ASSIGNENT OF MARKETING MANAGEMENT :

ON

ADVERTISING

IN

TELECOM SECTOR

Submitted to: Submitted by:

Dr. Satinder Kumar Arpandeep Kaur

M.B.A.1(c)

Roll No. 5218

TELECOMMUNICATION INDUSTRY OVERVIEW

Telecommunication is the transmission of messages over significant distances for

the purpose of communication. In the modern age of electricity,

telecommunications has involved the use of electric means such as the telegraph

and telephone, the use of microwave communications and the use of fiber optics.

The telecom industry plays an important role in the world economy

Approximately 20% of the world population has access to the Internet. The

telecom industry is vast and offers a wide range of career opportunities on both

the hardware and software fronts. These prospects include functional jobs in

mobile telephony, internet protocol media systems, wireless communications,

GSM, GPRS and CDMA technology, VoIP, data networks and optical networks

amongst others. The global leaders in the field are companies like AT&T,

Vodafone, Verizon, SBC Communications and Qwest Communications, who are all

trying to take the advantage of the industry’s spiraling growth. The focus of

telecom companies going forward is likely to be on leveraging more sophisticated

telecommunication platforms like broadband technologies, LAN-WAN inter

networking, optical networking, voice over Internet protocol and wireless data

service etc.

TELECOM SUBSCRIBER BASE IN INDIA

Indian telecommunication Industry is one of the fastest growing telecom market

in the world. The mobile sector has grown from around 10 million subscribers in

2002 to reach 150 million by early 2007 registering an average growth of over

90%.

The two major reasons that have fuelled this growth are low tariffs coupled with

falling handset prices.Surprisingly, CDMA market has increased it market share up

to 30%thanks to Reliance Communication. However, across the globe,CDMA has

been losing out numbers to popular GSM technology,contrary to the scenario in

India.

The other reason that has tremendously helped the telecom Industry is the

regulatory changes and reforms that have been pushed for last 10 years by

successive Indian governments. According to Telecom Regulatory Authority of

India (TRAI) the rate of market expansion would increase with further regulatory

and structural reforms. Even though the fixed line market share has been

dropping consistently, the overall (fixed and mobile) subscribers have risen to

more than 200 million by first quarter of 2007. The telecom reforms have allowed

the foreign telecommunication companies to enter Indian market which has still

got huge potential. International telecom companies like Vodafone have made

entry into Indian market in a big way. Currently the Indian Telecommunication

market is valued at around $100 billion (Rupees 400,000 crore). Two telecom

players dominate this market - Bharti Airtel with 27% market share and Reliance

Communication with 20% along with other players like BSNL (Bharat Sanchar

Nigam Limited). The Ministry of Communications and Information Technology

(MCIT) is has very aggressive plans to increase the pace of growth, targeting 500

million telephone subscribers by the end of 2010

SCOPE OF TELECOM INDUSTRY

The telecom industry is growing at a great pace and the growth rate is expected

to double with every passing year. There are many new developments in the

telecomm sector, including the ingress of 3G technology that the Indian market is

witnessing at present.

PUBLIC AND PRIVATE PLAYERS

MTNL, BSNL, VSNL are the major Public Players, whereas Airtel, Idea, Hutch, Tata,

Reliance, BPL are the leading Private Players in the country. Some of them are

entering foreign markets as well.

MAJOR PLAYERS IN TELECOM INDUSTRY

TOP FIVE COMPANIES:

The Top five companies, on the basis of ‘Market Share’as on 31st January,

2010 are:

•Bharti Airtel Ltd.

•Reliance Communications Ltd.

•Vodafone Essar Ltd.

•BSNL

•Idea Cellular + Spice

INTRODUCTION- ADVERTISING

Advertising is a form of communication that typically attempts to persuade

potential customers to purchase or to consume more of a particular brand of

product or service. “While now central to the contemporary global economy and

the reproduction of global production networks, it is only quite recently that

advertising has been more than a marginal influence on patterns of sales and

production. The formation of modern advertising was intimately bound up with

the emergence of new forms of monopoly capitalism around the end of the 19th

and beginning of the 20th century as one element in corporate strategies to

create, organize and where possible control markets, especially for mass

produced consumer goods. Mass production necessitated mass consumption, and

this in turn required a certain homogenization of consumer tastes for final

products. At its limit, this involved seeking to create ‘world cultural convergence’,

to homogenize consumer tastes and engineer a ‘convergence of lifestyle, culture

and behaviors among consumer segments across the world’.

Many advertisements are designed to generate increased consumption of those

products and services through the creation and reinvention of the "brand image".

For these purposes, advertisements sometimes embed their persuasive message

with factual information. Every major medium is used to deliver these messages,

including television, radio, cinema, magazines, newspapers, video games, the

Internet, carrier bags and billboards. Advertising is often placed by an advertising

agency on behalf of a company or other organization.

