

There is a growing trend here in Egypt to stop spoiling the environment and/or the
public’s health by either the wastes of an industry or by secondary effects of the
product itself. Since ETISALAT is basically a mobile phone network coverage
company it is crucial that our supply stations do not radiate (or at least in an
acceptable limit) any harmful radiations that may undermine the public’s health and
the environment. This may not become a problem for ETISALAT because of the
usage of the state of the art equipment so our business here will not be stopped by the
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environmental issues yet we should put it in our minds for further penetration in the
market.

Since ETISALAT emphasis is on offering services and not products, trading

regulations and tariffs will not be considered as a drawback because Egypt is
considered a developing country and the components used in our service offering
(which are high-tech) are not manufactured locally, the tariffs imposed on imported
products will be a minimal because our importing does not affect the local industry. A
word of caution is that the Egyptian industry is developing and tariffs may be
imposed on our components in the future, yet this should not be a big deal because at
that time our product will be well positioned in the market and the number of
customer will be increased.

Political stability is one of the significant characteristics of the Egyptian market.

Since the last war Egypt went into was in 1973, and since then Egypt didn’t go in
other wars which may affect its political stability. The diplomatic relationships
between Egypt and its neighbors are well so there is no fear of a coming war. There is
a one overwhelming dominating political ruling party so there is a little chance that
any other party will throw it away and take its place. Regarding the history of Egypt
in the last 3 decades one could say the Egypt has a very stable political stability with
very minimal occasions of unrest.

2.2.2 Economic Environment:

The economic analysis of a country should be related to the factors the affect the
purchasing power of the consumers and the firm’s cost of capital. These factors may
include the economic growth, interest, exchange and inflation rates.

Egypt is ranked as a developing country yet its economic growth is very much related
to national projects and not individual ones. National projects which affect the
Egyptian economy are like tourism and the Suez Canal. Projects like these are the
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backbone of the Egyptian economy. Due to the previous fact, the Egyptian
government pays attention to the field of tourism where tourists and who
accompanies them will certainly need a wide mobile phone coverage service on
tourism areas.

Most of the Egyptians are risk averse which is reflected in their investment in risk
free investments which yield low returns. The interest rates offered by national banks
usually range from 8.5% to 11%. However, inflation rates in Egypt are very high
(8.3% for year 2005) which consumes lots of the gains on the Egyptians investments’.

It is most probable that Egyptians will welcome the existence of a third mobile
network company in order to benefit from the competition between ELIATASLT and
its competitor which will be reflected on the price of service.

2.2.3 Socio-Cultural Environment:

An analysis of the Egyptian socio-cultural environment may include the family
structure, values, norms, career attitudes and language.

The Egyptian society is a society which holds family traditions at great esteem. The
most common family type is the normal families which consist of parents and
children. The other type of families is the extended families where three or more
generations live together. This type of families is most encountered in rural areas. The
other less common (but steadily increasing) is the nuclear families where a child lives
with a single parent and this is the least encountered in Egypt. Family relationships
are very important in Egypt and being a member of a family this entitles you to
communicate with each other on a very frequent basis and it became a norm that
people should not stay off contact for a long time otherwise they will be undermining
a very important social value which is “keeping in touch”.

It should be noted from observing the history of mobile phones in Egypt that it
became a norm that Egyptians older than 16 years old should carry cellular phones.
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And it is very important for girls in high school or university to have a cellular phone
in order for their parents to check up on them regularly when they are not home.

Most of the careers which give high salaries to fresh graduates in Egypt like the
petroleum field, field and sales engineers involve traveling a lot and probably to
unoccupied territories (like an oil well in the Western Desert). Despite the fact that
these jobs are so hard yet Egyptians rush to get a place in these jobs. These fields are
growing rapidly in Egypt and it is becoming a very vivid sector.

The number of illiterate Egyptians in the rural areas exceeds to a great extent their
counterparts in urban areas. Most of the Egyptians in urban areas do understand
Arabic (the native language) and find great comfort in using it on English. However,
highly educated may find the English language more intelligible and handy than the
Arabic language as they are used to understand and deal with it in their studies.
Usually Egypt has lots of tourists all along the year which dictates the usage of
foreign languages (mostly English) in it.

2.2.4 Technological Environment:

Technological factors have a significant role in lowering the barriers to entry,
enhancing the production efficiency, and outsourcing decisions. Some technological
factors include: R&D activity, automation and rate of technological change.

