An Assessment of The Marketing Strategy For Mobile Services of Ethiopian Telecommunication Corporation

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An Assessment of the Marketing Strategy for Mobile Services of Ethiopian

Telecommunication Corporation
Article in Services Marketing Quarterly · January 2010

DOI: 10.1080/15332960903408443
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An Assessment of the Marketing Strategy for Mobile Services of Ethiopian

Zelalem Temesgena; Rakshit Negib; Eyob Ketemaa
a
Ethiopian Telecommunication Corporation, Addis Ababa, Ethiopia b Department of Business
Education, Addis Ababa University, Addis Ababa, Ethiopia
Online publication date: 23 December 2009
To cite this Article Temesgen, Zelalem , Negi, Rakshit and Ketema, Eyob(2010) 'An Assessment of the Marketing Strategy
for Mobile Services of Ethiopian Telecommunication Corporation', Services Marketing Quarterly, 31: 1, 50 — 71
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Services Marketing Quarterly, 31:50–71, 2010
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ISSN: 1533-2969 print=1533-2977 online
DOI: 10.1080/15332960903408443
An Assessment of the Marketing Strategy

for Mobile Services of Ethiopian
ZELALEM TEMESGEN
Ethiopian Telecommunication Corporation, Addis Ababa, Ethiopia
RAKSHIT NEGI
Department of Business Education, Addis Ababa University, Addis Ababa, Ethiopia
EYOB KETEMA
Downloaded By: [PERI Ethiopia] At: 06:35 24 June 2010
Ethiopian Telecommunication Corporation, Addis Ababa, Ethiopia
The study was designed to assess the marketing strategy of

Ethiopian Telecommunication Corporation (ETC) in the light of
an integrated framework. Structured questionnaires along with
interviews were used for the purpose of data collection. The selec-
tion of the respondents was carried out by using the techniques
of purposive (for mobile customers) and stratified random
sampling (for employees and managers). Cross-tabulations along
with descriptive statistics were employed to generate the findings
inline with the research objectives. It has been found that ETC
maintains a corporate strategy and policy but does not formulate
any strategy for marketing. Duplication of efforts had been
observed among various marketing and customer service units.
Additionally, the absence of internal marketing is reported within
the corporation. However, the area for the study is limited to Addis
Ababa, and the eight ETC regional units and their corresponding
customers.
KEYWORDS ETC, Ethiopia, marketing mix, marketing strategy,

mobile service
Address correspondence to Zelalem Temesgen, Ethiopian Telecommunication Corpora-

tion, P.O. Box 40179, Addis Ababa, Ethiopia. E-mail: ztemesgen@gmail.com
50
Marketing Strategy for ETC’s Mobile Services 51
INTRODUCTION
The ultimate difference between marketing of goods and services, on the

basis of intangibility, heterogeneity, perishability, inseparability, and owner-
ship, separates the ways strategy is drafted and executed by the enterprise.
Thus, a service provider must consider these five service characteristics when
working on designing marketing programs. Moreover, the strategy for
marketing should be derived from broader corporate strategies, corporate
missions, and corporate goals. As the customer constitutes the source of a
company’s revenue, marketing strategy is closely linked with sales.
The strategic marketing planning process flows from a mission and
vision statement to the selection of target markets, and the formulation of
specific marketing mix and positioning objective for each product or
service the organization will offer. Additionally, organizations consider
internal strengths and how these strengths can be leveraged through
strategy to achieve sustainable competitive advantage. Concentration upon
core competencies and learning processes provides a connection of exter-

nal market forces with activities occurring within organizations. However,
calculating gaps between existing and required performance is the key
to developing a range of measures that link functional, team, and individual
performance to strategic objectives and performance improvements
(Dunmore, 2002).
Therefore, marketing strategy is most effective when it is an integral
component of corporate strategy, defining how the organization will success-
fully engage customers, prospects, and competitors in the market arena, and
is partially derived from broader corporate strategies, and corporate mission
and goals. Moreover, as the customer constitutes the source of a company’s
revenue, marketing strategy is closely linked with sales. A key component of
marketing strategy is often to keep marketing in line with a company’s over-
arching mission statement (Marketing Strategy, n.d.).
The organization in question, Ethiopian Telecommunication Corpora-
tion (ETC), is the sole provider of telecommunications services in Ethiopia
providing basic telephone (fixed line), mobile, Internet, and data services
with their corresponding distinct features and value added services. The
corporation is structured with five strategic business units (SBUs), 12 depart-
ments, and a college (GSTIT). As of June 30, 2008, the corporation main-
tained about 1,963,989 mobile, 897,901 fixed line, and 31,544 internet and
data customers (ETC’s MIS Report, March 2008) contributing to generate a
gross annual revenue of ETB 2.74 and 3.24 billion in 2006–2007 and
2007–2008 budget years, respectively (MIS Report, 2008).
According to Boone and Kurtz (1998), marketing is the process of
planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, services, organizations, and events to create and maintain
52 Z. Temesgen et al.
relationships that will satisfy individual and organizational objectives. As a

