MINOR PROJECT REPORT ON

“Marketing Strategy Of BSNL”

Summitted By:
Atul Bhardwaj

B.B.A. 4TH Sem.

Roll No. 1701925071004

Sub. Code.407

ALIGARH COLLEGE OF ENGINEERING AND

TECHNOLOGY, ALIGARH

AFFILATED BY B.R. AMBEDKAR, UNIVERSITY

 ACKNOWLEDGMENT

As a manager with only theoretical knowledge is not a complete manager.

practical knowledge is very important to develop and to apply manager skills.
It gives me a great pleasure to have an opportunity to acknowledgement and
to express gratitude to those who were associated with me during my training
at BSNL.

Special thanks to our faculty members for providing me with an opportunity to

undergo training under his able guidance.

I express my sincere thanks and gratitude to BSNL authorities for allowing me

to undergo the training in this prestigious organization. I will always remain
indebted to them for their constant interest and excellent guidance in my
training work, moreover for providing me with an opportunity to work and
gain experience.
 PREFACE

The conceptual knowledge acquired by management student is best

manifested in the project and training they undergo. I have got a change to
undergo practical training in BSNL. the present project gives a perfect vent
to understanding of the financial management specially the most modern
concept of marketing strategy.

The project report entitled “marketing strategy” is based on theme of BSNL

performance on the basis of in the last 5 years.

The report will provided all the information regarding the MARKETING
STRATEGY and their importance in BSNL.

I also hope that this report will be beneficial .

 INTRODUCTION

BharatSancharNigmLimited (abbreviated BSNL)isanIndian stateowned telecommunications

company headquartered in New Delhi. It was incorporated on 15 September 2000 and

assumed the business of providing telecom services and network management from the

erstwhile Central Government Departments of Telecom Services (DTS) and Telecom

Operations (DTO) as of 1 October 2000 on a going-concern basis. It is the largest provider

of fixed telephony and broadband services with more than 60% market share, and is

the fourth largest mobile telephony provider in India. BSNL is India's oldest communication

service provider and its history can be traced back to the British era. During the British

era, the first telegraph line, was established between Calcutta and Diamond Harbour.The

British East India Company started using the telegraph in 1851 and till 1854 telegraph lines

were laid across the country. In 1854, the telegraph service was opened to the public and the

first telegram was sent from Mumbai to Pune. In 1885,The Indian Telegraph Act was passed

by the British Imperial Legislative Counsel.

After the bifurcation of post and Telegraph department in 1980s, and with the creation of

Department of Telecom by 1990s, eventually led to the emergence of the State owned

telegraph and telephone company BSNL. BSNL thencontinued the telegraph services in India

until it shut down telegraph services completely in July 15, 2013.

The progress of mankind is associated with the exchange of information the communication.

The word communication comes from the Latin word communis, meaning “common”2.

Communication has several elements of its own, which make up the process of

communication. The advancement of technology contributed various technical means for

effective communication. Technology in communication eliminates time lags and space

boundaries. It facilitates an active interaction between people sitting across the world.

The telecommunication services have splendid influence in the lives of the people. The

services include basic landline voice services, broadband internet, mobile voice, video, video

calling, video streaming, games on demand, location based services and many other value

added services.

The modern telecommunication systems are indebted to the electrical speech machine, the

telephone invented by Alexander Graham Bell in 1876. The great invention of telephone

paved the way for the development of Information and Communications Technology (ICT).

The telecommunication services started flourished with the expansion of land-line (fixed line

or wire line) telephone networks. The telecommunication services in India had been the

monopoly of the government sector till early 1990s. There was huge demand for telephone

connections but the supply was highly limited. At that time the telephone spread in India was

0.8 per hundred persons as against the world average of 10 per hundred persons.
The post liberalization period was favorable for the development of telecommunication

services sector in India. The opening up of the telecom sector attracted domestic and foreign

private investments.

The entry of private sector telecom service providers led the way for enhanced competition in

the market. The initial growth rate was very less in mobile segment due to varied reasons

such as premium pricing of services, lower network coverage and relatively high cost of

mobile instruments. The continuous innovations in technology and marketing along with

liberalization make the Indian telecom sector conducive for rapid developments. This

facilitated telecom services to the Indian consumers at affordable prices. The mobile telecom

service providers shifted their pricing strategies from premium pricing to penetration pricing.

The convenience of mobiles phones and the low pricing of services attracted more and more

customers to the mobile telecommunication services. If mobile phone was a luxury in early

periods of 2000s, it became a basic necessity later on. At present the trend shows that the

market of mobile telecom services in India is rapidly approaching the stage of saturation.
1. Statement of the problem

The Indian telecommunication services sector has undergone revolutionary changes

during the past two decades. The decline of landline services and amazing growth of

mobile telecom services were the noted changes. The States in India is forerunner in the

advancement of telecommunication services. Tele density, the total of telephones per 100

inhabitants, is considered as one of the parameters for any country’s development. The

tele-density in India as on March 2013 is 73.32% and that is 96.09%. This shows the clear

indication of market .

The landline segment was the major telecom business in India till private sector

telecom service providers started mobile telecommunication services in the year 1996.

The focus of public sector telecom service provider – the BSNL (Bharat Sanchar Nigam

Limited) was in landline telecom services till their entry in mobile telecom market in the

year 2002. The public sector telecom companies were forced to practice modern concepts

of marketing management, which were totally alien to them in the monopoly era. The

importance has been shifted from service provider to customer. The customers became

more educated and more demanding.

The BSNL started 3G mobile telecom services in the year 2009. After a gap of one and a half

years private telecom service providers Tata Docomo, Airtel, Vodafone and Idea started 3G

mobile services. The market developments show that, even though BSNL was the only one

3G telecom service provider in during the one and half year’s period, it could not capitalize

the first mover advantage. The private operators with innovative marketing strategies create

strong competition to BSNL in 3G services.

