MKTG302

MAGED ABAZA

Submitted By:Moataz Said Nagy: 900030101Ali El Gendy: 900021955Ahmed Abd

El Gawad: 900011681Moataz Hamouda: 900010148

Index

1

1.0 Executive Summary……………………………………………………………...32.0Situation Analysis………………………………………………………………...5

2.1 Industry and Our Competitors…………………………………………...52.2 Six Forces: Business Environment………………………………………6

2.2.1 Political and Legal Environment………………………………72.2.2 Economic Environment………………………………………..82.2.3 Socio-cultural Environment……………………………………92.2.4 Technological Environment……………………………………10

2.3 Market Segmentation…………………………………………………….112.3.1 Demographic Segmentation……………………………………11

2.3.1.1 Age…………………………………………………...112.3.1.2 Gender………………………………………………..112.3.1.3 Income………………………………………………..12

2.3.2 Geographic Segmentation……………………………………...122.3.2.1 People Living in Cities……………………………….122.3.2.2 People Living in Upper Egypt and Urban Areas……..

122.3.2.3 People Living or Working in Remote Areas…………13

2.3.3 Behavioural Segmentation……………………………………..132.3.3.1 Companies and Business Organizations………..……132.3.3.2 Businessmen…………………………………………13

2.3.3.3 Youth………………………………………………………....142.4 Targeting…………………………………………………………………142.5 The Positioning Table……………………………………………………15

2.5.1 Comment on Table……………………………………………..152.5.2 Positioning Statement……………………………………….....17

2.6 SWOT Positioning Statement…………………………………………...172.6.1 Strengths and Weaknesses………………………………….....17

2.6.1.1 Strengths…………………………………………….172.6.1.2 Weaknesses………………………………………….17

2.6.2 Opportunities and Threats……………………………………..182.6.2.1 Opportunities………………………………………...182.6.2.2 Threats……………………………………………….18

3.0 Objectives………………………………………………………………………..194.0 Strategy…………………………………………………………………………..19

4.1 Market Penetration Strategy……………………………………………..194.2 Diversification Strategy (Secondary Party) ……………………………..20

5.0 Action Program…………………………………………………………………..216.0 Financial Statements……………………………………………………………..22

6.1 Marketing Expenses……………………………………………………...226.2 Income Statement………………………………………………………...22

7.0 Control……………………………………………………………………………23

7.1 Actual Implementation and Expenditure vs. Achievement of Objectives.237.2 Actual Expenditure vs. Budget…………………………………………...

24Refrences……………………………………………………………………………..26

2

1.0 Executive summaryOur newly established company, ETIASALT found the way paved to

start it giant investment in Egypt in the field of mobile services and satellite

communication. The market is expected to be segmented with respect to geographic

locations as follows as people living in the cities like Cairo, Alexandria, and Giza

where the greatest percentage of customers can be found. People living or working in

remote areas such as, oil fields, mobile phones are very vital as it is the only way of

communication that exists there. The second segmentation is Behavioural one in

which B2B is probably the most important segment that uses mobile phones.

Companies use mobile services in business to create a continuous network between

its employees. Usually business organizations are looking towards the quality of the

service. Based on the segmentation process, it was decided that the best strategy to be

used for targeting would be a custom marketing strategy, where different services are

introduced addressing the unique needs of each customer. Our assumption in the

positioning table illustrate that B2B would give the service of coverage in different

places 40% importance. The satellite service would work on filling this unsatisfied

need of very high demand for businessmen and engineers in Egypt. It is also assumed

that businessmen do not have a priority considering the Premium Price and Regular

Payment which have 18% and 17%, respectively. This is because work in detached

areas or outside Egypt is usually for high-income people. That would guarantee the

success of the satellite mobile service. Our strengths will be high capital investment:

the high capital investment will help the company provide the newest technology like

the satellite service, while our weakness is the costs would be high relative to the

revenue at the beginning in order to attract more customers.