Since technology is an investment a company should make in order to succeed and in

the field of mobile communications technological advancements are limitless. It is
very important to keep up updating our system to meet and surpass our competitors.

The technology that our competitors mainly use is a traditional one in the sense that
they depend on local network supply stations to enhance the signal coming from the
head quarter to the mobile users and vice versa. In networking business this
technology is traditional. It is worth noting that no mobile company uses satellite
connection. Although satellite communication technology costs a huge amount of
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money it enables the user to communicate from any place on earth provided that it is
not underground.

2.3 Market Segmentation:

In the following section, three types of segmentations are handled:
demographic, geographic and behavioural segmentation as they are relevant to this
particular business. Psychographic segmentation is not handled as it's relevant to
mobile phone industry but it does not have a significant role in the network services
business.
2.3.1 Demographic segmentation:
2.3.1.1 Age:
According to CIA world fact book (2006), there are 78,887,007 persons in Egypt
classified as follows:
0-14 years 32.6%
15-64 years 62.9%
64 years and over 4.5%
The median age is 24 years.
The data above shows that largest and the overwhelming category in Egypt is youth.
In fact, they are the most frequent users of mobile phones in making calls, sending
messages, ring tones, logos, clips… and so on. Egyptian youth are also the most
frequent users of internet and up-to-date technology-based products in the Arab
World.

2.3.1.2 Gender:
In fact, gender role is a very determinant factor, when trying to segment the Egyptian
cutomers for two main reasons:
• Literacy:
Age 15 and over can read and write, but high levels of illiteracy reaching more
than 40% of the population can be found in some areas like Upper-Egypt and
Oasis especially among girls.
Unfortunately, illiterate people are not expected to be frequent users of mobile
phones as literate people who can use the phone, send messages, e-mails, tones,
logos,……etc.
• Customs and traditions:
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As part of the Egyptian culture and the Egyptian family, ladies are given less
privilege than men especially in urban areas and Upper Egypt. In such area, it is
not usual for girls to hold mobile phones.
2.3.1.3 Income:
Income is one the important factors if not the most important one, upon which the
market is segmented because it determines the buying power of each segment. In
Egypt, three categories of incomes can be differentiated:
• Low to very low income:
These are people who can not or can hardly satisfy their basic needs such as food,
transportation, and basic education.
• Medium income:
This category represents the majority of the Egyptian society. People in this
category are educated people working for companies in the private or
governmental sector, or owners of very small projects like grocery shops, mini-
markets. Most of customers falling in this category are having mobile phones;
yet, their usage of mobile phones is very limited.
• High income:
This category includes people with high incomes such as businessmen, owners of
large projects and companies. Of course, all members of high income families are
included in this category. In fact, customers falling in this category are the most
frequent users of mobile phones.

2.3.2 Geographic segmentation:

The market is expected to be segmented with respect to geographic locations as
follows:
2.3.2.1 People living in the cities:
In cities like Cairo, Alexandria, and Giza, the greatest percentage of customers can be
found. In these cities, life is very dynamic and full of interactions between people
working together, students, relatives. This is why the use of mobile phones is high.
2.3.2.2 People living in Upper Egypt, and urban areas:
In urban areas and Upper Egypt as stated above due to some factors like high
percentage of illiteracy and existence of some rigid customs and traditions that make
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the use of mobiles among ladies not favourable. Therefore, the lowest rate of using
mobile phones can be found in such areas.
2.3.2.3 People living or working in remote areas:
For people living in places that are far from the cities or the capital or working
in remote areas like oil fields, mobile phones are very vital as it is the only way of
communication that exists there. Even with the existence of some land phones in
some remote areas like El Wady El Geded, the price of making a call using a land
phone is almost equal to the price of making the call using a mobile phone, which
makes the mobile phone more favourable to use.

2.3.3 Behavioral segmentation:

2.3.3.1 Companies and business organizations:
B2B is probably the most important segment that uses mobile phones.
Companies use mobile services in business to create a continuous network between
its employees. Mobile lines are also used by companies in order to connect with
employees working in remote areas. For instance, oilfield companies work on
projects in the desert, the sea and they are in need to communicate to the head office
frequently.