Telecom service providers require innovative marketing strategies for existence and excel in

the market, especially in the saturated market. Telecom service providers experimented many

strategic marketing initiatives. The strategies significantly vary from public sector to private

sector and operator to operator. To ascertain the marketing strategies of public sector and

private sector telecom service providers in INDIA, and the BSNL being the only public

sector telecom service provider, the topic of the study was identified and titled as “A study on

marketing strategies of BSNL in telecommunication services - A comparative study with

private sector telecommunication service providers in INDIA”.

2. Review of literature

An extensive search conducted to identify existing literature in the area of study. The

researcher comprehensively reviewed the previous studies related to growth, development

and innovations in telecommunication services, the practice of marketing management in

telecommunication services, and various marketing strategies and its applications by

telecommunication service providers. The reviews of literature facilitated theoretical back

ground to the study, brought clarity and focus to the research problem and helped the

researcher to identify the research gap.

The effectiveness of marketing communications may differ according to the age of the

adolescent consumer. The comparative advertising directed at young people may be

relatively more effective among older adolescents than younger adolescents, since the older

group was better able to cognitively differentiate and retain such advertising content. The

findings also suggest that the importance of product attributes considered in decision making

may vary with age. Consequently, marketers might benefit by isolating by age group the

significant product attributes used in young people’s consumer decision making processes

and adjusting their marketing and promotional mixes accordingly.

Data for testing and refining the instrument were obtained from customers spread across five

different service categories: appliance repair and maintenance, retail banking, long-distance

telephone, securities brokerage, and credit cards. The authors claimed that extensive

statistical analysis of data from five different samples of respondents yielded a highly reliable

and valid instrument (SERVQUAL) containing 22 items. They grouped the items in

SERVQUAL into the five distinct dimensions: (i) Tangibles: Physical facilities, equipment,

and appearance of personnel (ii) Reliability: Ability to perform the promised service

dependably and accurately (iii) Responsiveness: Willingness to help customers and provide

prompt service (iv) Assurance: Knowledge and courtesy of employees and their ability to

inspire trust and confidence (v) Empathy: Caring and individualized attention the firm

provides to its customers. The further refinement and reassessment of the SERVQUAL scale

was suggested again by Parasuraman A. et al. (1991).

The standard five-dimensional structure of SERVQUAL scale serves as a meaningful

framework for tracking a firm’s service quality performance over time and comparing it

against the performance of competitors. In the guidelines for usage of this scale, it was

suggested that, since the SERVQUAL is the basic skeleton underlying service quality, it

should be used in its entirety as much as possible. While minor modifications in the wording
of items to adapt them to a specific setting are appropriate, deletion of items could affect the

integrity of the scale and cast doubt on whether the reduced scale fully captures service

quality.

Paul Fifield and Colin Gilligan (1995) in their book ‘Strategic Marketing Management’

observed that the marketing strategy is influenced by organisations market position. The

market leaders typically but invariably have the largest market share and, by virtue of their

position, are able to determine the nature, bases and intensity of competition.

The market challengers have rather smaller share of the market and adopt an aggressive

position by attacking the market leader or others in the industry in an attempt to strengthen

their position and perhaps gain the leadership position. The market followers pursue less

aggressive strategies, avoid direct confrontation and are generally willing to accept current

market structure and status quo. The market nichers concentrate their efforts upon small and

often specialised parts of the market and in this way avoid head-on fights and develop

detailed but specific market knowledge.

Athreya M. B. (1996) in the article, ‘India's telecommunications policy: A paradigm shift’

observed that India's telecommunications sector is undergoing significant change. This paper

examines three phases of change. First, there was a policy vacuum almost up to1990. Second,

there was a shift in telecommunications policy brought about by a paradigm shift in

government economic policy. Third, difficulties were experienced in implementing the new

policy. Finally, the paper considers the future for the Indian telecommunications sector.

Fornell C. et al. (1996) in their research paper titled ‘The American customer satisfaction

index: Nature, purpose, and finding’ argued that perceived quality, which had been explained

as the served market’s evaluation of recent consumption experienced, would have a direct
and positive impact on overall customer satisfaction. In their development of the American

Customer Satisfaction Index (ACSI), they concluded that overall customer satisfaction,

especially for ACSI, has three antecedents, which are: perceived service quality, perceived

value and customer expectation.

The people are all human actors who play a part in service delivery and thus influence the

buyer’s perceptions; namely, the firm’s personnel, the customer, and other customers in the

service environment. The physical evidence is the environment in which the services are

delivered and where the firm and customer interact, and any tangible components that

facilitate performance or communication of the service. The process is the actual procedures,

mechanisms, and flow of activities by which the services are delivered. They stated that from

customer’s point of view, the most vivid impression of service occurs in the service

encounter, or the “moment of truth,” when the customer interacts with the service firm. From

the organisation’s point of view, each encounter thus presents an opportunity to prove its

potential as a quality service provider and to increase customer loyalty.

The strategies to be followed when too low demand are:

(i) Use sales and advertising to increase business from current market segments

(ii) Modify the service offering to appeal to new market segments Offer discounts or

price reductions

(iii) Modify hours of operation and

(iv) Bring the services to the customers.

By identifying the reasons “why” people buy, and their key “evaluative” criteria, direct

marketers can generate sustainable competitive advantages in their served markets through

individualized products/services, offers, messages, and other key marketing mix strategies.

It consists of seven Ps (Booms & Bitner, 1981). Four of these are the conventional four Ps of

the marketing mix, comprising product, price, place, and promotion. Product translates for

services as service design, and place as location and distribution (e.g., distance to service

sites, home delivery, 24-hour availability, etc.). Price and promotion have common meaning

for goods and services. To these four Ps are added three other Ps, unique to services: people

(service employees who produce and deliver the service), process (the service production

procedures and protocol), and physical facilities (the surroundings in which the service

production is housed). These three Ps comprise the service delivery system. The interface

between the customer and the service delivery system is the service encounter. The authors

proposed that it is useful to think of both the customer and the service encounter as part of the

services marketing system, because the service encounter is where the service actually

happens. Furthermore, the customer is not merely a passive recipient of the service product;

rather, he or she actually helps produce the service. Without his or her participation, no

matter how brief and perfunctory, the service could not happen.