sole provider of the telecom services, ETC has an obligation to understand
customers needs and wants, and to satisfy them by deploying the required
services in a timely and efficient manner. However, it is observed that some
of the services like internet, data. and some of the value added services are
under utilized. On the contrary, the corporation is unable to satisfy mobile
customers.
Furthermore, huge projects are underway to expand the existing
services in folds (10 million). Thus, the purpose of this study is to assess
the existing marketing strategy and to identify whether it is aligned with
the corporate mission to satisfy customer requirements on one hand, and
in turn the contribution in generating revenues and further expansion, on
the other. Specifically, the research raised the questions such as: does ETC
drive its marketing strategy from the corporate strategy; how does it segment,
target and position mobile telecommunication services; what are the compo-
nents of service marketing mix; to what extent the corporate, SBU, and zonal
or regional marketing units perform their activities coherently to ensure qual-

ity service and customer satisfaction; and whether marketing staff prevail
strategic thinking?
Market Segmentation, Positioning, and Targeting

The essence of the marketing concept is the idea of placing customer needs
at the center of the organizational decision-making. The need to adopt this
approach stems from a number of factors, including increased competition,
better informed and educated customers and, most importantly, changing
patterns of demand. Primarily, it is the change in patterns of demand that
has given rise to the need to segment markets contributed through higher
standards of living and a trend towards individualism (Lancaster, 2004).
Therefore, choosing the value, the strategist proceeds to segment the market,
followed by selecting appropriate market target, and developing the offer’s
value positioning. The formula—segmentation, targeting, positioning (STP),
thus is the essence of strategic marketing (Kotler, 1994).
Recklies (2001) stated that segmentation is the basis for developing
targeted and effective marketing plans. However, the purpose for segment-
ing a market is to allow marketing and sales programs to focus on the subset
of prospects that are most likely to purchase firm’s offerings. According to
Otilia (2003), market segmentation is widely defined as being a complex
process consisting of two main phases:
1. Identification of broad, large markets; and

2. Segmentation of these markets in order to select the most appropriate target
markets and develop marketing mixes accordingly. After the market has
been separated into its segments, the marketer will select a segment or
series of segments and target it or them. Resources and effort will be

targeted at the already identified segments. Once the organization has
decided which customer groups within which market segments to target,
it has to determine how to present the product to this target audience. This
allows to exactly addressing the needs and expectations of the target
groups with a tangible marketing mix that consists of service characteristics,
price, promotional activities and places to present the product or service
(Dibb, 2005).
Since positioning is based on customers’ perceptions, it is only partly

within the control of marketers. External developments could change the
way customers think about a service. Lancaster (2004) states that a company
has to develop a positioning strategy for each segment it chooses to serve.
However, the final step in the appraisal of segmentation, targeting, and
positioning is developing appropriate marketing mixes.
Service Marketing Mix

Lovelock and Wright (2000) suggest using the eight ‘‘Ps’’ (product, place=
cyberspace=time, process, productivity and quality, promotion and educa-
tion, price and other user outlays, physical evidence, and people) of
integrated service marketing mix that describes eight decision variables
facing managers of service organizations. Service providers must select the
features of both the core product and the bundle of supplementary service
elements surrounding it, with reference to the benefits desired by customers;
delivering product elements to customers involves decisions on both the
place and time of delivery. This may concern physical or electronic distri-
bution channels (or both), depending on the nature of the service being pro-
vided, and customer expectations of speed and convenience as important
determinants in service delivery strategy.
While badly designed processes are likely to annoy customers because
of slow, bureaucratic, and ineffective service delivery, poor processes may
make it difficult for frontline staff to do their jobs well, resulting in low
productivity and an increased likelihood of service failures. Improved
productivity is essential to keep costs under control, but managers must
beware of making inappropriate cuts in service levels that are resented by
customers (and perhaps by employees too). However, no marketing
program can succeed without an effective communication program as it
plays three vital roles: providing needed information and advice, persuading
target customers of the merits of a specific product, and encouraging them to
take action at specific times. Managers also seek to minimize other costs and
burdens that customers may bear in purchasing and using a service, includ-
ing additional financial expenditures, time, mental and physical effort, and
negative sensory experiences (Lovelock & Wright, 2000).
Furthermore, service firms need to provide physical evidence carefully

because it can have a profound impact on quality. As many services depend
on direct, personal interaction between customers and firm’s employees, the
nature of these interactions strongly influences customer satisfaction and
customer’s perceptions of service quality.
Service Quality and Customer Satisfaction

According to Zeithaml and Bitner (2000), service quality is a critical compo-
nent of customer perceptions. In the case of pure services, service quality will
be the dominant element in customer’s evaluations. In cases where customer
service or services are offered in combination with a physical product,
service quality may also be very critical in determining customer satisfaction.
Customer-facing staff requires support from colleagues in noncustomer-
facing roles. The quality of services provided by supporting employees
(internal service quality) has an impact upon the quality of service the
customer-facing employee is able to provide to customers (external service

