Comparison of Airtel's and Vodafone's marketing strategy in India PDF

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Airtel and Vodafone in India International Marketing Name: Dumindu Katuwala Student ID: 2948 Lecturer: Mr. Bruno Silva Airtel and Vodafone in India International Marketing Table of Contents Executive Summary ........................................................................................... ...

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Airtel and Vodafone in India International Marketing

Name:

Dumindu Katuwala

Student ID:

2948

Lecturer:

Mr. Bruno Silva

Airtel and Vodafone in India International Marketing Table of Contents

Executive Summary ........................................................................................... 2

Company Introductions ..................................................................................... 3 Airtel ............................................................................................................... 3 Vodafone ..................................................................................................... 4

Marketing Strategies ......................................................................................... 5 Airtel ............................................................................................................... 5 Vodafone ..................................................................................................... 6

How big a threat is Vodafone to Airtel? ............................................................ 8

How big a threat is Airtel to Vodafone? ............................................................ 9

Work Cited ...................................................................................................... 10

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing

Executive Summary This paper focuses on India’s telecommunications sector taking two of the top three telecommunication service providers in India. The two companies are Airtel and Vodafone. Airtel and Vodafone hold the first and the second position in the Indian market in terms of subscriber base. Airtel is originally an Indian company which was incorporated on the 7 th of July, 1995. Vodafone is a British multinational company which entered into the Indian market in February 2007 by acquiring Hutch-Essar. Vodafone has been massively successful since its inception in India which is reflected by the position Vodafone holds today in the Indian market. Vodafone’s entrance into the Indian market would be discussed further by relating to the strategic decisions taken by Vodafone to compete with strong domestic companies like Airtel and Reliance. The different marketing strategies used by the two companies (Airtel and Vodafone) will be discussed highlighting a successful marketing strategy used by each company. This would enable us to understand the different strategically important methods used by the two companies to reach a larger market share in India. The strengths of each company would be discussed and also how one company’s strengths would affect another would be analyzed. The strength of one company is always a weakness of the other and recommendations to overcome these weaknesses will be explained.

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing

Company introductions Airtel Bharti Tele-Ventures was incorporated on July 7, 1995 as a company with limited liability under the Companies Act, for promoting telecommunications services. Bharti TeleVentures received certificate for commencement of business on January 18, 1996. The Company was initially formed as a wholly-owned subsidiary of Bharti Telecom Limited. Today Airtel is a multinational telecommunications Services Company headquartered in New Delhi, India. It is the largest cellular service provider in India, with 192.22 million subscribers as of August 2013. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. Its services sector businesses include mobile operations in Andhra Pradesh, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Kolkata, Madhya Pradesh circle, Maharashtra circle, Mumbai, Punjab, Tamil Nadu and Uttar Pradesh (West) circle. In addition, it also has fixed-line operations in the states of Madhya Pradesh and Chhattisgarh, Haryana, Delhi, Karnataka and Tamil Nadu and nationwide broadband and long distance networks.

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing Vodafone Vodafone Group PLC is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world's second-largest mobile telecommunications company measured by both subscribers and 2011 revenues (in each case behind China Mobile), and had 439 million subscribers as of December 2011. On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion. The whole company was valued at USD 18.8 billion. The transaction closed on 8 May 2007. Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16 telecom circles in India. Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros.

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing

Marketing Strategies One of the main purposes of this report is to compare the marketing strategies adopted by Airtel and its rival international counterpart Vodafone. The comparison would help us understand how both the companies have been challenging each other to gain a large sector of the market share. Airtel Segmentation Airtel has done their segmentation in terms of geographic and demographic Geographic: Urban/City areas Demographic: Middle Income earners in the age group of 20 to 28 years Targeting According to Airtel’s chief executive officer, Airtel’s main target market is the middle income level youth who are living in the city areas. (Beckett)

Successful Marketing Strategy followed In late-2002, Bharti Cellular Ltd. (Bharti), India's largest cellular telephone company released a television commercial (TVC), which despite using the 'oft-repeated' celebrity endorsement route was unusual in terms of its celebrity selection. Instead of using the usual movie stars/sports celebrities, it chose one of the country's most successful music composers, A.R Rahman (Rahman) to promote its brand. The campaign attracted considerable media attention because this was the first time Rahman had agreed to do a television commercial and also because, Rahman had been paid Rs. 10 million for the campaign, a sum usually unheard of, for celebrity endorsers in India. The campaign received brickbats as well as bouquets in the media, both for the selection of Rahman and the TVC's execution. However, Bharti claimed to have scored an ace in terms of getting Rahman to compose five exclusive symphonies downloadable as ring tones for Airtel users.

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Airtel and Vodafone in India International Marketing The TVC was a part of the brand repositioning and restructuring efforts for Airtel, as part of which, Bharti changed the brand's tagline in early-2002 from 'Touch Tomorrow' to 'Live Every Moment.' The company also decided to undertake a comprehensive brand building program for the company and chose the slogan 'Unlimited Freedom' for the same. Commenting on these changes, company sources said, "Airtel's brand identity and campaign will now have a new younger and international look and feel that builds on the earlier positioning."

