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Summer Internship Project
DHRUV SRIVASTAVA PGDM 2009-11 Roll No. 038 Birla Institute of Management Technology
Date: __________ Signature ___________ Seal: Name of Faculty________ Birla Institute of Management Technology Page 2 . Roll No. This is his original work to the best of my knowledge.Summer Internship Project Summer Project Certificate This is to certify that Mr. 038. Ltd. after trimester-III in partial fulfilment of the requirement for the programme. a student of PGDM has worked on his summer project titled “Planning& Implementation of Advertising & Promotion Budgets basis Urban & Rural markets” at Idea Cellular Pvt. Dhruv Srivastava.
His mentorship has set an example for me. under whose able guidance this project was carried out. guidance. I am highly indebted to Professor R.Marketing Communications. I thank him for his continuous support. Birla Institute of Management Technology Page 3 . my Faculty Guide. help and mentoring before. Ashit Singh. Masilamani.J.Summer Internship Project Acknowledgement I take this opportunity to express my deep sense of gratitude to all those who have contributed significantly by sharing their knowledge and experience in the completion of this project work. Head. I am extremely grateful to Mr. during the tenure & after completion of the project. my industry guide for being supportive and for taking out time to help me during my project.
Summer Internship Project Table of Contents Birla Institute of Management Technology Page 4 .
India‘s first truly multinational corporation. Idea Cellular is a leading GSM mobile services operator in India with over 62 million subscribers. Idea Cellular is a publicly listed company. It is a pan India integrated GSM operator covering the entire telephony landscape of the country. having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March 2007.Idea is seen as an innovative. The Group has been adjudged the ‗6th Top Company for Leaders in Asia Pacific Region‘ in a survey conducted by Hewitt Associates. 30. and Fortune. or low-end. Mobile TV. A front runner in introducing revolutionary tariff plans. Data card. Idea Cellular has partnership with over 400 operators to ensure that customers are always connected while on the move. price sensitive consumers – Idea‘s tariff plans are designed to suit every pocket.000 employees belonging to 30 nationalities. The group operates in 25 countries. Idea offers seamless coverage to roaming customers travelling to any part of the country. It won the GSM Association Award for ―Best Billing and Customer Care Solution‖ for 2 consecutive years. Be it high end. Idea is the winner of ‗The Emerging Company of the Year Award‘ at the Economic Times Corporate Excellence Awards 2008-09. and is anchored by over 1. Birla Institute of Management Technology Page 5 . anywhere. as well as to international travelling customers across 200 countries. Idea offers affordable and world-class mobile services to varied segments of mobile users.Summer Internship Project Company Background Idea Cellular is an Aditya Birla Group Company. customer focus brand. The company has received several other national and international recognitions for its path-breaking innovations in mobile telephony products & services. Idea Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings. It was awarded ―Mobile Operator of the Award – India‖ for 2007 and 2008 at the Annual Asian Mobile News Awards. in partnership with The RBL Group. for the first time in India. With a vision of delighting its customers while meeting their individual communication needs anytime. Games etc. and has NLD and ILD operations. in an increasingly segmented market. The Group has also been rated ‗The Best Employer in India and among the Top 20 in Asia‘ by the Hewitt-Economic Times and Wall Street Journal Study 2007. under brand Idea. within the country or other parts of the world. From basic voice & Short messaging Service (SMS) services to high-end value added & GPRS services such as Blackberry.
054. Assam.611. West Bengal. Karnataka. Spain Initial Public Offering aggregating to Rs.153 Idea acquired 9 licences for Punjab.Summer Internship Project The chronology of key events of the Company from incorporation is set out below: Calendar year Events Becomes pan-India operator in 2009 2009 Subscriber base as on December 31. 2008: 40.016. Kolkata. ever Launched services in Bihar 2007 Subscriber base as on December 31. Tamil Nadu & Chennai. UP(W) & Kerala and new licensee in HP Birla Institute of Management Technology Page 6 .872 Idea becomes a pan-India operator Emerging Company of the Year . 28.027 Won an award for the "CARE" service in the "Best Billing or Customer Care Solution" at the GSM Association Awards in Barcelona.187 million and Listing of Equity Shares on the Bombay Stock Exchange and the National Stock Exchange Merger of seven subsidiaries with Idea Cellular Limited Reached the twenty million subscriber mark Acquired Escotel. North East and Jammu & Kashmir Acquired Spice Communications with the operating circles of Punjab and Karnataka Launched services in Mumbai metro in the largest single metro city launch. Orissa.fastest growing mobile operator in the world‘s fastest growing telecom market 2008 Subscriber base as on December 31. 2007: 21. incumbent cellular service provider in Haryana. 2009: 57.
