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A STUDY ON
PROMOTIONAL PRICING VS BRAND SWITCHING WITH RESPECT TO
1P/SEC SCHEME OF TATA DOCOMO
PROJECT Done By
BHANUCHANDER REDDY .P (09MBA010)
SAMPATH .V (09MBA117)
SHIVANI KUMARI (09MIB054)
VINUSHA .K (09MBA059)
UNDER THE GUIDANCE OF
Dr.P.GANESAN
PROFESSOR
JANUARY 2010
Page | 1
CONTENTS
S.NO TITLE PAGE NO
1. INTRODUCTION 05
2. LITERATURE REVIEW12
3. METHODOLOGY23
4. DATA ANALYSIS27
5. FINDINGS55
6. CONCLUSION59
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TABLES
S.NO TITLE OF THE TABLE PAGE. NO
1 AGE OF THE RESPONDANT
2 GENDER OF THE RESPONDENT
3 OCCUPATION OF THE RESPONDENT
4 MOBILE SERVICE THE RESPONDENT USES
5 PURPOSE OF USING THE MOBILE SERVICE
6 SPENDING PER MONTH
7 AIRTIME PER DAY
8 FACTOR CONSIDERED MOST WHILE SWITCHIG BRAND
9DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER
SERVICES (LOCAL RATES)
10DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER
SERVICES (STD RATES)
11 USAGE OF 1 P/SEC PLAN
12 WHICH SERVICE –IF USING 1 P/SEC SCHEME
13 INTERESTED IN 1 P/SEC SCHEME
14 IF INTERESTED – WHICH SERVICE
15 DOCOMO’S1P/SEC -BENEFICIARY IN TERMS OF TARIFFS
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16TATA DOCOMO’S 1P/SEC PLAN- AS A TACTIC TO
ATTRACT CUSTOMERS
17 PRICING POLICY OF AIRTEL
18 PRICING POLICY OF DOCOMO
19 PRICING POLICY OF AIRCEL
20 PRICING POLICY OF UNINOR
21PRICE IS CONSIDERED AS AN IMPORTANT FACTOR WHILE
SWITCHINGBRAND
22CONSIDERATION OF CALL TARIFFS WHILE SWITCHING
BRAND
23CONSIDERATION OF SMS CHARGES WHILE SWITCHING
BRAND
24CONSIDERATION OF SIM RATES WHILE SWITCHING
BRAND
25 USAGE OF 1P/SEC PLAN- CONSIDERATION OF TARIFFS WHILE SWITCHING BRANDS
26USAGE OF 1 P/SEC PLAN- CONSIDERATION OF PRICE AS
AN IMPORTANT FACTOR WHILE SWITCHING BRAND
27PURPOSE OF USAGE OF MOBILE SERVICE-RANKING OF
DOCOMO
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INTRODUCTION
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Industry profile:
The Indian telecommunication industry, with about 506.04 million mobile phone connections (Nov 2009), is the third largest telecommunication network in the world and the second largest in terms of number of wireless connections. The Indian telecom industry is one of the fastest growing in the world and is projected that India will have ‘billion plus’ mobile users by 2015. Projection by several leading global consultancies is that India’s telecom network will overtake China’s in the next 10 years. For the past decade or so, telecommunication activities have gained momentum in India. Efforts have been made from both governmental and non-governmental platforms to enhance the infrastructure. The idea is to help modern telecommunication technologies to serve all segments of India’s culturally diverse society, and to transform it into a country of technologically aware people.
Modern growth:
A large population, low telephony penetration levels, and a rise in consumers’ income and spending owing to strong economic growth have helped make India the fastest-growing telecom market in the world. The first and largest operator is the state-owned incumbent BSNL, which is also the 7th largest telecom company in the world in terms of its number of subscribers. BSNL was created by corporatization of the erstwhile DTS (Department of Telecommunication Services), a government unit responsible for provision of telephony services. Subsequently, after the telecommunication policies were revised to allow private operators, companies such as Vodafone, Bharti Airtel, Tata Indicom, Idea cellular, Aircel and Loop Mobile have entered the space. In 2008-09, rural India outpaced urban India in mobile growth rate.
India’s mobile phone market is the fastest growing in the world, with companies adding some 16.67 million new customers a month.
The total number of telephones in the country crossed the 543 million mark on Oct 2009. The overall tele-density has increased to 44.85% in Oct 2009. In the wireless segment, 17.65 million subscribers have been added in Nov 2009. The total wireless subscribers (GSM, CDMA & WLL (F)) base is more than 543.20 million
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now. The wire line segment subscriber base stood at 37.16 million with a decline of 0.13 million in Nov 2009.
The Mobile telecommunications system in India is the second largest in the world and it was thrown open to private players in the 1990s. The country is divided into multiple zones, called circles (roughly along state boundaries). Government and several private players run local and long distance telephone services. Competition has caused prices to drop and calls across India are one of the cheapest in the world. The rates are supposed to go down further with new measures to be taken by the Information Ministry. The mobile service has seen phenomenal growth since 2000. In September 2004, the number of mobile phone connections has crossed fixed-line connections. India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players are Airtel, Reliance, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with operations in only a few states. International roaming agreements exist between most operators and many foreign carriers.
