Mobilink Jazz Essay Example

Mobilink Jazz Essay Example Mobilink Jazz Essay Mobilink Jazz Essay The project in your hands follows a marketing plan in which Mobilink Jazz is discussed. The plan is simple yet with changes to Mobilink Jazz’s marketing plan. The document holds the market segmentation for this telecom service provider. Along with that it discusses the main four P’s of Maketing and future plans for each of them. Before all the above mentioned, however, we’ve discussed the telecommunication industry in detil and have carried out an analysis of the sector. In the ending we have the budgeting of the marketing end of Jazz. Hope you like the effort we’ve put into it. Happy Reading! TABLE OF CONTENTS Table of Contents Introduction5 Industry Analysis8 PEST, BCG, Porter’s 5 Forces, Positioning Map11 The 4 P’s16 Marketing Budgeting33 The New Package35 Introduction Mobilink GSM (PMCL), a subsidiary of Orascom Telecom is the market leader in providing state-of-the-art communications solutions in Pakistan. Orascom Telecom Holding S. A. E (OTH), the parent company based in Egypt was established in 1998, and has grown to become the largest and most diversified GSM network operator in the Middle East, Africa, and Pakistan. With over ten licenses covering the region, Orascom Telecom has positioned itself as a leading telecommunications conglomerate in emerging markets of this region. Orascom enter in the Pakistani market through the licensing where they have to pay the Royalty fee. Mobilink covers approximately 85 percent of Pakistans urban population and it can proudly boast of being the first cellular service provider in Pakistan to operate on a 100% digital GSM technology. It offers tariff plans that are exclusively designed to cater to the communication needs of a diverse group of people, taking into account occasional users to businessmen. To achieve this objective, Mobilink offers both postpaid (Indigo) and the prepaid (JAZZ) solutions to its customers. In addition to providing advanced voice communication services, Mobilink also offers a number of value added services to its valued subscribers. Keeping in mind its customers convenience, Mobilink has also bundled mobile handsets, sold either independently or bundled in Get Set Go Pack. Mobilink GSM started operations in the year 1994, as a third entrant in the market, while Paktel and Instaphone were already operating since 1991 and had acquired substantial market penetration. Despite the re-launch of Ufone, the main competitor, Mobilink has maintained its momentum of growth. All this has been possible due to inter-departmental synergy and strengthening of Mobilink’s brands. Till early 2001, they had a market share of 43%. OT took over management control of the company in April 2001 and changed the overall market dynamics through its aggressive marketing strategy and expertise. In less than two years time Mobilink grew by almost 400% with market leadership of 60% market share (year end 2003). At the time when it entered the market it was a small player in the cellular market of Pakistan it is now the market leader both in terms of growth as well as having the largest subscriber base in Pakistan. INDUSTRY ANALYSIS The Pakistani cellular industry comprises of 6 players: Mobilink, Ufone, Telenor, Warid Telecom, Zong (a brand of China Mobile Pakistan) and Instaphone, out of which, Instaphone has not maintained a prominent market position in the industry, and thus, has the lowest number of subscribers. As per the PTA findings as of June 2008, the number of subscribers for Mobilink is over 32 million customers (and has approximately 36. 39% of the market share). While Ufone and Telenor tie for second place with 21% market share, Warid Telecom has 17. 9% of the pie while Zong being the most recent has a share of 4. 4%. The price-sensitive industry faces tough competition from all players in the market, which is reflected by the marketing campaigns and by observing the past, thus making cellular services a highly elastic commodity. The market, however, is seen as very lucrative as there are only 6 operators who are providing services to just over half of Pakistan’s population – the tele density figures are a little below 60%. At the same time, companies are investing in infrastructure and technology in order to serve the untapped markets. The PTA acts as a governing body for all telecommunication-related providers in the country, and has set different regulations which operators are bound to follow, to the extent that operators are required to obtain an approval from the PTA before launching a new product or service, thus giving the authority powers to control the competitiveness of the industry. Technology is constantly changing in the telecom sector. Recently, two other players entered the market with BlackBerry support, in order to counter Mobilink’s domination. Moreover, as 3G licenses are expected to be awarded this year, it is expected that companies will invest in 3G and roll out services to users within one year. Moreover, as the telecom sector is witnessing rapid growth, represented by high revenues, companies are devising new tactics on attracting and targeting users and trying to increase the average revenue obtained per user. Firms compete on the basis of