3

The opportunities that may encounter our company are can be summarized as the

increase in number of out-of-towns jobs; the skilled workers, the importance of

mobile phones to Egyptians; the political stability in Egypt and the welcome of the

Egyptians to third company that may break the duopoly. On the other hand, our

company may undergo some threats such as the low purchasing power of Egyptians;

the coalition of the competitors and the economic recession in Egypt. Our Objectives

are to be the company of the highest share in cellular phone network coverage

business in Egypt with five year and achieve profit of 500 million pounds. Strategy:

Market penetration strategy (prime product). We should enhance a price promotion

tactic for the prime product to gain substantial market share. The company has a

huge capital to establish its brand. To offer low price ill attract consumers. This

strategy will help the company gain the highest market share. Diversification

strategy targets specific stratum to promote our secondary product of satellite

connection which is not ordinary in Egypt. It will be offered for limited at higher

prices. This offering has direct impact on sales as our company is the only provider

of this service and indirect psychological one as the company is the only one to offer

this service which undermines the value of its competitors. This will help us achieve

500 after 5 years. In order to follow up the improvement of our company we have to

implement a controlling scheme on our performance. One of the most important

aspects to follow up is the percent achieved of the stated objectives. A numerical

figure has to be assigned to the objective and then continuously referred to in order to

know the performance of the company. In order to know how far (Etisalat) gained

from the market share it is suitable to calculate the value of our company at the end of

each year and compare it with the value of our competitors. If we have more value

than our competitors then we have highest market share. The amount of sales can be

calculated by knowing the number of our clients and compare that number with the

estimated number clients in our target market(s). After doing that we can know our

sales and our sales relative to the market.

The amount of profit is obtained by subtracting the costs and expenses from the net

sales. This is beneficial in controlling the objective related to amount of profit.

4

2.0 Situation Analysis Accordingly, our newly established company, ETIASALT found the way paved

to start it giant investment in Egypt in the field of mobile services and satellite

communication. The company started to

study the environment where it will open its

project. Egypt is located in Northern Africa,

bordering the Mediterranean sea. It possesses

one of the most important water passages in

the world which is the Suez Canal. This canal

represents an international way passage for

world trade. The population in Egypt reached

78 million. Egypt is developing country. Most

of Egyptians are belong to the medium class.

The medium category represents the majority

of the Egyptian society. People in this category are educated people working for

companies in the private or governmental sector, or owners of very small projects

like grocery shops, mini-markets. Most of customers falling in this category are

having mobile phones; yet, their usage of mobile phones is very limited. Egypt is

considered a right place to start such project as it is politically stable.

2.1 The Industry and Our Competitors

MobiNil and Vodafone are functioning at the present time as they are the two

competitive cell phone companies to ETIALSAT. Now, MobiNil phones are

becoming an essential part of the daily life and are considered to be a necessity. It is

known that MobiNil is a national company, while Vodafone is a multinational

operating in Egypt.

5

In late 1996, MobiNil started operating under the name Arento Telecom

Egypt. The company was owned by the government for a few months then it was

privatized and became the first mobile operating company in Egypt. MobiNil was

considered a monopoly at that time as the government gave it the exclusive right to

produce; moreover it was the only producer, owner of a key resource (mobile

technology only at that time) and a price maker. MobiNil has proved its leadership in

marinating Mobile services in Egypt to the extent that it has even able to acquire the

trust of huge number of customers. It is main objective is providing quality service

for its customers. It is a pioneer in meeting customer's diverse needs. MobiNil is the

first telecommunication company to develop EDGE that has five times speed than

GPRS. Its network covers 98% of Egypt.

In 1998, Vodafone started its investment in Egypt. Since then, the investments

of Vodafone have reached l.E 4.5 billion. It is estimated that Vodafone has many

products, such as, pre-paid lines, SMS, wireless fax. In 2003, Vodafone launched the

first GPRS network which was the base of Vodafone line. The mission of Vodafone is

to help people around the world enjoy communication technology developments,

preserve the environment and support the local communities. Its network covers 98%

of Egypt.