Introduction of TATA DOCOMO:
Tata Teleservices Provides mobile services under 3 Brand names:
Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator)
Virgin Mobile (CDMA Mobile operator)
Tata DoCoMo was formed in November 2008 as an alliance between Tata Teleservices and NTT DoCoMo
Currently, Tata Docomo Mobile service is available Bihar & Jharkhand, Tamil Nadu, Orissa, Andhra Pradesh, Karnataka, Kerala, Kolkata, Mumbai, Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Haryana, Chennai, Eastern Uttar Pradesh, Western Uttar Pradesh, Punjab, Rajasthan, West Bengal.
NTT DoCoMo holds 26 % stake in the jointly formed company. It has also emerged as the first mobile operator in India to have re-introduced ‘per second’ pulse, after Loop Mobile (formerly BPL Mobile) discontinued their 'pay per
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second' service which was introduced in 2004.From October 2009 TRAI announced that TATA tele service is India's no.1 tele service brand.
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STUDY OBJECTIVES
Statement of the problem:
Today, with the increase in number of mobile users, the competition between
mobile network service providers is also increasing drastically. Companies are
introducing many promotional pricing schemes to attract the customers and
increase their market share. Tata docomo came into the market with its
introductory pricing scheme of 1paise billing- 1p/sec both for local and STD. This
offer was a huge success and captured considerable amount of market share.
The study deals with whether this scheme (promotional pricing) made the
customers switch their usage of their brand.
MANAGEMENT QUESTION
Management question is a useful way to approach the research process is to state
the basic dilemma that prompts the research and helps to develop it more specific.
MANAGEMENT QUESTION OF OUR STUDY:
How do consumers evaluate and respond (switch or stick) to promotional incentives with reference to Tata Docomo’s 1p/sec plan?
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RESEARCH QUESTION
A Research Question is the hypothesis of choice that best states the
objective of the research study. The research question is one of the first
methodological steps the investigator has to take when undertaking research.
The research question must be accurately and clearly defined.
RESEARCH QUESTION OF OUR STUDY:
What is the effect of TATA DOCOMO’s promotional pricing on different
customer segments?
INVESTIGATIVE QUESTIONS
Investigative questions are questions the researcher must answer to satisfactorily
arrived at a conclusion about the research question. To formulate them the
researcher takes a general research question and breaks it into more specific
questions about which to gather data. Investigative questions should be included in
the research proposal as they guide the development of the research design. They
are the foundation for creating the research data collection instrument.
INVESTIGATIVE QUESTIONS OF OUR STUDY: Page | 10
Which customer segments are more favorable to TATA DOCOMO’s promotional pricing?
Do other service providers lose their potential customers due to TATA DOCOMO’s promotional pricing?
SCOPE OF THE STUDY:
The present study titled “A study on the effect of promotional pricing on
brand switching with reference to Tata Docomo’s 1p/sec plan.”
Attempts to analyze the effect of promotional pricing on brand switching.
Attempts to analyze which customer segments are more favorable to 1p/sec
plan.
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LITERATURE REVIEW
Promotional pricing:
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Promotional pricing is a sales and marketing technique. It involves reducing
the price of a product or service to attract customers. This technique can be
effectively used across numerous industries including food services, cosmetics, and
household cleaning supplies.
Promotional pricing often involves reducing prices to unsustainably low
levels. In some cases, products and services may be sold at or below cost. A buy
one get one free scheme may even be used. When this is done, interest in goods
can be greatly increased; meaning sales are also likely to increase dramatically.
This technique may be used by retailers or by producers. When it is used by
retailers, the goal is generally to attract attention to the business and to attract
regular customers. When the technique is used by producers, the goal is generally
to attract customers to a product or brand and to encourage brand loyalty.
For example, a clothing store may offer clothing at prices that are below the
manufacturer’s suggested retail price. Shoppers, attracted by the low prices, are
likely to remember that store and visit again when they have apparel needs. A
cosmetic company may offer two compacts of eye shadow for the price of one.
When women need eye shadow again, it is hoped they will be motivated to buy
that brand again.
What customers are likely to find when they return for a future purchase is
that the prices of these goods have increased. Promotional pricing is usually
temporary. This means that in most cases, quality and experience need to
complement this pricing strategy. If it does not, and customers do not feel there is
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anything significant about the product or service, it can be very difficult to get
them to purchase it at higher prices.
There are other reasons the use of promotional pricing must be used wisely.
If it is not, it can amount to a company losing a great deal of money without the
expected return. If the technique is used too often, for example, consumers may
anticipate the price lowering and refuse to buy goods at the normal price.
Promotional pricing is typically used when new products are being
introduced to the market. It can also be used to stimulate demand for products or
services with lagging demand. This strategy of price targets buyers who are
looking for the deal.
Some examples of promotional pricing are:
Special event pricing. Pricing that is 'special' (or lowered) for special events
such as Christmas, Easter, Valentine's Day, Mother's Day, Super Bowl,
Thanksgiving and Back to School.
Rebate programs. Such as a rebate or allowance when buying a home and
the seller offers a move-in allowance, or a carpet replacement or renovation
allowance or a rebate for all cash, no financing, and purchases of big ticket
items like cars.
Low or no-interest financing. A number of furniture stores will advertise
no-interest financing loans for furniture purchases. Car dealerships also offer
these pricing programs - often for last year's models. This strategy has been
a sales success for a number of industries in the past, be careful how you use
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it though as consumers are becoming more sensitive to the true value of the
strategy.