2006. 100 million. agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for the consideration of Rs.450 Became part of the Aditya Birla Group subsequent to the TATA Group transferring its entire shareholding in the Company to the Aditya Birla Group Acquired Escorts Telecommunications Limited (subsequently renamed as Idea Telecommunications Limited) Restructuring of debt Launch of the New Circles Reached the 10 million subscriber mark Received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle. Received Letter of Intent from the DoT for a new UAS License for the Bihar Circle through Aditya Birla Telecom Limited. 2005 Subscriber base as on December 31. Spain Sponsored the International Indian Film Academy Awards 2004 Completed debt restructuring for the then existing debt facilities and additional funding for the Delhi Circle.473.Summer Internship Project 2006 Subscriber base as on December 31. Acquired Escotel Mobile Communications Limited (subsequently renamed as Idea Mobile Communications Limited) Acquired RPG Cellcom.962 Reached the five million subscriber mark Turned Profit Positive Won an Award for the "Bill Flash" service at GSM Association Awards in Barcelona. 2006: 12. 2005: 6. pursuant to a letter dated November 22. service provider in Madhya Pradesh (Feb) Awarded Brand IDEA launched Delhi operations commence (Nov) Birla Institute of Management Technology Page 7 . ABNL.442. the parent of Aditya Birla Telecom Limited.
Summer Internship Project Reached the four million subscriber mark First operator in India to commercially launch EDGE services 2005 2003 Reached the two million subscriber mark 2002 Changed name to Idea Cellular Limited and launched "Idea" brand name Commenced commercial operations in Delhi Circle Reached the one million subscriber mark 2001 Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited Obtained license for providing GSM-based services in the Delhi Circle following the fourth operator GSM license bidding process 2000 Merged with Tata Cellular Limited. thereby acquiring original license for the Andhra Pradesh Circle 1999 Migrated to revenues share license fee regime under New Telecommunications Policy ("NTP") 1997 Commenced operations in the Gujarat and Maharashtra Circles 1996 Changed name to Birla AT&T Communications Limited following joint venture between Grasim Industries and AT&T Corporation 1995 Incorporated as Birla Communications Limited Obtained licenses for providing GSM-based services in the Gujarat and Maharashtra Circles following the original GSM license bidding process MoU for merger between Birla AT&T and Tata Cellular Limited Andhra Pradesh signed (Jan) Birla AT&T commence Cellular operations Maharashtra & Gujarat Birla Institute of Management Technology Page 8 .
Birla Institute of Management Technology Page 9 .e. the subscriber base) has increased from 6. The total number of mobile subscribers in India (i. at a compounded annual growth rate (CAGR) of 81%..4 million in March 2002 to around 350 million in December 2008.Summer Internship Project Telecommunications Industry in India India is among the fastest growing mobile markets in the world: India. aided by a significant increase in network coverage and a continual decline in tariffs and handset prices. the second largest mobile market in the world. is also among the fastest growing mobile markets globally.
As compared with a capital cost of US$50-90/subscriber to provide mobile service. has benefited from a significant decline in mobile network costs during the last three to four years. coverage in the Class B and Class C cities is still low at 15-25%. within these circles growth has largely been concentrated in the urban areas while penetration in the rural areas remains lower. Birla Institute of Management Technology Page 10 . However. Thus future growth is likely to come largely from Class B and C circles and rural areas. mobile growth in India is expected to continue in the short to medium term albeit at a lower level because of the larger base effect. Keeping this in view. which is relatively lower as compared to other countries as depicted in Chart 2. This and the added benefit of mobility have led to stagnation in the total fixed line subscriber base. mobile penetration remains moderate: As on end September 2008. Reliance Communications Limited. a relatively late entrant into mobile services. with coverage reaching around 90% and 35%. which along with the significant growth in the mobile base has translated into India having one of the highest ratios globally of mobile subscribers to total telecom subscribers. larger players like Bharti Airtel Limited. Growth expected to be led by B and C Class circles: The growth in the domestic telecom industry has largely been concentrated in the Metros and Class A circles in the past decade. Despite the growth. India had a mobile penetration of around 27%. Moreover.Summer Internship Project India. and Bharat Sanchar Nigam Limited (BSNL) are largely focusing on increasing their geographical coverage in Class B and C circles. respectively. Given the moderate penetration levels at present. it costs as much as US$200-350/subscriber to provide fixed-line services.
