Amit Kumar Gupta

8/10/2019 Amit Kumar Gupta

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UNIVERSITY OF MUMBAI

A STUDY ON

COMPARATIVE-ANALYSIS-ON PRICINGDECISION POLICYOF VODAFONE AND

AIRTEL

SUBMITTED BY

Mr.Amit Kumr Gu!t

SUBMITTED TO"

T#E UNIVERSITY OF MUMBAI

FOR T#E PARTIAL FULFILLMENT OF

BAC#ELOR OF MANAGEMENT STUDIES

ACADEMIC YEAR $%&'-$%&(

TYBMS- SEM (SEAT NUMBER) &%*$'&+

UNDER T#E GUIDANCE OF

MRS. DAINA RAYEN

CLARA,S COLLEGE OF COMMERCE

YARI ROAD"AND#ERI EST/

MUMBAI- '%%%(+

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ACKNOLEDGEMENT

I take this opportunity to express my sincere gratitude and deep

regards to my guide Mr0. DIANA RAYEN& also Mr. FAISAL

TANAR BMS CO-ORDINATOR/for their exemplary guidance,

monitoring and constant encouragement throughout the course of this

thesis. The blessing, help and guidance given by them from time to timeshall carry me a long ay in the !ourney of life on hich I am about to

embark.

I ould also like to thank "#$IA1AY KAUL SIRand

PRINCIPAL DR.2A#IDA S#AIK#for giving me this opportunity to

shocase my hard ork.

I am also grateful to F3u4t5 C4r,0 C644787 69 C6mm7r37 for

continuous and deliberate discussion on the topic and indeterminable

burden taken by her in helping me during the pro!ect.

I thank almighty %od, my Parents, siblings and my friends for their

constant support and encouragement ithout hich this assignmentould not be possible.

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TABLE OF CONTENTS PG NO

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I:tr6;u3ti6: 69 T74736mmu:i3ti6: 073t6r

Telecommunications of late has become the backbone of a modern economy. In

fact, the concept of a %lobal 2illage is attributable mainly to the rapid advances in

telecommunications. Today, a large country like India ith its social, cultural and

geographic diversity can seek to address developmental problems previously

considered intractable, thanks to telecommunications.

Lr870t N7tuipped capacity of 1.< million lines

and 19.: million orking telephones as on 6arch 71 this year. The long distance

transmission netork has about 9,; route kilometers of microave systems and

about 9


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Perhaps the most significant aspect of the 1;;8 telecom policy as the recognition

that telecom as a vital infrastructure, and resources re>uired to meet the

ob!ectives and targets set out ere beyond the capacity of government funding and

international generation of resources. Private investment and association of the

private sector as needed in a big ay to bridge the resource gap. This as the

beginning of the telecom liberaliAation in the country.

S!77; :; E99i3i7:35

That the government ill not leave any stone unturned in making India the hub of

telecommunications as once again made clear by the Prime 6inister, "hri -tal

ihari 2a!payee. #e has repeatedly advocated to bring speed and efficiency in

resolving the pending issues pertaining to telecommunication.

In the last six months, some ma!or decisions ere taken to hasten the groth of the

telecom industry. The %overnment extended the license period for the cellular

operators to 1 years as India as the only country ith a 1/ year duration for the

license period. This decision made the cellular pro!ects more bankable. "hort

)istance +harging -rea ?")+-@ as declared as local area from -ugust 1 this

year enabling calls to the ad!acent ")+-s, hich ere being made on "T) rates

to be charged as the local calls, at three minutes per call unit.

N7< T74736m P64i35

There are some other factors, hich necessitate the need for revie of the telecom

policy. In 1;;9, India !oined


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the %overnment of India formalised its commitment to revie 2"'5Bs monopoly

over international telecom services in //8 and revie )oTBs monopoly over long

distance services in 1;;;. The %overnment has decided to disinvest part of its

e>uity in 2"'5 and to increase the plan outlay for +ommunications by 7D as

compared to 1;;9E;:.

I:t7r:7t P64i35

In the recently announced Internet policy, the monopoly of the the 2idesh "anchar

'igam 5imited ? 2"'5 @ as the countryBs sole internet provider came to an end.

To private companies and the 6ahanagar Telephone 'igam 5imited ?6T'5@

have got licences to provide this service.The ne policy has incorporated all the

recommendations of the 'ational Task 3orce on Information Technology . It

allos private I"Ps ? Internet "ervice Providers@ to set up their on gateays,

virtually does aay ith the licence fee and extends the term of the licence to 1

years.The ban on internet telephony, hoever, continues. -t present, 89 companies

have applied to the )(T ho ill shortly get the licence.