Buy One, Get One free or Two for the Price of One. If product costs are
low, and price includes a healthy profit margin, this may be a good strategy
to use if you have an overabundance of inventory. Even better if competitive
pricing comparisons result in your product offer being the better deal.
Extended payment terms. This can also be viewed as a hold and pay, or
lay-away, pricing model. You typically pay a deposit and pay over time.
You do not get the product until paid up. The renovation and construction
industry do a variation on this strategy: you usually are required to pay one
third of the projected cost for the project up-front - this is to help pay for the
materials; one third about half way through the project and the balance on
completion. For the business-to-business market, the extended payment
terms might be pays in net 30 days, or net 60 days or a discount if you pay in
net 15 days. There are many variations to this pricing strategy.
No charge or low-cost warranties. If a business has a good warranty or
return program (good in the sense that there are no, or few, product failures
and no, or few, product returns), then it is not a high cost investment for
them to offer low cost or no cost warranties. Buyers view these types of
promotional prices very positively because they believe it shows that the
business has high confidence in the product's performance.
The promotional pricing strategy has been over-used in the retail markets and
buyers have developed a healthy skepticism about the reality of the 'deal'. One of
the most often used promotional pricing strategies is the "Going out of Business"
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sale; the sale seems to last for years and the business eventually just 'goes out of
business' at that location but then restarts elsewhere.
Brand switching:
Brand switching is the process of choosing to switch from routine use of one
product or brand to steady usage of a different but similar product. Much of the
advertising process is aimed at encouraging brand switching among consumers,
thus helping to grow market share for a given brand or set of brands.
Convincing consumers to switch brands is sometimes a difficult task. It is
not unusual for customers to build up a great deal of brand loyalty due to such
factors as quality, price, and availability. To encourage switching brands,
advertisers will often target these three areas as part of the strategy of encouraging
brand switching.
Price is often an important factor to consumers who are tight budgets. For
this reason, advertisers will often use a price comparison model to entice long time
users of one brand to try a new one. The idea is to convince the end user that it is
possible to purchase the same amount of product while spending less money.
Ideally, this means that the consumer can use the savings for other purchases,
possibly even a luxury item of some sort. The idea of more discretionary resources
in the monthly budget can be an effective in the encouragement of jumping brands.
However, price is not always enough to encourage brand switching. When
this is the case, comparing the quality of one brand to another is a common
approach. With this model, the motivation is that the new Brand B will work just
as well as the more established Brand A. When coupled with a cost savings, the
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comparison of quality can often sway long time consumers at least long enough to
give the newer product a try.
There are consumers who are less concerned with cost. For these users, the
approach is to present the new brand as being of superior quality to the established
brand. Essentially, this means demonstrating that the new brand can do everything
the older brand can do, plus a little more. For example, a product that can be used
to dust wood, glass, and plastic surfaces may be more attractive than a product that
is formulated for glass only. The implication is that the one product can take the
place of three products, and may motivate brand switching.
Article reviews:
Assessing the impact of a very successful price promotion on brand, category and competitor sales:
Price promotions are endemic in consumer packaged goods markets. In 1987, Abraham and Lodish reported that many consumer goods categories sold 90 percent of their volume on deal (Abraham and Lodish, 1987).Ten years later, tradepromotions reportedly accounted for 50 per cent of the marketing budgets of US consumer goods firms (Mela et al., 1997). It is well known that price promotions produce a short-term volume gain for the brand being promoted (e.g. Blattberg andNeslin, 1990). Previous research has also indicated that price promotions are unlikely to have any long-term positive impact for the brand by attracting new buyers who repeat-buy, as per Ehrenberg et al. (1994). This promotion, with its massive volume uplift and temporary category expansion, did not yield any longer-term benefits for the brand. The implications for manufacturers are that price promotions, even those that engender massive short-term volume uplifts, do not appear to induce new buyers to the brand who buy again later. This means that the evaluation of such promotions should be strictly based on the immediate effect onprofit margins. This criterion is likely to show price promotions, particularly deep ones, in a negative light. Dickson (1997, Chapter 16) shows that it is virtually impossible to make additional contribution to profit from deep price reductions.
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From the manufacturer’s perspective, however, this research also showed no appreciable long-term negative impact on brand sales. If there were such negative effects, the profit potential from temporary price reductions would be even moretenuous than currently thought. This is not to say that price promotions do not or cannot have longer-term negative effects. Evidence shows that repeated use of promotions can lower reference prices (Kalyanaram and Winer, 1995) and inducehabitual deal-buying (e.g. Blattberg and Neslin, 1990, Chapter 5; Mela et al., 1997, 1998). For managers concerned about the effects on their brands from competitor’s promotions, this analysis demonstrates that in grocery goods, unpromoted brands may still sell at approximately normal volume levels even when a competing brandis being promoted and enjoying a massive sales uplift. The possible problem for competitor brands in this case appeared to be the longer-termcategory effects. This massively successful promotion for one brand reduced the total category sales for the retailer that ran it, for approximately ten weeks following the promotion. This means that for ten weeks after the promotion, competitor brands had a smaller market from which to obtain sales in retailer. It is indeed surprising that given this contraction in category sales, sales for brand X itself did not exhibit a post-promotion trough. For the retailer, there are also clear implications for current practice. The results suggest that the benefits to grocery retailers of low-price, highuplift promotions should be evaluated over the longer-term. Due to the longer-term negative effect on the category, the total extra volume to the retailer was considerably less than what immediate reporting would indicate. Indeed, if theretailer had reduced its own margins during the promotion the overall profit result might have been negative. This is because it has simply transferred a considerable amount of normal price sales in future periods to discounted sales (with possiblylower margins) in the period of the promotion.
