University of Mumbai

A study on

“MARKETING STRATEGY OF PAYTM”

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the Faculty of Commerce

By

MUJAFFAR ALI SIDDIQUI

Under the Guidance of

NAVEEENA SURESH

Sree Narayana Guru College of Commerce

PL Lokhande Marg Chembur (W), Mumbai, Maharashtra 400089

APRIL, 2019

Page 1
 Sree Narayana Guru College of Commerce
PL Lokhande Marg Chembur (W), Mumbai, Maharashtra 400089

Certificate

This is to certify that Mr MUJAFFAR ALI SIDDIQUI has worked and

duly completed her/his Project Work for the degree of Bachelor of
Management
Studies under the Faculty of Commerce in the subject of
MARKETING and her/his project is entitled,

“MARKETING STRATEGY OF PAYTM” under my supervision.

I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree
or Diploma of any University.
It is her/ his own work and facts reported by her/his personal findings and
investigations.

Seal of the
College

Asst.Prof NAVEENA SURESH

Page 2
Date of submission: /04/2019

Declaration by learner

I the undersigned Mr. MUJAFFAR ALI SIDDIQUI Name of the learner

here by, declare that the work embodied in this project work titled
“MARKETING STRATEGY OF PAYTM” forms my own contribution to the
research work carried out under the guidance of Mrs NAVEENA SURESH is
a result of my own research work has not been previously submitted to any
other University for any other Degree/ Diploma to this or any other
University.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.

MUJAFFAR ALI SIDDIQUI

Certified by

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Mrs. NAVEENA SURESH

ACKNOWLEDGEMENT

I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Dr Ravindran Karathadi for providing

the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator Prof. LakshmiChaya Kale,

for her moral support and guidance.

I would also like to express my sincere gratitude towards my project guide

Asst.Prof Naveena Suresh. Whose guidance and care made the project
successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.

Page 4
 INDEX
SR.NO SUB-SEC PARTICULAR PAGE.NO
1 Chapter 1- INTRODUCTION
2 Chapter 2- RESEARCH
METHODOLOGY
3 Chapter 3- LITERATURE REVIEW

4 Chapter 4- DATA ANALYSIS

5 Chapter 5- FINDING,
CONCLUSION &
SUGGESTIONS
6 BIBLIOGRAPHY

Page 5
EXECUTIVE SUMMERY
Paytm has several business interface and customer friendly processes for the ease of
doing transactions. The basic process of using Paytm is as follows. Once a user has
registered with Paytm, they have to transfer some money using netbanking, credit/
debit cards, IMPS or other ways mentioned from their bank. Once the money is the
Paytm wallet, codes and numbers of vendors are used to transfer e-money from
customer to vendor. As the brand is new and is growing rapidly, it had also focused
on customer service processes.

The distinction between “strategic” and “managerial” marketing is used to distinguish

"two phases having different goals and based on different conceptual tools. Strategic
marketing concerns the choice of policies aiming at improving the competitive
position of the firm, taking account of challenges and opportunities proposed by the
competitive environment. On the other hand, managerial marketing is focused on the
implementation of specific targets."[3] Marketing strategy is about "lofty visions
translated into less lofty and practical goals [while marketing management] is where
we start to get our hands dirty and make plans for things to happen." [4] Marketing
strategy is sometimes called higher order planning because it sets out the broad
direction and provides guidance and structure for the marketing program.

Pay Through Mobile is simply referred as Paytm and it is associated with e-

commerce industry. It is of Indian origins and was founded in the year 2010 by its
founder Vijay Shekhar Sharma. Paytm is a subsidiary of its owner company
One97 Communications but a major part of its share is also owned
by Alibaba Group from neighbouring country China. Paytm has targeted each and
every person irrespective of age, income, gender or status as its target customer
because it wants to penetrate in every nook and corner of India. 

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 CHAPTER – 1

INTRODUCTION

Strategic analysis is designed to address the first strategic question, "Where are we
now?" [12] Traditional market research is less useful for strategic marketing because
the analyst is not seeking insights about customer attitudes and preferences. Instead
strategic analysts are seeking insights about the firm's operating environment with a
view to identifying possible future scenarios, opportunities and threats.

Strategic planning focuses on the three 3C’s, namely: Customer, Corporation and
Competitors.[13] A detailed analysis of each factor is key to the success of strategy
formulation. The 'competitors' element refers to an analysis of the strengths of the
business relative to close rivals, and a consideration of competitive threats that might
impinge on the business' ability to move in certain directions.  The 'customer' element
refers to an analysis of any possible changes in customer preferences that potentially
give rise to new business opportunities. The 'corporation' element refers to a detailed
analysis of the company's internal capabilities and its readiness to leverage market-
based opportunities or its vulnerability to external threats. 

Mintzberg suggests that the top planners spend most of their time engaged in analysis
and are concerned with industry or competitive analyses as well as internal studies,
including the use of computer models to analyze trends in the organization.
[14]
 Strategic planners use a variety of research tools and analytical techniques,
depending on the environment complexity and the firm's goals. Fleitcher and
Bensoussan, for instance, have identified some 200 qualitative and quantitative
analytical techniques regularly used by strategic analysts[15]while a recent publication
suggests that 72 techniques are essential.[16] No optimal technique can be identified as
useful across all situations or problems. Determining which technique to use in any
given situation rests with the skill of the analyst. The choice of tool depends on a
variety of factors including: data availability; the nature of the marketing problem; the
objective or purpose, the analyst’s skill level as well as other constraints such as time
or motivation.

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Marketing Strategy is:

"The marketing strategy lays out target markets and the value proposition that
will be offered based on an analysis of the best market opportunities." (Philip
Kotler & Kevin Keller, Marketing Management, Pearson, 14th Edition)
“An over-riding directional concept that sets out the planned path.” (David
Aaker and Michael K. Mills, Strategic Market Management, 2001, p. 11)
"Essentially a formula for how a business is going to compete, what its goals
should be and what policies will be needed to carry out these goals." (Michael
Porter, Competitive Strategy: Techniques for Analyzing Industries and
Competitors , NY, Free Press, 1980)
"The pattern of major objectives, purposes and goals and essential policies and
plans for achieving those goals, stated in such a way as to define what
business the company is in or is to be in. (S. Jain, Marketing Planning and
Strategy, 1993)
"An explicit guide to future behaviour.” (Henry Mintzberg, “ Crafting
Strategy,” Harvard Business Review, July–August, 1987 pp. 66–74)
"reserved for actions aimed directly at altering the strengths of the enterprise
relative to that of its competitors... Perfect strategies are not called for. What
counts is... performance relative to competitors.” (Kenichi Ohmae, The Mind
of the Strategist, 1982, p. 37)
The distinction between “strategic” and “managerial” marketing is used to distinguish
"two phases having different goals and based on different conceptual tools. Strategic
marketing concerns the choice of policies aiming at improving the competitive
position of the firm, taking account of challenges and opportunities proposed by the
competitive environment. On the other hand, managerial marketing is focused on the
implementation of specific targets."[3] Marketing strategy is about "lofty visions
translated into less lofty and practical goals [while marketing management] is where
we start to get our hands dirty and make plans for things to happen." [4] Marketing
strategy is sometimes called higher order planning because it sets out the broad
direction and provides guidance and structure for the marketing program.

Marketing strategy is a long-term, forward-looking approach to planning with the

fundamental goal achieving a sustainable competitive advantage. trategic planning

Page 8
involves an analysis of the company's strategic initial situation prior to the
formulation, evaluation and selection of market-oriented competitive position that
contributes to the company's goals and marketing objectives. trategic marketing, as a
disinct field of study emerged in the 1970s, and built on strategic management that
preceded it. Marketing strategy highlights the role of marketing as a link between the
organisation and its customers.

At its most basic level, strategic marketing addresses three deceptively simple
questions: (1) Where are we now? (2) Where are we going? and (3) How are we going
to get there? In attempting to answer these questions, strategic planners require
sophisticated skills in both research and analysis.

Scholars continue to debate the precise meaning of marketing strategy. Consequently,

the literature offers many different definitions. On close examination, however, these
definitions appear to centre around the notion that strategy refers to a broad statement
of what is to be achieved.

Marketing strategy involves mapping out the company's direction for the forthcoming
planning period, whether that be three, five or ten years. It involves undertaking a
360° review of the firm and its operating environment with a view to identifying new
business opportunities that the firm could potentially leverage for competitive
advantage. Strategic planning may also reveal market threats that the firm may need
to consider for long-term sustainability.[9] Strategic planning makes no assumptions
about the firm continuing to offer the same products to the same customers into the
future. Instead, it is concerned with identifying the business opportunities that are
likely to be successful and evaluates the firm's capacity to leverage such
opportunities. It seeks to identify the strategic gap; that is the difference between
where a firm is currently situated (the strategic reality or inadvertent strategy) and
where it should be situated for sustainable, long-term growth (the strategic
intent or deliberate strategy).[10]

Strategic planning seeks to address three deceptively simple questions, specifically:[11]

* Where are we now? (Situation analysis)

* What business should we be in? (Vision and mission)
* How should we get there? (Strategies, plans, goals and objectives)

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 A fourth question may be added to the list, namely 'How do we know
when we got there?' Due to increasing need for accountability, many
marketing organisations use a variety of marketing metrics to track
strategic performance, allowing for corrective action to be taken as
required. On the surface, strategic planning seeks to address three simple
questions, however, the research and analysis involved in strategic
planning is very sophisticated and requires a great deal of skill and
judgement.

A marketing strategy is a business' overall game plan for reaching people and turning
them into customers of the product or service that the business provides. The
marketing strategy of a company contains the company’s value proposition, key
marketing messages, information on the target customer and other high-level
elements.

The marketing strategy informs the marketing plan, which is a document that lays out
the types and timing of marketing activities. A company’s marketing strategy should
have a longer lifespan than any individual marketing plan as the strategy is where the
value proposition and the key elements of a company’s brand reside. These things
ideally do not shift very much over time.

DIGITAL WALLET

A digital wallet refers to an electronic device that allows an individual to make

electronic transactions. It is also referred by other names like mobile money, mobile
money transfer, and mobile payment generally represents a payment services operated
under financial regulation and are performed from or via a mobile device. This can
include purchasing items on-line with a computer or using a smartphone to purchase
something at a store. An individual's bank account can also be linked to the
digital wallet. In other words, mobile money transfer refers to any method of
monetary exchange that utilizes the facility of a mobile device with authorized
support facility and conformance to defined and explained legal policy.

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PayTm, as its abbreviation states, Pay through Mobile was launched in 2010 by
One97 communications as a prepaid mobile and DTH recharge company. Gradually,
it made its way into the e-commerce market in the year 2014 and further added bus
ticketing to its kitty in 2015. PayTm now offers multiple products ranging from
primary mobile recharges to buying apparels or electronics enabling customers to get
everything at one place. Thus, over a period of time, it has become both a payment
platform as well as the marketplace.

This strategy not only enables PayTm to serve multiple needs of the customers, giving
them a holistic experience by saving their time and efforts but is also expected to be
helpful in cross-selling and up-selling and thus increasing the overall profitability of
the organization. It has even obtained the license from Reserve Bank of India to run a
Payments Bank. As a result, PayTm is amongst the top 7 e-commerce companies in
India to have billion-dollar valuation and transformed the business model of PayTm
from a recharge web site to a payment cum e-commerce marketplace. It has 100
million PayTm Wallet users that carry out over 75 million transactions every month.
China’s Alibaba Group with its affiliate Ant Financial invested $680 million in
PayTm in September 2015 to raise their stake to 40%, taking its valuation at
somewhere around $4 billion. On account of higher valuation, PayTm had resources
to stitch Rs.203 Crores worth of deal with Board of Control for Cricket in India for 84
matches. Considering the quantum of following that cricket has in India, this
association with BCCI for primary sponsorship rights is sure to get a lot of visibility
to PayTm brand and likely to catapult it as a national brand with significantly high
brand recall amongst all sections of society.

