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INTRODUCTION
Brand loyalty is a highly sought after goal in the market place and building
loyalty is seen by some as the “central task for the marketing manager”. The importance
given to brand loyalty is not surprising considering the many advantages that accrue on
account of it. The presence of Brand loyalty customers has a beneficial impact on sales,
costs and profit. Brand loyal customers even represent a barrier to entry for competitors
because enticing such customers is very expensive. Marketing managers should
therefore know which of the strategic alternatives at their disposal give the best results
vis-à-vis brand loyalty.
Branding and brand preference have gained importance only in the recent
past. Earlier consumers were not able to differentiate / compare the features of the
goods / services due to the lack of brand names available in the market.
Many of the companies have started highlighting the product features with
specific brand names in the goods / services market helping the consumers differentiate
and choose the products / services which best suited their requirements.
Consumers are now able to compare many features in the goods / services
like quality, price and value for money, service, durability and brand image, etc., to
decide which goods / services they want to buy for their need satisfaction. Once
customers are satisfied with a particular product / brand, they purchase the product
repeatedly. When a customer repeatedly purchases a product / service, showing
favorable attitude towards the brand, he will be a loyal customer to the brand.
Meaning / Definition of Brand loyalty:-
Loyalty: - A combination of Attitudinal and Behavioural factor.
Brand loyalty has been defined in many terms by many eminent
personalities.
1. Jacoby and Chestnut defined it as, “ the biased, behavioural response, expressed
over time, by some decision making unit, with respect to one or more alternative
brands out of a set of such brand and is a function of psychological (decision
making evaluative ) process”. (Jacoby and Chestnut, 1978)
2. Tellis defined it as, repeat purchasing frequency or relative volume of same-brand
purchasing. ( Tellis, 1988)
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3. Newman and Werbel, defined loyal customers are those who are bought a brand,
considered only that brand and did no brand – related information seeking”.( Newman
and Werbel 1973)
4. Oliver defined loyalty as “ a deeply held commitment to re buy or repatronize a
preferred product / service consistently in the future, thereby causing repetitive same –
brand or same brand set purchasing, despite situational influences and marketing efforts
having the potential to cause switching behaviour. (Oliver,1997)
Need for Brand loyalty
Many marketers have started highlighting the product features with specific
brand names in the market helping the consumers differentiate and choose the products
which best suited their requirement.
Consumers are now able to compare many features in the products / services like
quality, price, and value for money, durability and brand image, etc., to decide which
product they want to buy for their need satisfaction.
A customer would be loyal to a commodity brand, if the person repetitiously
chooses one brand over the sheer infinite choice of others over a period of time.
Understanding and building this kind of loyalty is an important task for the marketer,
especially at the times of fierce competition. A loyal customer base helps the brands
withstand the pressure from competitors in the market.
MODELS OF BRAND LOYALTY
A model is a theoretical representation of reality, which one uses as a thinking aid
in the study of some system too complex to be understood by direct references from
observed data.
1. Brand infused casual loyalty model.
Moving from left to right in the figure given below, the model hypothesizes the
customer experiences with our touch point shape brand essence: the salient images,
personality and feelings-associations that customers have for the brand. Those brand
associations, in turn, activate both rational and emotional motivation and these two
combine to influence customer loyalty.
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2. Conceptual model of Brand Loyalty with respect to Brand Personality.
+
+ +
+
+
The figure presents the conceptual model of determinants of brand loyalty. The
brand personality traits sincerity, excitement, competence, and ruggedness with which
the customer relates himself – impact brand loyalty. The relationship characteristics such
as length of relationship ( period for which customer has been associated with the brand)
enhance brand loyalty.
2. A model of Brand Loyalty and Brand Performance.
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Sincerity
Excitement
Competence
Ruggedness
Relationship length
Brand loyalty
Experiences
points
Operationalizing the findings
Brand
Essence
Rational motivation
Emotional motivation
Loyalty
Business results
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H1a H3
H1b H3
H2a H4
H2b
The model includes certain product-level category related control variables
(hedonic and utilitarian value) and certain brand level control variables. According to
categorization theory (sujan 1985), people form categories of the stimuli around them,
and new stimuli (e.g. brands) are understood according to how they fit into these
categories. Thus, prior knowledge of the product category determines the type of
evaluation that a brand stimulus will make.
Brand loyalty includes both purchase loyalty and attitudinal loyalty.