Money spent on advertising has increased dramatically in recent years. In 2007,

spending on advertising has been estimated at over $150 billion in the United

States and $385 billion worldwide, and the latter to exceed $450 billion by 2010.

Types of Advertising

Commercial advertising media can include

--wall paintings, billboards, street furniture components, printed flyers and rack

cards, radio, cinema and television adverts, web banners, mobile telephone

screens, shopping carts, web popup, skywriting, bus stop benches, human

billboards, magazines, newspapers, town criers, sides of buses, banners attached

to or sides of airplanes ("logo jets"), in-flight advertisements on seatback tray

tables or overhead storage bins, taxicab doors, roof mounts and passenger

screens, musical stage shows, subway platforms and trains, elastic bands on

disposable diapers, stickers on apples in supermarkets, shopping cart handles

(grabertising), the opening section of streaming audio and video, posters, and the

backs of event tickets and supermarket receipts. Any place an "identified"

sponsor pays to deliver their message through a medium is advertising.

Covert advertising

Covert advertising is when a product or brand is embedded in entertainment and

media. For example, in a film, the main character can use an item or other of a

definite brand, as in the movie Minority Report, where Tom Cruise's character

John Anderson owns a phone with the Nokia logo clearly written in the top

corner.

Television commercials

The TV commercial is generally considered the most effective mass-market

advertising format, as is reflected by the high prices TV networks charge for

commercial airtime during popular TV events. The annual Super Bowl football

game in the United States is known as the most prominent advertising event on

television. The average cost of a single thirty-second TV spot during this game has

reached $3 million (as of 2009).

The majority of television commercials features is a song or jingle that listeners

soon relate to the product.

Infomercials

There are two types of infomercials, described as long form and short form. Long

form infomercials have a time length of 30 minutes. Short form infomercials are

30 seconds to 2 minutes long. Infomercials are also known as direct response

television (DRTV) commercials or direct response marketing.

The main objective in an infomercial is to create an impulse purchase, so that the

consumer sees the presentation and then immediately buys the product through

the advertised toll-free telephone number or website. Infomercials describe,

display, and often demonstrate products and their features, and commonly have

testimonials from consumers and industry professionals.

Celebrities

This type of advertising focuses upon using celebrity power, fame, money,

popularity to gain recognition for their products and promote specific stores or

products. Advertisers often advertise their products, for example, when

celebrities share their favorite products or wear clothes by specific brands or

designers. Celebrities are often involved in advertising campaigns such as

television or print adverts to advertise specific or general products.

Media and advertising approaches

Increasingly, other media are overtaking television because of a shift towards

consumer's usage of the Internet as well as devices such as TiVo.

Advertising on the World Wide Web is a recent phenomenon. Prices of Web-

based advertising space are dependent on the "relevance" of the surrounding

web content and the traffic that the website receives.

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail

advertising is known as "spam".

Some companies have proposed placing messages or corporate logos on the side

of booster rockets and the International Space Station. Controversy exists on the

effectiveness of subliminal advertising, and the pervasiveness of mass messages.

- turning it into a generic term which means that its legal protection as a

trademark is lost.

As the mobile phone became a new mass media in 1998 when the first paid

downloadable content appeared on mobile phones in Finland, it was only a

matter of time until mobile advertising followed, also first launched in Finland in

2000. By 2007 the value of mobile advertising had reached $2.2 billion and

providers such as Admob delivered billions of mobile ads.

ADVERTISING TREND IN TELECOM

Telecom advertising is an overlooked field. Almost all ad agencies would love to

have a telecom operator client as they are among the top 10 advertising spenders

in all countries; usually they regret that afterwards though due to the short lead

times, long working hours, and over demanding clients (mostly from technical

backgrounds); all of which result in a relatively low quality end product.

Telecom advertising is a very specific industry in many ways different from

conventional advertising mostly due to the nature of the beast (it is a media

within itself that is constantly expanding to include more and more industries)

and constant evolution. Advertising agencies rarely have such experts though,

due to the high turn-over of people on the accounts, mostly due to the reasons

mentioned in the first paragraph.

Despite their differences all telecom operators require the same campaigns,

usually in the following order from launch date (I will use a mobile operator for

the sake of the example as they do the most advertising):

1. A teaser / announcement to indicate their launch date

2. A brand launches campaign

3. Corporate Social Responsibility campaigns

4. Core Product campaigns (usually prepaid and post-paid)

5. Coverage Campaign (to show that their networks are now complete)

6. Payment methods campaign (listing the channels in which can pay their bills)

7. 3G campaign (focusing on their innovative technology, and claiming first to

market)

8. Roaming campaign (mentioning how many operators they have roaming

agreements with)

9. Airport campaigns (selling their ‘visitor’ lines, asking inbound roamers to switch

to their networks, promoting their mobile internet roaming capabilities, and

mentioning how you can feel at home while roaming on their network)

10. Store opening campaigns (indicating that new stores are opening and

mentioning their locations)

11. International call rate reduction campaign

12. Tariff reduction campaign

13. Mobile Content campaign (focusing on the mobile portal and what content it

includes, mostly music, ring tones, ring back tones, news etc.)