Carl E. Batt and James E. Katz (1998) conducted a study on Consumer spending behaviour

and telecommunications services in among telecom customers of United Sates. They

concluded that beyond basic local telephone, long distance, and cable TV, most current

telecom services within the US market are perceived luxuries. To most consumers, they are

neither particularly important nor exciting. Moreover, demand is limited by narrow

acceptable price ranges, budget constraints, and assimilation habits.

Regarding market segmentation, there is strong evidence for the 80/20 rule. While 80% of

consumers sharply limit their final purchase considerations, the remainder defend much
greater additional spending. These ‘heavy telecom spenders’ tend to be young and

technologically oriented. Moreover, they generally perceive telecom services as necessities

rather than as luxuries, view many services as fun and exciting, and expect to substitute

telecom for other expenditures. On the other hand, heavy spenders rarely have more

disposable income than do average consumers.

Seungjae Shin et al. (1998) studied pricing strategies suitable for telecommunications

industry. They observed that to devise a customer oriented pricing strategy thorough analysis

of customers’ call behaviour pattern is required. They suggest Strategic Information

Management System as a strong tool to get the customers’ call behaviour pattern and to

formulate appropriate pricing strategies.

Adrian Payne and Pennie Frow (1999) in their paper ‘Developing a Segmented Service

Strategy: Improving Measurement in Relationship Marketing’ addressed the need for the

development of a segmented service strategy. A four step framework for developing a

segmented service strategy is proposed. They are: Define the market structure, Segment the

customer base and determine segment value, Identify segments’ service needs and Implement

segmented service strategy. Marketing activity directed at retaining customers can be

expensive, and needs to be closely evaluated against measured results. The most successful

retention programmes in the future will segment customers according to their existing and

potential lifetime profitability and identity the type and frequency of marketing activity that

should be directed at each segment. More refined segmentation strategies, based on service

requirements and relative performance represent a great opportunity for increased long-term

profitability.

Pinaki Das and Srinivasan P. V. (1999) in their paper ‘Demand for telephone usage in India’

estimates price elasticities of demand for aggregate telephone usage in India using

alternatively national level time series data and a panel data set consisting of annual
observations on 19 Indian States. It also makes use of individual call data obtained from

Public Call Offices (PCOs) to obtain own price elasticities of local and long distance calls

separately. The price elasticity of long distance calls is much higher than that observed in

developed countries. Price elasticity of demand for local calls, however, appears to be

comparable to that in most other countries. These elasticities imply that the current level of

cross subsidy is sub-optimal and raising government resources through an increase in the

price- cost mark-up on long distance traffic can be highly inefficient. This justifies the current

restructuring of telecom tariffs in India.

Jha S. M. (2000) argued that sky is the limit for marketing of services. Innovation is the key

element in services marketing. There are a number of services likely to be productive if the

policies and strategies are innovated.

Communication services are one among them waiting for a major change. He suggested five

levels of product as: core services, generic product, expected services, augmented services

and potential services. The author added that telecommunication services play an incremental

role in the multi dimensional development activities. A well functioning telecommunications

network is an essential component of economic infrastructure. The application of modern

marketing principles in telecommunication services would make ways for generation of

profits and at same time would also make the service affordable to the users at large. The

telecom organisations need to bridge over the gap between the services-promised and

services offered. It is right to mention that the first and foremost task before the Department

of Telecommunications in the Indian perspective is to improve the quality of employees.

Lars Grønholdt et al. (2000) studied the relationship between customer satisfaction and

loyalty based on European Customer Satisfaction Index (ECSI). The basic ECSI model is a

structural equation model with latent variables. The model links customer satisfaction to its

determinants and, in turn, to its consequence, namely customer loyalty. The determinants of
customer satisfaction are perceived company image, customer expectations, perceived quality

and perceived value (`value for money’). Perceived quality is conceptually divided into

two elements: `hard ware’, which consists of the quality of the product/service

attributes, and `human ware’, which represents the associated customer interactive

elements in service, i.e. the personal behaviour and atmosphere of the service environment.

The authors claimed that the Danish applications of the ECSI model have been very good.

The model fits well in Denmark and seems to be sufficiently flexible for different industries.

Lee J. and Feick L. (2001) suggested that the opinions of consumers regarding pricing plan,

coverage of the calling area ,the clarity of sound, precision of billing of services and easy

access to provider are primarily be considered for measuring the customers satisfaction of

cellular mobile customers.

Phil Stone (2001) in book ‘Make Marketing Work for You’ explains the marketing

techniques to boost the profits. According to him marketing concentrates are selling the right

products at right price in the right place at the right time. The five essential components of

essential strategy are:

(i) Potential customers must be made aware of the company’s existence

(ii) They need to know what product the company is offering

(iii) The customers must be advised how the products will satisfy their needs

(iv) The customers must perceive the company’s product as being the best to suit their

needs

(v) They must be persuaded actually to make a purchase. The author observed that

marketing is a never ending process – the organisation must review the performance

if they want to retain their competitive advantage. He remind the organisation to keep
 track on what the competitors are doing and concentrate on fulfilling the desires of

consumers in the market.

Research is the process of generating knowledge about reality. The word research is

composed of two syllables, re and search. The dictionary defines the former as a prefix

meaning again, anew, or over again and latter as a verb meaning to examine closely and

carefully, to test and try, or to probe.

Together they form a noun describing a careful, systematic, patient study and

investigation in some filed of knowledge, undertaken to establish facts or principles.

Research is a structured inquiry that utilizes acceptable scientific methodology to solve

problems and creates new knowledge that is generally applicable. Scientific research is a

systematic, controlled empirical and critical investigation of propositions about the

presumed relationships about various phenomena. Consistent with this view Pawar B. S.