We all are well aware of the term ‘Demonetisation’. Have

experienced its wrath. On 2016 with the announcement of
demonetisation of 500 and 1000 rupee notes by Indian Government
it got tough for the masses to cope up eith daily money problems.
Banks and ATM’s too were exhausted leaving people clueless to
deal with money problems.

Paytm was launched into market long back but its digital wallet
came to much use during the demonetisation period. It was not that

Page 11
there was no other app that solved the purpose but Paytm with its
huge ad campaigns attracted more audiences.

Between the period of November 10 and December 20 PayTm

added almost 20 million new users. They had over
seven million transactions each day which was more than
combined daily usageof debit and creditcards.

This definitely was not possible in a jiffy with other competitors in

market but this was the result of a great marketing strategy applied
by Paytm team.

The Perfect Strategy Of Marketing

Marketing is not a rocket science. Partnership with perfect brands,
campaigns and advertisements can work wonders. As it is said strike
the Iron when its hot, PayTm followed the simple rule books of
marketing to grab attention and gain users.

PayTm Karo is now viral and now everyone is upto saying let me
PayTm you! It became active in social media and also partnered
with Uber and NDTV for their campaigning. Creating awareness
camp and going facebook live to make people aware of their digital
wallet helped them a lot in business.

Competitors-

 Oxigen Wallet

 Mobikwik

Page 12
  FreeCharge

 Vodafone M-pesa

 Airtel Money

Marketing Ideas To Retain Existing Customers

1. Safety Flowchart

No matter how much modern people have grown day by day but transferring and
paying money online creates a bit of confusing thoughts among users that would it be
safe or not. But Paytm made a flowchart depicting how using their digital wallet is as
safe as compared to credit and debit cards. As digital wallet is not connected to bank
account so its amount is limited and also if any case of hacking occurs or fraud ones
bank account remains untouched!

Infographics

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2. Bank Account Protection

Just before you click on purchase option in any e-commerce site pops up a spartan
warrior with his shield giving the message that PayTm guards users bank accounts.

3. Facebook Live

It’s very important to make people believe and understand of how their account is
protected and free of hacking with Paytm digital Wallet. what could have been a
better way rather than using Facebook Live!

4. Soldier Mobile Game

Perfect campaign for tech-savvy people and game lovers. Users could download a
soldier game from Paytm app. The game is about Spartan PayTm soldiers fighting
against an army of frauds. Basically to make people aware of how Paytm protects
ones account!

5. Automatic Start Of The Month SMS

Withh the start of the month Paytm started sending reminder payment messages to
users andsayingit can be done stress freely by using Paytm digital wallet.

Guiding All Way

Page 14
6. Workshops

Parenting camp were introduced where the trainers spoke how teenagers nowadays
tend to bad habits due to use of free pocket money. This can be used by limiting their
account and payments by using Paytm.

7. Mumbai Dabbawallas

They tied up with Mumbai dabbawallas, rather with the lunch services to accept
Paytm cash only for more usage of app.

8. MBA Contest

A free video contest for MBA first year students were conducted. A team of four were
asked to create a video about how Paytm can be used and the video that would get
maximum likes would win. This became viral and gave more user retention to Paytm.

Gaining New Users Marketing Strategies

1. Pocket Dance

This was the best of the ad campaigns. It was known as Pocket dance. The miseries of
taking out wallet a to pay and checking for money on various pockets of a user. It can
be made easy by just pulling out ones mobile and Paytm-ing the amount. It ended
with the message- Why do the pocket dance every time looking for money? Paytm
karo!

Page 15
2. Celebrity Endorsements

Famous dancing stars like Shiamak Davar and Remo D’Souza were seen doin pocket
dance in television. In internet cartoons and GIF’s were made on famous people doing
pocket dance that went viral.

Remo And Shamak

3. Interactive Fun App

Do you like Talking Tom or Chip Munks? They made something similar, an app
where famous people in their animated avatarwould teach you the pocketdance. The
instructions came like – Right bottom pocket, Left bottom pocket and Back pocket.
One can adjust the speed and choose songs too.

Talking Tom

Page 16
4. Gabbar Singh viral video

Humour was added aby using dialogues of famous character Gabbar that went viral.
The video opened up by Gabbar asking his dacoits to go and loot the village people.
he dacoits return empty handed. When Gabbar enquired ‘Khali Hatth kyu Aya Hai?
the dacoits replied,’ Kisike paas paisa nhi hai, sab Paytm kar rahe!’

These marketing strategies has been great by Paytm to attract audience and they have
been successful. Let us watch out on how they further build up a strong network in
marketing.

BREAKING DOWN 'Marketing Strategy'

Marketing strategies are often confused with marketing plans. Because they do feed
off one another, it is not unusual to find the marketing strategy and the marketing plan
baked together into a single document. Although the transition between the two is
blurry, a marketing strategy covers the big picture of what the business offers - the

Page 17
value proposition and related brand messaging. The marketing plan is how the
business will get across those key message - the platforms, the creative, the timing,
and so on. The marketing strategy may also be absorbed upwards into the corporate
value statements and other strategy documents.

The Creation of a Marketing Strategy

A marketing strategy grows out of a company’s value proposition. The value

proposition summarizes the competitive advantage a company has in its market. The
value proposition usually provides the key message for all marketing. Walmart, for
example, is a discount retailer with “everyday low prices,” and its business operations
and marketing revolve around that. A company is never creating a marketing strategy
from scratch. They start with the value proposition and distill the key marketing
message(s) from that.

Once the value proposition is succinctly stated, the hard work is done. Any marketing
asset, from a print ad design to a social media campaign, can be judged by how well it
communicates the value proposition. To further the efficiency of marketing
efforts, market research can be added to the marketing strategy for the purpose of
identifying untapped audiences or refining the target consumer. Finally, an overall
goal for the marketing strategy can be set, with all the subsequent marketing plans
inheriting the responsibility for delivering on it. These can be concrete, bottom-line
goals such as increasing sales or something less direct like climbing the ranking of
trusted providers within the industry.   

Marketing plans are operational documents that get more attention because they are
the day-to-day work that a company does to sell itself to the world. That said, a
marketing plan would be meaningless without a message, a target market, and a goal
— the core of every marketing strategy. 

Definition

Scholars continue to debate the precise meaning of marketing strategy. Consequently,

the literature offers many different definitions. On close examination, however, these
definitions appear to centre around the notion that strategy refers to a broad statement
of what is to be achieved.

Page 18
Marketing Strategy is:

"The marketing strategy lays out target markets and the value proposition that
will be offered based on an analysis of the best market opportunities." (Philip
Kotler & Kevin Keller, Marketing Management, Pearson, 14th Edition)
“An over-riding directional concept that sets out the planned path.” (David
Aaker and Michael K. Mills, Strategic Market Management, 2001, p. 11)
"Essentially a formula for how a business is going to compete, what its goals
should be and what policies will be needed to carry out these goals." (Michael
Porter, Competitive Strategy: Techniques for Analyzing Industries and
Competitors , NY, Free Press, 1980)
"The pattern of major objectives, purposes and goals and essential policies and
plans for achieving those goals, stated in such a way as to define what
business the company is in or is to be in. (S. Jain, Marketing Planning and
Strategy, 1993)
"An explicit guide to future behaviour.” (Henry Mintzberg, “ Crafting
Strategy,” Harvard Business Review, July–August, 1987 pp. 66–74)
"reserved for actions aimed directly at altering the strengths of the enterprise
relative to that of its competitors... Perfect strategies are not called for. What
counts is... performance relative to competitors.” (Kenichi Ohmae, The Mind
of the Strategist, 1982, p. 37)

The generic competitive strategy outlines the fundamental basis for obtaining a
sustainable competitive advantage within a category. Firms can normally trace their
competitive position to one of three factors:[64]

 Superior skills (e.g. coordination of individual specialists, created through

the interplay of investment in training and professional development, work
and learning)
 Superior resources (e.g. patents, trade-mark protection, specialized
physical assets and relationships with suppliers and distribution
infrastructure.)
 Superior position (the products or services offered, the market segments
served, and the extent to which the product-market can be isolated from
direct competition.)

Page 19
 It is essential that the internal analysis provide a frank and open evaluation of the
firm's superiority in terms of skills, resources or market position since this will
provide the basis for competing over the forthcoming planning period. For this
reason, some companies engage external consultants to provide an independent
assessment of the firms capabilities and resources.

CHAPTER – 2

MARKETING STRATEGY OF PAYTM

Pay Through Mobile is simply referred as Paytm and it is associated with e-
commerce industry. It is of Indian origins and was founded in the year 2010 by its
founder Vijay Shekhar Sharma. Paytm is a subsidiary of its owner company
One97 Communications but a major part of its share is also owned
by Alibaba Group from neighbouring country China. Paytm has targeted each and
every person irrespective of age, income, gender or status as its target customer
because it wants to penetrate in every nook and corner of India. 

Product in the Marketing Mix Of Paytm :

Paytm is actually a payment system via the electronic-commerce medium. It

started its operationsas a B2B organisation but realised the importance of
customer participation and opened B2C option also. Paytm offered mobile
recharging and later added bill payment like payment of DTH, electricity and
broadband along with e-commerce to its portfolio.

Page 20
In the year 2015, it ventured towards new horizons and added travel booking for
busses and in the year 2016 for movies in partnership with Cinepolis. It acts as a
portal to shop for multiple productsfrom apparel to electronic items. Paytm has
increased its operations to include services like booking air tickets, taxis and payment
at petrol pumps.

The government is propagating cashless economy system and this endeavour will be a
step in right direction. Payments bank will be opened and it will attain a separate
entity with the founder of Paytm Vijay Shekhar Sharma, One96 Communication and
its subsidiaries holding 51%, 30% and 10% respectively. Paytm has gained approval
from Bharat Bill Payment System and users can easily pay bills through this medium
from now onwards.

Place in the Marketing Mix Of Paytm :

Paytm has a Pan-India presence and has set up its headquarters base at Noida in Uttar
Pradesh. It is actually a platform that can be used easily by anybody and everybody at
his/her convenience. Paytm launched a toll-free number which is first of its kind and
was at that point of time unheard of. 1800-1800-1234 was a simple number that was
used for recharges. Paytm was launched as a recharge website via a mobile
application. It can be accessed via browser and its app is also on iOS, Windows
and Android operating systems. Paytm Wallet was launched in the year 2014 and it
became largest service portal for mobile payment in India. By the end of November
2016, 150 million and 75 million wallets and Android-based apps were downloaded

Page 21
respectively. It has signed a deal with InMobi, one of the largest portals in online
industry to increase its user base.

Price in the Marketing Mix Of Paytm :

Paytm is a medium which helps to pay bills in an easy manner without going to that
related office and standing in the queue for payments. It has become one of the most
successful ventures related to online payment.  In the year 2015 Reserve Bank of
India granted it a license to start first payment bank in India. The intention of the bank
is to use existing user-base of Paytm to offer diversified new services like online
transfer, savings account, online banking and debit cards. Paytm has become easy-to-
use and innovative interface and this has been possible because of its features as well
as its pricing policy. The company was the first to start a trend of cashback and
instead of discounts they offered a money back in wallets.