The movements in the ARPUs and minutes of usage (MoUs) for global system for mobile communications (GSM) and code division multiple access (CDMA) operators are presented in Charts 5 and 6. Birla Institute of Management Technology Page 11 .Summer Internship Project Addition of low usage subscribers and competitive pressures lead to fall in ARPUs: With growth coming from the lower economic strata and on account of strong competition in the mobile industry. average revenues per user (ARPUs) have moved south over the years.
Summer Internship Project Conservation of capital In the past. taxes. the margins and return indicators may come under pressure as ARPUs continue to fall. Reliance Communications Limited. Competition set to intensify further with market liberalization: The Indian mobile sector is an intensely competitive industry. competition is expected to intensify further. Birla Institute of Management Technology Page 12 . However. Thus. in the current market conditions. featuring 10 mobile operators of which four. operations can be unviable at the current level of incremental ARPUs. This is also the partly on account of the fact that these operators have their presence in a larger number of circles as compared with other players. most telecom operators were able to improve their earnings before interest. depreciation and amortisation (EBITDA) margins. Vodafone Essar Limited and BSNL together account for almost three-fourths of the entire mobile market share. with costs being amortised over a larger base and steps being taken to rationalize costs. The chart broadly illustrates the impact of declining ARPUs on the internal rate of return (IRR) at different EBDITA margins. the sharing of the cost is also going to determine the future profitability of the companies. namely Bharti Airtel Limited. for new operators especially whose margins are low because of the high set-up costs. This is also leading to increasing load on the existing infrastructure of towers and stations. With most tower companies like Indus towers being joint ventures between the competing cellular service providers. With licences being granted to some of the existing operators for new circles and also to new entrants.
Summer Internship Project Birla Institute of Management Technology Page 13 .
Summer Internship Project Service Provider wise market Share as on 28-02-2010 Mobile penetration as on Jun 2009 for each circle Circle Delhi Mumbai Kolkata Maharashtra Gujarat Andhra Pradesh Karnataka Tamil Nadu Kerala Punjab Haryana Uttar Pradesh (W) Uttar Pradesh (E) Rajasthan Madhya Pradesh West Bengal Himachal Pradesh Bihar Orissa Assam North East Jammu & Kashmir Category Metro Metro Metro A A A A A B B B B B B B B C C C C C C Mobile Penetration 138% 112% 102% 37% 45% 41% 46% 52% 55% 56% 44% 31% 24% 40% 25% 24% 55% 20% 27% 22% 29% 37% Birla Institute of Management Technology Page 14 .
73 Million 18.055 MTNL customer base.146.2.908.9.44 Million new additions in wireless Overall Tele-density reaches 35.Summer Internship Project Telecom Subscription Data as on 28th February 2009 Total Telephone subscriber base reaches 413.69 Million Wireless subscription reaches 563.389 Idea’s Market Share (%) .65 Telecom Subscription Data as on 28th February 2010 Total Telephone subscriber base reaches 600.290 (Excluding Mumbai) Idea Cellular customer base.481 Reliance.480 Aircel customer base.6.570.871.05 Total Subscriber base (Maharashtra-Goa Circle) – 42.66 % Tata Customer base.7.233.12 Million 13.601.6.21.639.6.506 Birla Institute of Management Technology Page 15 .279.932 Vodafone customer base.987 Airtel customer base.76 Million new additions in wireless Overall Tele-density reaches 51.85 Million Wireless subscription reaches 376.
Promotions globally as well as in India have the potential of being a strategic and brand building tool. US marketers are willing to explore alternatives to the 30-second TV commercial as they shift budget from TV to social media. More than half of them — 62% — told them that TV advertising is less effective than it used to be. there is more than enough opportunity to simultaneously build equity for the brand. However. by preparing to deliver targeted commercials.88 million subscribers while Tata Telecommunications added 14. sales promotion and marketing budget by 3 per cent. have marginally lowered down their advertisement. Meanwhile. delivering true branded entertainment experiences. The telecom sector firms. Advertisers want more accurate measurement and the option for more targeted and clutter-free ad inventory. Birla Institute of Management Technology Page 16 . That's in line with what they told in 2008. and interactive TV. banners. In India the integration of promotion with other communication is mostly done on the recommendation of the brand owner / the client. As the Indian telecom sector which registered a robust growth rate of 38. and search. Any work that needs to be evaluated will have to take into account whether the promotion activity has managed to activate the brand promise and will keep up the brand equity in the long term.56 million subscribers in the last fiscal.Summer Internship Project Review of Literature When it comes to promo tools. Reliance Telecom added 26. which used to be fervent advertisers in the past. Forrester and the Association of National Advertisers (ANA) surveyed 104 US advertisers representing nearly $14 billion in measured media budgets. More forward-looking marketers are ready to experiment with online video ads. They recommend that advertisers get ready for the future of television. This is best done by ensuring that promo and activation is well-integrated with the advertising strategy for the brand. and embracing the connected TV. branded entertainment.38 million subscribers in 2008-09.51 per cent in 2008-09 as against the previous year by adding nearly 10 million subscriber month on month. their net sales increased by 26. India‘s largest telecom sector company Bharti Airtel added 32.9 percent despite the decline in their advertisement expenditure. there is a strong misconception they are tailor-made only for tactical objectives — while promos may be primarily used for immediate activation of the brand.