quality). Kotler and Keller (2006) suggest that if all employees have high
levels of customer consciousness and are service-oriented, higher levels of
service quality can be provided by an organization. Additionally, achieving
and maintaining customer-perceived service quality is regarded as essential
strategy for the successful provision of overall customer satisfaction
(Parasuraman, Berry, & Zeithaml, 1990; Reichheld & Sasser, 1990).
While satisfaction has been examined by many researchers in different
industries to ensure customer retention (Fornell, 1992; Anderson & Sullivan,
1993; Bolton, 1998; Ranaweera & Prabhu, 2003), service quality is also likely
to influence customer satisfaction (Bitner 1990; Cronin & Taylor, 1992). This
further increases existing customer loyalty, repurchase process, and aware-
ness about the firm, while decreasing price flexibility and preventing
customers from being affected by competitive enterprise (Peter & Olsan,
2005). Heskett, Jones, Loveman, Sasser, & Schlesinger (1994) proposed the
service-profit chain that shows a positive relationship between internal
service quality and increased profits. It identifies a ‘‘chain of events’’ that
stretches from inside the company to its customers. The chain begins with
internal service quality and leads to enhanced profitability.
METHODOLOGY
The basic objective of this study was to evaluate the existing marketing
strategy of ETC for mobile business. Considered suitable to address a large
number of samples with the limited time and budget, the survey approach
was used. Both quantitative and qualitative procedures were planned to
obtain desired results and to overcome limitations of resources.
In order to gather the data from relevant sources, two instruments were
developed: one each to be responded to by mobile users and employees or
managers who are actively engaged with marketing and customer service
operations at ETC. Items related to the measurement of customer satisfaction,
service quality, approach to market segmentation and strategy development,
service provisions, marketing mixes, awareness, and perception of existing
and upcoming value added mobile services were prepared and structured
to frame the questionnaires.
Pilot testing of the instruments was carried out to ensure the validity of
the data to be collected from both the groups, and it was observed that a sig-
nificant number of respondents (mobile users) felt it difficult to understand
adequately the English version of the questionnaire provided, therefore, an
Amharic (local language) version was prepared for such cases, reserving
the English version for corporate employees and managers. Stratified random
sampling technique was used to select the mobile users from six zones of the
capital city (Addis Ababa), and the marketing managers with concerned staffs
(directly involved in marketing planning and services) were selected through

purposive sampling.
A total of 789 questionnaires were distributed among mobile custo-
mers, employees, and managers, respectively. Out of the questionnaires
distributed to the customers, 671 were returned and 650, completely filled,
were retained for the final analysis. Similarly, 81 questionnaires were
returned and retained for analysis from 89 distributed to ETC employees.
Additionally, a semistructured interview with selected managers (15) had
been conducted in supplementing the data obtained through question-
naires. On the part of secondary data, written documents on strategies
and marketing strategies, policies, procedures, and sales and revenue
reports from ETC were referred. For analysis, statistical procedures were
applied using SPSS 13.0 package. Descriptive statistics were used to sum-
marize demographic characteristics of the respondents (both customers
and managers), purchase and usage of mobile service, and awareness.
However, to review the internal consistency of the scale items (of percep-
tion and performance), Cronbach coefficients (alpha) were computed and
the reliability scores were found to be 0.926 and 0.727 for employees and
customers respectively, an indication of the acceptability of the items for
further analysis. Cross-tabulations were obtained for various items to assess
their level of association.
DATA ANALYSIS AND FINDINGS
The demographic profile of the customers was found to be diverse with a

majority (65%) reported as male and the remaining (35%) as female. Over
half (54.5%) of the respondents responded as the middle age group
(26–40), followed by little over one-third (35.2%) as young (15–25), and the
remaining distributed over senior age group (above 40 years). On education,
less than half (47.5%) of the respondents claimed to have a degree, followed
by over one-fourth (28.3) who had completed secondary school, and about
one-fifth (20.8%) who had their first degree or higher. With respect to their
monthly income, over one-third (37.5%) reported to be between ETB 501
and ETB 1,500, followed by less than one-third (29.5%) who claimed ETB
500 or less, and the remaining scattered almost equally within the range
ETB 1,500 and ETB 3,000 (Table 1).
On the other hand, the profile of the other group of respondents
(employees) found to be similar to that of customers with a male majority
(67%). While a great majority (73%) reported to be within the age 26 to 40
years, less than one-fifth (16%) found to be below 26 years, and the remain-
ing scattered somewhere above 40 years. With respect to work experience,
above half (51%) of the respondents reported with 5 or less years, followed
by over one-third (38%) who maintained it between 6 and 10 years, and
remaining with more than 10 years. Furthermore, over half (53%) of them
claimed to have their first degree or above, followed by less than half
(43%) who reported having a degree. Also, the majority of the respondents
(62%) are working at customer service and related areas while the remaining
(38%) engaged in marketing and planning activities (Table 2).
Opinions of Customers
About all (95.4%) the respondents claimed to be the users of ETC mobile
service with the remaining 4.6% who do not have this service, reported as
nonusers. A majority (60%) of nonusers reported the service as expensive,
followed by less than one-third (30%) who did not receive the service
when asked, and the remaining attributed it to lack of awareness (7%)
and unwillingness to avail the service (3%). A great majority (76.5%) of
the respondents reported to be as dissatisfied with the existing mobile
communication and value added services provided by ETC (Table 3).
The reasons as forwarded include poor service quality (68%), followed
by high service charges (18%), few services (12%), and poor after-sales
services (10%).
In contrast, almost all (94%) of the respondents claimed to have
additional mobile services such as Internet and data (59%), video (53%),
and voice mail (30%), if introduced in the near future by the ETC (Table 4).
However, the majority (60%) of them do not have a mobile phone that
supports the services they claimed to have, and over half (57%) of them
do not know how long will it take to replace their mobile handsets, while
one-fifth (20%) confirmed that they do not have any budget for this upgrade.
Moreover, about one-fourth (23%) reported with a strong willingness to get
the handsets replaced within a year time.
TABLE 1 Demographic Statistics (Customers)
Monthly income
Sex % Age % Education % Occupation % (in ETB) %
Male 65 15–25 35.2 Primary or less 2.8 Student 14.5 <500 29.5
Female 35 26–40 54.5 Secondary 28.5 Business 19.9 501–1,500 37.5
57
41–55 8.2 Diploma 47.8 Civil servant 48.1 1,501–2,000 9.4
>55 2.2 First degree and above 20.9 Private sector employee 11.4 2,001–2,500 10.8
Daily laborer 2.0 2,501–3,000 4.0
Other 4.0 >3,000 8.8
Total 100 100 Total 100 100
TABLE 2 Demographic Statistics (Employees)
Sex % Age % Education % Occupation % Monthly income %
Male 67 15–25 16.0 Secondary 3.7 Customer Service 61.7 501–1,500 9.9
58
Female 33 26–40 72.8 Diploma 43.2 Marketing and planning 38.3 1,501–2,000 29.6
41–55 9.9 First degree and above 53.1 2,001–2,500 16.0
>55 1.2 2,501–3,000 30.9
>3,000 13.6
Total 100 100 Total 100 100
TABLE 3 Satisfaction Level and Reasons for Dissatisfaction
Satisfaction level % Reason for dissatisfaction %
Satisfied 23.5 Low QOS 37.7