A:6t>7r 4:;mr=) GMPCS

-nother landmark event in the history of telecommunications as the launching of

the Iridium system in India on 'ovember 1, by linking it to the orldBs first

satellite telephony system. This event as marked at Iridium IndiaBs "outh -sian

%ateay ith three satellite tracking earth stations erected at the 2"'5 premises

at )ighi near Pune. This gateay is one of 1 such gateays orldide and ill

manage satellite telephony traffic in the "outh -sian region. *nder the %lobal


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6obile Personal +ommunication "ystem ? %6P+"@, telephone calls can be made

and received from virtually anyhere on earth.

O:7 Mi44i6: Su?03ri?7r0

'o doubt there is a lot to be achieved for moving up the present tele density of 1.:

to match the orld average of 1/. ut then India is the first country to reach the

one million subscriber base ithin the first three years of paging. The *"- took 9

years to achieve the same. In cellular also it took +hina six years to reach ; lakh

subscribers base, something e did in to years.

-ccording to the industry estimates over the next 1 years, the telecom services

industry is expected to generate around $s.7,//,/// crore ?$s.7/// billion@ and

about /,/// ne !obs. Cith this kind of frameork and expectations, surely, a

ne telecom policy ill bring reprieve to the telecom industry and telecom ill

indeed be the engine of groth in the Indian economy.

The telecom services have been recogniAed the orldEover as an important tool

for socioEeconomic development for a nation and hence telecom infrastructure is

treated as a crucial factor to realiAe the socioEeconomic ob!ectives in India.

-ccordingly, the )epartment of Telecom has been formulating developmental

policies for the accelerated groth of the telecommunication services. The

)epartment is also responsible for grant of licenses for various telecom services

like *nified -ccess "ervice Internet and 2"-T service. The )epartment is also

responsible for fre>uency management in the field of radio communication in

close coordination ith the international bodies. It also enforces ireless

regulatory measures by monitoring ireless transmission of all users in the

country.

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ABSTRACT

- prime task of a marketer is to understand the market, his customer and the needs

of the customer and finally look for the best possible ay to satisfy the needs

of the customer.

The pro!ect undertaken is A COMPARATIVE ANALYSIS OF PRICING

DECISION POLICIES OF VODAFONE AND AIRTEL. The telecom services

have been recogniAed the orldEover as an important tool for socioEeconomic

development for a nation and hence telecom infrastructure is treated as a crucial

factor to realiAe the socioEeconomic ob!ectives in India. -ccordingly, the

)epartment of Telecom has been formulating developmental policies for the

accelerated groth of the telecommunication services. The )epartment is also

responsible for fre>uency management in the field of radio communication in close

coordination ith the international bodies. It also enforces ireless regulatorymeasures by monitoring ireless transmission of all users in the country.

The leverage of this pro!ect lies in understanding the customerFs knoledge,

aareness and perception about the telecomm +ompanies, G2odafone and -irtelH

in the telecommunication sector as accompany to subscribe the service. This ould

be done, by adopting a research based approach. It deals ith customerFs

aareness and involves direct intervies ith >uestionnaire method for market

research.This study ill help to report the scope of both the companies in the

market. It also enables the use of various marketing research instruments such as

>uestionnaires and methodologies like prototyping and articulate intervieing and

also understanding the market condition by taking hypothesis.

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This pro!ect ill help me to evaluate the perception of customer about pricing

strategy of 2odafone and -irtel. -lso this pro!ect ill give me an opportunity to

gather knoledge about telecommunication sector and customer knoledge.

The pro!ect also involves making recommendations, after comprehensive "C(T

analysis that ould help both the companies to provide better service to its existing

customers and improve its reach to potential customers. (verall the pro!ect ould

be a inEin situation for both, the companies 2odafone and -irtel.

1.

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OB1ECTIVES OF STUDY

*nderstanding the customerFs knoledge, aareness and perception about

2odafone and -irtel as a ma!or company in telecommunication sector.

To find out the share of 2odafone and -irtel in the market at )elhi.

*nderstand the target customer of 2odafone and -irtel in context to their

pricing strategy.

To understand & kno the re>uirements of the clients

The pro!ect ill help, kno and understand the target customer better and to kno

the efforts of both the companies to attract more and more customers. It deals ith

customerFs aareness and involves direct intervies ith >uestionnaire method

and check out through hypothesis method. This study ill help to report the scope

of 2odafone and -irtel at %urgaon as a choice for communication purpose. The

pro!ect also involves making recommendations, after comprehensive "C(T

analysis that ould help both the companies to provide better service to its existing

customers and improve its reach to potential customers.