Promotions in the Marketing Mix Of Paytm :

Paytm has adopted an aggressive and unique marketing policy to create

better brand visibility. They initiated net banking and launched several schemes and
offers as part of their promotions.  Ad campaigns were shown via multiple channels
on radio, television, newspapers, magazines and billboards. It also relied heavily on
mouth publicity. Demonetization of currency notes worked heavily in its favour and
garnered huge publicity and an increase in active users. Paytm is the title sponsor for

Page 22
every cricket series in India hosted by BCCI for four years since the year 2015. It is
the recipient of several accolades and awards like Disruptive Digital Innovator Award
in the year 2015 and The Most Innovative Company of the year 2014.

Product:

Paytm is a leading online payment company and an ecommerce portal based out of
India. Paytm offers various products & services in its marketing mix like ewallet,
online shopping etc. The name Paytm is a short form for pay through mobile.
Customers can access the portal on computers and apps on their smartphones for
making online payments like mobile recharge, bills, shopping etc. Paytm wallet
enables customers to pay bills like electricity, recharge their mobile numbers, pay for
DTH services, pay at restaurants, book air tickets, movie tickets etc. Paytm basically
empowers the customers to make payments instead of using cash or debit / credit
cards. Payments bank from Paytm enable customers to have bank accounts like any
other bank and have access to services like debit card, savings account etc.

Image: way2offer

Price:

Page 23
Paytm is a free to use service as it is a medium through which customers can make
payments for the other services which they avail. The foundation of payment was
because of series of investments they received. Indian business tycoon had invested in
Paytm as a personal investment in the brand. After this, a funding of $575 million was
received by Paytm from China's leading business group Alibaba. Paytm also received
funding from Taiwan based Mountain Capital. These huge fundings enables the
company to get new customers on board and give them free service. Paytm is also
parallely giving discounts and offers to promote its online shopping ecommerce
portal. This gives an insight in the pricing strategy in its marketing mix. There are
many other apps and tech companies similar to Paytm but none of its competitors
have a market share as strong as it has. Paytm earns its revenue from commission
which happen on the transactions. Also, money deposited and stored in the ewallets
are also used to generate income through interest.

Place:

Paytm, like any other app or website, is accessible everywhere through a smartphone
or laptop having internet connectivity. The Paytm office is headquartered in Noida,
India. The service is currently serving the Indian consumers and is available
throughout the country for making payments and shopping. Paytm is widely accepted
as a mode of payment across various industries, sectors and geographies. Several
restaurants, groceries, supermarkets, hotels etc all accept Paytm as a part of payment.
Ticketing houses and tour operators use Paytm's service for rail, plane, bus ticketing.
All these show the extensive reach of the service, which is widely accepted by
vendors and customers alike. Paytm has also launched services in Canada.

Promotion:

Paytm has been aggressively advertising itself as a part of its marketing mix. Ad
campaigns of Paytm are been showcased through TV commercials, online ad banners,
billboards, print media like newspapers, magazines etc. These have enabled Paytm to
become a household name, with a catchy phrase of "Paytm karo". Apart from this, the
company has also been actively involved in sponsorship of several events,
competitions etc which have given the brand tremendous visibility. Paytm has also

Page 24
been roped in as the official sponsor and partner of the Indian cricket team, which
would give huge publicity and visibility to the brand across the world. Retailers,
grocery stores and supermarkets accepting Paytm as a mode of payment also display
wall hangings and posters, which give the brand a strong visibility.

Since this is a service marketing brand, here are the other three Ps to make it the 7Ps
marketing mix of Paytm.

People:

Paytm, being a service brand, gives importance to its people ie its customers as well
as its employees. More than 13000 people are employed with Paytm as a part of its
strong people strategy in its marketing mix. Apart from employees, more than 3
million merchants accept Paytm as a mode of payment. The company has grown in
leaps and bounces as it has in excess of 75 million app downloads. Also, more than
150 million people actively use Paytm wallets for making online transactions.

Process:

Paytm has several business interface and customer friendly processes for the ease of
doing transactions. The basic process of using Paytm is as follows. Once a user has
registered with Paytm, they have to transfer some money using netbanking, credit/
debit cards, IMPS or other ways mentioned from their bank. Once the money is the
Paytm wallet, codes and numbers of vendors are used to transfer e-money from
customer to vendor. As the brand is new and is growing rapidly, it had also focused
on customer service processes.

Physical Evidence:

Paytm's physical evidence is the presence of the brand with customers and merchants.
The app installed in smartphones is the biggest physical evidence for Paytm as the app
interface is the most critical moment of truth for the customer for making payments

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and vendor for receiving the payments. Apart from this, the blue logo with Paytm
written is easily recognisable. The presence of stickers, hanging placards, posters etc
of Paytm at outlets give the physical presence of the brand. Hence, all this summarises
the Paytm marketing mix.

Marketing Ideas To Retain Existing Customers

1. Safety Flowchart

No matter how much modern people have grown day by day but transferring and
paying money online creates a bit of confusing thoughts among users that would it be
safe or not. But Paytm made a flowchart depicting how using their digital wallet is as
safe as compared to credit and debit cards. As digital wallet is not connected to bank
account so its amount is limited and also if any case of hacking occurs or fraud ones
bank account remains untouched!

Infographics

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2. Bank Account Protection

Just before you click on purchase option in any e-commerce site pops up a spartan
warrior with his shield giving the message that PayTm guards users bank accounts.

3. Facebook Live

It’s very important to make people believe and understand of how their account is
protected and free of hacking with Paytm digital Wallet. what could have been a
better way rather than using Facebook Live!

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4. Soldier Mobile Game

Perfect campaign for tech-savvy people and game lovers. Users could download a
soldier game from Paytm app. The game is about Spartan PayTm soldiers fighting
against an army of frauds. Basically to make people aware of how Paytm protects
ones account!

5. Automatic Start Of The Month SMS

Withh the start of the month Paytm started sending reminder payment messages to
users andsayingit can be done stress freely by using Paytm digital wallet.

Guiding All Way

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6. Workshops

Parenting camp were introduced where the trainers spoke how teenagers nowadays
tend to bad habits due to use of free pocket money. This can be used by limiting their
account and payments by using Paytm.

7. Mumbai Dabbawallas

They tied up with Mumbai dabbawallas, rather with the lunch services to accept
Paytm cash only for more usage of app.

8. MBA Contest

A free video contest for MBA first year students were conducted. A team of four were
asked to create a video about how Paytm can be used and the video that would get
maximum likes would win. This became viral and gave more user retention to Paytm.

Gaining New Users Marketing Strategies

1. Pocket Dance

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This was the best of the ad campaigns. It was known as Pocket dance. The miseries of
taking out wallet a to pay and checking for money on various pockets of a user. It can
be made easy by just pulling out ones mobile and Paytm-ing the amount. It ended
with the message- Why do the pocket dance every time looking for money? Paytm
karo!

2. Celebrity Endorsements

Famous dancing stars like Shiamak Davar and Remo D’Souza were seen doin pocket
dance in television. In internet cartoons and GIF’s were made on famous people doing
pocket dance that went viral.

CHAPTER – 3

OBJECTIVES OF MARKETING STRATEGY

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To better understand how to craft a marketing plan, you should know its elements. A
marketing plan consists of several key pieces of information, which can be divided
into sections based on your preference. If you’re not sure where to begin, take a look
at these sample marketing plans. As you start yours, keep in mind that that you should
include the following points:
 A situational analysis. A ‘situational analysis’ is simply a snapshot of your
company’s current situation. List your company’s strengths, weaknesses,
opportunities and threats. When trying to determine your strengths, think what is
your company’s competitive advantage. In what ways is your product notable, or
superior to other products? Do you have access to a more or less untapped
market? Are your customers particularly loyal? Is your customer service
exemplary? Use a similar process to analyze your weaknesses, and be honest
with yourself. Opportunities are self-evident; what potentials can you positively
exploit in the future? 
 Your target audience. It’s absolutely key that you identify your target
audience. If you don’t know your target audience, you may as well not be in
business! Figuring out your target audience takes a bit of guessing and some
presumptions. Start by determining their general interest: rock-climbing, gaming,
cooking?  You should then describe your target audience in terms of
demographics, such as age, sex, earnings, religion, or family composition, or by
lifestyle (healthy, active, sedentary, etc.)  Then try to determine their thinking
habits. Are they conservative, modern? Introverted, extroverted? How often do
they purchase your product, and in what quantity? Once you determine your
target audience you can figure out the best channels to market your business to
them on social media.
 Outline your marketing strategies. Which methods and outlets will you use
to push your product? Are you going to be using social media networks? If so,
which ones? If you’re using Facebook or Twitter, will you also be using paid
advertisements? Consider other forms of marketing you may not have
considered: billboards, print advertising, promotion via influencers and
bloggers, etc .For more examples of marketing strategies for small businesses,
check out our previous post.

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 Set a budget. Every successful business has to have a marketing budget. You
should dedicate a percentage of your projected gross sales to your monthly or
annual marketing budget. If you’re a small business or just starting out, this may
mean paying out of pocket or borrowing at first, but it’s well worth
it. Remember: marketing is absolutely essential to the success of your business.
Don’t think that marketing is out of your budget—with so many different
marketing tactics available, including digital media, you can find a mix of
strategies to appease even the tightest budget.

Significance of Marketing Strategy

Because one aspect of a marketing plan affects all of the others, coordinating your
activities is critical to eliminating interference and maximizing your profits. A
marketing strategy looks at all of the areas of your selling activities and helps each
one support the next, making sure all of your departments are aware of what each is
doing. Understanding how to create an integrated marketing strategy will help you
make better individual decisions regarding specific marketing tactics.

treamlines Product Development

A marketing strategy helps you create products and services with the best chances for
making a profit. This is because marketing strategy starts with marketplace research,
taking into consideration your optimal target customer, what your competition is
doing and what trends might be on the horizon. Using this information, you determine
the benefit customers and clients want, what they’re willing to pay and how you can
differentiate your product or service from the competition.

Helps Determine Optimal Prices

Part of a marketing strategy is setting the right price for your product or service based
on what you learned in your market research. If you learned that customers want a
high-end product in your category, your pricing strategy might require you to sell at
prices that create a high-end perceived value. If your target customer is bargain
conscious and is willing to accept fewer bells and whistles on your product in
exchange for paying less, your pricing strategy will require you to sell at or below the
competition’s price.

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Establishes Effective Distribution

Once you know what product features you’ll offer, who your target customer is and
what your price points will be, you can select where you want to sell to maximize
your marketing effectiveness. Younger customers will be more likely to shop using a
smartphone or on a website, paying with PayPal or a credit card. Older customers
might prefer to shop at retail outlets. If your market research shows you need to be in
retail stores but you don’t have a sales force, you can use a wholesaler or distributor.

Assists with Marketing Communications

Your market research will help you create your brand, or image you want to establish
about your business. Without marketplace research and a strategic marketing plan,
you might respond to solicitations from advertising salespeople on an individual,
reactionary basis, sending messages that don’t fit in with the brand identity you’ve
created based on your product development efforts. A marketing strategy lets you
determine if a particular magazine, radio station or website fits into your selling plans.