Dissatisfied 76.5 Few SOO 12.6
Total 100 Poor ASS 6.6
Poor technology 0.9
High SC 1.9
Low QOS and few SOO 9.8
Low QOS and poor ASS 2.3
Low QOS and high SC 18.3
All 10
Total 100
Note. QOS ¼ quality of service; SOO ¼ services on offer; ASS ¼ after sales support; SC ¼ service charges.
Respondents were further asked to report their level of agreement

(1 ¼ strongly disagree and 5 ¼ strongly agree) with the framed items of

marketing exercised by the ETC (Table 5). On the part of promotional activ-
ities, respondents found to be above average when stated that these create
sufficient awareness (M equals; 3.10), and broadcasted on suitable media
for disseminating the information easily (M ¼ 3.08) to keep up the name
and dignity of ETC (M ¼ 3.28). However, they somewhat denied accepting
that the content simulates the actual performance as experienced by them
(M ¼ 2.82).
When asked about the competencies and performances of the front
desk employees (FDE), respondents found they properly handled their com-
plaints (M ¼ 3.00), but reported disagreement with respect to the information
they provide (M ¼ 2.97) and serving the customers politely and willingly
(M ¼ 2.89). Similarly, they reported that the information made available to
them by the FDE was not what they expected (M ¼ 2.88), and the agreed
the staff should be provided with training on customer service (M ¼ 3.30).
Customers reported that the current mobile services are satisfactory
(M ¼ 3.00) but not of high quality, and thus seriously pointed out the need
for upgrading the existing services (M ¼ 3.80). On the other hand, respon-
dents found to be dissatisfied with issues related to the impression ETC
TABLE 4 Customers Preference of Services to be Added by ETC
Services to be added %
Voicemail 30.0
Internet and data 59.3
Video conferencing 52.8
Who wants at least one of the above services 93.8
TABLE 5 Descriptive Statistics (Customers) for Scale Items on Marketing-Mix
Item M SD
Promotional service creates enough awareness 3.10 1.076

Promotional service broadcasted on suitable medias for easy sharing of 3.08 1.120
information
Promotional service keeps ETC’s name and dignity 3.28 1.368
Promotional services simulate real situation 2.82 1.108
FDE have adequate info regarding services 2.97 1.097
FDEs serve politely and willingly 2.89 1.153
FDE handle complains properly 3.00 1.083
Information provided in general is as expected 2.88 1.074
FDE and other customer service staffs should be provided training 3.30 1.152
Currently available services are good and satisfactory 3.00 1.214
Upgrading of mobile service is required 3.80 1.101
There is almost no network=Connection related problem 1.77 .880
I have good overall impression about ETC as a mobile service provider 2.08 .901
I feel happy to continue as a customer of ETC 2.86 1.203
Note. ETC ¼ Ethiopian Telecommunication Corporation; FDE ¼ front desk employees.
has created with them (M ¼ 2.08), network quality (M ¼ 1.77), and loyalty
(M ¼ 2.86).
Cross-Tabulation Analysis for Customer Data

Service type (voice mail, SMS, etc.) was found to be significantly associated
with income (v2 ¼ 72.16, p < .01), age (v2 ¼ 35.76, p < .05), and the purpose
of use (office work, business, etc.; v2 ¼ 78.46, p < .001). However, education
(v2 ¼ 31.56, p < .14) and occupation (v2 ¼ 46.35, p < .23) were not found as
significantly associated with service type.
Customer Awareness of Promotion, Tariff, and Service Availability