2.2 Six Forces:

Business Environment

For our company to enter the Egyptian market and to position our product well it

becomes of extreme importance to study the external environment (climate) in which

ETISALAT is going to work in. The external climate for our company has several

dimensions which include political and legal environment, economic environment,

socio-cultural environment, and technological environment.

6

2.2.1 Political & Legal Environment:

For a foreign company like ours wanting to establish a new market for itself in

Egypt, it is important to know the formal and informal rules under which a firm must

operate. Government regulations and legal issues of importance to our case include:

tax policy, employment laws, environmental regulations, trade restrictions and tariffs,

and political stability.

Regarding tax policy, the Egyptian government does not follow a stratified system of

taxation (i.e. a tax rate for every stratum); however it follows a fixed taxation system

which obliges all the corporations working in Egypt to pay a fixed percentage (20%)

of its income as a tax on its business. ETIASALT will have to account for a fixed

portion of its income as a tax for the Egyptian government regardless of the

performance of the company. This is an edge from the point of view of our company

because this is considered a moderate and fair tax rate so it will not break our back!!

Egypt offers very skilled workers, computer scientists, IT specialists, and engineers

for much lower wages than their counterparts in Europe or the Untied States.

Therefore, it is considered advantageous for ETISALAT to establish a business in

Egypt and make use of this fact. However, it should be noted that the Egyptian

government sets strict laws for employment which dictates that no person should

work manually more than 8 continuous hours, and has the right to have one day off

per week in addition to the fact that overtime is not mandatory but optional. Although

employment laws are not firmly enforced in Egypt, it is strongly recommended

(especially to multinational companies) to follow these laws in order not to affect our

stand and reputation in the market.

There is a growing trend here in Egypt to stop spoiling the environment and/or the

public’s health by either the wastes of an industry or by secondary effects of the

product itself. Since ETISALAT is basically a mobile phone network coverage

company it is crucial that our supply stations do not radiate (or at least in an

acceptable limit) any harmful radiations that may undermine the public’s health and

the environment. This may not become a problem for ETISALAT because of the

usage of the state of the art equipment so our business here will not be stopped by the

7

environmental issues yet we should put it in our minds for further penetration in the

market.

Since ETISALAT emphasis is on offering services and not products, trading

regulations and tariffs will not be considered as a drawback because Egypt is

considered a developing country and the components used in our service offering

(which are high-tech) are not manufactured locally, the tariffs imposed on imported

products will be a minimal because our importing does not affect the local industry. A

word of caution is that the Egyptian industry is developing and tariffs may be

imposed on our components in the future, yet this should not be a big deal because at

that time our product will be well positioned in the market and the number of

customer will be increased.

Political stability is one of the significant characteristics of the Egyptian market.

Since the last war Egypt went into was in 1973, and since then Egypt didn’t go in

other wars which may affect its political stability. The diplomatic relationships

between Egypt and its neighbors are well so there is no fear of a coming war. There is

a one overwhelming dominating political ruling party so there is a little chance that

any other party will throw it away and take its place. Regarding the history of Egypt

in the last 3 decades one could say the Egypt has a very stable political stability with

very minimal occasions of unrest.

2.2.2 Economic Environment:

The economic analysis of a country should be related to the factors the affect the

purchasing power of the consumers and the firm’s cost of capital. These factors may

include the economic growth, interest, exchange and inflation rates.

Egypt is ranked as a developing country yet its economic growth is very much related

to national projects and not individual ones. National projects which affect the

Egyptian economy are like tourism and the Suez Canal. Projects like these are the

8

backbone of the Egyptian economy. Due to the previous fact, the Egyptian

government pays attention to the field of tourism where tourists and who

accompanies them will certainly need a wide mobile phone coverage service on

tourism areas.