Purchase loyalty is defined as the willingness of the average consumer to repurchase the
brand. Attitudinal loyalty is the level of commitment of the average consumer towards
the brand. Brand trust and brand affect are each related to both purchase and attitudinal
loyalty. They appear to serve as key determinants of brand loyalty, consistent with the
concept of one-to-one marketing relationships.
H1: Brand trust is positively related to both
a) Purchase loyalty b) Attitudinal loyalty
Berschird (1983) isolates two critical aspects of a close emotional relationship namely,
the magnitude of the affect (intensity) and its hedonic sign (+ve / -ve)
The close relationship of a brand with its consumers (i.e. commitment) tends
to reflect the level of positive affect generated by that brand.
Therefore H2: Brand affect is positively related to both
a) Purchase loyalty b) Attitudinal loyalty
The given figure further suggests that the variables of purchase loyalty and attitudinal
loyalty contribute to brand outcomes such as market share and relative price. (Because
of higher levels of repeat purchases by the brand users)
H3: Market share increases as purchase loyalty increases.
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Product-level controls Utilitarian
value Hedonic value
Brand Trust
Brand Affect
Brand level controlsDifferentiation Share of voice
Purchase Loyalty
AttitudinalLoyalty
MarketShare
RelativePrice
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Consumer with a strong, favourable brand attitude shall be more willing to
pay premium prices for the brand. Therefore
H4: Relative price increases as attitudinal loyalty increases.
Smith and park (1992) found that the degree of brand differentiation is
significantly related to market share with some exceptions, the brand’s share of voice
had also tended to account for market share. (Jones 1990) Furthermore brand
differentiation may justify higher relative price. Also, share of voice may reflect
differences in advertising expenditures and therefore may also lead to affect relative
price.
3. A model of trust worthy behaviour and practices, trust, value and loyalty.
The model is based on the works of Michele paulin et al. (1998), Craig C.
Julian and B.Ramaseshan (1994), Deepak sirdeshmukh, Jagdip singh and Barry Sabol
(2002) which focused on dimension on MPP (Management Policies and Practices) and FLE
( Front Line Employees) ; trust in MPP and FLE that linked with satisfaction. Consumer’s
trust in the service provider focused on to develop around two distinct facets, FLE’s and
MPP’s. In most service contexts, these facets are structurally distinct nodes around which
the consumer is likely to make independent judgements during the course of a service
exchange.
DIMENSIONS: -
Operational Competence: - The expectation of competent performance from an
Dimensions of FLETrustworthiness
Operational competence & Benevolence
Problem solving orientation
Dimensions of FLETrustworthiness
Operational competence & Benevolence
Problem solving orientation
Trust in FLEBehaviours
Trust in MPP
Value Loyalty
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exchange partner has been noted as a precursor to the development of trust in a variety
of business relationship contents. “Competence” is defined as an ability of a marketer to
meet his promise to the best satisfaction of his customers.
Operational benevolence: - Defined as behaviour that reflect an underlying
motivation to place the consumers interest ahead of self interest.
Problem solving orientation: - Defined as the consumers evaluation of FLE and
management motivations to anticipate and satisfactorily resolve problems that may
arise during and after a service exchange.
Value and Loyalty: - Zeithams (1998) defines value as the consumers perception of
the benefits minus the costs of maintaining an ongoing relationship with the service
provider. Kolter (2000) says as value maximizes consumers are thought to consume
exchanges with providers that provide max. value. Holbrook (1994) goes as far as to
note that customer value and loyalty are the fundamental basis for all marketing activity.
FACTORS INFLUENCING BRAND LOYALTY
INTERNAL FACTORS EXTERNAL FACTORS
(Mental constructs) (Outside consumers skin)
--Internal to the consumer -- external to the consumer.
* Pre-dispositions * Prices
* Opinions * Income
* Images * Assets
* Attitudes
* Motivations
* Personality traits
* Alternatives
* Perception
* Learning
Internal factor refers to all those factors within a consumer or inner or
intrinsic qualities of the individual consumer. The buying choices of the consumers are
influenced by four major factors such as motivation, perception, learning and beliefs and
attitudes. Each factor influences the buyer to purchase and repurchase or to become
brand loyals.
MOTIVATION
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There is general agreement that consumer is goal oriented. Consumers
are motivated to seek ways to satisfy specific goals. Motivation is the driving force within
individuals that impels them to action. This driving force is produced by a state of
tension, which exists as a result of and unfulfilled need. The forces that impel such action
are called motives.