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LIMITATIONS OF STUDY

The report does not take into consideration extraneous factors such as time

given by different intervieees for the intervie and the attitude toards

ansering specific >uestions such as categoriAing of commission rate into

poor, good, average etc.

The report does not also include any provision for the change in attitude of

the respondents in future.

The report does not give a single full proof recommendation for improving

the product offering and advisory services to each and every potential as

ell as existing customers.

Personality differences beteen respondents.

The persons surveyed may not give correct information as the data is

generally related ith the financial gains of the person concerned.

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SCOPE OF STUDY

The leverage of this pro!ect lies in understanding the customerFs knoledge,

aareness and perception about 2odafone and -irtel separately as an option in

mobile communication services. It ill help, kno and understand the target

customer better and ho to lure them to subscribe more. This ould be done, by

adopting a research based approach. It deals ith customerFs aareness and

involves direct intervies ith >uestionnaire method for market research folloed

by putting hypothesis to understand better. This study ill help to report the scope

of the given companies in the market of )elhi as a good company for mobile

services. The pro!ect gives an opportunity to understand the changing and varied

customer needs and the pricing strategies that should be adopted by both 2odafone

and -irtel to fulfill them. It also enables the use of various marketing research

instruments such as >uestionnaires and methodologies like articulate intervieing

and hypothesis testing.

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MET#ODOLOGY

Tr87t !6!u4ti6: People subscribing services of 2odafone -irtel

T5!7 69 0m!4i:8 +onvenient "ampling and #ypothesis testing

Sm!47 0i@7 1//

)ue to time and accessibility constraints sampling as adopted and the sample siAe

as limited to 1//.

1@ Interacting ith people ho use to subscribe the mobile services of

2odafone and -irtel, to have their vie.

@ Prepare a >uestionnaire and getting it approved by faculty guide and get it

filled by visiting customers and ith hom the meeting takes place.

7@ The analysis of the data collected through >uestionnaire has been done ith

the help of the results derived from 6"Excel.

8@ $eference to secondary sources of information hich include study of

relevant books, magaAines etc., and use of literature from Internet ?articles,

surveys etc.@

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@ )iscussion ith faculty guide and professionals has been undertaken. ased

on the interactions, secondary and primary research, the analysis and

recommendations has been made.


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COMPANY PROFILE

Airt74

Telecom giant harti -irtel is the flagship company of harti nterprises.

The harti %roup, has a diverse business portfolio and has created global

brands in the telecommunication sector. harti has recently forayed into retail

business as harti $etail Pvt. 5td. under a 6o* ith CalE6art for the cash

& carry business. It has successfully launched an international venture ith

5 $othschild %roup to export fresh agri products exclusively to markets in

urope and *"- and has launched harti -J- 5ife Insurance +ompany 5td

under a !oint venture ith -J-, orld leader in financial protection and

ealth management.

-irtel comes to you from harti -irtel 5imited, IndiaFs largest integrated and

the first private telecom services provider ith a footprint in all the 7

telecom circles. harti -irtel since its inception has been at the forefront of

technology and has steered the course of the telecom sector in the country

ith its orld class products and services. The businesses at harti -irtel

have been structured into three individual strategic business units ?"*Fs@ E

6obile "ervices, -irtel Telemedia "ervices & nterprise "ervices. The

mobile business provides mobile & fixed ireless services using %"6

technology across 7 telecom circles hile the -irtel Telemedia "ervices

business offers broadband & telephone services in ;8 cities. The nterprise

services provide endEtoEend telecom solutions to corporate customers and

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national & international long distance services to carriers. -ll these services

are provided under the -irtel brand.

V6;96:7

V6;96:7 Gr6u! is a mobile netork operator head>uartered in 'ebury,

erkshire, ngland, *K. It is the largest mobile telecommunications netork

company in the orld by turnover and has a market value of about L1//

billion ?)ecember //9@. 2odafone currently has e>uity interests in

countries and Partner 'etorks ?netorks in hich it has no e>uity stake@ in

a further 7; countries. The name 2odafone comes from 2oice data fone,

chosen by the company to Mreflect the provision of voice and data services

over mobile phones.

-t 71 0anuary//92odafone had // million proportionate customers in

marketsacross continents. MProportionate customersM means, for example,

that if 2odafone has a 7/D stake in a business ith a million customers, that

is counted as 7//,///@. (n this measure it is the second largest mobile

telecom group in the orld behind +hina 6obile. The eight markets here it

has more than ten million proportionate customers are the *nited Kingdom,

%ermany, India, Italy, "pain, Turkey, gypt and the *nited "tates. In the

*."., these customers come via its minority stake in 2ersion Cireless, and in

the other seven markets 2odafone has ma!orityEcontrolled subsidiaries.