pricing, while quality of service is often overlooked. The telecom sector has faced a boom due to the continuous reduction in price, and the ability of network providers to continuously add customers to their user base. Due to this, companies gain momentum and size rapidly, and can are therefore able to provide more services. At the same time, these companies become cash-rich, and investment is an on-going process. Network coverage, subsidized SIM card rates, the ability to switch from one network to another while retaining the same number all have posed opportunities for different providers, but simultaneously, these are also challenges. The industry’s success is due to the large amounts of investment that takes place. The telecom sector takes a good chunk of the annual FDI, with investment running into millions of dollars. Evidently, these companies are making substantial amounts of profit, considering there is no bar on the amount of remittances companies are allowed to take to their home countries’. The amount of money telecom companies utilize for investment and expansion purposes is sizable, thus providing an opportunity for financial institutions to offer their credit. From July 1 2008, the government announced in the budget that the telecom services in Pakistan will have a sales tax of 21% in place of the 15% that was charged before. This is a significant development in the telecom sector’s story as the current telecom penetration rate is less than 60%, and this also poses a challenge to the growth rate as basic access to telecom services has been made more expensive for the consumers. It should be noted that there are other taxes such as the activation tax that is in place for each connection sold (amounting to Rs. 00 per connection or SIM card), which is already being sold at a subsidized rate by the operators. Moreover, the cellular companies and the main fixed-line operator in the country moved a petition to abolish the USF (Universal Service Fund) Access Promotion Charge in order to maximize their revenues. Currently, companies are already fulfilling the basic requirement of 1. 5% of total revenues, and consider the APC as detrimental to their revenues. Only recently has a proposal been sent to the Ministry of IT and Telecom to remove the APC. MARKET SHARE PEST ANALYSIS POLITICAL: Considering the current politically instable condition in Pakistan, the telecom sector of Pakistan is not doing too badly. The sector was by far the largest recipient of foreign direct investment in 2007-08. As per PTA, the industry continues to add more than 3 million new mobile subscribers every month even under the current conditions. Although the frequently changing government does bring very frequent changes in the laws and regulations, this does not however stop the number of users from increasing. ECONOMIC: Around the globe there’s a recessive economy prevailing. There is an increase in the interest rates and the slump in the economy world over doesn’t seem to be coming to an end. Pakistan is no exception to this recession. Due to inflation, price of every product/service is sky rocketing. Apart from that the increase in federal excise duty on telecommunication services from 15 percent to 21 percent has adversely impacted the usage of mobile phone and has resulted in reduction in service usage by 8 percent to 9 percent within few weeks of the previous fiscal year. Unfair taxation would lead to burdening the new potential rural consumers who do not have access to mobile phone facility hampering the development of the rural economy. The growth in the telecommunication sector during last 4 years was recorded 100 percent due to its expanding consumer base(Daily Times, July 7, 2008). However, the burden of taxes and duties is going to reduce the usage by the consumers resulting in fewer revenues for the government and reduced operations by the companies. SOCIAL: Cellular revolution has taken Pakistan by storm. The mobile density in Pakistan is reaching 56% (Babar Bhatti, August 31, 2008). Mobile phones are increasingly being used as a social tool across the globe. Pakistani cellular companies are also trying to catch on with this growing ‘cellular activism’ frenzy. It’s true that cellular companies have limited scope of action as far as brining social change is concerned still almost all the mobile companies of Pakistan are doing some kind of social uplift projects. Telenor, for instance, has launched a farmers’ uplift scheme TeleKisan besides the apna PCO and other schemes. Similarly, other cellular companies are also conducting some activities in the avenues of social uplift. Corporate sector too has a major role to play. Instead of simply doling out a few millions in charity, local corporate giants, along with the multinational conglomerates, should come forward with new ideas of using cellular technology for poverty alleviation. TECHNOLOGICAL: Due to the current economic recession, the technology required to expand is difficult to gain. And therefore, Pakistan needs to increase telecom research and development work within the country. China and India are in the process of becoming world major Ramp;D centers for technology and telecommunication. Two top Chinese telecom equipment firms have announced their plans to collaborate with Pakistan: Huawei is working with UET Lahore and ZTE will setup Ramp;D center in Islamabad. The goal of the policy makers should be to increase the rate of transfer of technology from abroad, broaden the pool of local skilled workforce and accelerate the local production of telecom equipment and handset parts etc. PORTER’S FIVE FORCES 1. Threat of New Entrants is High. Since PTA has adopted liberal policies to create a foreign investment friendly environment the barriers to entry have significantly reduced. Deregulation has opened up a number of economic benefits in terms of huge foreign investment. Therefore threat of new entrants is considered high because it is easier for foreign giants to come and enter the market. 