Vodafone Segmentation 

Demographic: Vodafone uses the occupation aspect in the demographic category of segmentation. They divide their users as consumer and business. On their website these two segments are catered to by two completely different web pages. The business users are offered company solutions, machine to machine solutions and all other end to end business connectivity solutions. The consumers on the other hand are again segmented as follows



Geographic: The company provides different plans, tariffs and offers to different customers depending on the state that they come from.  Behavioral (User Status): The users are further segmented depending upon whether they are postpaid users or prepaid users. Separate plans are then provided to each user depending upon their category.

Targeting Vodafone is adopting a multi segment targeting. They are targeting the high end user, low end user, the business professional as well as the common man.

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Airtel and Vodafone in India International Marketing Successful Marketing strategy followed Vodafone in order plan for the future and in wake of mobile number portability decided to distinctly identify its value added services by launching the Zoozoos campaign during the Indian Premier League 2 (IPL-2). Cricket is considered to be a religion in India, and Zoozooz captured attention of nearly two billion people during the IPL. People eagerly waited for breaks between matches to see more stories about Zoozoo. Zoozoos have been successful in giving Vodafone a makeover and establishing maximum brand presence. It is an excellent example of a well-laid out marketing strategy. It was a fresh and innovative concept and Vodafone wonderfully promoted their services by creating different stories featuring Zoozoos. There were no celebrity endorsements. The charm of the Zoozoo was itself a great self-marketing strategy and they were instant success among masses. Within few days, Zoozooz created a huge audience for them, giving a boost to the Vodafone brand. People were already in awe of those cute and lovable characters, but the curiosity heightened when Vodafone disclosed that Zoozooz were not animated, rather humans were playing those characters. People were hungrier to know about their favorite Zoozooz. In the second phase, after the release of these ads, Vodafone promoted these characters on social media sites, which was another wise decision. Zoozoo fan clubs are there on social networking sites like Facebook, YouTube, Orkut, Twitter, and many more, where they have a huge followings. Now Vodafone has announced to launch the Zoozoo goodies like zoozoo toys, zoozoo mugs, zoozoo keychains, zoozoo t-shirts, etc.

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing

How big a threat is Vodafone to Airtel? This question was raised in 2007 to Sunil Mittal and he responded very confidently about Airtel. He said that they don’t expect Vodafone to be no different from Hutch. He also mentioned Vodafone had in 2005 picked up around 10% stake in the Bharti group and that they were released within minutes when requested by Vodafone. (Mookerji) However Mittal forgot to realize that by Vodafone selling the 10% stake of Airtel back to Airtel, Vodafone got the opportunity to re-invest at Hutch where knowledge and technology previously available to Airtel moved into the hands of one of its competitors. Also it is understandable that Mittal took Vodafone lightly and actually is starting to pay the price. It was reported this year that Vodafone has overtaken Bharti Airtel in the rural areas of India. Vodafone’s total of 82.24 million rural customers now just outstrips Bharti Airtel’s 82.16 million. However Vodafone has a long way to go to catch up to India’s market leader; as of March 2013 Vodafone and Bharti have 152.3 million and 188.2 million respectively. That said, Vodafone’s growth is encouraging, with 2.47 million additions across the same month. Bharti meanwhile gained 1.57 million customers in this period. (Barton)

People have started switching from Airtel to Vodafone Vodafone has been able to provide faster internet at a much cheaper rate which has basically caused a large portion of Airtel users to shift to Vodafone. Also even though the calling rates are fairly similar in both Vodafone and Airtel, Vodafone has been able to provide a much larger range of plans that customers can select from which has again negatively affected Airtel. Recommendation for Airtel It is understandable that Airtel did not take Vodafone as a serious threat to their business when Vodafone initially launched. However Vodafone has been able to seriously affect Airtel in the past few years. One recommendation would be to analyze Vodafone’s strategies and work out new strategies to keep Airtel’s current customers with Airtel. Airtel definitely has the resources to work out new strategies as they are still standing at the top of the market; but they need to work up soon before Vodafone reaches Airtel’s position in the market. Dumindu Katuwala

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Airtel and Vodafone in India International Marketing

How big a threat is Airtel to Vodafone? Airtel however is one of the most trusted telecommunication companies in India simply due to the fact that it is one of the oldest companies in India. Also the fact that Airtel is solely an Indian company serves well for Airtel as people would prefer what is theirs over a foreign company. The brand image created by Airtel still keeps them in the forefront of the market which Vodafone has not been able to reach until today. Analyzing Airtel’s strategy deeply we need to understand that the strategic decisions taken by Airtel in 2002 have really pushed them forward. The music composed by A. R. Rahmen in 2002 for Airtel’s television commercial has been so catchy that it is even heard today in Airtel’s new television commercials. This again is due to the fact that Airtel has focused on the cultural aspect of India in their marketing.

Recommendation for Vodafone Vodafone should try and adopt the Indian culture more into their marketing. Plus they should try and gain the trust of its customers if they need to reach the top level of the market in India.

Dumindu Katuwala

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Airtel and Vodafone in India International Marketing Work Cited

Beckett, Paul. "An Ideal Bharti Airtel Audience: Youth." India Real Time RSS. N.p., 01 July 2010. Web. 03 Dec. 2013. Mookerji, Nivedita. "Vodafone Is Not a Bigger Threat than Hutch, Says Sunil Mittal." Money. N.p., 28 Apr. 2007. Web. 04 Dec. 2013. Barton, James. "Developing Telecoms in Emerging Markets Worldwide." Vodafone Overtakes Bharti Airtel in Rural India. N.p., 08 May 2013. Web. 04 Dec. 2013.

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