Usually business organizations are looking towards the following aspects in

communication services:
• Quality of the service.
• Continuity of the service (no frequent breakdowns)
• Fast response from the company providing the mobile services.
• Price

2.3.3.2 Businessmen:
Mobile phone is very vital to people who own or manage a business. They use the
phone for long time to make many local and international calls.
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Such segment of customer is usually looking for aspect like:

• Quality
• Price
2.3.3.3 Youth:
As stated above, youth constitutes the majority of mobile phones users in
Egypt. They are using almost all aspects or services offered by the mobile phone
service provider like making calls, voice calls, sending messages, jokes, ring tones, e-
mails, logos, chatting…etc.
Such segment of customer is usually looking for aspect like:
• Variability of services offered (e-mail sending, voice mail, ring tones,…).
• Ease of use
• Reasonable price
The 80/20 rule is valid to a great extent in this particular business as the B2B and
business segments representing no more than 20% of the mobile phone users
consumes about 80% of what is consumed by the whole market.
2.4 Targeting:
Based on the segmentation process, it was decided that the best strategy to be
used for targeting would be a custom marketing strategy, where different services are
introduced addressing the unique needs of each customer.
For B2B market and businessmen, ETISALT Company will offer satellite network
coverage that will allow consistent coverage with high quality any where. In
addition, ETIASLAT will use and activated the concept of customer care by building
a very friendly relationship with other businesses and by fast responding to any
comments, complaints made by these customers.
For the major segment of customers represented by youth, the ETIASALT will
provide different service packages with different price ranges that suits different
income categories.
Moreover, ETISALT will explore areas and segments that were not targeted by its
competitors. As a result, for the movement fro urban places to towns and cities
looking for education and jobs especially in the industrial field, the need for
communication is increasing. Therefore, ETISALT will try to address urban and
Upper Egyptian customers by using a very special message that addresses their needs
 15

and increases their awareness about mobile services and how mobile phones can
serve them and facilitate their communications.

2.5 The Positioning Table:

Positioning Table:

Premium Regular Coverage Customer Offers Total

Products Price Payment in different Service 15% (100%)
27% 28% places 10%
20%

Etisalat 26 27 18 9 14 94
(satellite)

MobiNil 25 22 13 8 11 79

VodaFone 26 21 15 6 10 78

2.5.1 Comment on the above table:

As mentioned in the Targeting section, the company will try to satisfy the gap

of the B2B, youth and new users. For businesses which seek to receive mobile phone

services in isolated areas, like at oil rigs, our service will provide a greater attraction.

In these places, engineers need mobile phones which are more reliable rather than

going to make calls at certain places or centers. Also for businessmen, or people who

travel abroad frequently, they will not be required to switch their service when they

are outside Egypt. Therefore, our service will save businessmen and engineers’ time

and effort. In this case, businessmen/engineers would go for our product, as they have

no other alternative for mobile services which provide high coverage as Etisalat’s

service does. The satellite service would work on filling this unsatisfied need of very

high demand for businessmen and engineers in Egypt. The higher coverage out of
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cities and outside the country would be considered by MobiNil/Vodafone-customers

as an incentive which can make them change their mobile service. Another great

feature that differentiates Etisalat’s product is the low Periodical Payments feature,

which would present an allure to both completely new users and other services users

to switch their mobile service to Etisalat. Despite that the Premium Payment is

approximately the same between the three competitors where Etisalat, MobiNil, and

Vodafone would score 26, 25 and 26, respectively, out of 27%, Etisalat would provide

a differentiated Periodical Payment feature in which it is going to be lower than that

of MobiNil and Vodafone. Another feature that would attract both the new users and

other services users is the high discounts and offers. Our product scores 14% out of

15% in offers. Offers are going to be in the form of offering mobile services with

mobile devices of latest models at very low costs. Our service provided to youth

would be at lower prices than our competitors’ in order to grab their attention. In

addition, the company will work on having eye-catchy offers; for example, offering a

mobile and mobile service at discounts reaching 30% less than the market prices.

Accordingly, people would pay less and would purchase the mobile devices they

desire. That will assure complete success and allure to buyers, especially youth who

usually seek the newest mobile devices, bearing into consideration the nature of hyper

consumption of the Egyptian people. Not to mention that these qualities would attract

new buyers, for instance, people with extremely very low income, as it is known that

the Egyptian mobile market is not yet fully saturated.

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2.5.2 The Positioning Statement:

Our product is cheaper, in periodical payments, and provides more offers for new

subscribers to our service. Our product is available every where in the world,

provides better coverage, with the highest technology available in the world, and is

more suited to the needs of the customers, saving their time and effort.