2. Power of Suppliers is Low. At first glance, it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. Indeed, without the high fiber optic technology required, the companies can’t operate. But there are actually a number of large equipment makers around. There are enough vendors, arguably, to dilute bargaining power. Thus the power of suppliers is low. . Bargaining Power of Buyers  is High. With the increased choice of telecom products and services that are available to customers due to the numerous telecom service providers, the bargaining power of buyers is high. Also because the switching cost from one service provider to another is very low, the buyer can always switch. 4. Threat of Substitutes is Medium. Pro ducts and services from non-traditional telecom industries pose serious  substitution threats. PTCL’s scheme to make all national calls toll free attracted a lot of attention and was able to divert traffic from mobile usage to increased landline usage. . Competitive Rivalry is High. Competition is cut throat. The wave of industry deregulation paved the way for a rush of new entrants. New technology is prompting a wave of substitute services. All players in this competitive market are thus forced to offer new and exciting services at lower prices. This tends to drive industry profitability down. BCG MATRIX Mobilink Jazz has been through the cycle and now enjoys the position as a cash cow as compared to its competitors. It needs to bring down its rates to grow further in the market and back to its position as a star which it once ruled. POSITIONING MAP The above positioning map shows the relative positions of the major players of the telecom industry on a scale that measures price affordability on the x-axis and Value Added Services (VAS) attractiveness on the y-axis. It can be observed that Ufone is leading by a clear majority in the telecom sector with Telenor and Zong following price affordability. While Mobilink is better in VAS attractiveness compared to majority of its competitors, however it is considered comparatively more expensive. Warid lags behind in both price affordability in comparison to its competitors and VAS attractiveness. Product / Services Mobilink being the market leader enjoys major share of the overall market with both Indigo and Jazz dominating the postpaid and prepaid segments respectively Mobilink deals with postpaid Indigo and prepaid (Jazz) packages. JAZZ Addressing the press conference, Graham Burke, president Pakistan Mobilink Corporation Limited said that with the prepaid card a customer could control its cost with the freedom to use. This is when Jazz was first launched in Pakistan, and with the passage of time became very popular, especially among the young lot. Jazz, is based on an intelligent network which is the most advanced and expensive platform, presently available in cellular telephone technology. Scores of facilities available in the package will cater to the communication needs of thousands of people in the country who cannot afford a post paid mobile phone connection. Jazz is an amazing prepaid service that allows customer freedom from monthly bills and gives him/her complete control over his/her cellular expenditure. Customer decides in advance when and how much he/she wants to spend. Jazz is simple, easy and loads of fun. Jazz is extremely affordable, with features like: * No daily charges * Low outgoing rates * 180 days validity of Jazz Scratch Cards * Simply reactivate deactivated Jazz connection Jazz-Aur Sunao Jazz tariffs have been reduced from Rs. 4. 75 per minute to Rs. 3. 50 per minute on all calls from Jazz to any other Mobilink numbers. This tariff reduction will serve as an unparalleled advantage to the largest mobile community in Pakistan, who will now have to pay less to call within the Mobilink family, 24 hours a day. Jazz Member get Member The Jazz Member get Member promo is the first of its kind where Mobilink will be giving it’s customers an opportunity to become the brand’s ambassadors and at the same time earn some free airtime. The essence of the campaign is that an Existing Jazz customer can refer up to 4 new customers and earn Rs. 400 in airtime. The new Jazz customer will also get Rs. 100 free airtime. The list of the Jazz connections is described below: * Jazz Easy the most affordable package that provides access to the best rates to call across Pakistan. Jazz Easy customers can not only enjoy calling at amazingly low call rates from Mobilink numbers, but can call on other networks at comparatively lower