(n 7/ 6ay//


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from continuing operations as L19. billion and the bottom line loss for the

financial year as L1.: billion. The company as pushed into loss by

impairment charges of L7. billion, hich related to the ac>uisition of

6annesmannseveral years earlier, and losses of L8.< billion in relation to its

discontinued business in 0apan. -t an operating level it remained highly

profitable, ith an operating profit on continuing operations of L;.8 billion

before impairment costs.

Curr7:t r7!6rt i: r74ti6: t6 V6;96:7 Airt74

2odafone to invest approximately $s.


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History of Cellular Telephony

1947 Bell Laboratories introduced the idea of cellular communications with the police

car technology.

1947 The basic concept of cellular phones began, when researchers looked at crude

mobile (car) phones and realized that by using small cells (range of service

area) with freuency reuse they could increase the traffic capacity of mobile

phones substantially. !owever at that time, the technology to do so was

none"istent.

1947 #T$T proposed that the %&& allocate a large number of radio'spectrum

freuencies so that widespread mobile telephone service would become

feasible.

1947 The %&& decided to limit the amount of freuencies available, the limits made

only twenty'three phone conversations possible simultaneously in the same

service area.

1968 #T$T and Bell Labs proposed a cellular system to the %&& of many small, low'

powered, broadcast towers, each covering a cell a few miles in radius and

collectively covering a larger area. ach tower would use only a few of the total

freuencies allocated to the system. #s the phones traveled across the area,

calls would be passed from tower to tower.

1968 The %&& reconsidered its position by stating *if the technology to build a better

mobile service works, we will increase the frequencies allocation, freeing theairwaves for more mobile phones.*

1973 (April) The first call on a portable cell phone is made by +r artin &ooper, a former

general manager for the systems division at otorola, who is also considered

the inventor of the first modern portable handset.

1977 #T$T and Bell Labs had constructed a prototype cellular system. # year later,

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public trials of the new system were started in &hicago with over - trial

customers.

1979 The first commercial cellular telephone system began operation in Tokyo.

1980 #nalog cellular telephone systems were e"periencing rapid growth in urope,

particularly in /candinavia, 0nited 1ingdom, %rance and 2ermany. ach

country developed its own system, which was incompatible with everyone

elses in euipment and operation

1981 otorola and #merican 3adio telephone started a second 0./. cellular radio'

telephone system test in the 4ashington5Baltimore area.

1982 %&& authorizes commercial cellular service for the 0/#.

The &onference of uropean 6osts and Telegraphs (&6T) formed a

study group called the 2roup /p7cial obile (2/) to study and

develop a pan'uropean public land mobile system. The proposed

system had to meet certain criteria8

2ood sub9ective speech uality

Low terminal and service cost

/upport for international roaming

#bility to support handheld terminals

/upport for range of new services and facilities

/pectral efficiency

:/+; compatibility

1983 The first #merican commercial analog cellular service or #6/

(#dvanced obile 6hone /ervice) was made available in &hicago by

#meritech.

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1987 &ellular telephone subscribers e"ceeded one million and the airways

were crowded.

1989 2/ responsibility was transferred to the uropean Telecommunication/tandards :nstitute (T/:),

1990 6hase : of the 2/ specifications were published.

1991 &ommercial launch of cellular service based on 2/ standard in

%inland.

History of Cellular TelephonyHistory of Cellular TelephonyHistory of Cellular

Te

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#i0t6r5 69 C744u4r T747!>6:5 i: I:;i

&**$ Telecommunication sector in India liberaliAed to bridge the gap

through government spending & to provide additional resources

for the nationFs telecom target. Private sector alloed participating

&**+ The telecom industry gets an annual foreign investment $s /.uire mobile for their official purposes. The next category is

the households, ho are either houseife, small units hich operate from their homes etc. They

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OCC!AT"O#

1$%

$$%

20%

10%

&T'(#T& ()(CT"*(& HO&(HO+'& OTH(,&


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are /D of the hole. The next segment is the students. They are 1D of the hole. -nd 1/D of

the hole is categories ho are the professionals.

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S7ri37 Pr6i;7r Gr!>

These are the total market share of mobile user or people captured by the mobile provider

company. There to ma!or company in mobile phone service sector 2odafone and -irtel ho

respectively hold the market share ith other company as 19D and /D of total market user

segment of mobile customer.