Most of the Egyptians are risk averse which is reflected in their investment in risk

free investments which yield low returns. The interest rates offered by national banks

usually range from 8.5% to 11%. However, inflation rates in Egypt are very high

(8.3% for year 2005) which consumes lots of the gains on the Egyptians investments’.

It is most probable that Egyptians will welcome the existence of a third mobile

network company in order to benefit from the competition between ELIATASLT and

its competitor which will be reflected on the price of service.

2.2.3 Socio-Cultural Environment:

An analysis of the Egyptian socio-cultural environment may include the family

structure, values, norms, career attitudes and language.

The Egyptian society is a society which holds family traditions at great esteem. The

most common family type is the normal families which consist of parents and

children. The other type of families is the extended families where three or more

generations live together. This type of families is most encountered in rural areas. The

other less common (but steadily increasing) is the nuclear families where a child lives

with a single parent and this is the least encountered in Egypt. Family relationships

are very important in Egypt and being a member of a family this entitles you to

communicate with each other on a very frequent basis and it became a norm that

people should not stay off contact for a long time otherwise they will be undermining

a very important social value which is “keeping in touch”.

It should be noted from observing the history of mobile phones in Egypt that it

became a norm that Egyptians older than 16 years old should carry cellular phones.

9

And it is very important for girls in high school or university to have a cellular phone

in order for their parents to check up on them regularly when they are not home.

Most of the careers which give high salaries to fresh graduates in Egypt like the

petroleum field, field and sales engineers involve traveling a lot and probably to

unoccupied territories (like an oil well in the Western Desert). Despite the fact that

these jobs are so hard yet Egyptians rush to get a place in these jobs. These fields are

growing rapidly in Egypt and it is becoming a very vivid sector.

The number of illiterate Egyptians in the rural areas exceeds to a great extent their

counterparts in urban areas. Most of the Egyptians in urban areas do understand

Arabic (the native language) and find great comfort in using it on English. However,

highly educated may find the English language more intelligible and handy than the

Arabic language as they are used to understand and deal with it in their studies.

Usually Egypt has lots of tourists all along the year which dictates the usage of

foreign languages (mostly English) in it.

2.2.4 Technological Environment:

Technological factors have a significant role in lowering the barriers to entry,

enhancing the production efficiency, and outsourcing decisions. Some technological

factors include: R&D activity, automation and rate of technological change.

Since technology is an investment a company should make in order to succeed and in

the field of mobile communications technological advancements are limitless. It is

very important to keep up updating our system to meet and surpass our competitors.

The technology that our competitors mainly use is a traditional one in the sense that

they depend on local network supply stations to enhance the signal coming from the

head quarter to the mobile users and vice versa. In networking business this

technology is traditional. It is worth noting that no mobile company uses satellite

connection. Although satellite communication technology costs a huge amount of

10

money it enables the user to communicate from any place on earth provided that it is

not underground.

2.3 Market Segmentation:

In the following section, three types of segmentations are handled:

demographic, geographic and behavioural segmentation as they are relevant to this

particular business. Psychographic segmentation is not handled as it's relevant to

mobile phone industry but it does not have a significant role in the network services

business.

2.3.1 Demographic segmentation:

2.3.1.1 Age:

According to CIA world fact book (2006), there are 78,887,007 persons in Egypt

classified as follows:

0-14 years 32.6%15-64 years 62.9%64 years and over 4.5%The median age is 24 years.

The data above shows that largest and the overwhelming category in Egypt is youth.

In fact, they are the most frequent users of mobile phones in making calls, sending

messages, ring tones, logos, clips… and so on. Egyptian youth are also the most

frequent users of internet and up-to-date technology-based products in the Arab

World.

2.3.1.2 Gender:

In fact, gender role is a very determinant factor, when trying to segment the Egyptian

cutomers for two main reasons:

• Literacy:

Age 15 and over can read and write, but high levels of illiteracy reaching more

than 40% of the population can be found in some areas like Upper-Egypt and

Oasis especially among girls.