2.6 SWOT Analysis:

2.6.1 Strengths and Weaknesses:

2.6.1.1 Strengths:

• High capital investment: the high capital investment will help the company

provide the newest technology like the satellite service.

• Satellite technology will enables clients to use our service anywhere. This

feature will be very useful to users, like oil engineers, who travel to work in

detached areas or businessmen who travel outside the country.

• Providing better customer service that aims to inform client about his system

plus keep providing him with service he needs.

• Cheaper service, in terms of periodical payments.

2.6.1.2 Weaknesses:

• Very high initial costs: As the company would provide the newest

technology, attractive offers, e.g. selling phone line and cellular phone at a

very specialized price, the costs would be high relative to the revenue at

the beginning in order to attract more customers.

• Egyptian employees might not be acquainted with the new technology

provided by the company. The satellite mobile technology is a complete

novelty in Egypt, so it is very probable not to find employees who are

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skilled in that new field. This could be managed by bringing foreign

employees or training Egyptian employees. However, training would make

the costs higher.

• Not having enough experience about the telecommunication business

environment in Egypt. The company has not yet had enough contact with

the Egyptian public and all the environmental trends surrounding the

mobile business. That would take it sometime to adapt to the Egyptian

environment rather than just making market research which its results are

not as accurate as real experience.

2.6.2 Opportunities & Threats

From the previous analysis of the business environment, the opportunities and threats
which encounters ETISALAT as a foreign multinational company wanting to
establish mobile communication business in Egypt is deduced.

2.6.2.1 Opportunities:
The opportunities in the external environment can be classified into the following:
o The growing of out-of-town jobs like petroleum and field engineering,
and salesmen, which necessitates network coverage in their fields
24/7.
o The abundant skilled workers and specialists at lower prices than most
other countries.
o The importance of cellular phones to Egyptians socio-culturally.
o The relatively high political stability in Egypt allows the establishment
and continuation of multinational businesses.
o The welcome of the Egyptian society to a third mobile coverage
company which may break the duopoly.
2.6.2.2 Threats:
Although there are opportunities that ETISALAT may take advantage of, there are
also threats which may cause a source of unrest to the company which are:
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o The low purchasing power of the Egyptian economy.

o The coalition of the two competitors together against (ETISALAT).
o An economic recession in Egypt which may force the Egyptians not to
use mobiles.

3.0 Objectives
• To be the company with the highest market share in cellular phone network
coverage business in Egypt within five years.
• To achieve a profit of 500 million pounds after a period of 5 years.

4.0 Strategy
Due to our offering of two different products in the Egyptian market, it is appropriate
to approach our consumers in two different strategies.

4.1 Market Penetration Strategy (prime product):

Because basically the product offered by (Etisalat) is already existing and established
in the Egyptian market, we will have to gain a space in Egypt by offering the same
quality of service with a lower price. Since the average Egyptians income is not high
as Europeans and Americans, it is very convenient to enhance a price promotion tactic
for our prime product in order to attract them.

By following this strategy it is expected that the Egyptians will subscribe in (Etisalat)
service and we will gain a room in the Egyptian market. It is predicted that we will
have a tough competition at the beginning but consequently in few years we will be
able to gain a stand in the market and acquire a substantial market share.

To summarize the reason for choosing a market penetration strategy for our prime
product is that:
o (Etisalat) has a huge capital which will enable it to establish its brand
in the market despite the strong competition predicted.
 20

o Offering the same quality of service with a lower price will attract
consumers. At the end of the day “why pay more while you can pay
less?”
o Following a market penetration strategy will enable (Itsalat) to achieve
the objective of being the company working in network coverage with
the highest market share.

4.2 Diversification Strategy (secondary product):

The diversification strategy will target a specific stratum of people as it will be used
to promote our secondary product (satellite connection) in the Egyptian market. As
the satellite connection system is not accustomed in Egypt, it will be a diversification
strategy to reach this particular group of people. The satellite connection system is of
particular importance to a limited number of people in the Egyptian society.
Therefore, in the diversification strategy followed it will be convenient to offer this
service in limited amount but higher prices.

Offering another type of service (satellite connection) will have direct and indirect
impact on (Etisalat). The direct impact is related to the number of sales offered by our
company (as the only provider of this service) in Egypt while the indirect impact is a
psychological one related to the fact that (Etisalat) offers a service not offered by any
of its competitors which has an undermining value on our competitors.