Among the existing promotional services, word-of-mouth influenced the
respondents heavily (40%) in deciding to buy the service, followed by the
Internet (18%) and advertising (17%). Irrespective of their monthly income,
the vast majority (76.1%) of the respondents stated that the service charge
(per minute for mobile) available with ETC is expensive, while about
one-fifth (20.7%) reported it as average (Table 6).
With regard to the price of mobile handsets, over half (54.9%) claimed it
to be expensive while about two-fifths (42.5%) reported as average. When
asked about subscription fee, over half (53.6%) stated it was expensive, while
about two-fifths (39.4%) as average. Also, less than half of the respondents
(45%) found the replacement of postpaid SIM card as expensive with another
two-fifths (38.1%) who reported it as average. However, regarding the pre-
paid SIM card, the respondents found it expensive (29%), average (34.8%),
and cheap (36.2%).
TABLE 6 Opinion on Promotional Influence and Price of Mobile Phone Service Components
Items Response %
Promotional mix Internet 18.0

Word-of-mouth 40.3
Sales representatives 4.8
Industry publication 3.1
Advertising 17.3
Trade show=Events 1.5
Other 15.0
Price of mobile handset Expensive 54.9
Average 42.5
Cheap 2.6
Subscription fee Expensive 53.6
Average 39.4
Cheap 7.0
Service charge per minute Expensive 76.1
Average 20.7
Cheap 3.2
SIM replacement fee (for postpaid) Expensive 45.0
Average 38.1
Cheap 16.8
SIM replacement fee (for prepaid) Expensive 29.0
Average 34.8
Cheap 36.2
Customer Service and Marketing Employees=Managers Opinions

Similar to the customer respondents, customer service and marketing
employees and managers were asked to express their opinions on different
issues related to marketing activities. A great majority (73%) of the respon-
dents confirmed the existence of a corporate strategy followed by a little
below one-fourth (23%) who claimed to be unaware of its existence. When
they were asked whether they are aware of existence of a marketing strategy,
about half (51%) of the respondents claimed its existence though ETC has
none. Surprisingly, about one-fifth (19%) of these are the members of the
marketing and planning units (Table 7).
TABLE 7 Awareness of Existence of Marketing Strategy
Whether ETC has Whether marketing strategy is

marketing strategy derived from corporate strategy
Employees I don’t I don’t

(occupational) Yes No know Total Yes No know Total
category (%) (%) (%) (%) (%) (%) (%) (%)
Customer service 33 10 20 50 24 23 19 65
Marketing and 19 10 9 38 19 5 11 35
business planning
Total 51 20 29 100 43 28 30 100
Over half (55%) of the respondents believe that when a new service is
deployed or upgraded, it is not supported by the studies related to market
opportunity and market size. Moreover, a majority (64%) of the respondents
stated that mobile services are not segmented in logical groupings (Table 8).
Regarding the eight service marketing mixes (8Ps), respondents were
asked to report the importance of elements that should be incorporated by
the ETC when it comes to framing the marketing startegy. FDE (89%), price
(74%), service=product (61%), promotion (56%), productivity and service
quality (50%), service distribution (36%), service delivery process (30%),
and physical evidence (13%) were identified as important and to be consid-
ered in providing mobile services, hence must be included while developing
the marketing mix (Table 9).
Unlike customers, about one-third (34%), little above one-fourth (26%),
and one-fifth (20%) of the respondents believed that sales representatives,
advertisement, and word-of-mouth, respectively, are important elements of
promotional mix helping customers in buying the mobile services. Related
to the setting of tariff for mobile services, employees and managers provided
their views on the basis of 13 options as listed in the questionnaire. Additional
information was obtained through interviews with senior managers and
secondary (published) sources to identify the ways tariffs being set. It was
found that a ‘‘cost-plus’’ approach and benchmarking the neighboring countries
are considered in determining tariffs, and usually after the services in place.
When asked about charges associated with the current mobile services,
a great majority (76%) of respondents stated that the charge as set by ETC for
postpaid SIM card replacement is expensive, while about one-sixth (16%)
reported it as average (Table 10). However, for prepaid SIM card replace-
ment, they found it to be expensive (10%), average (45%), and cheap
(45%). With regard to the service charge (call per minute), over half (56%)
reported it as expensive, with about two-fifth (38%) who stated it as average.
On the part of subscription fee, over half (53%) of the respondents found it to
be expensive, while about two-fifths (38%) reported it as average. Moreover,
one-third (33.8%) of the respondents claimed that the price of their mobile
handset is expensive with the majority (65%) reporting it as average, while
TABLE 8 Opinions about Market Research Use in Mobile Service and Segmentation
New service or upgrading is Mobile market

supported by market research is segmented
Employees Yes No Total Yes No Total

(occupational) category (%) (%) (%) (%) (%) (%)
Customer service 30 31 61 25 36 61
Marketing and 14 24 39 11 28 39
business planning
Total 44 55 100 36 64 100
TABLE 9 Level of Importance of Marketing Mix
Productivity Physical
Employees Service=product Front desk Service delivery Promotion Place and service evidence Price
(occupational) category (%) employee (%) process (%) (%) (%) quality (%) (%) (%)
63
Customer service 35 61 10 37 12 20 3 35
Marketing and business planning 26 28 20 19 24 30 10 26
Total 61 89 30 56 36 50 13 74
TABLE 10 Opinion on Promotional Influence and Price of Mobile Service Components
Items Response %
Promotional mix Internet 8