(2009) notes that the research process reflects the positivistic paradigm/view or model of

science (also referred to as natural science model) and research. This approach would

imply that research involves a process of constructing conceptual representations of the

reality and then assessing the extent to which the conceptual representations or

predictions made from them correspond with the observations made from the empirical

world. Research methodology is the systematic process of initiation, execution and

completion of a research study. Research methodology describes the methods of

formulating a research problem, conceptualizing a research design, constructing valid and

reliable instruments for data collection, selecting the sample frame, collecting, processing,

analyzing and interpreting data, drawing conclusions and writing the research report.
Research design

Research design is the blueprint to undertake the various procedures and tasks required to

complete the study. Kerlinger (1986) defines research design as a plan, structure and strategy

of investigation so conceived as to obtain answers to research questions or problems. The

plan is the complete scheme or program of the research. It includes an outline of what the

investigator will do from writing the hypotheses and their operational implications to the final

analysis of data. Research design constitutes the framework for data collection design,

sampling design, instrument development, data collection, data processing and analysis of

data required for the research study.

The telecommunications sector plays a significantly important role in the socio-economic

development of the country. It contributes to Gross Domestic Product (GDP), generates

revenue for the government and creates job opportunities. The advancements in

telecommunication services in India facilitated to bridge the digital divide - the gap

between haves and have-nots in information and communication facilities.

 The Indian telecom services industry has experienced great changes and developments for

the last two decades. Kerala among the States in India is forefront in these developments.

The telecommunication services industry has progressed through telegraph services,

landline telephony, mobile radio paging services, first, second and third generation mobile

telecom services. Now it is the era of fourth generation mobile telecom services with

sophisticated technology and equipments.

The evolution of telecommunication services

The history of modern telecommunication services originated with the invention of electrical

telegraph by an American artist-turned inventor Samuel F. B. Morse1 in 1837. The signals

used for transmitting telegraph messages are called Morse code. The British started telegraph

services in India at Calcutta in the year 1850. In addition to postal services, telegraph services

too became the part of long distance communication. In 1854 the Telegraph Act was enacted

in India. Subsequently a permanent Telegraph Department was set up and telegraph facilities

were exposed to public traffic. In Kerala the telegraph offices started functioning at

Trivandrum, Kollam and Alleppey in the year 1864. The telegraph service was the one and

only shelter for the instant long distance communications for a long period. The nationwide

scattering and function of post offices have made the telegraph services accessible for the

people.

The revolution in the field of telecommunication started in the world with the invention of

telephone by Alexander Graham Bell in 1876. The Oriental Telephone Company Limited of

England opened telephone exchanges at Calcutta, Bombay, Madras and Ahmadabad within

five years after the invention of the telephone.

But it took quite a long time, to reach the telephone facilities at Kerala. The first manual

telephone exchange with 100 line capacity was installed in Kerala at Ernakulum only in the
year 1923. The telephone exchanges are the key points in the telecommunication networks.

The switching systems installed in the telephone exchanges establish temporary connection

between calling and called subscribers. In early stages of telecom developments this process

of interconnection of telephone lines was done manually at telephone exchanges. Gradually

the automatic switching systems started evolving. The first one in this kind was automatic

mechanical switching system developed by Almon B. Strowger in 1889, known as Strowger

switching system.

The Travancore State Telephone System maintained by the Travancore Electricity

Department established the first auto exchange in Trivandrum in the year 1948.

Subsequently the Travancore State Telephone System was taken over by the Indian postal

department in 1950.The next evolution in the telecom networks was the introduction of

electro- mechanical switching systems, generally known as cross-bar telephone exchanges.

These switches were fairly common in the developed countries during 1950s.
In INDIA the first cross-bar telephone exchange was installed at Ernakulam in the year 1968.

In the year 1973, the first STD (subscriber trunk dialing) route in Kerala opened between

Trivandrum and Kottayam. In 1975, the first Trunk Automatic Exchange (TAX)

commissioned in Trivandrum and STD services started from Trivandrum to Delhi. In the

same year, the telecommunication wing was separated from Indian postal department and

department of telecommunications (DoT) was formed. In 1979 STD PCOs (Public Call

Offices) opened in india . Although these developments were taken place and a separate

government department was formed for telecom services, the progress of telecom services

sector was substantially in a very slow pace in Kerala. The accesses to the telephone services

even through the public call offices were alien to the vast majority of general public. They

depended on the telegraph service available through the post offices for their immediate

communication needs at distant places. The telegraph services were one of the major

businesses of post offices at that period.

The developments of telecom services industry in INDIA

The Indian telecom industry has experienced an amazing growth and development

particularly in mobile communications sector during the last decade. The contribution of

INDIA in this achievement is commendable.

Landline telecom services sector in INDIA

The landline telephone industry of INDIA was the monopoly of DoT turned BSNL till the

year 2004. The private telecom service providers Reliance, Bharati Airtel and Tata started

their landline telecom services in INDIA in the years 2004, 2005 and 2006 respectively. The

table shows landline connections in INDIA pertaining to various telecom service providers

during the period 2006-2013. The percentage market share of service providers are also

indicated in the table.