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Cu0t6m7r S7ri37 At Airt74 Gr!>

-s the above graph clearly shos that customer services at -irtel seems poor. .uite popular among the people intervieed. :D of the total mobile users

ere having cash card connections. This means that the cash cards should be easily and readily

available in the local markets. -irtel should make sure that 6agic is available in each and every

nook and corner of the market. 1D of the people ere having sim connections hich is the

regular bill.

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M6:t>45 7!7:07 8r!>

People on an average spend $" // per month as their mobile phone expense.


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A

C55 seemed to be a ne ord for many of the people. 8D of the people ere not at all aare

of such a technology. "o, in order to get the anser for this >uestion they ere first explained the

concept. (nly, D people kne hat C55 is all about.

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Awareness of WLL Players Graph

2odafone as the brand hich as popular amongst the intervieed people. -s 2odafone had

done so much advertising and has it banners and hoarding spread all over 0aipur. "o, this could

be one the reasons of its popularity. Tata as hardly a knon brand in this ne field. Possibly,

because of less promotions done by them as compared to 2odafone.

(n the basis of analysis of the >uestionnaire I have found that the maximum no. of people ho

use mobile phones is in the age group of / to :. Cho are the young executives and other office

goersN

They spend a maximum of $" // as their mobile expense.

There is more no. of prepared cards than post paid cards. The mobile users ant to spend money

side by side than to spend money at the end of the month on a big bill.

'o hen I compared -irtel ith its competitor from the point of vie of the consumer I

found that on the basis of Tariff plan, value added services and billing accuracy -irtel is at par or

ahead of its competitor but in the case of customer care and availability they lag behind there

competitors. -s, -irtel has a hold in the market because it has the maximum no. of connections,

so it must improve upon it customer services. -s far as C55 is concerned people are aare

about it but not many people are aare about Tata. They only kno more about 2odafone.

People at this point of time are not interested to sitch over from %"6 to C55

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#O TO DEVELOP A PRICING PLAN

E0t?4i0> Pri3i:8 O?73ti70

The first ma!or step in the development of a pricing plan is to establish your

pricing ob!ectiveEhether you intend to implement a loer, higher, or parity

pricing approach relative to the competition. -ll other ob!ectives, such as increased

sales, higher margins, etc., are overall goals of your business or marketing plan to

hich pricing contributes.

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as ell as non product advantages such as service, guarantees, location for

retailers, or additional distribution channels. Interestingly, it is also utiliAed hen

product differentiation is lo and price is the basis of competition. In mature

categories ith fe competitors and little differentiation, such as the airline

industry, parity pricing is the norm. If one carrier ere to raise prices, demand

ould shift to the competition ith loer prices. If one airline loers prices, the

others ould be forced to loer theirs in response, hich ould loer profits for

all in the industry and create a price ar. (ften, in such industries, one ma!or

player, typically the market leader is considered the price leader. (thers in the

industry atch this leader for price activity.

L6uires appropriate capacity and distribution channels to support

the volume re>uirements. The reasons for a lo price ob!ective are usuallyO

To expand the market, alloing ne consumers ho couldnFt

purchase at higher prices to become purchasers.

To increase trial and or sales due to price incentives.

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To take advantage of a strong priceEelastic product for hich a lo

price generates increased demand. The result is loer margins but

increased profits because of the increased volume.

To preempt competitive strategies, helping to steal market share. This

is often necessary in a mature market.

To remain competitive ith your competition. If a ma!ority of the

competitors have reduced their prices, oftentimes you ill need to do

so, especially if you are in a priceEsensitive product category. If a

strong competitor is also offering an attribute such as service ith

hich you cannot compete, you mayF need to loer your price to

counter the service offering.

To keep competitors from entering the marketplace by having a price

that is difficult for a ne company ith high initial investment coststo match. This E policy of expanded market pricing allos a company

to develop a large, loyal consumer base hile keeping competition to

a minimum.

#i8>7r Pri3i:8

-s e have discussed many times, a premium priceEa higher prices relative to the

competitionEsupports a >uality positioning and provides high margins to support

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higher product and promotional expenditures. The reasons for a high price

ob!ective are usuallyO

- need for a fast recovery of the firmFs investment.

- need for faster accumulation of profits to cover research and development

costs. The profits can then be used to improve the product and to sustain

competitive marketing tactics once competitors enter the market.

To substantiate a >uality image positioning.

The product is price inelasticEthe demand or sales decrease only marginally

ith higher pricing.

The product or service is in the introductory phase of its product life cycle

and represents a substantial innovation ithin the product category. -lso, the

company may ish to skim profits hile there are no substitute products to

force competitive pricing.