A person has many needs at any given time. A motive is a need that is
sufficiently pressing to direct that person to seek satisfaction of the need. Motivation is a
driving force or a necessity to reduce a state of tension. A person acts because he is
motivated i.e. set into motion to take action to fulfill the need or want. Thus motivation
will also have its influence on consumer behaviour. Therefore understanding of
motivation help marketers to develop insight into the needs motivates and tension of
consumers to know its influence on consumer purchase and repurchase decision making.
PERCEPTION: -
How a motivated person acts is influenced by his perception of the
situation. Perception is the process by which individuals select, organize and interpret
stimuli into a meaningful and coherent picture of the world. Perception has strategy
implications for marketers, because consumers make decisions based on what they
perceive rather than on the basis of objective reality. Consumers selections of stimuli
from the environment are based on the interaction of their expectation and motives with
stimulus itself.
The perceived image of the product or service i.e. its symbolic meaning is
probably more important to its success than are its physical characteristics. Products and
services that are perceived favorably have a much better chance of being purchased
than products or services with unfavorable or neutral images. Two persons in the same
motivated state and objective situation may act quite differently because they perceive
the situation differently. Thus perception of a consumer influences his buying behaviour.
LEARNING: -
Consumer learning is a process by which individuals acquire the purchase
and consumer knowledge and experience they apply to future related behavior. Although
some learning is intentional, much learning is incidental.
A persons learning is the result of interplay of drives, stimuli, cues,
responses and reinforcement. Learning enables a person to recognize differences in sets
of similar stimuli and to adjust his responses accordingly. Thus, learning experiences of
consumers affect their buying behavior. For marketers, the purposes of understanding
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how consumers learn are to teach them that their brand is best, and to develop brand
loyalty.
ATTITUDES AND BELIEFS: -
Attitudes play a major role in both consumer research and marketing
attempts to affect consumer behavior. An attitude describes an individual’s enduring
favorable or unfavorable cognitive evaluation, emotional feelings and action tendencies
towards some object or idea. Attitudes put the individual into a frame of mind of liking or
disliking an object, moving towards or away from it.
The importance of attitudes in the study of marketing and consumer
behaviour is due largely to the fact that they are learned tendencies to both perceived
and act a linkage of perceptions ( beliefs, opinions, images, etc.,) and actual consumer
behavior.
A belief is a descriptive thought that a person holds about something. The
beliefs make up product and brand images, and people act on their beliefs. The beliefs
refer to the accumulated feelings and priorities that individuals have about ‘things’. More
precisely, belief consists of very large no. of mental or verbal statements, which reflect a
person’s particular knowledge, and assessment of something that is another person, a
store, perhaps a product, a brand.
Attitudes and beliefs are strong and direct forces affecting consumer’s
perceptions and buying behavior.
EXTERNAL FACTORS:-
All those factors outside the consumer constitute external factors
influencing brand loyalty.
A consumer’s economic circumstance will greatly affect his product choice.
Economic circumstances of the consumer consist of their disposable income, assets
borrowing power, and attitude towards spending versus saving and price. Income
available for spending is the amount available for personal consumption, expenditures
and assets. Disposable personal income represents the amount of income that a
consumer possesses to be used for spending or saving after having paid the taxes, debt
installments etc. The changes in disposable personal income are relevant to consumer
buying decisions.
The consumer is not only influenced by his current income, but also by the
future income. The expectations of future income will determine the level of future
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expenditure. If expectations of future income are strong, there will be a tendency to
spend more and save less, whereas if expectations are weak, then there will be a
tendency to spend less and save more in the present. Since, most of the consumers are
not having sufficient disposable income; they are not in a position to fulfill all their wants.
Consequently, they give priority to certain wants and satisfy them by purchasing the
suitable products. Thus the consumer’s loyalty towards the brand will be influenced by
the economic circumstances i.e. external factors of the consumers.
LOYALTY PHASES:-
Oliver (1997) has given cognition-affect-conation pattern. Consumers are
theorized to become loyal in a cognitive sense first, then later in an affective sense, still
later in a Conative manner and finally in a behavioral manner, which is described as
“action inertia”.