Unfortunately, illiterate people are not expected to be frequent users of mobile

phones as literate people who can use the phone, send messages, e-mails, tones,

logos,……etc.

• Customs and traditions:

11

As part of the Egyptian culture and the Egyptian family, ladies are given less

privilege than men especially in urban areas and Upper Egypt. In such area, it is

not usual for girls to hold mobile phones.

2.3.1.3 Income:

Income is one the important factors if not the most important one, upon which the

market is segmented because it determines the buying power of each segment. In

Egypt, three categories of incomes can be differentiated:

• Low to very low income:

These are people who can not or can hardly satisfy their basic needs such as food,

transportation, and basic education.

• Medium income:

This category represents the majority of the Egyptian society. People in this

category are educated people working for companies in the private or

governmental sector, or owners of very small projects like grocery shops, mini-

markets. Most of customers falling in this category are having mobile phones;

yet, their usage of mobile phones is very limited.

• High income:

This category includes people with high incomes such as businessmen, owners of

large projects and companies. Of course, all members of high income families are

included in this category. In fact, customers falling in this category are the most

frequent users of mobile phones.

2.3.2 Geographic segmentation:

The market is expected to be segmented with respect to geographic locations as

follows:

2.3.2.1 People living in the cities:

In cities like Cairo, Alexandria, and Giza, the greatest percentage of customers can be

found. In these cities, life is very dynamic and full of interactions between people

working together, students, relatives. This is why the use of mobile phones is high.

2.3.2.2 People living in Upper Egypt, and urban areas:

In urban areas and Upper Egypt as stated above due to some factors like high

percentage of illiteracy and existence of some rigid customs and traditions that make

12

the use of mobiles among ladies not favourable. Therefore, the lowest rate of using

mobile phones can be found in such areas.

2.3.2.3 People living or working in remote areas:

For people living in places that are far from the cities or the capital or working

in remote areas like oil fields, mobile phones are very vital as it is the only way of

communication that exists there. Even with the existence of some land phones in

some remote areas like El Wady El Geded, the price of making a call using a land

phone is almost equal to the price of making the call using a mobile phone, which

makes the mobile phone more favourable to use.

2.3.3 Behavioral segmentation:

2.3.3.1 Companies and business organizations:

B2B is probably the most important segment that uses mobile phones.

Companies use mobile services in business to create a continuous network between

its employees. Mobile lines are also used by companies in order to connect with

employees working in remote areas. For instance, oilfield companies work on

projects in the desert, the sea and they are in need to communicate to the head office

frequently.

Usually business organizations are looking towards the following aspects in

communication services:

• Quality of the service.

• Continuity of the service (no frequent breakdowns)

• Fast response from the company providing the mobile services.

• Price

2.3.3.2 Businessmen:

Mobile phone is very vital to people who own or manage a business. They use the

phone for long time to make many local and international calls.

13

Such segment of customer is usually looking for aspect like:

• Quality

• Price

2.3.3.3 Youth:

As stated above, youth constitutes the majority of mobile phones users in

Egypt. They are using almost all aspects or services offered by the mobile phone

service provider like making calls, voice calls, sending messages, jokes, ring tones, e-

mails, logos, chatting…etc.

Such segment of customer is usually looking for aspect like:

• Variability of services offered (e-mail sending, voice mail, ring tones,…).

• Ease of use

• Reasonable price

The 80/20 rule is valid to a great extent in this particular business as the B2B and

business segments representing no more than 20% of the mobile phone users

consumes about 80% of what is consumed by the whole market.

2.4 Targeting:

Based on the segmentation process, it was decided that the best strategy to be

used for targeting would be a custom marketing strategy, where different services are

introduced addressing the unique needs of each customer.

For B2B market and businessmen, ETISALT Company will offer satellite network

coverage that will allow consistent coverage with high quality any where. In

addition, ETIASLAT will use and activated the concept of customer care by building

a very friendly relationship with other businesses and by fast responding to any

comments, complaints made by these customers.