Organizational Impact

When you have a marketing strategy, your departments can better work with each
other, because they are all working from the same plan. For example, your advertising
people will talk with your product development people to determine what message
you should send about your benefit. Your sales people will talk with the people
responsible for managing your image to determine if they can offer discounts,
coupons or rebates without damaging your brand.

 Marketing strategy provides an organization an edge over it’s competitors.

 Strategy helps in developing goods and services with best profit making
potential.
 Marketing strategy helps in discovering the areas affected by organizational
growth and thereby helps in creating an organizational plan to cater to the
customer needs.
 It helps in fixing the right price for organization’s goods and services based on
information collected by market research.
 Strategy ensures effective departmental co-ordination.

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  It helps an organization to make optimum utilization of its resources so as to
provide a sales message to it’s target market.
 A marketing strategy helps to fix the advertising budget in advance, and it also
develops a method which determines the scope of the plan, i.e., it determines
the revenue generated by the advertising plan.

Scope

The marketing plan is a detailed roadmap that outlines all your marketing strategies,
tactics, activities, costs and projected results over a period of time. The plan keeps
your entire team focused on specific goals - it's a critical resource for your entire
company.
It takes time to develop a marketing plan - from a few days to a few weeks, depending
on your experience and the depth of the plan - so it's a good idea to define the scope
beforehand to manage content expectations and deadlines.

Marketing plans can range from something as simple as a 1-page summary document
to a 50+ page document covering multiple product lines and distribution channels.
"Traditional" marketing plan templates can be intimidating for a business person
without an MBA or a marketing degree, as they contain a lot of theory that business
people can't always tie to tangible results like market share goals, profit and loss
results and monthly sales and marketing activities.
There's nothing wrong with creating a very detailed plan; however, it's best to create a
plan that delivers what you need based on your company situation. Each company is
different, depending on company age, revenue, resources available and marketing and
sales expertise.
Feel free to modify the process and the level of detail, based on your needs and your
available time. For example, if you need to prepare a plan very quickly, you may not
choose to go through all of the exercises in the supporting subjects. Instead, just
respond to the questions in the exercise and do your best. You can always come back
and revise your plan if necessary.

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SIGNIFICANCE, OBJECTIVES & SCOPE OF STRATEGY MARKETING OF
PAYTM

Objective

Paytm’s objective has been to increase the market share of the Wallet, capturing the
market.

To achieve this, it had to overcome several hurdles, the biggest of which is that the
adoption of the Wallet as a way of keeping money online and transacting using
mobile phones is a challenge for many people in India. The brand also had to figure
out how to increase the number of Paytm Wallets, since success depends on volumes.

Paytm’s target market is all of India’s internet users and smart phone users. The
Paytm mobile app is available on all possible platforms including Android, IOS and
Windows.

The publicity strategy was uniform and aimed at mass audiences across all cities. To
truly reach everyone, including those in regional markets, the brand even began using
local vernacular with its press ads, in an attempt to reach out to regional markets.

The number of mobile phone connections in India is increasing. The mobile phone is
seen to be a very convenient means of cashless transactions. Also the trust factor that
Paytm has established through its recharge and bill payments services had already
been increasing its daily transaction volumes going into the campaign. More
importantly, its repeat user base was expanding and so Paytm was sitting on an
opportunity.

The creative across offline and online media was based on the variety of products
Paytm offers its customers, such as recharge, wallet, payments and online shopping.
This encouraged new customers to sign up for the Paytm Wallet, and for existing
customers to use it again.

The offline channels of communication were television, out-of-home, newspapers and

transit media. Having tasted success with its TV campaign during the World Cup,
Paytm released its new TV commercial during the Indian Premier League Season 8
and major cricketing events. It was also launched across other media like digital, print

Page 35
and radio. Paytm was an associate sponsor of IPL and got 120 seconds of airtime
during each of the 60 matches of the tournament & sponsor of BCCI.

This was planned with Paytm’s target market in mind, since the brand needed to reach
a mass audience. The strategy was to establish the brand image through offline and
push the promotions through online. Paytm’s online advertising strategy is simple –
bring visibility to Paytm everywhere, and motivate people to try the offers the brand
runs.

Paytm allocated a budget of Rs 500 crore solely for marketing in the year 2015. The
money was used to finance marketing campaigns via online and mobile as well as
offline channels. Out of the budget, 70 percent of orders on Paytm come from mobile.
Though Paytm has websites for its services, shopping using Paytm is a mobile first
experience for sure.

The Paytm campaign’s mobile component included: mobile banner advertising, app-
install pushes, app notifications, SEM advertising and more promotion on Paytm
properties as well as third party sites.

Paytm Care works on the brief of resolving issues at lightning speed. The way it
communicates is also in sync with the Paytm personality. Every email carries a name
and aspires to bring a resolution as quickly and as well as possible.

Where other marketing channels miss out is in prompting app-installs. In keeping

with its “storming the market” strategy, Paytm has also been exploring co-branding
opportunities. Such strategic partnerships with Uber Cabs, Meru Cabs and many more
brands brought the brand a significant amount of new customers in cities and
continuous loyalty to the Paytm Wallet.

Scope

Founded in 2010, Paytm started as a prepaid mobile recharge website. Currently its
business is not only limited to recharge but has expanded as online payment platform
including mobile recharges, utility bill payment, wallet payment and wallet to wallet
and wallet to bank transfers for many leading internet based companies like
Bookmyshow, Makemytrip, FoodPanda, IRCTC and many others.

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It was founded under the implemented idea of Vijay Shekhar Sharma and has got the
first mover advantage in the mobile industry. The company has been backed up by
Alibaba group and Ratan Tata. The firm raised $575 million from Alibaba group for a
share of 25% in the company.

Paytm is growing faster and they have over 20 million registered users as per their
current data. Their website and mobile app has been transformed into a fully-fledged
e-commerce marketplace offering categories from electronics, mobile phones, sports
& health, home & kitchen, books, baby & toys and many more categories.

The app downloaded on various platforms has touched the mark of 7 million. The
additional features added like Bargain power which is not currently available at any
other marketplace and unified dashboard has made the selling and buying more
interesting. Monthly order of over 15 million is completed over here.

Significance

With over 100 million users a year ago, PayTM was already ahead of its digital
payment competitors before the Nov. 2016 demonetization of high value currency
notes in India. On the back of the push for #CashlessIndia consequent
to #CurrencySwitch, the Alibaba-backed mobile wallet has increased its lead over its
other mobile wallets (e.g. MobiKwik, PayZapp) and account-to-account money
transfer apps (e.g. UPI). Today, PayTM boasts 150M users (Source: Wikipedia).

Based on my personal experience and anecdotal evidence, I advance five reasons to

explain why PayTM is miles ahead of its rivals.

#1. Ease of Onboarding Merchants

Merchants can sign up for PayTM without a bank account. They can receive money
into their PayTM wallets without a bank account. They can even spend their wallet
balance by shopping at other merchants that accept PayTM payments. It's only when

Page 37
they want to cash out their money from their PayTM account that they need a bank
account.

As a result, PayTM was / is able to sign up hundreds of thousands of merchants that

don't have bank accounts. These merchants could sign up for PayTM as soon as they
had a compelling need to accept cashless payments i.e. immediately after the
demonetization announcement, start accepting payments and visit banks later to open
their accounts after their PayTM account balances started growing.

Contrast this with competing e-wallets, which insist that merchants link their bank
accounts (or debit cards or credit cards) to their apps right at the time of installing
them. As a result, financially-excluded merchants couldn't sign up for them when they
had a compelling need. PayTM's rivals lost this market to PayTM.

#2. Viral Distribution

When PayPal launched in the late 1990s, it incented existing users to send money to
non users. When users sent money to their friends and family members (that were not
on PayPal), PayPal sent them an email saying “Collect $$ by signing up for PayPal".
This give non-users a far more compelling reason to join PayPal than any direct
advertising or PR efforts could have and generated a massive amount of viral
distribution for PayPal.

PayTM has copied this approach. And has probably reaped the rich rewards à
la PayPal.

Surprisingly, PayTM’s competitors haven't followed this approach. They insist that
payments can be made only to people that have already signed up to their e-wallets.
They probably think sending money to a non-user would be tantamount to putting the
cart before the horse. Indeed, it would. But, as I’ve said time and again, Putting Cart
Before Horse Does Work (hyperlink removed to comply with Finextra Community
Rules but this post will appear on top of Google Search results when searched by the
title). PayTM and PayPal get it. Their competitors don't. Instead, they put their
prospective users at the mercy of their respective banks to gain signups.

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To take UPI as an example, to receive payments, you need to have a Virtual Payment
Address (VPA) from your bank. Assuming that you're thorougly sold on UPI and
decide to create your VPN, you'll need to contend with your bank's systems to
actually generate one. This adds a big moving part, which doesn't always work. Just
today, I got an SMS from my bank saying they can't issue new MMIDs - an integral
part of IMPS, the payment rails on which UPI works - for the next five days. There's
no guarantee that you'd still be interested in UPI five days later.

#3. Feet On Street Approach

In the weeks following #CurrencySwitch, PayTM salespersons made daily rounds in

retail hotspots asking storekeepers if they wanted PayTM.

I’ve seen this personally in my building storefront that’s dotted with tea shops, fruit
stores, cigarette sellers and other micromerchants.

I've also heard more about PayTM's aggressive merchant acquisition drive from a
couple of Uber drivers.  According to this cabbie who accepts PayTM on his personal
name – PayTM is also Uber’s official digital payments partner - PayTM sales reps
ride on their motorbikes up and down a street near Pune Airport where hundreds of
Uber and Ola taxis are parked, asking drivers if they want to sign up for PayTM.
When a driver says yes, the rep connects the driver’s smartphone on his own 4G
network using tethered WiFi hotspot, downloads the app, installs and onboards the
driver on PayTM. All this in 5-10 minutes. Without being judgmental about whether
the driver is tech savvy or not. And at no data charges to the cabbie. This Uber driver
is so conversant with PayTM’s merchant acquisition program that he actually knows
the PayTM rep's sales quota (10 merchants a day)!

In sharp contrast, most competitors of PayTM haven't harnessed the power of feet-on-
street to recruit merchants. Instead, they seem to expect merchants to sign up in self-
service mode. An investor in one of these PayTM competitors actually said this in
a MEDIUM article:

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"Merchants should be able to go to an Amazon or Flipkart site or a Croma store and
just buy a terminal at their own cost and link their bank account and start accepting
payments."

Well tried. Even if they’re tech-savvy, crazy busy merchants simply don’t have the
time to shop for terminals and learn how to make them work - especially when they’re
getting pampered by the nation's #1 mobile wallet company!

As a result, most micromerchants I’ve quizzed are not even aware of UPI, BHIM and
other competing e-wallets.

#4. Frictionless Payments

By design or default, the Sign Out link in PayTM’s mobile app is buried deep inside
the app. As a result, many users have never seen it and stay logged into their app all
the time. This means they're able to make a payment without a password or PIN.

This creates a significant security vulnerability in PayTM. But it also makes PayTM's
CX that much more frictionless, which makes a lot of difference when people use it
many times a day.

Security is a hygiene factor. Convenience trumps security. Everytime. Even in India.

PayTM has understood and capitalized on this element of consumer behavior. Its
competitors have totally missed it.

#5. Miscellaneous

PayTM is very well funded and is able to spend big bucks on advertising as also
absorb losses on virtually every transaction.