Dynamics of price sensitivity among mobile service customers:
Price sensitivity is one of the key factors affecting to companies pricing choices. Yet in mobile services sector business practitioners are facing problems in pricing decisions as they are short of knowledge on their customers’ price sensitivity levels and dynamics. Price has been observed as an important element affecting the diffusion of new products and services, but pricing of a new product or service is particularly difficult (Foxall, 1984). To enable accurate pricing decisions for new products or services, a detailed knowledge on the potential customers’ perceptions and characteristics is needed. However, though it is known that price is an integral part of diffusion enhancement activities, we have a very limited knowledge on its actual effects on the diffusion of mobile services. It is
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also more or less unknown how customers of mobile services perceive the charged prices and what are the dynamics affecting to price perceptions. The perceived price is formed from the bases of a customer’s experience about mobile services and in comparison to prices of other optional service delivery channels. Further challenges for pricing of mobile services is brought by the fast evolving new wireless technologies and business practices. In this new service environment traditional pricing strategies have brought unsatisfactory results, a need to develop pricing has generated. For that purpose it is necessary to study the customers’ subjective price perceptions to enable the creation of more effective pricing schemes. In this study the researcher concentrates on studying how mobile service customers perceive the prices, do customers differ in their price sensitivity levels, and could customers’ price sensitivity levels be accurately predicted. For these purposes we have divided mobile service customers into three segments which are believed to differ in terms of their price sensitivities:1 mobile segment;2 combined segment; and3 fixed-line segmentAt an aggregated level, price sensitivity is often used as a synonym for price elasticity (Link, 1997) and thus also in this study these two terms are seen to as synonyms. Sensitivity of demand refers to how volume-sensitive a product or a service is to price changes. Sensitivity represents a valuable strategic tool in pricing (Tucker, 1966).Price sensitivity on the individual adopter level appears to be equivalent to the concept of price consciousness for a potential buyer of any product. Price consciousness has been defined as:. . . the degree to which he or she is unwilling to pay a high price for a product and willing to refrain from buying a product whose price is unacceptably high (Monroe, 1990).Price consciousness is related to the price acceptability level as well as to the width of latitude of price acceptability(Lichtenstein et al., 1988). Individuals, who are price conscious, are generally not willing to pay high prices for the product in question. Furthermore, the range of acceptable prices is relatively narrow for price conscious individuals (Link, 1997).In studies on price sensitivity in telecommunication industry three different consumer segments have been identified (e.g. Kollmann, 2000). It has been found that in both ends of pricing (high-end versus low-end) the price sensitivity is substantially lower, in other words insensitive. Influencing on these two market segments with pricing would be most probably ineffective. Thus, for these market segments it would be most effective to pursue quality-focused marketing strategies (e.g. improvement of service/speech quality). Along with consumer attitudes and shopping orientation,
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there has been significant weight given to price perceptions of consumers, and its impact on the adoption of product and service innovations.
The price/acceptance function: perspectives of a pricing policy in European telecommunication markets
Innovation management success for telecommunication products depends not only on sales, but also, and primarily so, on actual call times by subscribers (e.g. on their mobile phones). It is not only the purchase price that plays a major role for this type of service, but also call and rental charges. This study investigates two potential subscribers' decisions, using the graphic device of a price/acceptance function and a charge/acceptance function. The first decision is to buy telecommunications products (accepting the purchase price), and the second decision is to use these products (accepting the charges for using the product).In particular, an attempt is made to describe the general profile of the price/acceptance function through considerations of plausibility. Based on an empirical experiment, conclusions are drawn for the pricing policy of telecommunication products. The policy emerging is one of abandoning fixed basic charges and of giving away end-user sets (e.g. mobile phones) free of charge.
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The price and acceptance pricing:
The charges/acceptance function:
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Switching costs and consumer behavior: implications for telecommunications regulationSwitching patterns provide an important indicator that the demand-side of a market is well-developed and that consumers are sufficiently empowered to participate actively. The motivation to switch is generally a function of consumers’ estimate of the performance of their existing supplier; and whether or not they believe there are better alternatives available from other suppliers on the aspects of service that matter to them. If the market is perceived to be undifferentiated and/or if their current supplier is perceived to be the best on the market on the criteria that are important, there is no expected benefit from switching. The ability and willingness of consumers to switch is critically important. If switching is discouraged or impeded this could impact not only on the demand-side but also potentially raise supply side barriers (Barrow, 2007). This is because new entrants could be deterred from entering the market in the belief that it will be difficult to persuade consumers to switch from their existing provider. This could diminish the effectiveness of competition and serve to limit the benefits that consumers would otherwise derive from it. It is important to note, however, that switching is not the only measure of a vibrant demand-side, nor is switching necessarily always in a consumer’s best interests. The decision to engage in co-ordinate information gathering that will support the decision to switch or not to switch is also important. If a consumer is
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satisfied with a current provider, switching is not necessarily an improvement. Moreover, choosing a new service does not necessarily mean switching provider.