rates. * Jazz Octane the hot new package from Mobilink Jazz is customized to meet the needs of the highly dynamic and energetic urban youth of Pakistan. The package entitles the customers to lowest SMS rates, lower late night rates, and the coolest rates for three favorite numbers. * Jazz budget Offers remarkable rates and package features, it is the best package to stay in touch with millions of Mobilink family members in Pakistan. Furthermore, a unique and innovative feature for Jazz Budget is Happy Hour, with exciting rates to all Mobilink numbers for 1 hour in the day. * For the first time ever, a package designed especially for ladies, Jazz Ladies First is the customer’s command on the very best. It provides sizzling recipes to tips on looking the best through SMS. Jazz Ladies First offers remarkably low calls rates amp; to top it all, gives discount card to shop well within your budget. SWOT ANALYSIS STRENGHTS: * Pioneer in GSM service in Pakistan * It is a sign of prestige Number of customers is more as compare to any other mobile service provider in Pakistan * Highest market share not only in terms of number of subscribers but also in terms of revenue * Mobilink has signed bilateral roaming agreements with 50 operators around the world to have true roaming service operational in over 42 countries of the world * Large number of corporate customers * Economy of scale * Strong Brand name WEAKNESSES: * Large organizational structure, makes it difficult to manage * VAS not that many or effective as compared to its competitors * Service quality not as good as claimed Many inactive customers, includes all those who own a Mobilink SIM but have now switched to another service provider * Highest call rates for a prepaid service, especially compared to the competitors OPPURTUNITIES: * Can lower prices to make business difficult for new companies * Mobilink can target to a market that delivers Internet Protocol packet services to over 650 million GSM subscribers THREATS: * New market players are coming in near future * High tax rates * Increase in imported equipment costs New companies can offer packages for corporate customers in better way * Wireless local loop service providers too targeting areas which are less developed * Current price war may reach at a position where only brand names survive * Due to expensive quality of service now-a-days customers can shift to other companies * Saturating telecom market PRODUCT LIFECYCLE Telecom industry has just started to touch the maturity stage of the product lifecycle; where as the brand, Mobilink jazz having to be the first mover in the market, has now reached maturity stage. The brand due to its high prices and lower VAS services may be progressing a decline because the economy is running in inflation and the purchasing power parity is also making it difficult for one to keep up with high prices when cheaper and better ones are offered in the market. RGI MATRIX PUBLIC NECESSITY| PRIVATE NECESSITY(TELECOM SERVICE)| PUBLIC LUXURY(MOBILINK JAZZ)| PRIVATE LUXURY| On the reference group index matrix, telecom service is a private necessity because it helps you keep in touch with your loved ones. It also helps you contact someone in case of emergency, or could be any reason why you may need to contact someone. However, Mobilink jazz is a public luxury since it’s a brand name in telecom sector. One could always use the les prestigious services to fulfill the need, but using Mobilink jazz is a status symbol. AIOD Framework Activities| Interests| Opinions| Demographics| SchoolingPlaying video gamesOutdoor games(cricket)Hanging out with friendsSchool events participationHolidays spent with familyWatching movies of multiple genre(action, romantic, comedy, horror and cartoons)| Story books (romantic for females; comics)dSchool sports and playsFashion onscienceLike fast food(burgers, pizzas etc)Watch TV cartoons and sitcomsCollecting video games| Soft drinks are cool and a must have with foodPolitics is boringEducation is tiring and boringThey are the new generation with new ideasCulture is holding them down, they’re more westernizedThey are right in what they say, mom and dad are ‘old school’ | No income apart from pocket moneyAged 11-18 yrsIslamabad’s habitatSt udentsMale and femaleSingle| Activities| Interests| Opinions| Demographics| UniversityHanging out with friendsAttending concerts/gigsSpending time with friends during school hrs and outsideGetting together with friends to go out of station to other cities especially up northWatching movies out in the cinemaKeeping up with sports especially cricketListening to loud music(heavy metal, rock, RnB, hip hop)| Opposite Gender attractionFemales develop interest in houseworkPart-time workersMain friends’ circle comes from reference group in the university/collegeDriving around to different hangout spotsCollecting music and listening to itStaying up late at nightFashion conscience and brand conscienceFast food (burgers; pizzas etc) along with formal cuisines from time to time Watching TV series, seasons of all the hit TV shows| They know how the world works nowadaysStaying at home is boring and constrictingPolitics in our country is messed up anyone comes up for the post wants to make money for themselvesOur social values are