PayTM makes every effort to enhance UX. For example, as I’d highlighted in Hiding
Your Secret Sauce, PayTM preloads its wallet on the fly without user intervention.
As a result, users wary of having to topup prepaid mobile wallets before initiating
payments find the PayTM experience superior to that of other mobile wallets, which
bump them off with a message asking them to load enough money into their wallets
first and then reattempt the payment.

Page 40
 CHAPTER – 4

LITERATURE REVIEW

 Rajesh Krishna Balan, Narayan Ramasubbu, Giri Kumar Tayi studied in their
paper

“Digital Wallet: Requirements and Challenges” (2006) that the

requirements and challenges of deploying a nationwide digital wallet solution
in Singapore. Further they discussed why Singapore is ready for a digital
wallet and identify the key challenges in building and deploying a digital
wallet. Then discussed one of the key challenges, supporting peer -to-peer
cash transactions between individuals using a digital wallet, in more detail and
end the paper with their proposed solution.

 Prof Trilok Nath Shukla in his paper “Mobile Wallet: Present and the
Future” (June 2016) has discussed about mobile wallet, working, types and
its advantages and disadvantages. His analysis included perception of
consumers and retailers about mobile wallets. He concluded that mobile
wallets will be used to engage with the customer by the marketers and digital
businesses. Irrespective of the market status of these mobile wallets, marketers
should take advantage of the emerging opportunities.

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  Dr. Poonam Painuly, Shalu Rathi in their paper “Mobile Wallet: An
upcoming mode of business transactions” (May 2016) has explained about
mobile wallet, types and trends. Then discussed about Role of mobile wallet
in various sectors like Banks, Retail and Hospitality. The paper explains the
importance of mobile wallet for Banks, Customers and Companies. In future
scope it talks of mobile wallets becoming a latest marketing channel in near
future. And contribute highly in a seamless shopping experience for the
customers that increase their tendency for frequent and more repurchases with
delightful experiences. To conclude they speak the importance and growth of
mobile money in business, social and economic prospective. The presence of
mobile wallet spreading from urban to rural areas on a large scale. Hence,
wallet money sees a high bright future in near time.

 ThaeMin Lee in his paper “The impact of perceptions of

interactivity on customer trust and transaction intentions in mobile
commerce” (2005) investigated the impact of perceptions of interactivity on
consumer trust and transactions in mobile commerce and concluded that trust
does in fact play a significant role in determining consumer transaction
intentions. Hsin-Hui Lin and Yi-Shun Wang in their paper “An examination of
the determinants of customer loyalty in mobile commerce contexts”

(2005) examined the factors that contributed to customer loyalty in mobile

commerce; perceived value and trust were found to be directly related to
customer satisfaction and customer loyalty; customer satisfaction was also
suggested to positively affect customer loyalty; and habit was proposed to
determine customer loyalty. They also found that customer loyalty was
directly affected by perceived value, trust, habit, and customer satisfaction.
Customer loyalty was evaluated to be a strong determining factor in
acceptance of mobile commerce.

 Key Pousttchi and Dietmar G. Wiedemann in their paper “What Influences

Consumers’ Intention to Use Mobile Payments?” (2008) studied the adoption of
mobile payments and evaluated what key influences affected consumers to use mobile
payments and found that subjective security was not a primary driver of mobile
payment acceptance. They found that perceived confidentiality of payment details and
perceived trustworthiness were strongly correlated. Four key variables were found to

Page 42
directly impacting consumer intention and usage behavior: performance expectancy,
effort expectancy, social influence, and facilitating conditions

The Strategic marketing is to identifying competitor is based on the differences in

firms strategic for competing in an industry. This study shows company should not
take only competitive marketing strategy to survive in downturn economic condition
but firms also aware about the shrinkage of the company which reduces the liquidity,
so they can make profit in the recession economy. Now the question is how firm
utilizing their competitive marketing strategy to increase the profit in recession
economy and how do firm stop their shrinkage to achieve the goal.

How do competitors react to each other.s price-promotion and advertising attacks?

What are the reasons for the observed reaction behavior? Steenkamp et al. (2003)
answer these questions by performing a large-scale empirical study on the short-run
and long-run reactions to promotion and advertising attacks in over 400 consumer
product categories, over a four-year time span.

The main finding of the study is that competitive reaction is predominantly passive.
When it is present, it is usually retaliatory in the same instrument, i.e., promotion
attacks are countered with promotions, and advertising attacks are countered with
advertising. There are very few long-run consequences of any type of reaction
behavior. The authors are able to draw these inferences because their models examine
the .chain reaction. of consumer and competitor response following the initial
advertising or promotion campaign.

The study also reports on a number of moderating effects, such as power asymmetry,
promotional intensity and perishability of the product category, that support the
presence of a certain amount of rationality in competitive reaction behavior. Finally,
by linking reaction behavior to both cross and own marketing effectiveness, they
demonstrate that passive behavior is often a sound strategy. On the other hand, firms
that opt to retaliate often use ineffective instruments, resulting in .spoiled arms..
Accommodating behavior is observed in only a minority of cases, and often results in
a missed sales opportunity when promotional support is reduced.

The authors. overall conclusion is that the ultimate impact of most promotion and
advertising campaigns depends primarily on the nature of consumer response, not the

Page 43
vigilance of competitors. In order words, the strong link in the chain reaction is the
consumer. This is an important finding for marketing strategy, especially as it
counters a prevailing belief in the management strategy literature that the ultimate
effectiveness of an action depends largely on the defenders response. While marketing
scientists are understandably focused on consumer and competitor response to
marketing actions, it is equally important to study how these actions influence
investor behavior. In particular, do investors place a premium value on firms that
advertise heavily? Do they value new-product activity and/or promotional campaigns?
The finance discipline has long established that stock prices follow random walks, i.e.
new information that is profit relevant is incorporated immediately and fully in
valuation. As a result, stock prices are always evolving, and persistence models may
be used to uncover how marketing actions influence that evolution, above and beyond
their sales- and profit impact. This principle has been used in two contexts to date.
First, Pauwels, Silva-Risso, Srinivasan and anssens (2004) contrasted investor
reactions to auto companies. new-product introductions vs. rice promotions over a
five-year period. They found that new-product introductions have a gradually
increasing influence on stock price.

Competitive Marketing Strategy: Porter (1985) examined that low cost, differentiation
and focuses these three type competitive strategies. Low cost strategy, a firm set out
to become the low cost player in the industry. It can achieve by pursuing of economic
scale, preferential accessing to raw materials, proprietary technology and other factor.
Firm try to provide unique products or service that call differentiation strategy. By
using this strategy firm can able to set premium price for their unique product and
service. Cost focus and differentiation focus comes under focus strategy that firm can
set their target segment. In recession economy requires to change the marketing
strategy and action by marketing manager which can be profitable and responsive
from the customer. Shama (1978) described that customer change their buying
patterns under economic hardship and stress.

This study purpose is to identify how competitive marketing strategies can help firms
to succeed in the market and also to analyze the scope and importance of marketing
strategies for successful firms. The Strategic marketing is to identifying competitor is
based on the differences in firms strategic for competing in an industry. Like the
business definition approach, the concept is intuitively appealing and understandable.

Page 44
However, academics are understandably surprised at reported empirical results that
85% of all promotions are losing money to the promoters, and that only half of the
advertising expenditures generate economic benefits to the advertisers (Abraham and
Lodish 1990). Economic downturn is the most important fact for the present world.
Realizing this, it is necessary to extract the fact in this present situation. This paper
seeks to investigate the current debate regarding the threats and vulnerabilities of the
recession economic condition and to study some possible remedial action to defend
the threats of economic situation. This research revealed a lot of risk and way to save
the company in this recession economy. In economic crisis firm need to change their
marketing policy to makes the profit. Marketing mix strategy, product strategy,
pricing strategy, promotion strategy and distribution strategy can make successful in
economic crisis. In marketing mix strategy firms withdraw their product and service
from the weak market. Avoid introducing new product in product strategy. Pricing
strategy firm improve the product or service quality and promotion strategy they
maintain their advertising budget and open new wholesale centers under distribution
strategy. By changing their marketing strategy firm can be successful in the recession
economy. This research also showed how company can survive by using competitive
marketing strategy and also by controlling the shrinkage in the recession economy.
For example, a hypothetical industry may be composed of three strategic groups:

A set of large firms pursuing a strategy of low-cost production of a full line of

standardized products through mass-market outlets

Another set of firms whose strategy emphasized high-quality, differentiated and

products sold through speciality shops

A group of smaller firms which have gained strategic advantage by specializing in

serving either specific customer group or producing a very narrow range of products.

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Research Question:

What is Competitive Marketing Strategy?

What is downturn economy or recession economy?

How can company use these strategies to survive in recession economic condition?

1.4       Significance of Research: Recession economy is very impotent in this          

present situation for all the company all over the world. So, it is very important to find
the            way to survive the company. This research is important because it's
showing importance            of marketing strategies to survive the company and make
succeed in the market during the            recession economy.

1.5 Limitation of Research: This is very difficult to collect the data from the firm
what strategy they are using to overcome the recession economic condition because
different company using the different strategy and also its very confidential for the
company so the company don't want to flash their marketing policy or strategy.

Problem Statement:

What are the reasons for the observed reaction behavior?

Page 46
How do competitors react to each other's price-promotion and advertising attacks?

Very difficult to face and overcome this situation without changing marketing
strategy.

Insecure economy is the main problem of this situation.

Lake of enough knowledge, which step should be take in this economic condition

1.2 Aims and Objectives: The objective of this report is to acquire the practical
knowledge about the market to conduct a Business run successfully and also develop
our knowledge how can Firms survive in down turn economy or recession economy
by changing competitive marketing strategy. Recession affects different company
differently. So it's necessary for the Firms change their marketing strategy to survive
in the recession economy. They should aware about the shrinkage of the Firm, follow
the low cost strategy, improve the employee effectiveness by proper training and
reduce the wastes of the Firms.

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 CHAPTER – 5

RESEARCH METHODOLOGY.

This chapter focuses on data and research methodology. It highlights the use of
statistics to test research hypothesis and assumptions done during the course of
research. The chapter discusses the rationale used while drafting the questions for
sample study and the differences in questionnaire for Plastic Money and Virtual
Mobile Wallet. The survey explored the unexplored area comparing the users of
Plastic Money and Wallet.

Awareness about the conditions of card holders, services and security measures has
been ascertained during the survey. The popularity of the cards and wallet is also an
important factor that would contribute to the overall growth of different kinds of
electronic modes of payments and electronic services offered to the user.

Page 48
Additional benefits of cards relate to shopping convenience, loans and disbursements
in the form of credit and debit facility, safety and recordkeeping.

Currently acceptability of mobile wallet payment is limited at outlets though Paytm

has increased acceptance at many outlets. But the wide acceptability of wallets is still
required to gauge the correct impact of wallet on payments services. The current
effort captures the data set considering the limitations of the system.

Data was collected from both primary and secondary sources. Data on the use of
plastic money and virtual wallet was done by two different questionnaires which are
similar in nature and constitute the primary data source for this research. Pilot test was
carried out using a set of questionnaire.

The questionnaire is well structured and starts from collecting the user’s
demographics, then user usage and perception on plastic money and virtual wallet.
The questionnaire was devised after working out the various surveys and literary
contents. The central idea was to use the data collection to bring out the usage and
preferences of customers and non-customers. The result of the pilot was used for to
carry out the survey on a large number of participants.