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METHODOLOGY
RESEARCH METHODOLOGY
Research simply means a search for facts, answers to questions and solution to
problem. It is a purposive investigation, an organized inquiry. It seeks to find
explanations to unexplained phenomenon, to clarify the doubtful propositions and
to correct the misconceived facts. In order to comply with our objective and test
our research hypotheses we design a study based on the effect of corporate social
responsibility on the consumer purchase behavior.
TYPE OF RESEARCH
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Descriptive Research
Descriptive research, also known as statistical research, describes data and
characteristics about the population or phenomenon being studied. Descriptive
research answers the questions who, what, where, when and how.
Although the data description is factual, accurate and systematic, the research
cannot describe what caused a situation. Descriptive research can be said to have a
low requirement for internal validity.
Descriptive research deals with everything that can be counted and studied. But
there are always restrictions to that. Your research must have an impact to the lives
of the people around you.
TYPE OF SAMPLING
Sampling is the use of a subset of the population to represent the whole population
for the purpose of. Probability sampling, or random sampling, is a sampling
technique in which the probability of getting any particular sample may be
calculated. For the present study we have taken convenience sampling, a type of
non random/ non probability sampling techniques.
SAMPLE SIZE
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The sample size for our research is 100 which includes sample of age groups
below 30 and above 30.
DATA COLLECTION-
Data collection is the process of collecting information for use in evaluation. The
most common methods are surveys, interviews, pre and post-testing, professional
observation, self-report and review of existing records. The gathering of
information (figures, words or responses) from administered questionnaires that
describe some situation from which conclusions can be drawn. It is also the
process of gathering and measuring information on variables of interest, in an
established systematic fashion that enables one to answer stated research questions,
test hypotheses, and evaluate outcomes. There are two types of data in data
collection:-
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Primary Data-it is the first hand information that is collected for the survey.
It includes the behavioral responses, measuring attitudes, observation.
Observation
Consumer’s purchasing behavior of FMCG products
(P&G, ITC, Britannia, HUL)
Questionnaire: Structured and unstructured
Secondary data- a secondary source is a document or recording that relates
or discusses information originally presented elsewhere. A secondary source
contrasts with a primary source, which is an original source of the
information being discussed. Secondary sources involve generalization,
analysis, synthesis, interpretation, or evaluation of the original information.
Literature review
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Data analysis and
interpretation
Data analysis :
TABLE 1: AGE OF THE RESPONDENT
Respondents Frequency PercentValid
PercentCumulative
Percent<30 70 70.0 70.0 70.0
>30 30 30.0 30.0 100.0 Total 100 100.0 100.0
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Inference:
Out of 100 respondents 70% falls under the age group of less than 30 and 30% falls under the age group of above 30.
TABLE 2: GENDER OF THE RESPONDENT
Frequen
cy PercentValid
Percent
Cumulative
PercentValid
male 47 47.0 47.0 47.0female
53 53.0 53.0 100.0
Total 100 100.0 100.0Page | 29
Inference:
Out of 100 respondents, 47% are male and 53% female.
Table 3: Occupation of the respondents
Occupation Frequen
cy PercentValid
Percent
Cumulative
Percentbusiness
12 12.0 12.0 12.0
housewife
7 7.0 7.0 19.0
job 11 11.0 11.0 30.0 student 70 70.0 70.0 100.0
Page | 30
Total 100 100.0 100.0
Inference:
Out of 100 respondents, 12% comes under the category “business”, 7% are house wives, 11% comes under the category “job”, and 70% are “students”.
Table 4: mobile service the respondent uses
Mobile service
Frequency Percent
Valid Percent
Cumulative Percent
Airtel 37 37.0 37.0 37.0 Vodaf
one13 13.0 13.0 50.0
idea 9 9.0 9.0 59.0 cell
one1 1.0 1.0 60.0
relian 6 6.0 6.0 66.0Page | 31
ce doco
mo\34 34.0 34.0 100.0
Total 100 100.0 100.0
Inference: Out of 100 respondents the mobile users of Airtel are 37%, Vodafone 13%, idea 9%, cell one 1%, reliance 6% and docomo 34%
Table 5: purpose of usage of mobile service
Frequen
cy PercentValid
Percent
Cumulative
PercentValid busin
ess3 3.0 3.0 3.0
personal
64 64.0 64.0 67.0
both 33 33.0 33.0 100.0Total 100 100.0 100.0
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Inference:
Out of 100 respondents, 3% use it for business, 64% for personal use and 33% for business as well as for personal use.
Table 6: spending per month
Frequen
cy PercentValid
Percent
Cumulative
PercentValid <100 14 14.0 14.0 14.0
100-300
59 59.0 59.0 73.0
301-500
18 18.0 18.0 91.0
>500 9 9.0 9.0 100.0Page | 33
Total 100 100.0 100.0
Inference:
In a month Out of 100 respondents, 14% spend less than 100, 59% spend between the range of 100- 300, 18% spend between the range of 301-500 and 9% spend more than 500.