Table

Landline connections in INDIA 2006-2013 (Percentage market share within brackets)

Service Providers

Year Total
BSNL Airtel Reliance Tata

3571683 11672 7313 184 3590852

2006
(99.47) (0.32) (0.2) (0.01) (100)

3630567 26790 20602 554 3678513

2007
(98.7) (0.72) (0.56) (0.02) (100)

3586119 38917 44006 3656 3672698

2008
(97.64) (1.06) (1.2) (0.1) (100)

3463628 50774 55525 6443 3576370

2009
(96.85) (1.42) (1.55) (0.18) (100)

3345461 51808 51808 9641 3458718

2010
(96.72) (1.5) (1.5) (0.28) (100)
 3182212 55037 53194 10346 3300789
2011
(96.41) (1.67) (1.61) (0.31) (100)

3065384 55778 56298 12336 3189796

2012
(96.1) (1.75) (1.76) (0.39) (100)

2943505 55971 54014 11328 3064818

2013
(96.04) (1.83) (1.76) (0.37) (100)

In INDIA the telecom industry witnessed huge disconnections of fixed line telephones and

tremendous additions of mobile telephones from the year 2007 onwards. The effective price

per minute usage in landline was ` 1.5 till the year 2005 and was reduced to less than a rupee

in 2012. It can be noticed that the landline industry is facing declining stage of product life

cycle, as customers are being switched over to mobile services. The convenience and very

low pricing offered by mobiles services cannot be counterbalanced by landline industry. An

interesting fact is that even though the total market shares of all of the private operators are

nearly 4%, they are trying to maintain their subscriber base even in the decline stage of

landline telecom industry.

The graphical representation of declining trends of landline industry of Kerala during the

period from 2006 to 2013 is shown the figure . The service provider BSNL is the major

contributor for the decline of the landline industry in INDIA.

Figure

The declining trends of landline industry in INDIA

40
Landline Connections in Lakhs

35 TOTAL
BSNL
30

25

20
PRIVATE SECTOR
15
2006 2007 2008 2009 2010 2011 2012 2013
10
Year 2006 - 2013
5
Mobile telecom services sector in INDIA

In INDIA at the city of Kochi, the telecom service provider Escotel started mobile

communication services in the year 1996. Later on, in the same year another service provider

BPL also started mobile communication services in the State. Escotel and BPL were the two

operators in INDIA till the year 2001. At that time the mobile phone was a status icon among

the upper class society in INDIA. The growth rate of mobile telecom services was very slow

duringthatperion The effective mobile call charges during 1998-1999 periods were ` 16/- per

minute and the mobile incoming calls were also chargeable. Further to the implementation of

NTP 1999, there was trend in reduction in tariff of mobile communication services. The

mobile call charges reduced to ` 4/minute by March 2002. At the end of the year 2002, the

telecom service providers Airtel and BSNL entered into the mobile telecom market of

INDIA. The initial penetration pricing strategy of BSNL became a major breakthrough in

mobile tariff. The tariff had been reduced to less than a rupee per minute and incoming calls

of mobile telephones became free. Gradually the competition in the mobile telecom market

enhances and price war begins. In the year 2003, Reliance also started mobile

telecommunication services in INDIA.

Table

Mobile subscriber growth in INDIA from 1997 to 2004

(Subscribers in lakhs & percentage market share-within brackets)

Service
1997 1998 1999 2000 2001 2002 2003 2004
Provider

0.09 0.23 0.41 1.25 1.99 2.44 3.39 5.45

Escotel
(64.29) (57.5) (50.62) (50.4) (57.02) (45.95) (32.5) (26.96)

0.05 0.17 0.4 1.23 1.5 1.48 2.03 3.71

BPL
(35.71) (42.5) (49.38) (49.6) (42.98) (27.87) (19.46) (18.36)

0.66 1.31 3.32

Airtel - - - - -
(12.43) (12.56) (16.43)

0.73 3.5 6.7

BSNL - - - - -
(13.75) (33.56) (33.15)

0.2 1.03
Reliance - - - - - -
(1.92) (5.1)

0.14 0.4 0.81 2.48 3.49 5.31 10.43 20.21

Total
(100) (100) (100) (100) (100) (100) (100) (100)

Mobile number portability

The mobile number portability (MNP) allows customers to change mobile operators without

changing the mobile phone number. Prior to the implementation of MNP, customers were

predominantly reluctant to switch their mobile network operator because they would have to

change their mobile phone number. The changing of mobile telephone numbers can be a
major inconvenience and a potential barrier preventing the customers from taking advantage

of the options available in a hyper competitive telecommunications market and retaliating to

the repeatedly.
The implementation of MNP all over the country started in January 2011. In total of 84.26

million porting requests in India till January 2013, 3.55 million requests are from INDIA. The

implementation of MNP changed the customer more powerful than ever. The MNP created

new opportunities and improved the customer experiences. The telecom service providers are

compelled to innovate their services to retain existing customers especially in the saturated

telecom market of INDIA.

Future developments of telecom services in India

The continuous advancements in telecom technologies gave birth to fourth generation (4G)

mobile communication services and beyond. The ongoing research and developments will

produce next generations soon. Apart from the conventional voice, video and data

applications, the hand-held mobile phone in future will become an intelligent device with

multiple enhancements. It may be used to monitor and control resources at far off places. The

remote operations and control of office resources, house and house hold appliances like

refrigerators, air-conditioners, ovens, washing machines etc. may be possible with further

ICT (Information and Communications Technology) revolutions.

The future developments of telecom services in India are envisioned in the National Telecom

Policy 2012. The goal of the policy is to provide secure, reliable, affordable and high quality

converged telecommunication services anytime, anywhere for an accelerated inclusive

socioeconomic development. The missions of the policy are:

(i) To develop a robust and secure state-of-the-art telecommunication network

providing seamless coverage with special focus on rural and remote areas for

bridging the digital divide and thereby facilitate socio-economic development.

(ii) To create an inclusive knowledge society through proliferation of affordable and

high quality broadband services across the nation.

(iii) To reposition themobile device as an instrument of socio-economic

empowerment of citizens.

(iv) To make India a global hub for telecom equipment manufacturing and a centre

for converged communication services.

(v) To promote Research and Development, Design in cutting edge ICTE

(Information and Communications Technology Enabled) technologies, products

and services for meeting the infrastructure needs of domestic and global markets

with focus on security and green technologies.

(vi) To promote development of new standards to meet national requirements,

generation of IPRs (Intellectual Property Rights) and participation in international

standardization bodies to contribute information of global standards, thereby

making India a leading nation in the area of telecom standardization.