The company is stressing profits rather than sales thus margins must remain

high.

The product has a short life span. -n example ould be fad products hich

last for a relatively short time. This necessitates a high price policy hich

ill help recover the firmFs research and development costs in a short time

period.

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The product is difficult to copy and reproduce or has patent protection.

Curr7:t r7!6rt i: r74ti6: t6 V6;96:7 Airt74

2odafone to invest approximately $s. 4i8>t0)

The largest single foreign investment ever in the history of India

The largest investment in the Indian telecom sector

harti establishes its supremacy in the Indian telecom market, having

attracted -siaFs best Q "ingTel, and no orldFs best Q 2odafone.

harti set to gain global leadership in the telecom sector.

harti nterprises continues to hold shareholding and management control

in harti TeleE2entures.

N7< D74>i" O3t6?7r $" $%%()The orldFs leading mobile telecommunications

company, 2odafone %roup Plc. ?2odafone@ has secured around 1/D interest in

harti TeleE2entures 5td. ?T25@, IndiaFs largest private sector telecom company.

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2odafone, through 2odafone 6auritius 5td., has contracted to subscribe shares in

harti nterprises, giving it a beneficial stake in T25 of 8.8D. In addition

2odafone, through 2odafone International #oldings 2, has also picked up .irm: Gr6u! M:8i:8 Dir73t6r 69 B>rti said RCe are

delighted that 2odafone has made a call on the Indian telecom sector and has

chosen T25 to be the vehicle to develop its continued interest in the -sian

region. harti has had the privilege of tying up ith Gbest in classF, blue chip

companies, from around the orld ho have come and !oined hands ith harti, at

different stages, to develop the telecom sector in India. -t the time hen the

estern orld started hanging up on India, it brought in -siaFs telecom

poerhouse, "ingTel, to replace Telecom Italia and ritish Telecom. "ingTel

helped harti ith the capital and strategy to gro from a midEsiAe telecom

operator into IndiaFs largest telecom company. Carburg Pincus, making its second

largest investment in the history of the firm, supported the company in developing

the strategy and investor focus, in its public listing and in the process making

harti one of the best investments ever undertaken by Carburg Pincus around the

orld. Today, hen harti stands on the threshold of being an -sian telecom

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poerhouse, it has tied up ith 2odafone to take the company to the next level and

to support harti in achieving its vision of making -irtel the most admired brand

in India. harti is fortunate to have four strong pillars to achieve its vision. The

entrepreneurial leadership of harti nterprises, the -sian telecom poerhouse Q

"ingTel hich ill continue to be our leading partner, the orldFs largest telecom

operator Q 2odafone and, the most important one, a orldEclass management

team.H

C>i79 E73uti7 O99i37r 69 V6;96:7 Gr6u! P43." Mr. Aru: Sri: , speaking on

the occasion, said RI am delighted to announce this strategic partnership ith

T25, the leading national mobile operator in India. Together e ill take this

venture to a ne level as clear leader in this market. Ce are entering a relationship

ith a ma!or company, hich shares our vision and values and understands, as e

do, the enormous potential of mobile telephony in society. This transaction is

consistent ith 2odafoneBs strategy of developing our global footprint in groth

markets, here e can create value for shareholders.H

C>i79 E73uti7 O99i37r 69 Si:8T74" Mr. L77 #0i7: Y:8, speaking on the

occasion, said RCe entered into India through a partnership ith harti nterprises

at a time hen many ere skeptical about IndiaFs telecom story. Ce are delighted

that harti, ith "ingTelFs support, has successfully executed its groth strategy.

hartiFs entrepreneurial spirit and innovative culture continue to drive the

companyFs groth. Today e are pleased to elcome 2odafone as our partner to

further develop the Indian telecom market and to take harti to greater success.H

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+ommenting on the transaction, r?ur8 Pi:3u0 C6-Pr70i;7:t C>i! K57 saidO

RCe are proud to have been part of one of the most compelling groth stories in

IndiaFs history. #aving invested in harti in 1;;; and orking closely along the

ay ith a orldEclass management team and a leader of the caliber of "unil

6ittal, it is gratifying to see the company take this step toard its next phase of

groth.H )alip Pathak, the Carburg Pincus senior partner ho oversees the firmFs

Indian investment portfolio, addedO Rharti is no truly a orldEclass company

and as e depart, e ish the company ell and are confident that it ill continue

to attract interest from investors around the orld.H

A?6ut B>rti T7477:tur70

harti TeleE2entures is one of IndiaBs leading private sector provider of

telecommunications services ith an aggregate of 1.17 million customers as of

end of "eptember B/, consisting of approximately 18./9 million mobile customers.