messed up and worsened by governmen t’s negligenceInflation is rising to increase disparityEducation standards are deteriorating, they haven’t changed much since our parents’ timeMust use branded products as it is a sign of pride and elitesCulture is too conventional and is a hurdle in economic and national prosperity| Majority-no incomeFew part-time jobs (income range 5,000-20,000)Aged 19-25Islamabad’s habitatStudents and professionalsMale and femaleSingle and married| Activities| Interests | Opinions | Demographics| Extensive talking with their friends and relativesBeing very choosy and selective in shoppingRarely having any interest in sportsAttending social events like weddings etc| Part-time or full-time job if working womenLooking after childrenLooking after householdSpending time with amilyFriends and relatives form the reference groupsWatching TV, especially cooking programsFashion dies down as they grow older | We have quite an experience in life so we are quite matureSome are high ly involved in politics, siding with one political figure, while others abstain from even discussing politicsEducation is getting expensive with the passage of timeCulture is a great asset to us and is an important part of our livesThis new generation poses a great that to our social values and cultureThey become brand loyal when it comes to purchasing products | Majority-no income (relying on husband’s income)Few part-time/full-time jobsAged 26 and aboveIslamabad habitatProfessionals and housewivesFemaleMarriedFamily size, 4 (on avg. )| Activities| Interests| Opinions| Demographics| Full-time jobs/working men 9-5Attend social gatherings like weddings, and other official gatheringsMostly smoke regularlySome even play sports, while others have lost interest by now due to aging factorThey listen to soft melodious musicThey spend much lesser time in shopping, but usually don’t shop alone | They want to give remaining time to their familyThey occasionally take family out for dinnerThey read news-paper regularlyThey follow their jobs religiously as it is the mostly the only source of income for the familyFashion is not much a part of their life and it dies down as they grow older| We have an experience of professional life as well as life as a wholeThere should be a balance between our perception of social and moral values and the new generation’sThey support one political figure enthusiastically while literally detest the opposing oneThey want their children to get good education, nonetheless, limited resources hinder itTend to go for branded products b ut it depends on their affordabilityInflation is a grave concern to them| Middle class income rangeFull-time jobs/professionalsAged 26 and aboveIsla mabad’s habitatMaleMarriedFamily size, 4(on avg. )| PRICING Major stakeholders affect pricing decisions are: * Consumers * Government * Distributors * Competitors Sometimes an organization wills assure a forward integration strategy primarily to gain better control over price charged to consumers. Government can impose restriction on price fixing, price advertising and price controls an organization must be careful in adopting its pricing strategy. MOBILINK now a days going on decreasing its pricing strategies (e. g. call rates rs3. 50/min and sms Rs 1) to compete with its competitors i. e. UFONE, PAKTEL GSM, and recent competitors TELENOR amp; WARID). Strategist of MOBILINK is viewing prices from both a shorts –run and long run perspective, because competitor can copy rice changes with relative ease. JAZZ AIRTIME CHARGES: Mobilink strikes back with lowest outgoing rates for on and off-network calls, at 68 Paisas per 30 seconds for all calls. This offer is for sure not going to please Telenor who is running 75 paisa offer these days. 8 Paisa per 30 second offer by Mobilink is available for Jazz Budget users only. (for package conversion dial 123) MOBILINK,since the time of its very entry in the cellular industry,has targeted the less price sensitive strata of the societ y. Mobilink has always maintained its up scale market positioning, backed by its slightly higher service rates. Mobilink intends competing on features and quality of service instead of competing on price. However after witnessing the recent industry trends,where there is an intense price war going on between the cellular industry players,Mobilink had to slighlty deviate from its earlier stratergy in order to maintain its market share. As a result,today,Mobilink is lowering its call rates,offering economical packages (e. g. call rates rs3. 50/min and sms Rs 1. Its latest offering of â€Å"Jazz Budget† is an evidence of this strategic shift in the pricing policy). Future Pricing Plan Later in the report we will introduce a package which will cash on Mobilink’s strength to attract lost consumers and get them to use the brand with prestige and pride once again. PLACEMENT â€Å"Distribution channels, distribution coverage Sales territories, levels and locations† Distribution becomes especially important when a firm is striving to implement a market development or forward integration strategy. MOBILINK is operating through franchises in Pakistan.MMS Outgoing per 50 KB (Rs. )| 6| MMS Receiving (Rs. )| Free| | | GPRS Rate per MB (Rs. )| REFERENCES http://en. wikipedia. org/wiki/Jazz