Word-of-mouth 20
Sales representatives 34
Industry publication 3
Advertising 26
Trade shows 9
SIM replacement fee (for postpaid) Expensive 76.3
Average 16.3
Cheap 7.5
Service charge per minute Expensive 56.3
Average 37.5
Cheap 10.0
SIM replacement fee (for prepaid) Expensive 10.3
Average 44.9
Cheap 44.9
Subscription Expensive 52.5
Average 37.5
Cheap 10.0
Price of mobile handset Average 33.8
Cheap 65.0
Expensive 1.3
Total 100.0
an overwhelming majority (80%) of both customer service and marketing=

planning employees found to fear losing customers to another service
provider (if appears in future).
Marketing-Mix Elements as Experienced by the Employees

and Managers
Respondents were further asked to report their level of agreement with the
items related to marketing-mix as exercised by the ETC (Table 11). On the
part of marketing unit staffs, respondents were found to be above average
when asked if they have adequate staffs (M ¼ 3.08). However, they reported
disagreement on the skills acquired, knowledge and attitude towards market-
ing (M ¼ 2.71), and the units staff development program (M ¼ 2.59). Similar
opinions were found from respondents of the customer service unit for the
same items, as they agreed with availability of adequate staff (M ¼ 3.06),
but disagreed with the skills acquired, knowledge and attitude (M ¼ 2.79),
and their staff development program (M ¼ 2.69).
When asked about promotional services, respondents were found to be
above average when stated that the promotional services keep ETC’s name
and dignity (M ¼ 3.43), and broadcasted on suitable media for disseminating
the information easily (M ¼ 3.05), but disagreed on creating enough
awareness (M ¼ 2.50), and the content simulates the actual performance as
TABLE 11 Descriptive Statistics (Employees) for Scale Items on Marketing Mix
Item M SD
Marketing department has adequate staff 3.08 1.220

Marketing staff has acquired required skill, knowledge, and attitude 2.71 1.138
towards marketing
Marketing department has staff development program 2.59 1.290
Customer service unit has adequate staff 3.06 1.266
Customer has acquired required skill, knowledge, and attitude 2.79 1.177
towards marketing
Customer service has staff development program 2.69 1.539
Promotional service creates enough awareness 2.50 1.243
Promotional service broadcasted suitable medias 3.05 1.211
Promotional service keeps ETC’s name & dignity 3.43 1.281
Promotional services simulate real situation 2.16 1.049
Front desk employees have adequate info regarding services 2.41 1.219
Front desk employees serve politely and willingly 3.29 1.088
Marketing and customer service units consider customer access pts 2.75 1.315
when promoting
Marketing and customer service units collect and use customer 2.32 0.955
information appropriately
Marketing and customer service units set standards to insure effective 2.52 1.239
customer care
Marketing and customer service units take action to ensure for every 2.32 1.172
customer is satisfied
Marketing and customer service units measure performance against 2.61 1.372
standard for customer care
Marketing and customer service units takes customer compliant very 2.59 1.080
seriously
Marketing and customer service units are attempting to win back lost 2.14 1.174
customers
Marketing and customer service units listen what customers say 2.86 1.071
Marketing and customer service units try to add value to ETC’s 3.03 1.206
services
Marketing and customer service units draw up a pricing strategy for 2.97 1.414
every new service
Marketing and customer service units measure the overall 2.65 1.321
effectiveness of a publicity
Marketing and customer service units keep updating non-marketing 2.44 1.059
functional units on marketing developments
The public would like to continue as ETC customers even if there are 1.90 0.914
other choices
Note. ETC ¼ Ethiopian Telecommunication Corporation.
experienced by them (M ¼ 2.16). Moreover, they accepted that FDE serving to

the customers politely and willingly (M ¼ 3.29), but shown doubt about the
information they have regarding services (M ¼ 2.41). Furthermore, on the
marketing and customer units’ activities, respondents somehow found to be
agreed that the units try to add value to ETC services (M ¼ 3.03), but hardly
accepted the activities such as considering customer access points during pro-
motions (M ¼ 2.75), appropriate collection and use of customer information
(M ¼ 2.32), set standards to insure effective customer care (M ¼ 2.52), take
action to ensure satisfaction to every customer (M ¼ 2.32), measuring

performance against standards for customer care (M ¼ 2.61), takes customer
complaint very seriously (M ¼ 2.59), and customer loyalty (M ¼ 1.90).
CONCLUSION AND RECOMMENDATIONS
On the basis of these findings, we address the conclusion drawn with an