Table 7: airtime per day
Frequen
cy PercentValid
Percent
Cumulative
PercentValid <30mi
n31 31.0 31.0 31.0
30min-2hrs
45 45.0 45.0 76.0
2hrs-5hrs
18 18.0 18.0 94.0
Page | 34
>5hrs 6 6.0 6.0 100.0Total 100 100.0 100.0
Inference:
Out of 100 respondents, 31% talk for less than 30 min per day, 45% talk between 30 min to 2 hours, 18% talk between 2 hours to 5 hours and 6% for more than 5 hours.
Table 8: factor considered while switching brand
Frequen
cy PercentValid
Percent
Cumulative
PercentValid price 45 45.0 45.0 45.0
good network coverage
48 48.0 48.0 93.0
customer 6 6.0 6.0 99.0Page | 35
serviceother factors
1 1.0 1.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 45% consider price, 48% good network coverage, 6% customer service and 1% other factors (location of dealers, the service providers used by family members) as an important factor while switching their brand.
Table 9: Docomo’s 1p/sec plan is better than other services (local)
Frequen
cy PercentValid
Percent
Cumulative
PercentValid yes 38 38.0 38.0 38.0
no 43 43.0 43.0 81.0can't 19 19.0 19.0 100.0
Page | 36
sayTotal 100 100.0 100.0
Inference:Out of 100 respondents, 38% think, while 43% don’t, 19% can’t say that Docomo’s 1p/sec plan is better than other services providers for local call rates.
Table 10: Docomo’s 1p/sec plan is better than other services (STD)
Frequen
cy PercentValid
Percent
Cumulative
PercentValid yes 47 47.0 47.0 47.0
no 35 35.0 35.0 82.0can’t 18 18.0 18.0 100.0
Page | 37
sayTotal 100 100.0 100.0
Inference:Out of 100 respondents, 47% think, while 35% don’t, 18% can’t say that Docomo’s 1p/sec plan is better than other services providers for STD call rates.
Table11: use of 1p/sec plan
Frequen
cy PercentValid
Percent
Cumulative
PercentValid
yes 51 51.0 51.0 51.0no 49 49.0 49.0 100.0Tota 100 100.0 100.0
Page | 38
l
Inference:Out of 100 respondents, 51% use, while 49 don’t use 1p/sec plan
Table12: if yes which service
Frequency PercentValid
PercentCumulative
PercentAirtel 14 14.0 27.5 27.5
Vodafone
1 1.0 2.0 29.4
Page | 39
reliance 3 3.0 5.9 35.3 docomo 32 32.0 62.7 98.0 others 1 1.0 2.0 100.0 Total 51 51.0 100.0
Inference:Out of 51 respondents who use 1p/sec scheme, 14% use Airtel, 1% use Vodafone, 3% use reliance, 32% use docomo and 1% use other network services.
Table13: if not interested in 1p/sec plan?
Frequen
cy PercentValid
Percent
Cumulative
PercentValid yes 20 20.0 40.8 40.8
Page | 40
no 29 29.0 59.2 100.0Total 49 49.0 100.0
Missing
System
51 51.0
Total 100 100.0
Inference:Out of 49 respondents, who don’t use 1p/sec scheme 20% are interested to opt 1p/sec plan while 29% are not.
Table14: if interested, which service
Respondents Frequency PercentValid
PercentCumulative Percent
Airtel 8 8.0 40.0 40.0 Vodafone 4 4.0 20.0 60.0
Page | 41
Idea 1 1.0 5.0 65.0 cell one 1 1.0 5.0 70.0 docomo 5 5.0 25.0 95.0 others 1 1.0 5.0 100.0 Total 20 20.0 100.0
Inference:Out of 20 respondents, who don’t use this scheme but are interested in using this scheme, 8% prefer Airtel, 4% prefer Vodafone, 1% prefer idea, 1% prefer cell one, 5% prefer docomo, the remaining 1% prefer others (Aircel)
Table15: rating for docomo: beneficiary in terms of tariffs
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 42
Valid strongly disagree
4 4.0 4.0 4.0
disagree 5 5.0 5.0 9.0neither agree nor disagree
30 30.0 30.0 39.0
agree 50 50.0 50.0 89.0strongly agree
11 11.0 11.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 4% strongly disagree, 5% disagree, 30 %are neutral, 50% agree, 11% strongly agree that Docomo’s 1p/sec plan is beneficiary in terms of tariffs.Table16: rating for Docomo’s tactic to attract customers (1 p/sec plan)
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 43
Valid strongly disagree
2 2.0 2.0 2.0
disagree 1 1.0 1.0 3.0neither agree nor disagree
38 38.0 38.0 41.0
agree 25 25.0 25.0 66.0strongly agree
34 34.0 34.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 2% strongly disagree, 1% disagree, 38 %are neutral, 25% agree, 34% strongly agree that Docomo’s 1p/sec plan as a tactic to attract customers.Table17: rating for Airtel
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 44
Valid excellent
37 37.0 37.0 37.0
good 53 53.0 53.0 90.0poor 5 5.0 5.0 95.0no opinion
5 5.0 5.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 37% feel that Airtel’s pricing scheme are excellent, 53% feel it’s good, 5% feel it is poor, while the remaining 5% have no opinion.