During the survey it was evident that the users had very different expectations from
the plastic money and wallets so it would not be great to draft nearly same set of
questionnaire from the respondents. Wallets is new and it is difficult to gauge people
responses as most of the people are not aware of the features and definitely most
people are not experts at using this new technology.

Acceptance was a challenge and it was also evident while collecting user responses
for it was hard to get people to response on wallet survey parameters.

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SAMPLE DESIGN & DATA COLLECTION

The study was carried out in and aroundBengaluru City and during the survey process users
from various walks of life were interviewed. The interviewees are professionals,
businessmen, students, retired personals and from all walks of life. The questionnaire was
distributed online as well as using forms. Each spot for the survey was selected carefully and
meticulously to ensure a decent mix of participants from all walks of life. Similarly, there is
lot of issues while collecting mobile wallet data as this is relatively a new way of payment
transactions and it is hard to find large number of user. Anonymity of users is also maintained
for users who did not like to disclose personally identifiable information. The survey ofnon-
userhelps to understand the expectation of potential users as well. Objective questions and
five point Likert scale was used to capture the survey data.

Demographic factors and the responses were captured using a combination of subjective and
objective questions. Data collected was nominal, ordinal and five point Likert scale. Data also
included radical questions like who uses your card aimed at drawing indirect reference that
would give a hint of how the card is used or misused and also some insight into the way users
manage their personal information. Some of the data set is different and trying to collect data

Page 50
set be directed and inference rather than asking question of binary nature which are
sometimes not answered truly.

DATA PROCESSING AND ANALYSIS

On collecting the data set was cleaned to detect errors and aberrations. Analysis was
done to compute measures, data pattern, relationship between variable, identify
factors in the data groups.

Conflicting data is subjected to the statistical test to find the significance. Editing was
done to ensure that the data is accurate to exclude minor human errors and aberrations
or large deviations in data. Data is arranged in homogeneous groups and for easy
analysis and display. Graphs and charts are prepared for the easy analysis and
interpretation of data.

Nominal and ordinal data set was collected during the questionnaire. Inferences can
also be drawn from indirect/direct answers where participants are new users of the
system like mobile wallets. Using multiple approach can give us insight into the
human nature and user behavior as these financial instruments are more often used
with family members as was evident from the survey. India is unique and so is
Bengaluru in many ways. The city is multilingual, multicultural and highest tax
collected from salaried individual who leads to thinking that the attitude and
perception of the masses towards use of cards and wallets would be different nature.
To capture this aspect some question asked are an indication of the preference of the
user and then the actual user preference is captured by asking direct question on
security or preference.

Responses are categorized into appropriate category and then analyzed using
statistical methods. Aberration are removed for consistency where necessary. Other
times the data is normalized to compare plastic money and mobile wallet data
summary. Normalization is done after considering the fact that the Plastic Money is
much more mature in terms of wide variety of security measure, acceptability and
other facts. Plastic money has been around for 60 years where as wallet technology is
less than five years. More recently there are new entrants in the market which play a

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critical role in the setup and so the data has to be normalized to draw reliable
inferences.

A large number of factors and variables have potential to affect user perception and
acceptance of plastic money and mobile wallet. The data was appropriately group to
find the following key influencing factors and the impact of those variables in the
growth and adoption of plastic money and mobile wallet.

1. Economic factors like Growth and Saving.

2. Technical factors like features that determine use of these instruments.

3. Demographic factors like age and how it affects the usage and adoption of cards.

4. Perceptions factors like security, ease of use, convenience

5. Education and awareness about the use of these instruments that affect the use.

The data is drafted and tabulated on which the statistical analysis is carried out.

Basic Statistics like Mean has been used.

Inferences and conclusions are arrived using the following statistical analysis tools
like.

1.Descriptive statistics

2. Correlation

3. Chi-Square Test

4. F-test for two sample variances

5. Principal Component Analysis

Research Design & Methodology

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The primary and secondary objective of the research point out at various demographic
and social factors that lead to the use a combination of survey and other statistical
methods like chi square, and other statistical analysis tools.

Mixed Methods Approach

The initial idea with this research was to bring out the message from the people which
needed few iteration and in-depth analysis of the data collected during research. The
outcome of the literature review was crystalized into set of queries for the survey. The
survey itself was split with one survey questionnaire for mobile and the other for
credit cards and debit cards. In this survey a great emphasis was given to a mix of
object type and open ended queries to arrive at suitable conclusion.

During the survey Technology Acceptance model along with few iteration during the
survey was found to be useful to understand the subject and test out the hypothesis
outlined during the research.

Once the outcomes of the question were studied some inferences were drawn during
the pilot survey. As virtual wallet is a new technology and so there are differences in
the way the evaluation has to be carried out. The survey questionnaire was drafted
after carefully studying the literature and the various outcomes.

A specially is the mix of indirect questionnaire which is used during the survey and
leads to indirect inferences. The various aspects of virtual wallet security are little
known to the users at the time of survey so the use of indirect questions like “How
confident are you that your personal information will not be stolen?” is used to bring
out the user’s confidence level while using the virtual wallet and also gives a glimpse
of security and the users perception about security

Perception of users is very difficult to gauge from a standard set of questionnaire and
it is extremely difficult to compare the perception of users of plastic money and
virtual wallet in the absence of uniformity in terms of ease of use, features and other
parameters. A simplified and modified view of Technical analysis is used for this
survey as it involves two different kinds of financial tools like plastic money and
virtualwallet.

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Survey Questionnaire Methodology

Survey questionnaire is a well-established method of collecting data from users. This

data collection technique used mostly electronic questionnaire and hard copy of the
survey questionnaire that is used to collect the user information and views during the
survey.

A key point during the research is the relative difficulty in getting users of virtual
wallet and the absence of large scale acceptance of this financial transaction
mechanism at various outlets.

To overcome the issues a set of questionnaire is drafted and responses are collected
using electronic tablets at Airtel mobile wallet stores and other similar establishments.
For a set of users, the data is collected via a combination of interview and
questionnaire method. This was done to engage the audience and get the time from
them to fill up the questionnaire.

The outcome of the pilot was used as a baseline for the subsequent survey efforts and
the design of the survey was structured was from simple direct questionnaire to
detailed questions, indirect questions, Likert scale and then opinions. There was scope
to provide feedback during pilot and actual survey. The form layout was kept simple
and clear to give a clutter free look even though the survey had a large set of
questionnaire.

Survey Construction

The survey was carried out using two different sets of questionnaire. One for virtual
wallet and another was plastic money. The set of questionnaire is structured in a
similar fashion but different in terms of the data set collected based on the interview
questionnaire circulated.

Each survey has a top section that is used to collect the demographic information
followed by multiple choice questions, Likert scales, indirect questions and open
questions or places where the users can express their opinion and demand additional
features or services.

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This mixed approach was selected to gather data set specially engineered for
particular cases like virtual wallet services which are just gaining acceptance in the
market. This survey construction is also required to gauge the perception of the users
in direct and indirect way as there is a likely hood of getting errors while asking
similar repeated questions during the duration of the survey. This survey would help
in creating awareness in users as they saw the various kinds of security measures that
are available with plastic money, some of these security features were known or used
by users while others were not known to a large section of users. The participants
were a decent mix of technical and non-technical respondents and there was a chance
of error while using technical or security terminology in the questionnaire. Thus a
conscious effort has been made to reduce the technical jargons in the survey. A range
of scales have thus been used in the survey starting from binary values like yes/no to
multiple choice and descriptive questions. Some of the questionnaires are closed
ended for easy statistical analysis while some are open ended used for interpretation.

That said, PayTM does face a few headwinds:

 Sustaining relationships with merchants with daily sales of INR 50K+. This
category of merchants includes vegetable vendors and fruit sellers among
others who find its cap (INR 20K per month without KYC, INR 100K per
month with KYC) too low. I know at least two merchants that have bailed out
of PayTM for this reason. (Interestingly, they’ve gone back to cash, which
suggests that PayTM’s competitors couldn’t recruit them either)
 Willingness of PayTM’s Chinese backer to fund the company's cashbacks and
mounting losses.

As they say, past performance is no indication of future success. This maxim is as true
for PayTM as any other company. Only time will tell how long India’s #1 mobile
wallet will hold on to the top spot.

Full Disclosure: Other than being a user of PayTM - among other e-wallets - I have no
personal or professional interest in the company.

Defining the research problem:

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Defining the research problem is an important step in research. The research
problem of this proposal is to study “An empirical study on marketing strategies
of telecom sector in Gujarat state.”

Objectives of study:

1. To study the existing marketing strategies adopted by telecom

industries

2. To work out the growing challenges faces by telecom sector

3. To analyses the role of various marketing techniques in telecom sector.

4. To study the customer response on various marketing MIX adoptedby

telecom sectorcompanies.

Hypothesis of study:

H1: There is significant impact of various marketing mix element on

purchasing decision of consumer.
H2: There is no significant difference in service or product pricing among
telecom service provider.

H3: There is service charges are depends on telecom service

providers.

H4: There is no significant difference on availing of services by

subscribers and telecom service providers.

H5: There are usage of services depends on telecom service providers.

H6; There is significant influence of service quality on customer

satisfaction.

H7: There is significant influence of people & process on level of

customer satisfaction.

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 H8: There is no significant relationship between marketing strategy and
demographic variables.

H9: There are no significant challenges in telecom sector.

Sample design:
For meeting the first objective, the tool used to collect data is structured
questionnaires. the questionnaire was used to elicit information on element of
marketing strategy like, marketing communication mix, promotion mix, product
mix, channel avaibility, price, service quality etc. Six major telecom service
provider in Gujarat, BSNL, Reliance telecommunication ltd, Tata

teleservices ltd , Bharti telecommunication ltd (AIRTEL), Idea ltd , Vodafone

ltd. Through random systematic sampling

The main sources of secondary data was published research papers/reports of

DoT & World telecommunication development , Indian telecom policy, journal
of marketing management , journal of service marketing, journal of advance
management , magazines like advertising express, business world, Book and
various websites of telecom operators.

Statical analysis
The data obtained in the present study were analysed using suitable tools study
the impact of marketing mix on overall telecom sector and to study the impact

Page 57
 of product and service quality on customer satisfaction. The following statistical
treatments were used for interpretation of data.

Percentage

The various product and services, demographic variables were analysed through
percentage method with pictorial representation by graphs.

Chi-Square Test

The chi-square test was used because there were no independent values, as this
is the only method which can be used when independent values are not
present. Furthermore, this method was used to check the probability of
occurrence and variation between different independent variables.

Limitation of study:

The following are limitation of study:

1. The sample is selected conveniently and in single phase so as the

perception is influenced by time in which data was collected and the
context in which the respondents were at the time of data collection.

2. The primary data and observational methods of research has its own
limitations and based on respondent the study is limited to Gujarat state.

3. The study is limited to selected telecom companies and selected revenue

centers of the state and there for the findings can not be generalize to
whole industries.

4. There are many other approaches to study on marketing strategy of

Page 58
 service sector; there is no unanimous opinion among the experts. So the
researcher has taken appropriate approaches, which might be appropriate
for the study.