intention to recommend bringing improvement in the existing planning
and execution led by ETC, associated with the marketing of mobile services.
An overwhelming majority of the respondents was under the age of 40;
this may be attributed to the minimal proportion of Ethiopian population in
the senior (above 40) age group (CIA, 2008). On the other hand, females, who
represents half of the entire country’s population, share approximately one-
third of the current market of mobile services and were found to be significantly
more satisfied with the current mobile services than their male counterparts
(v2 ¼ 8.033, p < .01), thus they can be seen as a good opportunity for ETC.
However, this will be tested further through additional studies with a larger
sample size to devise the mechanism of attracting this market. Similarly, the rea-
sons given not to be a mobile user, as forwarded by nonusers of mobile service,
indicate a gap between the demand for service and its availability. A further
study, in this regard, might help ETC acquire some of them as customers.
A majority of the respondents expressed their dissatisfaction due to low
service quality, high charges, few services, and poor after-sales performance
and service. Such issues can be addressed by deploying the appropriate tools
and assigning the right manpower for each of these activities, and tariff
revision may be important for different service components while taking into
consideration customers’ affordability. Otherwise, it will be difficult to attract
millions of customers, as projected, for upcoming services. Also, it is being
reported that almost all customers want additional services and features.
However, due to their economic constraints, the majority will be far from
using the upcoming services in the near future. On the other hand, ETC is
running a huge project to upgrade its mobile service both in capacity as well
as features, without conducting detailed market research (to support the
decision based on market opportunity and relative market size), and without
identifying market segments for additional services and features. This may
leave ETC with too much idle capacity for years in some areas.
Furthermore, poorly utilized ideas of marketing-mix (8Ps) in service
planning have contributed significantly to both customer and employee
dissatisfaction, and promotional mixes were found to be so inefficient that
both the customers and employees became aware of Value Added Services
(VAS) and based their decisions on the information gathered through informal
sources (word-of-mouth). However, this may have positive results as long as
the source acquires the accurate information and disseminates the same
without personal bias. Moreover, the marketing and customer service units of
the ETC are supported by employees lacking appropriate skills, knowledge,
and the attitude required to deal effectively with customers. As they are the
ambassadors to the corporation, any action by them can have a direct impact
on corporation’s image, as well as revenue. The present organizational struc-
ture associated to marketing and customer service units, as identified, results
in duplication of efforts and conflict of interests and causes problems in free
flow of information, and limiting the contribution of certain units in upgrading
or deployment of new services. On the other hand, due to the absence of
internal marketing, employees and managers hardly get the right information
at the right time. This will create difficulty in maintaining transparency among
different functional units, which intern contributes to the lower achievement
to ETC’s objectives.
Additionally, some employees claimed that they do not have an idea
about what strategy is, i.e., the corporate strategy which is used as a source
for annual plans of each lower level unit is not, as such, a shared document
between the managers and employees. Only selected managers are involved
in the process of formulating the corporate strategy. Therefore, it appears
that the employees, some middle and lower level managers, and supervisors
do not get an opportunity to participate in the process of designing the strat-
egy. Moreover, some of the problems related to the evaluation of the annual
achievements, as against plans, fail to realize the cause; instead they describe
the symptom as a problem (e.g., lack of service demand or lack of awareness
about value added services by customers, etc.), and unrealistic solutions (not
feasible in given time) and which should be studied through research or
other methods are being proposed (e.g., change the work culture) for the
sake of reporting. In effect, a lack of strategic thinking, which is expressed
as proper analysis of own strengths and weaknesses, as well as outside
opportunities and threats, in developing plans and their implementation
resulted in poor performance of the marketing and customer service units.
This can further be seen through the data from Table 12. Moreover, evalua-
tions made at the end of each fiscal year indicates that how much emphasis is
given to short-term annual plans instead of focusing on long-term strategic
thinking about marketing and customer service activities.
Being a monopoly-based government-owned organization, ETC has
both a social and business mission. This resulted in developing multiple
corporate strategies as those are needed to be executed simultaneously.
However, due to the lack of competency, adopting mixed corporate strate-
gies will lead to a failure in the market. Therefore, the following recommen-
dations are suggested:
1. The marketing unit should be restructured with due attention so that it will
perform its activities without leading to the duplication of efforts and
conflicts of interest.
TABLE 12 Comparison of Planned Versus Achievement Revenue (’000 ETB)
1995 (2002=2003) 1996 (2003=2004) 1997 (2004=2005) 1998 (2005=2006) 1999 (2006=2007) 2000 (2007=2008)
Service Planned Achieved Planned Achieved Planned Achieved Planned Achieved Planned Achieved Planned Achieved
Fixed tele 450,061 426,282 693,199 523,150 633,408 600,522 739,674 670,894 1,049,470 910,489 1,618,370 801,928
68
Mobile 169,208 156,896 358,270 239,894 496,178 412,681 1,336,000 877,213 1,501,575 1,096,835 2,138,030 1,696,578
Internet and data 69,556 28,390 45,808 38,956 141,820 70,005 197,117 72,734 157,678 130,696 210,500 109,059
VAS 25,000 9,574 30,877 6,543 45,000 1,435
Others 305,741 288,997 291,589 381,051 547,861 550,644 513,888 523,196 570,400 595,437 638,100 629,700
Total 994,566 900,565 1,388,866 1,183,051 1,819,267 1,633,852 2,811,679 2,153,611 3,310,000 2,740,000 4,650,000 3,238,700
Source: ETC Planning Services.
2. Presently, the technology leads to the marketing, i.e., information is