(vii) To attract investment, both domestic and foreign.

(viii) To promote creation of jobs through all of the above

MARKETING STRATEGIES OF TELECOM SERVICE PROVIDERS

The liberalisation and privatisation initiated in India during 1990s caused major reforms in

telecommunications services sector. The telecom policies rooted in liberalisation and

privatisation regime paved the way for entry of foreign and domestic private sector telecom

companies in India. The monopoly of government sector in telecommunication services ended

and the private sector players began to expand telecom markets in an extensive manner. The

business strategies of private sector players make them more excellent market performers than

the government sector service provider BSNL. Many of the private sector providers have become

the preferred brands of customers. The service provider Airtel became the top market performer

in terms of telecom market share in India. At present the second, third, and fourth positions in

terms of mobile telecom subscriber base in India are occupied by the service providers

Vodafone, Reliance and Idea respectively. The DoT (Department of Telecommunications) turned

BSNL with 160 years of legendary telecom experience in India became fifth in mobile telecom

market performance.

The telephone density in India in early 1990s was about 0.8 per hundred persons1. It had been

greatly improved to 73.32% in 2013. The number of mobile telecom services providers in India

became 13 by March 2013 with a subscriber base of 867.8 million. The service providers and

their market share are Airtel (21.69%), Vodafone (17.56%), Reliance (14.17%), Idea (14.01%),

BSNL (11.66%),

TATA (7.65%), Aircel (6.92%), Uninor (3.65%), Sistema (1.37%), MTNL (0.58%),

Loop (0.35%), Videocon (0.23%), and Quadrant (0.16%). The advancement of

telecommunication services in INDIA is considerably high; the telephone density in INDIA

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became 96.52% in 2013. The mobile subscriber base in INDIA as on March 2013 is 306.89

lakhs.

The service provider Idea is the top market performer in the mobile telecom services sector of

INDIA in terms of market share. The public sector service provider BSNL is the immediate

follower. The mobile telecom service providers and their market share in INDIA during this

period are: Idea (25.81%), BSNL (25.17%), Vodafone (20.21%), Airtel (11.41%), Reliance

(9.58%), TATA (5.92%), MTS (1.56%), and Aircel (0.34%).

The market performances of the organisations are primarily driven by their marketing strategies.

The marketing strategy consists of the analysis, strategy development and implementation

activities in: developing a vision about market(s) of interest to the organisation, selecting market

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target strategies, setting objectives and developing, implementing and managing the marketing

program designed to meet the value requirements of the customers in each market target.

The marketing strategy seeks to deliver superior customer value by combining the customer-

influencing strategies of the business into a coordinated set of market driven actions. Strategic

marketing provides the expertise for environmental monitoring, for deciding what customer

groups to serve, for guiding product specifications, and for choosing which competitors to

position against. The customers’ value requirements must be transferred into product design and

production guide lines. Market targeting and positioning strategies for new and existing products

guide the choice of strategies for marketing program components.

The successful marketing strategies are formulated through the right combination of services

marketing mix, the seven Ps, specifically product, price, place, promotion, people, physical

evidence and process. Therefore the product strategy, pricing strategy, distribution (place)

strategy, promotion strategy, people strategy, physical evidence strategy and process strategy are

widely utilised by the telecom service providers to design, develop, differentiate and implement

their marketing strategies. The various marketing strategies of telecom service providers based

on services marketing mix are discussed in detail as follows.

Product strategies

The basic essentials of product in mobile telecom services are its core functional benefits. The

key functional benefits desired by majority of the mobile telecom customers are voice clarity,

geographical network coverage and easiness to get connected to the network. The frequent

travellers outside the State consider roaming facility and the internet savvy customers consider

the easiness in activation of internet services also as the core service benefits. In third generation

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(3G) services along with these characteristics, the core benefits also include easiness in handset

settings for mobile internet facility and speed of data access.

The product is lifted to the augmented level with suitable customer support and customer care

activities and the maintenance of high level of quality of service. The customer support activities

related to the mobile telecom services are: easiness to get a new mobile connection the SIM

(Subscriber Identity Module) card with friendly processes and procedures, availability of mobile

service recharge facility or recharge cards at convenient locations (for prepaid customers),

helpful assistance from retailers, and customer convenient bill payment facilities (for post-paid

customers). The customer care activities are: easiness in activation of additional services,

easiness in deactivation of services availed as and when required, easiness to access customer

care helpline, easiness to get the right customer care person on the phone to get the required

support or information, and the ability to solve problems atcustomer care.

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Pricing strategies

The pricing strategy has direct impact on revenue and profit of any organisation. Even though the

pricing is simply the exchange value of the product or service, the pricing strategies depend on

the objectives of pricing. The objectives of pricing are different for different service providers.

The objectives may be to produce fair profit, profiteering, market growth, price leadership or

to enhance the image of the firm to attract more customers or to strategically counter the

competitors. In INDIA during mid-2000s, with the presence of multiple telecom operators, the

competition in the mobile market stepped up and price wars start. Pricing became the major

strategy of all telecom operators. Varieties of tariff plans are introduced by the telecom service

providers to attract customers of multiple segments. Special Tariff Vouchers (STV) for voice,

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data and SMS allows customers to make calls, SMS and access internet comparatively at low-

priced rates, sometimes on unlimited manner. When one operator introduces an STV,

immediately others launched competitive versions.

Xavier M. J. (2007) described copability (copying + ability) as a marketing strategy in a

turbulent environment. As the patent rules and intellectual property rights are not applicable in

copying a strategy introduced by one telecom service providers by others, copability became a

widely utilised strategy among the telecom service providers.

Distribution (place) strategies

The distribution strategy is to provide effective place convenience for the customers to avail

products and services of the service provider. It is related to the distribution pattern, channel

management, and retailer network of the telecom service providers. The private sector providers

mainly adopted intensive distribution strategy, which involves the use of all possible outlets to

distribute the products and services. The public sector provider BSNL in the initial stages

mainly resorted to exclusive distribution strategy, in which the outlets deal exclusively the

BSNL products.