For the major segment of customers represented by youth, the ETIASALT will

provide different service packages with different price ranges that suits different

income categories.

Moreover, ETISALT will explore areas and segments that were not targeted by its

competitors. As a result, for the movement fro urban places to towns and cities

looking for education and jobs especially in the industrial field, the need for

communication is increasing. Therefore, ETISALT will try to address urban and

Upper Egyptian customers by using a very special message that addresses their needs

14

and increases their awareness about mobile services and how mobile phones can

serve them and facilitate their communications.

2.5 The Positioning Table:

Positioning Table:

ProductsPremium Price27%

Regular Payment28%

Coveragein different places20%

Customer Service10%

Offers15%

Total (100%)

Etisalat (satellite)

26 27 18 9 14 94

MobiNil 25 22 13 8 11 79

VodaFone 26 21 15 6 10 78

2.5.1 Comment on the above table:

As mentioned in the Targeting section, the company will try to satisfy the gap

of the B2B, youth and new users. For businesses which seek to receive mobile phone

services in isolated areas, like at oil rigs, our service will provide a greater attraction.

In these places, engineers need mobile phones which are more reliable rather than

going to make calls at certain places or centers. Also for businessmen, or people who

travel abroad frequently, they will not be required to switch their service when they

are outside Egypt. Therefore, our service will save businessmen and engineers’ time

and effort. In this case, businessmen/engineers would go for our product, as they have

no other alternative for mobile services which provide high coverage as Etisalat’s

service does. The satellite service would work on filling this unsatisfied need of very

high demand for businessmen and engineers in Egypt. The higher coverage out of

15

cities and outside the country would be considered by MobiNil/Vodafone-customers

as an incentive which can make them change their mobile service. Another great

feature that differentiates Etisalat’s product is the low Periodical Payments feature,

which would present an allure to both completely new users and other services users

to switch their mobile service to Etisalat. Despite that the Premium Payment is

approximately the same between the three competitors where Etisalat, MobiNil, and

Vodafone would score 26, 25 and 26, respectively, out of 27%, Etisalat would provide

a differentiated Periodical Payment feature in which it is going to be lower than that

of MobiNil and Vodafone. Another feature that would attract both the new users and

other services users is the high discounts and offers. Our product scores 14% out of

15% in offers. Offers are going to be in the form of offering mobile services with

mobile devices of latest models at very low costs. Our service provided to youth

would be at lower prices than our competitors’ in order to grab their attention. In

addition, the company will work on having eye-catchy offers; for example, offering a

mobile and mobile service at discounts reaching 30% less than the market prices.

Accordingly, people would pay less and would purchase the mobile devices they

desire. That will assure complete success and allure to buyers, especially youth who

usually seek the newest mobile devices, bearing into consideration the nature of hyper

consumption of the Egyptian people. Not to mention that these qualities would attract

new buyers, for instance, people with extremely very low income, as it is known that

the Egyptian mobile market is not yet fully saturated.

16

2.5.2 The Positioning Statement:

Our product is cheaper, in periodical payments, and provides more offers for new

subscribers to our service. Our product is available every where in the world,

provides better coverage, with the highest technology available in the world, and is

more suited to the needs of the customers, saving their time and effort.

2.6 SWOT Analysis:

2.6.1 Strengths and Weaknesses:

2.6.1.1 Strengths:

• High capital investment: the high capital investment will help the company

provide the newest technology like the satellite service.

• Satellite technology will enables clients to use our service anywhere. This

feature will be very useful to users, like oil engineers, who travel to work in

detached areas or businessmen who travel outside the country.

• Providing better customer service that aims to inform client about his system

plus keep providing him with service he needs.

• Cheaper service, in terms of periodical payments.

2.6.1.2 Weaknesses:

• Very high initial costs: As the company would provide the newest

technology, attractive offers, e.g. selling phone line and cellular phone at a

very specialized price, the costs would be high relative to the revenue at

the beginning in order to attract more customers.