reached by the marketing unit after the technology and services are
selected, even sometimes after implementation, while the reverse should
be appropriate. Furthermore, adequate information should be made
available about the services and features being offered to avoid facing
any difficulty in devising different strategies to win customers.
3. Before devising the marketing strategy, the unit must be equipped with
staff having the appropriate skills, knowledge, and attitude towards
marketing, by facilitating trainings, experience sharing, etc.
4. Internal marketing should be given serious attention. All employees, in
general, and FDE in particular, should be aware of each new development
with respect to ETC services and related issues.
5. In order to reduce too much idle resource, it is favorable to work with a
well-situated phased approach, i.e., the upcoming plenty of services with
corresponding capacities seems too huge that once they are deployed, it
will take years to consume fully. Therefore, the frame work should be pre-
pared in a way that better support the investment with returns. In addi-
tion, utilizing modern technologies such as intranets, internet, and
extranets as much as possible, to ensure an increased flow of information
both internally and externally, and to reduce errors committed due to
frequent manual interventions.
. Utilizing modern technologies such as intranets, internet, and extranets
as much as possible, to ensure an increased flow of information both
internally and externally, and to reduce errors committed due to
frequent manual interventions.
6. There should be a series of public demonstrations to attract customers by
showing them the appropriate tools for the kind of service and feature in use.
7. In order to improve the quality of service and achieve the expected
customer satisfaction, marketing strategies should be developed based
on market research and should include:
a. Market segmentation, positioning, and targeting of both internal and
external customers. However, the initial target should be those who
are well acquainted with technology exposure, and also who have
the budget, so that the result will be better, as it requires new invest-
ment to buy new apparatus to support the new services and features;
b. The appropriate marketing mixes; and
c. Market monitoring and control system (setting performance standards
and evaluation system) should be in place and practical in their design.
IMPLICATIONS AND DIRECTIONS FOR FUTURE RESEARCH
The findings of this study contribute directly to the improvement of existing

ETC services and to the management of the upcoming services. This,
furthermore, contributes to leading the organization to provide satisfactory

services to the customers, which in turn generates high revenue and fulfill-
ment of overall objectives of ETC in a way to identify new approaches.
The results may also be used as a foundation to formulate or modify the
planning mechanism for services other than mobile, too.
However, a detailed study is expected to provide further guidance on
the issues associated with strategic planning, policy development, and
marketing of mobile services of the corporation, taking into consideration
variables other than those used in the study for assessment such as a wide
geographic area coverage, cultural influences, procedures for segmenting,
targeting, and positioning of the market.
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Rakshit Negi Eyob Ketema

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An Assessment of the Marketing Strategy

Ethiopian Telecommunication Corporation, Addis Ababa, Ethiopia

The study was designed to assess the marketing strategy of

KEYWORDS ETC, Ethiopia, marketing mix, marketing strategy,

Address correspondence to Zelalem Temesgen, Ethiopian Telecommunication Corpora-

The ultimate difference between marketing of goods and services, on the

core competencies and learning processes provides a connection of exter-

relationships that will satisfy individual and organizational objectives. As a

or regional marketing units perform their activities coherently to ensure qual-

Market Segmentation, Positioning, and Targeting

1. Identification of broad, large markets; and

series of segments and target it or them. Resources and effort will be

Since positioning is based on customers’ perceptions, it is only partly

Service Marketing Mix

Furthermore, service firms need to provide physical evidence carefully

Service Quality and Customer Satisfaction

customer-facing employee is able to provide to customers (external service

(directly involved in marketing planning and services) were selected through

DATA ANALYSIS AND FINDINGS

The demographic profile of the customers was found to be diverse with a

TABLE 1 Demographic Statistics (Customers)

TABLE 2 Demographic Statistics (Employees)

Sex % Age % Education % Occupation % Monthly income %

TABLE 3 Satisfaction Level and Reasons for Dissatisfaction

Satisfaction level % Reason for dissatisfaction %

Satisfied 23.5 Low QOS 37.7

Respondents were further asked to report their level of agreement

(1 ¼ strongly disagree and 5 ¼ strongly agree) with the framed items of

TABLE 4 Customers Preference of Services to be Added by ETC

TABLE 5 Descriptive Statistics (Customers) for Scale Items on Marketing-Mix

Promotional service creates enough awareness 3.10 1.076

Cross-Tabulation Analysis for Customer Data

Customer Awareness of Promotion, Tariff, and Service Availability

Promotional mix Internet 18.0

Customer Service and Marketing Employees=Managers Opinions

TABLE 7 Awareness of Existence of Marketing Strategy

Whether ETC has Whether marketing strategy is

Employees I don’t I don’t

New service or upgrading is Mobile market

Employees Yes No Total Yes No Total

TABLE 9 Level of Importance of Marketing Mix

TABLE 10 Opinion on Promotional Influence and Price of Mobile Service Components

Promotional mix Internet 8

an overwhelming majority (80%) of both customer service and marketing=

Marketing-Mix Elements as Experienced by the Employees

TABLE 11 Descriptive Statistics (Employees) for Scale Items on Marketing Mix

Marketing department has adequate staff 3.08 1.220

experienced by them (M ¼ 2.16). Moreover, they accepted that FDE serving to

action to ensure satisfaction to every customer (M ¼ 2.32), measuring

CONCLUSION AND RECOMMENDATIONS

On the basis of these findings, we address the conclusion drawn with an