Paytm is India's largest leading payment gateway that offers comprehensive payment
services for customer and merchants. We offer mobile payment solutions to over 7
million merchants and allow consumers to make seamless mobile payments from
Cards, Bank Accounts and Digital Credit among others. We pioneered and are the
leader of QR based mobile payments in India. With the launch of Paytm Payments
Bank, we aim to bring banking and financial services to half-a-billion un-served and
under-served Indians. Our investors include Softbank, SAIF Partners, Alibaba Group
and Ant Financial. We strive to maintain an open culture where everyone is a hands-
on contributor and feels comfortable sharing ideas and opinions. Our team spends
hours, designing each new feature and obsesses about the smallest of details. Paytm
was founded in August 2010 with an initial investment of $2 million by its
founder Vijay Shekhar Sharma in NOIDA, a region adjacent to India's capital New
Delhi. It started off as a prepaid mobile and DTH recharge platform, and later added
data card, postpaid mobile and landline bill payments in 2013.[6]

By January 2014, the company launched the Paytm Wallet, and the Indian
Railways and Uber added it as a payment option. It launched into E-commerce with
online deals and bus ticketing. In 2015, it unveiled more use-cases like education fees,
metro recharges, electricity, gas, and water bill payments. It also started powering the
payment gateway for Indian Railways.

In 2016, Paytm launched movies, events and amusement parks ticketing as well as
flight ticket bookings and Paytm QR.[ Later that year, it launched rail bookings[11] and
gift cards.

Paytm's registered user base grew from 11.8 million in August 2014 to 104 million in
August 2015. Its travel business crossed $500 million in annualised GMV run rate,
while booking 2 million tickets per month.[12]

In 2017, Paytm became India's first payment app to cross over 100 million app
downloads. The same year, it launched Paytm Gold, [14] a product that allowed users to
buy as little as ₹1 of pure gold online. It also launched the Paytm Payments Bank  and
‘Inbox’, a messaging platform with in-chat payments among other products. [ By 2018,

Page 59
it started allowing merchants to accept Paytm, UPI and Card payments directly into
their bank accounts at 0% charge. It also launched the ‘Paytm for Business’ app,
allowing merchants to track their payments and day-to-day settlements instantly. This
led its merchant base to grow to more than 7 million by March 2018.

The company launched two new wealth management products - Paytm Gold Savings
Plan and Gold Gifting to simplify long-term savings.It launched into gaming and
investments, partnering with AGTech to launch a mobile games platform
Gamepind, and setting up Paytm Money with an investment of ₹9 Crores  to bring
investment and wealth management products for the Indians.

Paytm led in Unified Payments Interface (UPI) transactions in January, closely

followed by Google Pay and PhonePe, according to people with knowledge of the
matter. As UPI gains further ground, the field is turning competitive – Paytm clocked
more than 221 million transactions, while Google Pay and PhonePe were at about 220
million each, said the people cited above. PhonePe, however, told ET across all
payment modes it had 225 million transactions worth Rs 30,000 crore in January.

While the National Payments Corporation of India (NPCI) issues overall UPI
transaction numbers, ET has sourced the individual split of the top three largest
payments players from multiple sources. Overall, UPI clocked around 672 million
transactions last month, up from 620 million in December. Google Pay did not
provide specific numbers and Paytm didn’t respond to queries. Even as the number of
transactions has jumped, peer-to-peer (P2P) transactions still dominate. “As per
internal calculations, the total number of merchant transactions is not more than 100-
120 million per month,” said a senior banker on condition of anonymity. “However,
merchant payments are growing as non-bank entities are pushing those transactions.
Even the number of UPI payments for cab rides is recording almost 2 million per
month, growing at a considerable pace.”

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The government-promoted Bharat Interface for Money (BHIM) has been losing steam
over the past few months as more transactions are flowing through private non-
banking applications. As per the latest numbers shared by NPCI, BHIM reported 14
million transactions in January, down from 17 million in December 2018.

A closer look at the number reveals that the amount of funds settled per BHIM
transaction is still the highest in the industry, which means that people are using the
application because they choose to and not because of incentives, which have
dwindled.

In January, the average amount per transaction on BHIM stood at Rs 4,436. It’s been
hovering in that range over the past three months.

The average ticket size of a UPI transaction is about Rs 1,600. ET’s calculations show
that the number could be hovering around Rs 1,907 for Paytm, Rs 1,300 for PhonePe
and around Rs 1,200 for Google Pay.

Page 61
The Allahabad high court has granted bail to Rupak Jain, husband of
former Paytm vice-president Sonia Dhawan, who were both in judicial custody after
being accused by Paytm founder Vijay Shekhar Sharma of stealing his personal data
and trying to extort him.

The bail comes two-and-a-half months after Rupak’s bail plea was rejected by
additional sessions judge Nalin Srivastava in mid-November. Subsequently, Rupak
Jain filed a bail application in Allahabad HC.

According to Rupak’s lawyer Satish Kumar, the bail plea was heard by Justice Vikas
Kumar on January 31 who ordered that Rupak’s case was fit for bail.

“We had contended that there wasn’t sufficient evidence against Rupak. No money
had been deposited in his bank account and neither was he employed with the
company. He had not issued any threats to the complainant. The court was satisfied
that there were sufficient grounds to allow the bail plea,” he said.

He said that while the court had orally granted bail, they are awaiting a written order
from the court this week after which Rupak is expected to walk out of the jail.

“The court remained closed on Monday due to holiday. We are waiting for the order
to be typed,” Kumar said.

While the family had taken Rupak’s bail plea to the high court, Sonia’s bail plea is
still being heard at a court in Surajpur. It has been listed for Tuesday.

“Rupak’s case was stronger for getting the bail. We are now looking for Sonia’s bail
coming up at the Surajpur court,” Kumar said.

While rejecting Rupak’s bail plea in November, the sessions court had noted the plea
that the accused allegedly connived to threaten the complainant and his brother, and
out of fear the complainant twice deposited Rs 67 lakh and Rs 2 lakh in a bank
account mentioned by a co-accused. “The co-accused, Rohit Chomal, had spoken to

Page 62
the complainant over WhatsApp and mobile which have been recorded. Sufficient
proof has been found against the accused in the investigation,” reads the order of the
Surajpur court.

Rohit Chomal had taken the names of Sonia, her husband Rupak Jain and an
employee of Paytm, Devendra Kumar, stating that they were the people behind the
extortion.

In another move to make digital payments safer, Reserve Bank of India (RBI)

proposes to regulate payment gateway service providers and payment aggregators.
This would mean that payment gateways such as Paytm, Mobikwik, Bharat Bill Pay
and so on would have to adhere to RBI guidelines just as many other financial entities
have to do. Consequently, these gateways can be expected to become more
transparent and accountable in their working thereby benefiting common people using
them for making digital payments. 

Page 63
As per RBI in its press release dated March 30, 2017 regarding advisory on e-
walletshas said that intermediaries, like aggregators and payment gateways, which
facilitate payment services, though not authorised by Reserve Bank under the Act, are
however required to route their transactions only through a nodal account opened with
a bank under Reserve Bank's guidelines of November 24, 2009.

The 2009 guidelines issued in this regard asked for the maintenance of nodal accounts
of intermediaries like payment gateway providers and payment aggregators. As per
the 2009 guidelines, all accounts opened and maintained by banks facilitating
collection of payments by intermediaries from customers of merchants, shall be
treated as internal accounts of the banks. While it is left to the banks to decide on the
exact nomenclature of such accounts it shall be ensured that such accounts are not
maintained or operated by the intermediaries.

Banks shall ensure that the process of converting all the existing accounts maintained
and operated by intermediaries for the purpose covered in these directions shall be
completed within three months of issuance of these directions, as per the guidelines.

Earlier, the apex bank in its "Payment and Settlement Systems - Vision 2018" has
mentioned about it. As per the document, "The increasing growth of electronic
payments, especially online payments, riding the growth of e-commerce and m-
commerce transactions, has brought to the fore the increasing role and importance of
entities that facilitate such online payments such as payment gateway providers and
payment aggregators. The current guidelines on maintenance of nodal accounts for
such intermediaries (monitored through banks) are indirect and address only a few
specific aspects of their functioning. Given their increasing role, the guidelines will be
revised for the payments related activities of these entities."

Page 64
 CHAPTER – 6

DATA ANALYSIS

Smartphone has become essential part of daily life. Due to technology, Digital wallets
are quickly becoming mainstream mode of online payment and mobile users can
nowadays use their smartphones to make money transaction or payment by using
applications installed in the phone. One such application is PayTm. The present study
tries to study the usage of PayTm by Smartphone users. Apart from this, the study
also attempt to find out the various problems faced by PayTm users.

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INTRODUCTION

In today-world, smartphone has become essential part of daily life. India will exceed
200 million smartphone users, topping the US as the world’s second largest
smartphone market by the end of 2016 due to increasing penetration of affordable
smart mobile devices in the country. Shoppers are adopting digital wallets at an
incredibly rapid pace, largely due to convenience and ease of use.

PayTm made its way into the e-commerce market in the year 2014. PayTm now offers
multiple products ranging from primary mobile recharges to buying apparels or
electronics enabling customers to get everything at one place. Thus, over a period of
time, it has become both a payment platform as well as the marketplace. It has even
obtained the license from Reserve Bank of India to run a Payments Bank

The aim of this research paper is to analyze the usage of PayTm by users for which
respondents were categorized on the basis of, age, Frequency of usage, Purpose of
usage and average monthly spending on PayTm.

SIGNIFICANCE OF STUDY
The research was conducted to analyze the usage of PayTm by users and to study the
satisfaction level of PayTm users based on different parameters.

The analysis of the collected data is done based upon the parameters as
shown below [Sample size = 151]

 Age

Majority of the sample population i.e. 124 respondents were from the age group of 18
– 25 and contributed 82% of the total sample size. 16% of the population was

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between the age group of 25-35 and 2% of population i.e. 3 respondents were above
the age group of 35.

 Frequency of PayTm usage

Out of total 151 respondents, 30 respondents (20%) use PayTm daily for various
reasons such as recharge, bill payment and shopping while 68 (45%) use weekly and
53 (35%) use monthly or rarely.

 Purpose of using PayTm

Majority of the respondents (nearly 80%) use PayTm for recharge since it is very
convenient to recharge your phone anytime anywhere without being dependent on the
recharge shops. Nearly 50 % of the respondents pay their bills through PayTm as it
prevents time and also it prevents the respondents from standing in long queues.
Mainly people use PayTm for Recharge, Ticket booking, Bill payment and Shopping.

 Devices on which PayTm is used

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Since the world is shifting towards mobile applications because everything can be
done just using a click and also people want services to be available in all the
conditions and at all times so almost all of the respondants use PayTm mobile app.

 Average monthly Spending on PayTm

Since people are using PayTm for various purpose such as Recharge, Ticket booking
and Payment of bills so majority of respondents (around 87.5%) spend an amount
above 100 on PayTm monthly. 35.8 % people spend an amount between 500 to 1000
monthly and 12.6 % people spend an amount greater than 1000.

 Failure in PayTm transaction

Around 51% people claimed that they faced some problem during their PayTm
transaction. This failure could be due to various reasons such as Payment gateway
failure, Problem with acceptance of Debit/Credit card, Failure of PayTm App, etc.

Page 68
Major problems faced during PayTm transactions
Out of 77 respondents who face problem during PayTm transaction, nearly 69% i.e.
majority of respondents faced problem due to the Payment gateway failure. And
around 40% respondents faced problem due to delay in confirmation of order.

 Failure in PayTm transaction

Around 51% people claimed that they faced some problem during their PayTm
transaction. This failure could be due to various reasons such as Payment gateway
failure, Problem with acceptance of Debit/Credit card, Failure of PayTm App, etc.