The company is the only operator to provide mobile services in all the 7 circles in

India. The company also provides telephone services and Internet access over )"5in 1 circles. The company complements its mobile, broadband & telephone

services ith national and international long distance services. The company also

has a submarine cable landing station at +hennai, hich connects the submarine

cable connecting +hennai and "ingapore. The company provides reliable endEtoE

end data and enterprise services to the corporate customers by leveraging its

nationide fiber optic backbone, last mile connectivity in fixedEline and mobile

circles, 2"-Ts, I"P and international bandidth access through the gateays and

landing station.

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PRICING STRATEGY OF VODAFONE

At I:tr6;u3ti6: St87 69 t>7ir 6!7rti6: i: I:;i)-

They are setting price because they have a ne product, and they are

entering into a ne market ith an existing product.

#6


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6arket share grothO -long ith profit and sales maximiAation,

groth in market share is also a bigger part of the business for

the company.

(ther ob!ectives e.g.

6atch competitorsF priceO (ne of the main ob!ectives of

2odafone at the recent time is to maintain !rit5 !ri37 taking

care of the pricing strategy of the competitor companies.

'onEprice competitionO being a ne company in Indian telecom.

"ector it is basically necessary to improve their image and

goodill in the market ith comparison to the image of the

competitors and that comes in nonE price competition.

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D7m:; A:450i0 0 !rt 69 !ri3i:8 0trt785

M70ur7 t>7 im!3t 69 !ri37 3>:87 6: t6t4 r77:u7OE

-t the initial stage of the company in the Indian origin, it is important

to find out that hether the pricing strategy of the company has any

impact on the customers or not. It is very much important to analyAe

the demand of the product of the company by various levels of the

customer.

Pr7;i3t0 u:it 0470 64um7 :; t6t4 r77:u7 96r ri6u0 !ri37

47740OE

-fter setting the price, it became important for the company to forecast

the sales volume and total revenue needed for future.

)ifferent customers have different price sensitivities and needsOE

It is important for the company to understand the fact that in India,

various customers have their different tastes and priorities. "o, the

company is emphasiAing on understanding the demand, taste and need

of the customers to standardiAe the products of the company .

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Im!3t 69 6t>7r 93t6r0 67r t>7 !ri3i:8 0trt785 69

V6;96:7

+ustomersF ability & illingness to buyO

The ability and illingness of the customers has a great impact over

the demand of the product hich in turn influence the pricing strategy

of 2odafone.

+ustomer lifestyleO

Pricing strategy of 2odafone greatly varies as per the lifestyle as ell

as location of the services of the company.

enefits soughtO

Chere there is benefit, customers run toards it. "o 2odafone is trying

to serve maximum benefits to the customers in the form of various

schemes both postpaid and prepaid.

+haracteristics of the product OTo fight ith the competitors, the

company is trying to add maximum characteristics to each product.7/

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PRICING STRATEGY OF AIRTEL

S=immi:8 !ri3i:8

+harging a high price initially and reducing the price over timeOE

R-irtel has reduced the price of its starter pack in the prepaid segment

in +hennai. It ill offer a student prepaid starter pack at $s 18; S cost

reduced from $s 8H.

(ne time hen -irtel as a leader in telecomm sector, it had high costs

of its product but after the entrance of various other competitors in the

market, it significantly reduced its price of the product hich has ma!or

impact over the services of their product.

Mi:ti:i:8 Ju4it5

y maintaining >uality of their products and services they became able

to maintain their introducing price over a long time.

P60iti6:i:8 Airt74 0 : 0!irti6: :; 4i970t547 ?r:;

The target customer as clearly definedO elite, up market professionals

and entrepreneurs. RThey became able to position -irtel as an

aspiration and lifestyle brand, in a ay that trivialiAed the price in the

mind of the consumer. It as pitched not merely as a mobile service,

but as something that gave him a badge value. In a service industry like

telecom, people live a brand 8J9. ItBs all about experience and for

-irtel Bbrandcustomer experience.


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Pri37-F47i?i4it5 Strt785

3lexibleEprice policySsetting different prices in different markets

based onO

%eographic 5ocationOE -irtel is trying to put price flexibility as per

5ocation.

Time of deliveryOE )elivery of services matters a lot to improve image

of the company, so -irtel believes in providing correct product at

correct time.

The complexity of the productOE Pricing of -irtel also depends on the

complexibility of its product and span of availability.

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DATA ANALYSIS

+ustomers are more sensitive to price changes if the products cost a

lot andor are bought fre>uently

+ompetitors may see each of price change as a fresh challenge and

react according to its selfEinterest at the time. 'eed to estimate each

close competitorFs likely reaction.

oth the companies trying to measure the impact of price change on

total revenue.

