IIPM Admission

Wednesday, December 30, 2009


IIPM set to beat economic slowdown

Cheap services and small handsets fueled India’s telecom boom. The stakes are not about to change anytime soon

The latest buzz to have gripped the telecom world is the launch of Reliance Communications’ (RCOM) GSM service. In a bid to increase subscriber tally, RCOM is targeting people whose Average Revenue Per User (ARPU) is less than Rs.300 per month, unlike the old ideology of chasing high-usage customers. With the second largest telecom operator making this move in the highly competitive telecom industry, it won’t be long before we see others treading a similar path. “RCOM’s GSM foray was expected to cause some disruption and their strategy to chase lower ARPU customers and giving away prepaid connections at virtually throwaway prices of Rs.25 each (along with free talktime worth Rs.900) are steps in that direction,” avers Prakash Gaba, an independent telecom analyst. But then arguably telcos had always taken pro-active steps to ensure getting even low-cost customers into their net. Vodafone’s chhota recharge was undoubtedly a step in that direction. Further, entry of new players like Unitech, Videocon, et al, would eventually make for still cheaper tariffs by at least 20-50%. Some say local calls would soon become as low as 10 paisa/minute!

“On VAS front too you find that micro-payments driven services are more popular and the trend is expected to only gain momentum,” explains another telecom analyst. Clearly, ringtones and caller tones will continue to be the most popular VAS after SMS. Also, analysts feel that the year would see a further reduction in SMS charges so as to ensure that the volume of SMSs do not fall in 2009.

A similar trend is also expected on the handset front. Though the low-end category in handsets have always been doing well, but of-late handset biggies had begun focusing profusely on the premium segment. The failure of Apple’s iPhone coupled with the slowdown induced fear instinct among consumers has made Nokia, Sony Ericcson, Samsung, et al, look afresh at the category. This year, they expect new customers in the mobile markets to be much higher than people opting for replacements. So, market leader Nokia has already announced the launch of Nokia 1200, very similar to their iconic Nokia 1100. To give more teeth to their entry level portfolio, the company has also launched handsets like Nokia 1208, Nokia 1209 and has plans for 1202, 2330 classic, 2323 classic... Even Samsung’s success (the company has now bagged the second spot in the handset market) is mainly attributable to the slew of entry level phones it launched last year. In 2009, this Korean handset maker is looking at expanding its base in the entry level handset market, positioning its sub-brand handset Guru300 as their star product.

The race to offer value-for-money, affordable handsets continues with Spice Mobile launching a people’s phone that costs only Rs.800 (minus a display screen & SMS sending services). But more popular perhaps would be Sony Ericsson’s R300 and R306, both AM/FM phones that are competitively priced. Clearly, slowdown or not, India’s telecom segment is going to be ruled by small ARPU’s, smaller recharges, cheap VAS and value-for-money handsets; while the phones themselves will get lighter, slimmer and yes, smaller on the pockets!

Surbhi Chawla

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Tuesday, December 29, 2009

DOT hai toh HOT hai!

IIPM Respected Business School

Election times provide a massive branding opportunity for marketers, say Savreen Gadhoke and Angshuman Paul

Saturday, November 29, 2008: The capital city of New Delhi was abuzz with activity. Raison d’ĂȘtre: That was the day when Delhi conducted the State Assembly Elections 2008. Plentiful promises, aggressive campaigning, massive advertising, et al, was the order of the day. Naveen Prabhakar, an MNC executive, too, was excited. But that had precious little to do with the elections and largely to do with the rare off he got as a result of the polls.

Naveen had some fool proof plans – a wholesome brunch followed by the screening of Quantum of Solace on his home theatre system and then an evening out with friends. Well, almost fool proof. For while Naveen was still lost in his reveries, his idealist wife Neeta announced her version of how the day should, and therefore would (the wife said it you see!) be spent. “We’ve to go and vote,” she said and that was that. Naveen agreed, but on one condition, “After voting, we’ll go out shopping and then lunch.” And so the two went to vote in the nearby booth and then headed straight toward the shopping mall. And that’s where a pleasant surprise lay for Naveen. As the duo entered a Louis Philippe showroom, they were surprised to see a flat 20% discount for those who had voted. And all they had to show was their index finger with a black ink blot mark and voila! While Neeta was beaming with a glow of nobility; Naveen’s eyes were in a great ‘Louis Philippe buying’ mood all of a sudden.