• Egyptian employees might not be acquainted with the new technology

provided by the company. The satellite mobile technology is a complete

novelty in Egypt, so it is very probable not to find employees who are

17

skilled in that new field. This could be managed by bringing foreign

employees or training Egyptian employees. However, training would make

the costs higher.

• Not having enough experience about the telecommunication business

environment in Egypt. The company has not yet had enough contact with

the Egyptian public and all the environmental trends surrounding the

mobile business. That would take it sometime to adapt to the Egyptian

environment rather than just making market research which its results are

not as accurate as real experience.

2.6.2 Opportunities & Threats

From the previous analysis of the business environment, the opportunities and threats

which encounters ETISALAT as a foreign multinational company wanting to

establish mobile communication business in Egypt is deduced.

2.6.2.1 Opportunities:

The opportunities in the external environment can be classified into the following:

o The growing of out-of-town jobs like petroleum and field engineering,

and salesmen, which necessitates network coverage in their fields

24/7.

o The abundant skilled workers and specialists at lower prices than most

other countries.

o The importance of cellular phones to Egyptians socio-culturally.

o The relatively high political stability in Egypt allows the establishment

and continuation of multinational businesses.

o The welcome of the Egyptian society to a third mobile coverage

company which may break the duopoly.

2.6.2.2 Threats:

Although there are opportunities that ETISALAT may take advantage of, there are

also threats which may cause a source of unrest to the company which are:

18

o The low purchasing power of the Egyptian economy.

o The coalition of the two competitors together against (ETISALAT).

o An economic recession in Egypt which may force the Egyptians not to

use mobiles.

3.0 Objectives • To be the company with the highest market share in cellular phone network

coverage business in Egypt within five years.

• To achieve a profit of 500 million pounds after a period of 5 years.

4.0 Strategy Due to our offering of two different products in the Egyptian market, it is appropriate

to approach our consumers in two different strategies.

4.1 Market Penetration Strategy (prime product):

Because basically the product offered by (Etisalat) is already existing and established

in the Egyptian market, we will have to gain a space in Egypt by offering the same

quality of service with a lower price. Since the average Egyptians income is not high

as Europeans and Americans, it is very convenient to enhance a price promotion tactic

for our prime product in order to attract them.

By following this strategy it is expected that the Egyptians will subscribe in (Etisalat)

service and we will gain a room in the Egyptian market. It is predicted that we will

have a tough competition at the beginning but consequently in few years we will be

able to gain a stand in the market and acquire a substantial market share.

To summarize the reason for choosing a market penetration strategy for our prime

product is that:

o (Etisalat) has a huge capital which will enable it to establish its brand

in the market despite the strong competition predicted.

19

o Offering the same quality of service with a lower price will attract

consumers. At the end of the day “why pay more while you can pay

less?”

o Following a market penetration strategy will enable (Itsalat) to achieve

the objective of being the company working in network coverage with

the highest market share.

4.2 Diversification Strategy (secondary product):

The diversification strategy will target a specific stratum of people as it will be used

to promote our secondary product (satellite connection) in the Egyptian market. As

the satellite connection system is not accustomed in Egypt, it will be a diversification

strategy to reach this particular group of people. The satellite connection system is of

particular importance to a limited number of people in the Egyptian society.

Therefore, in the diversification strategy followed it will be convenient to offer this

service in limited amount but higher prices.

Offering another type of service (satellite connection) will have direct and indirect

impact on (Etisalat). The direct impact is related to the number of sales offered by our

company (as the only provider of this service) in Egypt while the indirect impact is a

psychological one related to the fact that (Etisalat) offers a service not offered by any

of its competitors which has an undermining value on our competitors.

By introducing the satellite connection service in Egypt we will be following a

diversification strategy which will help us in achieving the goal of a profit of 500

million dollars after 5 years.