competitive positioning of the brand. Keller (2001) for example.) needs to evaluated and considered. etc. For practitioners. integrated marketing communication (IMC) has 1. each needs to be considered to achieving brand objectives in both short and long term. In particular. Birla Institute of Management Technology Page 17 . Has become an integral part of brand strategy that requires extensive brand development activities within the firm before beginning any external brand communication efforts. Has pervaded various levels within the firm 3. Become widely accepted 2. highlights the major communications options in the following way: In orchestrating these options and tools in marketing communications campaigns and programmes. levels of brand recognition and recall.Summer Internship Project Marketing communication programmes and campaigns can be built around a host of different communications options. the relationship between contributions to overall long term brand equity (perceptions of brand quality.
823). Brand management should be used for initiating and maintaining a continuing dialogue with the customer and for enhancing relationships. Vargo and Lusch (2004) suggest that 1. IMC should replace diverse. and the need for improved effectiveness of marketing communications. Reduced faith in mass marketing as communications channels proliferate and customer and consumer loyalties diminish or dilute. p. emphasize that ―strategically oriented integrated brand communications can help business move forward in the highly competitive world of the 21st century‖ (2004. The focus on IMC is also being driven by ongoing global changes in marketing communications environment. In keeping with this evolution. For Schultz (1998). and changes in consumer‘s response to traditional communications tools and approaches. Keller (1993) points out that customer-based brand equity emanates from the consumer‘s familiarity and strong. Birla Institute of Management Technology Page 18 .28. amongst others. italics added). Kitchen et al. Vargo and Lusch (2004) argued in a recent paper that marketing is evolving towards a dynamic and evolutionary process-one that is based on a service-centred view. ―marketing communications represent the voice of a brand and the means by which companies can establish a dialogue with consumers concerning their product offerings‖ (2001. Shimp (2000) further qualifies the changes affecting marketing communications as: 1. For Keller. the relationship between below and above the line activities. 2. cost of new customer acquisition and customer defection. brands are central to this integrated marketing communication. Increasing reliance on more highly targeted communications methods to reflect an emerging relationship marketing orientation in business. p. 2.Summer Internship Project Regarding academics. fragmentation of mass media. favourable associations with the brand. These global changes include the development of sophisticated customer databases. limited-focus promotional tools.
wearable items. racks. painted walls. Sports & Theatrical Events. Increasingly. in-store television and radio. interactive units. writing instruments. trade shows. bus shelter displays. electronic displays. Below is a list of media options that have found some acceptance as an advertiser continue their never-ending search to reach elusive consumers. airline ticket envelopes. billboards. banner pulling. Birla Institute of Management Technology Page 19 . air terminal posters In-Store media. to become more of a brand custodian or guardian than just a transaction based supplier of communication services.Audience segment ―hangouts‖. poster type ads.Car cards. Speciality advertising. television. When people think of advertising. inside taxi cabs. Transit. rest room advertising.POP banners. signs Non traditional Out of Home. moving bill boards. cash register units. 4.Summer Internship Project 3. in-flight advertising. they usually think of traditional media. business gifts. radio. magazines. ads on outside of public transportation. testers/sampling. clocks. floor stands. and perhaps direct mail. shopping mall displays.Calendars. unexplored ways to reach their target audience. Increased efforts to access communication ‗return on investment‘ reflecting greater demands by managers (marketers) for accountability and measurement of alternative customer acquisition and relationship activities. aisle displays. such as agencies. framed displays. free standing inflatable. kiosks. such as newspapers. marketers are looking for new. As consumers grow numb (and eventually immune) to the ads that inundate them through traditional media channels. yellow pages. stadium score boards. desk accessories. Greater Demands placed on marketing communications suppliers. revolving banners.programs. Sometimes it also makes sense to capitalize on existing non traditional approaches that they may not have previously considered. advertisers seek new formats to distribute their messages. counter units. truck stops.