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Promotion strategies

The effectiveness of marketing mostly depends on promotion - the integrated marketing

communication. There are several ways to promote the products. The telecom companies

use a mix of various promotional tools such as: advertisements, sales promotion, direct selling,

events, experiences and public relations. Philip Kotler (2009) cited the model for predictive

measurements of advertising effectiveness proposed by Robert J. Lavidge and Grey A. Steiner

(1961) to explain the hierarchy of effects of advertisements. Referring to this model the

suggested advertisements tasks of telecom service providers are:

(i) to build awareness about the products and knowledge as regards to the brand

(ii) to create liking, preference and faith for the service provider

(iii) to act as reminder to stimulate repeat association with the service provider and

(iv) 2to convince customer that the decision to continue with the service provider is a

right choice.

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The telecom companies use multitude of sales promotion tools. The prominent among them are:

promotional phone calls to the customers, price reduction offers, extra talk time offers, SMS

package offers, internet package offers, free trial of newly introduced services, free add-on SIM

card, facility to make calls even at zero balance on credit basis for prepaid customers, extending

continued services even at non-payment of bills due to delay or oversight for post-paid

customers, displays and demonstrations at the point of sales, and specialized pricing offers

exclusively for individual customers.

The sales promotion helps telecom operators to create stronger and quicker buyer responses,

including short-run effects such as highlighting product offers and boosting the sagging sales.

According to Philip Kotler (2009) sales promotion offer have three distinctive benefits:

(i) Communication: They gain attention and may lead the consumer to the product. (ii)

Incentive: They incorporate some concession, inducement or contribution that gives value to the

customer and (iii) Invitation: They include distinct invitation to engage in the transaction at

sight. The sale promotion techniques and its attractiveness vary from one telecom service

provider to another. The consistent attractiveness of the offers creates positive word of mouth

about the telecom service provider. The advertisements and sales promotion along with public

relations and publicity can be extremely effective for telecom service marketers.

In this computer era, internet is an effective medium for marketing communication. All the

telecom service providers have websites, which act a touch point for internet accustomed

customers.

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Service related marketing strategies – people, physical evidence and process

The services are primarily intangible, the customers are searching for evidence of service in

every interaction they have with the organisation. The three major categories of evidences as

experienced by the customers are people, process and physical evidence. These elements are

referred to as additional marketing mix for services or additional 3Ps of services marketing.

People: All human elements involved in service delivery or service assurance influence the

buyer’s perceptions. The customer care personnel, maintenance staff, persons representing

the organisation, the customers, and other customers in the service environment play vital

roles in services marketing. The private telecom service provider’s strategically manage the

people element primarily through outsourcing. The customer care and call centre personnel

are professionally trained employees provided by external agencies. The telecom service

providers extend excellent backend support for the outsourced customer touch points. They

utilise the IT capabilities for extending service to these touch points which in turn reflect in

the customer service.

Although the private telecom companies seem to avoid direct personal contact with the

customers, they have a limited number of experience centres or relationship centres or

customer care centres at main towns and cities. These centres are managed by the franchisees.

The service provider will dictate the terms to the franchisee with respect to code of conduct,

dress code, personal grooming, telephone. etiquettes, expected attitude and behaviour to be

shown by the employees engaged by the franchisees while interacting with customers. The

franchisee also benefitted from the win-win business relationships. The franchisees hire

employees with extreme dealing skills and impart them sufficient knowledge along with

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adequate IT support to deal with customers. It is observed that the employees at customer

support centres are youngsters especially females.

The BSNL manages their customer contact points largely through their own resources and

employees. The general observation shows that the employees at customer touch points lack

soft skills and knowledge to deal with customers as compared with the private sector

providers. The IT support is inadequate to deal with customers. The workforce is also aged.

The maintenance personnel of BSNL in landlines are highly unprofessional in appearance,

skill sets, knowledge level and even at attitude and behaviour towards customers. The

government employee attitude is predominant in BSNL.

Physical evidence: The physical evidence is the environment in which the service is

delivered and where the firm and customer interact, and any tangible components that

facilitate performance or communication of the service. The private telecom service providers

are keen in proving their presence through employee dresses, uniforms, brochures, tariff

booklets, business cards, and glow sign boards etc. The ever-changing tariff is immediately

updated and made available to retailers and customers. Their physical presence is evident

even in the remote rural villages of Kerala. The BSNL mainly rely upon their customer care

centre and telephone exchange network for proving the physical presence. As part of creating

the tangibility, the telecom service providers seem to offer newly introduced value added

services to customers for free trail for a limited period. This is followed by various sales

promotion techniques to enthuse the customers to become the subscribers of the services. The

advertisements, hoardings, events, and public relations also help building the physical

evidence.

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 Process: The actual procedures, mechanisms, and flow of activities by which the service is

delivered are termed as process. The private sector providers widely utilise the retailer

network to distribute their products and services. The process and procedures to avail mobile

connections and associated services from private sector providers are very simple as

compared to BSNL. Their retailers are motivated by trade schemes, incentives and proper

back end support to push their products. Even though the BSNL procedures and process have

been improved from the highly bureaucratic DoT era, it is still below the competitors’

benchmarks. The single window concept is not yet a reality in BSNL especially with respect

to landline segment.

Review of marketing strategies practiced by the telecom service providers in

INDIA

The market pioneer strategy was adopted by the service providers Escotel followed by

BPL when they introduced mobile telecom services in Kerala in the year 1996. They

maintained the position as product innovators as the services were new-to-the-world

products. Orville C. Walker Jr. et al. (2008) suggest three important strategic marketing

programs for pioneers. They are mass-market penetration, niche penetration and skimming.

The skimming was the strategy adopted by early mobile service providers in INDIA.