Major problems faced during PayTm transactions

Out of 77 respondents who face problem during PayTm transaction, nearly 69% i.e.
majority of respondents faced problem due to the Payment gateway failure. And
around 40% respondents faced problem due to delay in confirmation of order.

Some other problems which were seen are-

 PayTm was not accepting Debit cards from some of the banks (State
Bank of India) for some days.

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  Average ratings based on different parameters

Looking at the average ratings given by respondents it can be claimed that people are
strongly satisfied with the privacy which PayTm gives to its users because the
customer data is not shared with other firms. People are satisfied the most by the App
user interface because of the user friendly PayTm App. Around 13% respondents are
dissatisfied by the transaction time taken by PayTm and believe that a lot of time is
wasted during the transactions which could be reduced.

 Overall rating

Around 50% of respondents are satisfied with the overall service of PayTm but claim
that there is some room for improvement in the customer service and innovation. 18%
respondents are strongly satisfied with current services by PayTm. Still some people
are dissatisfied with the PayTm service due to failure at various points during, before
or after the transaction. Some of these problems are Payment gateway failure,
Customer care service failure, lack of discounts and offers, lengthy transaction time,
etc.

Page 70
 CHAPTER – 7

FINDINGS/ SUGGESTIONS & CONCLUSION

When we were asked to build a recommender system for our marketplace, the first
thought was to use an out-of-box implementation from spark MLlib like ALS
(alternating least square based matrix factorization) or an equivalent off-the-shelf
solution.
However, as we explored our data and business need, we understood that a more
tailored solution will be required. Our catalog had upwards of 50 Mn unique items
and only a small fraction of these products had view or purchase history. There was a

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 cold start problem on the user side as well – most users don’t view or purchase
enough products to reliably generate recommendations with user-item collaborative
filtering methods.
In addition to that, we required recommendations for a widget on the homepage that
was previously “hand-curated” by editors scanning the entire catalog and finding the
best selection for customers to delight them and help drive traffic to other parts of the
marketplace. Since editors couldn’t build selections for every customer they picked
broad market trends and built one assortment to show. To automate curation, we had
to find the best deals in the catalog, find deals that match the taste of every user and
ideally find deals that would eventually make that product popular. We also wanted to
recommend products from diverse categories in order to prevent any one category
from dominating sales, and to maintain a ‘freshness’ factor. Here is how we
decomposed this problem in 3 basic parts and how we came up with a modeling
scheme:

Figure 1: Overall Recommendation Architecture

1. Finding the best deals from the catalog (Product Pool Selection): We used
a forecasting model for predicting the lift in sales for a given product based on its
historical data and discounts offered on it. Initially, we just used a simple price
elasticity model by calculating an elasticity coefficient based on the ratio of quantity
change and price change and then multiplying it with price change to get new
predicted quantity. In a few days, we found that this is modeled better as a

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 multivariate problem and regressing on price only gives a very high variance. There
are other factors in forecasting like lifecycle of product, visibility, promotions etc.
Based on this finding we replaced this model with a random forest regression model
that took time series data for product sales and some product features into account and
predicted net lift over baseline sales every day. In addition to improving prediction
accuracy, it gives us flexibility to add more features in the future like the location of
product placement, the number of views, searches for similar products etc. Based on
this model we were able to filter the best deals in every category not just based on
discounted price but likeability by customers. We have used this information in other
areas of our business as well but that’s for later.
2. Personalization of deals based on user history (Collaborative filtering
based item recommendation): Now that we have the best deals, how do I maximize
my conversion? Well, by tailoring the products to a customer’s preference. We used
an item-item similarity matrix here. We gave it a simple spin to capture more data and
instead of building it in the traditional way of calculating co-occurrence of items
purchased together, we used co-occurrence of items browsed and items purchased.
Then we looked at every user’s last purchased item and recommend the N products
with the highest co-occurrence. We added two more improvements to this model:
 Instead of only using the last viewed item, use the last K views,
assigning higher weights to more recent views.
 When the co-occurrence values are simple counts, popular products
tend to dominate the recommendations. Using Jaccard Similarity or a similarity
measure can correct this popularity bias. Anyway, this gives us personalized deals for
all the users.
3. Predicting product categories (category affinity identification): In
objective 2 above we have already figured out the personalization so we should be
ready to go to town with it, but if you look at it closely what we have built so far is a
similar item recommender system that gives you best deals available in items similar
to your last viewed item. But we want to delight our user and preemptively see what
product would they like next. This is a hard problem to solve at the product level and
hence we decided to do this at category level (some 200+ categories). We use over
6000 features describing users’ view and purchase history across verticals like
physical goods, digital goods, travel, entertainment, bill payments etc. We pose this as

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a multiclass classification problem where we are trying to predict the next category
where a user will make a purchase (not a view!). We have been using random forest
implementation of spark ML Lib for this. Given we had the huge disparity in classes
we had to write our own resampling strategy before calling the model as ML LIB
does not have one implemented. We did cross validation to find the best parameters
and used precision recall as our measure. So far we have seen some very interesting
results with P@1 = 0.45 meaning in 45% cases we can predict the next category
correctly and this increases as we go to P@10.
Overall, this model now tells Paytm precisely out of 200 odd categories what would
the user like to purchase next and we are trying to take this to 2000 categories next.

4. Ensemble! (recommendation assembly):  To recap, we now know the most likely

purchase categories for each user, the most attractive deals in those categories and the
products most correlated to each user’s last product view. We can go to town with
this. We mix the probabilities from the three models to generate the sequence of
products we show each user. Using the ensemble method described above we have
powered 15 widgets on different parts of the marketplace that were serving similar
objective. Though we have already seen very promising results like 3.5x lift in CTR
and 2x lift in conversion rate coming from the widgets where this went live, there is a
long way to go in improving these algorithms. Here are a few results showing how we
have been able to improve our algorithms iteratively and drive more transactions

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We also faced many challenges like class imbalance, data sparsity, huge differences in
categories and figuring out similar feature sets so we can operationalize this easily etc.
We will do some future blog posts focusing on challenges faced and what we did to
solve them.
In summary, always think about the use case and think how to scale the solution.
When you can decompose the problem into small parts and build solutions like
frameworks, you can always scale better and repurpose solution to serve many similar
use cases
Team Profile: The Midgar team is tasked to deliver a highly personalized experience
on Paytm. The team is looking for super talented software engineers, machine
learning engineers and data engineers. Check out other open positions as well. To
know more, write us using the contact form.

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RECOMMENDATION

It would be wise not to underestimate the costs associated with marketing

on social media. Though the potential to reach a wide audience is both
immediate and as simple as opening a Facebook account it should not be
undertaken lightly.

a. A serious point to be remembered is the potential for damage to the brand

going viral across the internet. Repairing this damage could cost
considerable money and effort.

b. Sufficiently qualified staff would need to be hired plus the costs associated
with training other staff using the company accounts would need to be
factored in. These costs are beyond the purview of this report and further
research in this area is highly recommended.

c. A very minimum interaction that Hotels should consider is to treat

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 TripAdvisor and holidayiq.com as an influential means of reputation
management.

SUUGESTIONS

a. It is suggested that offline and online marketing strategies be brought into

alignment to prevent mixed messages and to promote the availability of
the online forums for interaction. Offline advertising should be used to
complement the online media. Adding “visit us on Facebook” and other
such texts to promotional material will help to raise awareness.

b. The social networking strategy should sufficiently flexible to allow it to

adapt to new developments and to determine what works and what does
not work.

c. A dedicated social media co-ordinator is recommended to monitor the

impact of any changes implemented. A dedicated co-ordinator would also
allow for consistency in communication. At the very least a profession
agency experienced in social media marketing should be consulted at from
the earliest planning stages.

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 d. The reviews and complaints raised by the customers on the SNS should be
effectively managed and proper actions should be taken by the hotels
management and the action taken should also be communicated to the
customer.

e. The promotional offers during season on should be displayed on the SNS

on regular basis, so that large number of customers is captured

CONCLUSION

PayTm supports their customers to transfer their payments with the usage of their
mobile phones in the easiest way. PayTm is a good app to download due to its wide
network of partners which makes it convenient whether you're taking a cab ride with
Uber, or ordering a meal via Foodpanda. PayTm has to work upon the Payment
gateway to improve the transaction efficiency as 70% people faced problem with
payment gateway. Only 5% people claim to have got assistance every time they had a
failure so the service could be improved to cater the needs of maximum customers.
PayTm is currently performing well in terms of privacy but it has to work upon
discounts/offers, transaction time and bring about innovation to increase customer
satisfaction.

a. Social media has become an integral part of the algorithms that decide
where a particular website is placed in the search rankings. The higher the
ranking the more visible it is to the consumer. One of the core questions
behind this research was to find out what impact social networking sites is
having on the hotel sector.

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b. The ability to interact with the guests of the hotel should be viewed as a
very positive aspect by Hotel business. It offers very real insight into how
the hotels are viewed.

c. The feedback shared on the review social networking sites such as

Facebook, LinkedIn, Twitter, Google+, holidayiq.com & TripAdvisor is
an opportunity to improve the service offering.

d. Measuring the affects that reviews, Wall-posting, Blog, Photo Video, Pop-
up, tweets and posts can directly have on bookings could be quite difficult.

e. In conclusion the ability to reach out to such a huge volume of potential

guests would make ignoring social media a poor business choice. The
other side of the coin is that potential for damage to the brand by reaching
out in a haphazard fashion could be quite destructive and costly to repair.

f. A well planned and coherent marketing strategy is needed to limit

potential damage and give the chance of succeeding greater odds. It would
be wise to consider hiring a qualified dedicated member of staff or to
consult with an outside agency or expert from the earliest stages to avoid
negative outcomes.
g. Social Networking Sites creates a real Connection between
companies and customers; that connection creates a trend for
purchase intensity.

h. Social Networking Sites provide ample of opportunities for interacting

with Hotel industries partners

i. Social Networking Sites provides a platform to innovative advertising to

be effectively used for business growth of Hotel industries

j. From data interpretation we observed that hotel industry in Pune prefer

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 Facebook and Tripadvisor.in more than any other Social Networking Sites
for their Promotional activities

k. Hotel Industry with use of Social Networking Sites can gain competitive
advantage by reducing advertising cost , create awareness, capture large
market, able to transact globally.

CHAPTER – 7

BIBLIOGRAPHY AND REFERENCES

 Anita Seth (2007), “quality of service parameters in cellular mobile

communication”, international journal of mobile communications, vol-5, issue
1, jan-2007.
 Bailey, J.P. and Bakos, Y. (1997), “An exploratory study of the emerging role
of electronic intermediaries”, International Journal of Electronic Commerce,
Vol.1, No.3, pp.7-20.
 Associated chambers of commerce and industry of india 2005. Bagozzi,R.P. &
Dholakia, U. (1999) “ Goal setting and Goal striving in consumer behavior”,
Journal of marketing, special issue.
 Akhil Gupta (2001), “Telecom – Is the Future Finally Near?”, 2001 Asian
venture forum, India, Dec.
 Akhil Gupta (2002), “Importance of Competition in Telecommunication”,
 Akwule R U (1992), “Telecommunications in Kenya; Development and policy
issue” in telecommunication policy, Sept- Oct.pp.603-11.

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 Achrol, R. (1991), “Evolution of the marketing organization: New Forms for
turbulent environments”, Journal of Marketing, Vol. 55, No. 4, pp. 77-93.
 Adrian Payne and Pennie Frow (1999), “Relationship Marketing: key Issues
for the Utilities sector”, Journal of Marketing.

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