14. Value added services campaigns (these are dispersed throughout the

communication plan depending on when a new service is rolled out)

15. Mobile Internet campaign (on both accessing the internet through your

phone, or data cards that plug into your laptop)

16. Customer service campaigns

17. Business campaign (launching their business services division)

18. Business product campaigns (mostly data-cards, push email, and closed user

groups)

19. Focusing on the Youth segment (through universities, and hip music)

20. High end packages (special numbers / elite services etc)

21. Loyalty programs

22. Bundling of products and services

23. Bouquet ads mentioning all of the offerings of the operator

Usually due to urgency, wanting to communicate so many messages at the same

time, and the need to claim first-to-market (because innovation is a key platform);

these operator end up with badly managed campaigns that are not fully

integrated (mostly newspaper ads and mentions on their website and in stores),

and sacrifice on the creative quality of their communications. All of the above

results in a confused customer who knows that an operator has many services but

cannot indicate or quantify them.

ADVERTISING TRENDS IN INDIAN TELECOM

The way telecom firms advertise, gives an approximate idea about the telecom

trends. I would try to uncover some of them, which come to my mind. At the

initial launch of the mobile services, they were advertised as lifestyle products.

The message that sought to be conveyed was that if you have a mobile phone,

you have arrived in life. A few well-healed people could afford the high call rates

at that time. It was in no way for the masses. I am sure that the mobile companies

made a large profit out of it. Perhaps for the first time, Indians were exposed to

concepts alien to them: Customer Care Support. It saw a booming of the ancillary

services and fresh graduates, stunted in mental development though, came out in

droves for the well-paid jobs.

Airtel then sought the services of Sachin Tendulkar. He was the brand ambassador

and saw his earnings sharply increasing. I saw his picture everywhere exhorting

me buy the mobile prepaid card. After the initial publicity passed away, A.R.

Rahman gave his now famous tune. All the other companies have variously tried

other gimmicks to sell their connections.

However, the landscape changed after Reliance came in the mobile services.

Mukesh Ambani was seen telling people about his fathers dream. The initial

launch was lackluster. With the launch of the prepaid services, the punch line was

“mujhme hai who baat or I have that thing! how many people actually signed

up after those ads. . Reliance was able to ramp up its numbers. Then came the ad

line Kar lo duniya muthi mein. (Have the world in your fist). Creative heads of the

ad agency.

The icing on the cake goes to Hutch. They designed the simple ad with the kid and

cute Chinese Pug. It was a hit of all sorts. It conveyed the effectiveness of the

message succinctly. I believe that it drove Hutch connections across the places

where it offered its services. However, it was considered too elitist for the

masses. The advertisement should be able to convey the message effectively; one

with which people could identify with. In this regard, BSNL could claim something.

BSNL advertisements depicted typically government mentality for awarding the

contract to lowest in the tender process. The quality clearly shows. Is there

anyway people could identify themselves with that advertisements? What of

those places where BSNL is the sole service provider?

As the title goes, advertising trends are reflective of the current scenario in

telecom. Airtel has been advertising its group card labeled as Friends. In fact, until

now, the market was treated as homogenous. Over the period, classification has

been sought to target the specific customers with specific needs. Airtel took the

lead in announcing Senior citizen cards targeted at those above 60. The Friends

card is for those who wish to restrict themselves to their group with low calling

rates and some free messages.

Reliance has realized early on about targeting the businesses. Its offer of flat rate

for making STD calls to anyone across its network is unparalleled. This way it can

ensure that there would be higher converts towards it services. R-Connect is its

portal that differentiated Reliance early on from other operators. It knows that

future revenues are going to come from value added services. This way it has

foreseen the development in the industry.

CONCLUSION

With the mobile handset population poised to top 500 million in India by 2010, it

has become a huge and vibrant communication platform, which no brand

marketer can afford to ignore. The Indian advertising industry registered a

compounded annual growth rate of 17.1 per cent during the last three years.

Taking all these facts and figures into the consideration it is clearly proved that

Advertising contributes efficient sales force for any product, but when it comes to

Telecom sector, it turns up very fast.

500 million subscriber in a country, where in the market is driven by almost more

than half of its rural users. It becomes necessary to get its touchpoint. Undoubtly;

Advertising approach has been constantly changing and rolling throughout its

experiments to grab the attention. The rural audience takes this approach in a

very sensible manner, most of them like this “sentimental” approach of

advertising. Advertising giants like O &M, JWT, Lowe and others are leading ones

who implemented but initiated by Airtel, Vodafone and others.