The ego bolstering needs of upper -upper segment of INDIA were stimulated by these

telecom companies to market the services. The mobile network coverage was available only

in main cities. At that period the mobile phone was a status symbol rather than a utility

service. The outgoing call charges were more than 32/- per minute and incoming call

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charges were ` 16/- per minute. Gradually they reduced the tariff. During 1998-99 periods

the effective call charges decreased to 16/- per minute. The mobile call charges further

reduced to ` 4/minute by March 2002.

The high end positioning of mobile services were continued till the entry of the service

providers Airtel and BSNL in the mobile telecom market of INDIA during the later part of

the year 2002. The market expansion was the growth market strategy adopted by BSNL.

They differentiated the product offering targeted to the needs of various potential segments.

The BSNL at their introductory stage itself differentiated their mobile telecom service with

maximum geographical coverage and connectivity. In order to accelerate the market

expansion they also practiced penetration pricing strategy. The BSNL introduced tariff plans

with outgoing call charges as low as ` 1/- per minute. The BSNL was the first mobile telecom

operator in INDIA introduced tariff plans with incoming calls free of charge. The BSNL

became the market leader in INDIA within three years. Subsequently all mobile operators

adopted market follower strategy and mobile incoming calls became absolutely free. The

competition in the market gradually enhanced. The minimum effective local call charges in

cellular mobile services declined to 77 paise per minute by September 2003. In the year 2004,

Escotel was taken over by the service provider Idea.

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ANALYSIS OF MARKETING STRATEGIES OF BSNL AND PRIVATE

SECTOR TELECOM SERVICE PROVIDERS IN INDIA

The analysis of primary data collected to study the marketing strategies of public sector

telecommunication service provider BSNL in comparison with private sector

telecommunication service providers in INDIA. The Statistical Package for Social Sciences

(SPSS 16.0) was used for the data analysis.

The primary data collection for the study was conducted for a six months period from July

2012 to December 2012. During that period, there were ten mobile telecom service providers

in INDIA specifically: Idea, BSNL, Vodafone, Airtel, Reliance, Tata, Tata Docomo, MTS,

Aircel and Uninor. Among the various mobile telecom service providers in INDIA, BSNL

(Bharat Sanchar Nigam Limited) is the one and only telecom operator in public sector under

the ownership of Government of India. The other telecom service providers in INDIA are

private sector organisations. The mobile subscriber base in INDIA as on March 2013 is

306.89 lakhs. More than 70% of mobile telecom market share in INDIA is vested with three

telecom operators namely Idea (25.81 %), BSNL (25.17%) and Vodafone (20.21%). Even

though Airtel is in fourth place in INDIA with a market share of 11.41%, they are the top

among telecom mobile service providers in India in terms of market share1. Hence BSNL

along with these three major telecom service providers are primarily considered for the data

analysis pertaining to the comparative study of marketing strategies. However the services

marketing aspects of other mobile telecom service providers and their marketing strategies

relevant to the context are also included in the study. In the data analysis of marketing of 3G

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 mobile telecom services, the service provider Tata Docomo is also included in the study,

taking into account its’ a vital role in 3G segment. Analysis of services marketing aspects of

landline and landline broadband internet services are the part of the study.

The data analysis pertaining to the study is presented in eight sections.

1. The descriptive statistics of the study sample.

2. Analysis of product differentiation strategies of BSNL and private sector mobile

telecom service providers in INDIA.

3. Analysis of pricing strategies of BSNL and private sector mobile telecom service

providers in INDIA.

4. Analysis of promotion strategies of BSNL and private sector mobile telecom service

providers in INDIA.

5. The effect of service related factors on customer satisfaction and customer loyalty of

customers of mobile telecommunication services.

6. Third generation (3G) mobile telecommunication services: Analysis of marketing

strategies of BSNL and private sector mobile telecom service providers in INDIA.

7. Analysis of demographic profile of respondents and preference for a particular mobile

telecom service provider.

8. Analysis of services marketing aspects of landline and landline broadband internet

services.

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The descriptive statistics of the study sample

The mobile telephone customers of INDIA are the population considered for the study.

Stratified multistage random sampling technique, coming under the category of probability

sampling designs is mainly used for selecting the samples for the primary data collection. In the

first stage, the entire population is divided in to three strata, namely urban, semi-urban and

rural. The municipal corporations are identified as urban stratum, the municipalities are

identified as semi-urban stratum and the panchayat are identified as rural stratum. The mobile

telephone customers of INDIA are the population considered for the study. Stratified multistage

random sampling technique, coming under the category of probability sampling designs is

mainly used for selecting the samples for the primary data collection. In the first stage, the

entire population is divided in to three strata, namely urban, semi-urban and rural. The

municipal corporations are identified as urban stratum, the municipalities are identified as semi-

urban stratum and the panchayat are identified as rural stratum.

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Objectives of the Study

• To study the marketing strategy of BSNL.

• To study the perception about the marketing strategy amongst the employees of BSNL.

• To study the initiatives taken by the management for job satisfaction of their employees in
BSNL.

• To study the effects of job satisfaction on performance and productivity amongst the employees
of BSNL.

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Conclusion

The findings in the paper show that there are many significant factors that together make up the

goals and decision making strategies of the industry. Customers’ perception towards a brand is

built largely on the satisfactory value the user receives after paying for the product and the

benefits the user looks for. In the above study, a large portion of the user is satisfied from the

Flipkart services.. It may be because of many services that industry offers to its customers.

It may be due to ability of the services to cure the problem. The satisfaction brings in the

retention of customer. Flipkart is enjoying the advantageous position in market through its timely

services. However, it should not ignore the competitors like Amazon, Snepdeal etc. Flipkart in

order to retain more customers and satisfy them , must fulfill the claims made by the industry

before any other industry may mushroom up and take away the benefits of the industry.

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Bibliography

I have taken the information to make this file from the various

sources :-

# https://www.scribd.com

# https://en.m.wikipedia.org/wiki/marketing_management

# https://www.EduRev.com