As idealist speeches, loud campaigning, et al, fail; varied marketers across sectors are imbibing the significance of voting in their marketing strategies, either directly or indirectly. Not only have the top-rung companies improved their top lines, but have also enhanced their brand value, brand image and equity by associating with this cause.

Sales at Louis Philippe were higher on Election Day, when it offered the discount, as compared to other normal days. “The idea was to reward those who had voted, in appreciation of their act, which was a service to the nation,” said Vishak Kumar, Chief Operating Officer, Louis Philippe to 4Ps B&M.

The Times of India’s ‘Lead India’ initiative, which commenced in 2007, was perhaps the first step taken in this direction. “The main idea was to awaken the ‘common man’ and make him realise his responsibility toward the country,” said Agnello Dias, the creative brain behind the campaign. Taking the campaign forward, Aamir Khan has been roped in to be the face of the ‘Lead India’ campaign, which urges citizens to vote, to have a bright future for the younger generation. A pun on the famous ‘Lead India’ campaign is the ‘Bleed India’ campaign. Though the client is still unidentified, the print campaign’s baseline says, ‘Take no tension. Why vote in election?’ The body text proclaims about the wrongdoings of the pappu raj (read government), and if this time, voters don’t come out and vote, pappu raj will continue to destroy the society.

Various campaigns are now being unleashed with a single-minded focus on awakening the common man and inducing him to go and exercise his fundamental right of voting. Take for instance, Tata Tea’s ‘Jaago Re’ campaign. Recent TVCs are aimed at not just ‘waking’ up the youth, but ‘awakening’ them from a deep slumber. Radio Mirchi’s ‘Dot hai toh hot hai’ campaign is dedicated to make voting hot and fashionable. Idea Cellular’s ‘Isiko kehte hain democracy, what an Idea sirjee’ campaign featuring Abhishek Bachchan (which was aired right after the State Assembly Elections last year), also propagates the idea that the common man should freely voice his opinion and vote for what he feels is good for him and for the society.

UTV’s ‘Ungli utha vote kar’ campaign, featuring John Abraham was also particularly aimed at youth to come forward and vote. Domino’s ‘April Happiness Ballot Paper’ signifies that citizens should vote for a happy life ahead. Ajay Kaul, CEO, Domino’s Pizza India told this magazine, “We wanted to highlight it (customer’s emotional connect with the brand) more through the ‘happiness’ quotient. To make it contemporary this time, we came out with a ‘Happiness Ballot Paper’, where we are saying that this Ballot Paper, like Domino’s, can bring happiness in your life.” A great way to gain customer insights as well.

Definitely, the brand building is phenomenal, if the advertisement is intelligently linked to the brand. Before coming out with the ‘Jaago Re’ campaign, Tata Tea was an also-ran in the tea category. However, post the campaign, the brand has jumped to the number one slot, leaving behind HUL’s Brooke Bond. Similarly, the advertising and communication of Idea Cellular has become bigger and larger than the brand itself, for the Idea connection is shown as having a prominent role to play in helping the common man in the Indian democracy. For Times of India, more than a campaign, ‘Lead India’ is a reflection of their responsibility toward the society. And it obviously goes a long way in maintaining their credibility as a responsible media house.

Even this time around, marketers are leaving no stone unturned to ensure that they urge citizens to step out of their cozy homes and vote. “We are taking forward a persuasion campaign by urging people to vote and getting others to vote through SMS, electronic direct mailers, e-mailers, in-store POPs & collaterals,” adds Kumar of Louis Philippe. For a change, democracy seems to be helping one and all!

Savreen Gadhoke and Angshuman Paul

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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