By introducing the satellite connection service in Egypt we will be following a

diversification strategy which will help us in achieving the goal of a profit of 500
million dollars after 5 years.
 21

5.0 Action Program

Starting Date Action Assignment Person in Charge Completion Date

Advertising
Jan-07 T.V Ads Manager Decemeber 31 2007

Jan-07 Sales to Retailers Sales Persons __

Jan-07 Classical Concerts PR Manager Jan-07

Aug-07 Popular Concert PR Manager Aug-07

 22

6.0 Financial Statement

6.1 Marketing Expenses:
Item Q1 Q2 Q3 Q4

Advertising 3000,00 4000,00 6000,00 3000,00

Public 1000,00 2000,00 7000,00 2000,00

Relations
Personal and 2000,00 3000,00 1000,00 3000,00
Selling
Sales 3000,00 4000,00 2000,00 4000,00
Promotion
TOTAL 9000,00 13000,00 16000,00 12000,00

Total=
6.2 Income Statement
Revenue 9000,000

Total Revenue 9000,000

Expenses 800,000

Operational budge 700,000

Administrative General 400,000

Market Minis 400,000

Total Expense 230000

Net profit 87700, 00

 23

7.0 Control
7.1 Actual Implementation and Expenditure vs. Achievement of
Objectives
In order to follow up the improvement of our company we have to implement a
controlling scheme on our performance. One of the most important aspects to follow
up is the percent achieved of the stated objectives. A numerical figure has to be
assigned to the objective and then continuously referred to in order to know the
performance of the company.

In order to know how far (Etisalat) gained from the market share it is suitable to
calculate the value of our company at the end of each year and compare it with the
value of our competitors. If we have more value than our competitors then we have
highest market share.

The amount of sales can be calculated by knowing the number of our clients and
compare that number with the estimated number clients in our target market(s). After
doing that we can know our sales and our sales relative to the market.

The amount of profit is obtained by subtracting the costs and expenses from the net
sales. This is beneficial in controlling the objective related to amount of profit.

Although the main pivotal points in measuring are the ends of years, yet controlling
should be done on a more frequent basis, example every month. Because by doing
that, you are ensuring you are having a good control on your company’s status and
not jeopardizing its safety.
 24

As mentioned in the weaknesses of Etisalat that it will have very high initial

costs because of differentiated costs which will enable the company to widen its

consumer base. Hence, this will enable the company to recover its losses. Therefore it

is very important that Etisalat measure its actual expenditures vs. budget.

7.2 Actual Expenditure vs. Budget:

Capital expenditure: Capital expenditure is expected to be 12,000,000,000 Arab

Emirates Dirham (AED). This entails the satellite coverage setup and all other fixed

assets

Media Advertising: Media advertising is expected to be 10,000,000 AED for every

coming year. This includes T.V ads, magazine ads, newspapers and other media. T.V

is going to be the main medium for advertising.

Sales promotion: This includes the cost of making offers. Offers could be made by

establishing joint-ventures with major mobile devices companies, like, Nokia,

Motorola, and others, where every side should discount its service or product to reach

a discount of 30%.

Brand/PR Sponsorship: Etisalat is going to sponsor many events, hosting very

famous Egyptian and international singers, like Amr Diab, Samy Yousef, and others.

The company would print its logo on the tickets, and provide booths to inform people

mainly about its products. The events would be in respectable places like Al Gezira

Club, and also at popular places as we need to attract low and high income youth.

Also considering the businessmen and other VIPs the company would sponsor

concerts, for artists like Omar Khayrat, Opera shows and other classical events to

attract the high class people who travel outside Egypt frequently. Again Tickets would
 25

contain Logo of the product and there would be booths nearby for informing about

the qualities of the product. Popular and classic events would be carried out both once

a year for the coming 5 years for 40,000,000 AED.

According to the budgeted costs above, the Actual expenditure would be

compared to the budgeted one to assess how much control we have on over our

marketing budget, using the following equation:

(Actual Expenditure/Budget)*100%

References
 26

"The world Fact book"

https://www.cia.gov/cia/publications/factbook/geos/eg.html
"Mobinil"
http://www.mobinil.com/roamers/travel/awards.aspx
http://www.aucegypt.edu/src/wsite1/background/nationalprofile/Population%20in%2
0Egypt.htm