20

5.0 Action Program

Starting Date Action Assignment Person in Charge Completion Date

Jan-07 T.V AdsAdvertising Manager Decemeber 31 2007

Jan-07 Sales to Retailers Sales Persons __

Jan-07 Classical Concerts PR Manager Jan-07

Aug-07 Popular Concert PR Manager Aug-07

21

6.0 Financial Statement 6.1 Marketing Expenses:

Item Q1 Q2 Q3 Q4

Advertising 3000,00 4000,00 6000,00 3000,00

Public

Relations

1000,00 2000,00 7000,00 2000,00

Personal and

Selling

2000,00 3000,00 1000,00 3000,00

Sales

Promotion

3000,00 4000,00 2000,00 4000,00

TOTAL 9000,00 13000,00 16000,00 12000,00

Total=

6.2 Income Statement

Revenue 9000,000

Total Revenue 9000,000

Expenses 800,000

Operational budge 700,000

Administrative General 400,000

Market Minis 400,000

Total Expense 230000

Net profit 87700, 00

22

7.0 Control 7.1 Actual Implementation and Expenditure vs. Achievement of

Objectives

In order to follow up the improvement of our company we have to implement a

controlling scheme on our performance. One of the most important aspects to follow

up is the percent achieved of the stated objectives. A numerical figure has to be

assigned to the objective and then continuously referred to in order to know the

performance of the company.

In order to know how far (Etisalat) gained from the market share it is suitable to

calculate the value of our company at the end of each year and compare it with the

value of our competitors. If we have more value than our competitors then we have

highest market share.

The amount of sales can be calculated by knowing the number of our clients and

compare that number with the estimated number clients in our target market(s). After

doing that we can know our sales and our sales relative to the market.

The amount of profit is obtained by subtracting the costs and expenses from the net

sales. This is beneficial in controlling the objective related to amount of profit.

Although the main pivotal points in measuring are the ends of years, yet controlling

should be done on a more frequent basis, example every month. Because by doing

that, you are ensuring you are having a good control on your company’s status and

not jeopardizing its safety.

23

As mentioned in the weaknesses of Etisalat that it will have very high initial

costs because of differentiated costs which will enable the company to widen its

consumer base. Hence, this will enable the company to recover its losses. Therefore it

is very important that Etisalat measure its actual expenditures vs. budget.

7.2 Actual Expenditure vs. Budget:

Capital expenditure: Capital expenditure is expected to be 12,000,000,000 Arab

Emirates Dirham (AED). This entails the satellite coverage setup and all other fixed

assets

Media Advertising: Media advertising is expected to be 10,000,000 AED for every

coming year. This includes T.V ads, magazine ads, newspapers and other media. T.V

is going to be the main medium for advertising.

Sales promotion: This includes the cost of making offers. Offers could be made by

establishing joint-ventures with major mobile devices companies, like, Nokia,

Motorola, and others, where every side should discount its service or product to reach

a discount of 30%.

Brand/PR Sponsorship: Etisalat is going to sponsor many events, hosting very

famous Egyptian and international singers, like Amr Diab, Samy Yousef, and others.

The company would print its logo on the tickets, and provide booths to inform people

mainly about its products. The events would be in respectable places like Al Gezira

Club, and also at popular places as we need to attract low and high income youth.

Also considering the businessmen and other VIPs the company would sponsor

concerts, for artists like Omar Khayrat, Opera shows and other classical events to

attract the high class people who travel outside Egypt frequently. Again Tickets would

24

contain Logo of the product and there would be booths nearby for informing about

the qualities of the product. Popular and classic events would be carried out both once

a year for the coming 5 years for 40,000,000 AED.

According to the budgeted costs above, the Actual expenditure would be

compared to the budgeted one to assess how much control we have on over our

marketing budget, using the following equation:

(Actual Expenditure/Budget)*100%

References

25

"The world Fact book"

https://www.cia.gov/cia/publications/factbook/geos/eg.html

"Mobinil"

http://www.mobinil.com/roamers/travel/awards.aspx

http://www.aucegypt.edu/src/wsite1/background/nationalprofile/Population%20in%2

0Egypt.htm

26