Table18: rating for docomo
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 45
Valid excellent
39 39.0 39.0 39.0
good 48 48.0 48.0 87.0poor 5 5.0 5.0 92.0no opinion
8 8.0 8.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 39% feel that Docomo’s pricing scheme are excellent, 48% feel it is good, 5% feel it is poor, while the remaining 8% have no opinion.
Table19: rating for Aircel
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 46
Valid excellent
3 3.0 3.0 3.0
good 28 28.0 28.0 31.0poor 56 56.0 56.0 87.0no opinion
13 13.0 13.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 3% feel that aircel’s pricing scheme are excellent, 28% feel it is good, 56% feel it is poor, while the remaining 13% have no opinion.
Table20: rating for uninor
Frequen
cy PercentValid
Percent
Cumulative
Percent
Page | 47
Valid excellent
13 13.0 13.0 13.0
good 38 38.0 38.0 51.0poor 35 35.0 35.0 86.0no opinion
14 14.0 14.0 100.0
Total 100 100.0 100.0
Inference:Out of 100 respondents, 13% feel that uninor’s pricing scheme are excellent, 38% feel it is good, 35% feel it is poor, while the remaining 14% have no opinion.
Table21: price is considered as an important factor while switching brand
Frequen
cy PercentValid
PercentCumulative
Percentstrongly 1 1.0 1.0 1.0
Page | 48
disagree disagree 3 3.0 3.0 4.0 neither
agree nor disagree
7 7.0 7.0 11.0
agree 51 51.0 51.0 62.0 strongly
agree38 38.0 38.0 100.0
Total 100 100.0 100.0
Inference:
Out of 100 respondents, 38% strongly agree, 51% agree, 7%neither agree nor disagree, 3% disagree and 1% strongly disagree that they consider price as an important factor while switching their brand.
Table22: consideration of call tariffs while switching brand
Page | 49
Inference: out of 100 respondents, 6% consider call tariffs as not very important, 5% consider as not important while 14% consider neither important nor not important, 26% consider as important, 46% consider it as very important while switching brands.Table23: consideration of sms tariffs while switching brand
Page | 50
Frequency Percent
Valid Percent
Cumulative Percent
not very important
6 6.0 6.0 6.0
not important 5 5.0 5.0 11.0 neither
important nor not important
14 14.0 14.0 25.0
important 26 26.0 26.0 51.0 very important 49 49.0 49.0 100.0 Total 100 100.0 100.0
Freque
ncyPerce
ntValid
PercentCumulative
Percentnot very important
8 8.0 8.0 8.0
not important 10 10.0 10.0 18.0 neither
important nor not important
36 36.0 36.0 54.0
important 20 20.0 20.0 74.0 very important 26 26.0 26.0 100.0 Total 100 100.0 100.0
Inference: out of 100 respondents, 8% consider call tariffs as not very important, 10% consider as not important while 36% consider neither important nor not important, 20% consider as important, 26% consider it as very important while switching brands.Table24: consideration of sim prices while switching brand
Page | 51
Inference: out of 100 respondents, 6% consider call tariffs as not very important, 5% consider as not important while 14% consider neither important nor not important, 26% consider as important, 46% consider it as very important while switching brands.Table 25: cross tabulation of usage of 1 p/sec and consideration of tariff s while switching brand:
Page | 52
Frequency Percent
Valid Percent
Cumulative Percent
not very important
26 26.0 26.0 26.0
not important 25 25.0 25.0 51.0 neither
important nor not important
25 25.0 25.0 76.0
important 18 18.0 18.0 94.0 very
important6 6.0 6.0 100.0
Total 100 100.0 100.0
H0: There is no significant relationship between the usage of 1 p/sec plan and consideration of call tariffs while switching brand.
consideration of call tariffs while switching brand Total
not very
importantnot
important
neither important
nor not important
important
very important
use of 1p/sec plan
yes3 3 8 17 20 51
no 3 2 6 9 29 49Total 6 5 14 26 49 100
Chi-Square Tests
4.562a 4 .335
4.612 4 .329
1.253 1 .263
100
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
4 cells (40.0%) have expected count less than 5. Theminimum expected count is 2.45.
a.
From the above table, minimum expected count is less than the value. Therefore the null hypothesis is not accepted.
From the table and from the test we can say that the there is significant relationship between the usage of 1 p/sec plan and consideration of call tariffs while switching their brands.
Table 26: Usage of 1p/sec plan and price is consideration as an important factor while switching brand
Page | 53
H0: there is no significant relationship between the usage of 1 p/sec plan and
consideration of price while switching brand
price is considered as an important factor while switching brand Total
strongly disagree
disagree
neither agree nor disagree agree
strongly agree
use of 1p/sec plan
yes1 0 6 31 13 51
no 0 3 1 20 25 49Total 1 3 7 51 38 100
Chi-Square Tests
13.699a 4 .008
15.714 4 .003
3.377 1 .066
100
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
6 cells (60.0%) have expected count less than 5. Theminimum expected count is .49.
a.
From the above table, minimum expected count is less than the value. Therefore the null hypothesis is not accepted. Therefore it is inferred that here is a significant relationship between considering price as an important factor while switching brand and the usage of 1 p/sec plan.
Table 27: purpose of usage of mobile service * rating for docomo
Page | 54
rating for docomo
Totalexcellent good poorno
opinionpurpose of usage of mobile service
business 1 2 0 0 3personal 22 33 3 6 64both 16 13 2 2 33
Total 39 48 5 8 100
Chi-Square Tests
2.816a 6 .832
3.175 6 .787
.653 1 .419
100
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
7 cells (58.3%) have expected count less than 5. Theminimum expected count is .15.
a.