The 2odafone has an idea is to maximiAe the profits of the entire

organiAation rather than that of a single product or a single line

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FINDINGS INTERPRETATION

6a!ority of the people has been subscribed to 2()-3(' due to its

various value added features. -I$T5 is not a ne company in India,

ut it needs span of time to stand in that level.

-irtel is trying its best to increase its market share through parity

pricing and penetration strategy. ItFs offering reduced price for the

products through various schemes to attract various levels of

customers. (n the other hand 2odafone hich had fixed and high

strategy of pricing, also trying to reduce its cost to expand the level of

customers.

-irtel is trying to expand its span through efficient promotion andstimulated reduce pricing here as 2odafone is trying to standardiAed

its services through flexible rating at various locations of India.

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CONCLUSIONS

2odafone seems to have consciously decided to go for the belly of the

market and aggressive market expansion, hile -irtel seems to be

pursuing a relatively more sophisticated consumer. There isnBt a great

deal of differentiation in terms of pricing, services, schemes and so on,

but there are differences in approach. (verall, 2odafone is focused on

functionality and efficiency, hile -irtel has veered toards armthand emotions.


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SUGGESTIONS

'o a days -s ma!ority of people ere aare of 2odafone, but after

ac>uisition by ne companies like tata & reliance, -irtel needs to

evolve through its balanced pricing strategy.

It should try to attract customers by offering flexible pricing. (n the

other hand 2odafone is already a established company ith a big

expansion. ut to stand the competitions from the companies, it

needs to reduce its price to come more close to the customers.

lectronic media#oardings are the ma!or medium hich attract

ma!ority of people toards the company. "o company should focus

on these to medium to attract more and more people toards the

company.

People of young age attract more toards the ne offers provided

by the company. "o the companies should focus more on youthFs

segments.


62/78

+ompany should also concentrate more on >uality of services to

grab ma!or segments.

To understand the customers and their re>uirements, they should go

for market research after every duration of time.


63/78

JUESTIONNAIRE

)ear "ir6adam,

I Amit =umr 8u!t 0tu;7:t 69 BMS 69 CLARA,S COLLEGE OF

COMMERCE I am doing my pro!ect onC6m!rti7 :450i0 69 !ri3i:8

;73i0i6: -!64i3i70 69 V6;96:7 :; Airt74. Please give your precious time for

filling these details.

=.1 'ame those companies hich provide telecom services no a daysN

-irtel

V6;96:7

T-T-

I)-


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=. Chich mobile company services you using no a days

-I$T5

2()-3('

T-T-

I)-


65/78


66/78


67/78


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=. 7 -mong them, hich rand you, prefer mostN

-irtel

2odafone

T-T-

Idea


69/78

=.8 #o long you have been using this ProductN

/E 4ears ?T-T-@

E 4ears ?I)-@

E1/ 4ears ?2()-3('@

6ore than 1/ ?-I$T5@


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=.-re you using other product instead of -irtelN

4es

'o

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=.< )o you collect any information search before making purchaseN

4es

'o

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=.9 Chat are the features you look for in a product before making purchase

decisionN %ive preferences ?1E#ighest,


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=.: If you have to purchase a ne connection or product in near future, hich

rand ill you go for and hyN

VODAFONE ,B73u07 t>75 !r6i;7 9t7r 047 07ri37 :;

t>7 VODAFONE,0 :7t


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=.; -re you aare of various promotional activities being run by -irtel, if yes

then hoN -re you satisfied ith these promotional activitiesN

2ery "atisfied "atisfied "omehat "atisfied 'ot satisfied

+ustomer +are

y -d 3ilms

y +amp

8 hrs call center services

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=.11 Chat are you suggestions for improving the product >uality, service

availability and parts availabilityN

It should try to attract customers by offering flexible pricing. (n theother hand 2odafone is already a established company ith a big

expansion. ut to stand the competitions from the companies, it

needs to reduce its price to come more close to the customers

9


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BIBLIOGRAP#Y

7?0it70)-

.bharti.com

.vodafone.com

.google.com

.Cikipedia.com

M8@i:708'

usiness orld

B66=0)-

6arketing "trategies ?"udhir +hala@

$esearch 6ethodology ?+.$ Kothari@

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http://www.bharti.com/http://www.vodafone.com/http://www.google.com/http://www.bharti.com/http://www.vodafone.com/http://www.google.com/


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6arketing 6anagement ?Philip Kotler@

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Amit Kumar Gupta