Inference:
From the above table, minimum expected count is less than the value. Therefore the null hypothesis is not accepted. Therefore it is inferred that there is a significant relationship between purpose of usage of mobile service and rating for docomo.
Page | 55
Findings
\
Findings:
Among the sample, Tata docomo stands second among various brands used
by the respondents.
Page | 56
Most of the respondents spend on an average of Rs.100- 300 per month and
talk between 30 min to 2 hours per day.
While switching their brands, customers mostly consider good network
coverage followed by price.
On an average, half of the samples feel Docomo’s 1p/sec plan is good for
local and STD call rates.
Among half of the respondents, who use 1p/sec plan docomo stands first
followed by Airtel.
Among the remaining half who are not using and interested to use in the
recent future, docomo stands second.
More than half of the samples feel that Docomo’s pricing scheme is
beneficiary in terms of tariffs.
Most of the respondents agreed that price is considered as an important
factor while switching their brand.
While switching brand call tariffs, sms charges are more considered than the
sim rates.
Page | 57
Conclusion
Conclusion:
It is a rewarding exercise “to study the promotional pricing vs. brand switching
with reference to 1p/sec scheme of Tata docomo”. From the overall analysis of the
Page | 58
study it is noted that promotional pricing plays an important role while brand
switching. But it is also observed that this scheme(promotional pricing) is more
favorable among the customer segments who talk and spend more.
Page | 59
http://www.telesutra.com/2009/09/25/indian-telecom-update-for-august-2009/
http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-base-
soars-to-543m-as-mobile-cos-add-record-1765m-in-Nov/articleshow/5370510.cms
http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/712/
pr23dec09no79.pdf
Books:
Marketing Research, Rajendra Nargundkar- Tata McGraw-Hill Publishing
House,2003
Marketing Management-A South Asian Perspective, Kotler, Keller, Koshy
and Jha- Pearson Education, 13th edition.
Business Research Methods, Donald R. Cooper and Pameela S. Schindler-
Tata McGraw-Hill Publishing House,2003
Journals:
Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 ·
pp. 303–314
Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 · pp. 303–314
European Journal of Innovation Management, Volume 3 . Number 1 . 2000 .
pp. 7-14
VOL. 10 NO. 4 2008, pp. 13-29, Emerald Group Publishing Limited, ISSN
1463-6697
Page | 61
Questionnaire:
Age: ___________ Gender: _________ Occupation: _____________
1. Which mobile service do you use?
a. Airtel ( ) b. Vodafone ( ) c. Idea ( ) d. Cell one ( ) e. Reliance ( ) f. TATA DOCOMO ( ) g. Uninor ( ) h. TATA Indicom ( ) i. Other specify.................
2. What is the purpose of your mobile service?
Page | 62
a. Business ( ) b. Personal ( ) c. Both ( )
3. How much do you spend on mobile service per month?
a. <100 ( ) b. 100-300 ( ) c. 301-500 ( ) d. >500 ( )
4. How much air time you spend daily on your phone?
a. >30 min ( ) b. 30min -2hrs ( ) c. 2hrs – 5hrs ( ) d. >5 hrs ( )
5. What is the most important factor you consider when you choose mobile service provider?
a. Price ( ) b. Good network coverage ( ) c. Customer service ( )
d. Location of dealer ( ) e. Other please specify: _____________
6. Do you think 1paise/second Tata DOCOMO plan is better than any other services (for local call rates)?
a. Yes ( ) b. No ( ) c. Can’t say ( )
7. Do you think 1paisa/second Tata DOCOMO plan better than other offers of other network providers (for STD call rates)?
a. Yes ( ) b. No ( ) c. Can’t say ( )
8. Are you using any of the 1 paisa/ sec scheme?
a. Yes ( ) b. No ( )
9. If yes please specify which mobile service? __________________
10. If no, then are you interested in 1 paisa/second scheme?
a. Yes ( ) b. No ( )
11. If you are interested then specify which mobile service would you prefer?
Please specify: ____________________
12. What is your opinion about TATA DOCOMO’s one paisa per second billing? Page | 63
Rate 1 to 5 for the following attributes (1 – strongly agree 2 – agree 3 – neutral 4 – disagree 5 – strongly disagree)
a. Beneficiary in terms of tariffs ___________
b. As a tactic to attract customers ____________
13. Rate the pricing policy of following telecom services.
(1-excellent 2-good 3- poor)
a. Airtel (RS 22 with validity period 1 year-1 p/sec):___
b. Tata DOCOMO (Rs 49 with life time validity with sim):___
c. Aircel (Rs 47 with validity 1 month):___
d. Uninor (Rs. 110 sim + 29 p/min offer): ____
14. While switching the brand, you consider price (call n sms rates) as an important factor
a. Strongly agree ( ) b. Agree ( ) c. Neither agree nor disagree ( )
d. Disagree ( ) e. strongly disagree ( )
15. Rank the following attributes from 1 to 5(1- not very important to 5-very important) when switch your brand
a. Call tariffs ________
b. Sms tariffs _______
c. Sim prices ________
Page | 64
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