1. Cognitive loyalty:- In the first loyalty phase, the brand attribute information
available to the consumer indicates that one brand is preferable to its
alternatives. Cognition can be based on prior or vicarious knowledge or on recent
experience-based information. Loyalty at this phase is directed toward the brand
because of this “information”. This consumer state, however, is of a shallow
nature. So the transaction is routine so that satisfaction is not processed, the
depth of loyalty is no deeper than mere performance. If satisfaction is processed,
it becomes part of the consumer’s experience and begins to take on affective
overtones.
2. Affective loyalty: - At the second phase of loyalty development, a liking or
attitude toward the brand develops on the basis of cumulative satisfying usage
occasions. This reflects the pleasure dimension of the satisfaction definition-
pleasurable fulfillment. Commitment at this phase is referred to as affective
loyalty and is encoded in the consumer’s mind as cognition and affect.
3. Conative loyalty: - The next phase of loyalty development is the conative
(behavioral intention) stage, as influenced by repeated episodes of positive affect
toward the brand. Conation, by definition, implies a brand-specific commitment to
repurchase. Conative loyalty, then, is a loyalty state that contains what at first,
appears to be the deeply held commitment to buy. However, this commitment is
to the intention to rebuy the brand and is more akin to motivation. In effect, the
consumer desires to repurchase, but similar to any “good intention”, this desire
may be an anticipated but unrealized action.
4. Action loyalty: - Study of the mechanism by which intentions are converted to
actions is referred to as “action control” (Kuhe and Beckmann 1985). In the action
control sequence, the motivated intention in the previous loyalty state is
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transformed into readiness to act. The action control paradigm proposes that this
is accompanied by an additional desire to overcome obstacles that might prevent
the act. Action is perceived as a necessary result of engaging both these states. If
this engagement is repeated, an action inertia develops, thereby facilitating
repurchase.
Loyalty phases with corresponding vulnerabilities
Stage Identifying Marker Vulnerabilities
Cognitiv
e
Loyalty to information such as price,
features, so forth.
Actual or imagined better competitive
features or price through communication
and Vicarious or Personal experience.
Deterioration in brand features or price
variety seeking and voluntary trial.
Affective Loyalty to a liking “I buy it because I
like it”.
Cognitively induced dissatisfaction.
Enhanced liking for competitive
brands. Perhaps conveyed through
imagery and association. Variety
seeking and voluntary trial.
Deteriorating performance.
Conative Loyalty to an intention “I am
committed to buying it”.
Persuasive counter argumentative
competitive messages. Induced trial
(eg. Coupons, sampling, point of
purchase promotions.) Deteriorating
performance
Action Loyalty to action inertia coupled with
the overcoming of obstacles.
Induced unavailability (eg. Stock lifts-
purchasing the entire inventory of a
competitor’s product from a
merchant). Increased obstacles
generally deteriorating performance.
OBSTACLES TO LOYALTY:-
Consumer idiosyncrasies: - Some aspects of consumer consumption are antithetical to
loyalty. For example, variety seeking frequently has been cited as a trait that will not
permit loyalty to develop until there is no variety. This will be particularly true at the
cognitive and even at Conative level. Until the variety seeking consumer reaches action
inertia, the lure of new experience will be too tempting to ignore. Many product and
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service provider fall into this pattern and find that even their regular clientele will try
new and different alternatives.
Other reasons for apparent consumer disloyalty include multibrand loyalty,
withdrawal from the product category and changes in need.
Switching incentives: - Competitors can (and do) take advantage of irrational behavior
of consumers, engaging them through persuasive messages and incentives with the
purpose of attempting to lure them away from their preferred offering.
Measurement of Brand Loyalty:-
Brand Management, the value and loyalty of the brand, is largely determined by
four key elements.
Brand Awareness
Brand Attributes and Associations
Perceived quality and
Brand loyalty.
Brand Awareness:- According to David Aaker, brand awareness involves a continuum
ranging form a hazy, uncertain feeling that the brand is recognized to a belief that it is
the only one in its product class.
Most brands, when they make an entry into the market are not known to
consumers. Planned marketing communications like ads, promos, publicity and
personnel selling take the brand up the awareness ladder. Further advertising /
promotional efforts help to move the brand up to the higher awareness level termed as
the Brand Recall level (the unaided recall level, a level superior to brand recognition).
More persuasive, frequent advertising / promotions can take the brand higher up the
awareness ladder to the top of the mind. Aaker introduces a further level in the
continuum, which goes beyond the “Top of the Mind” level – Dominant. This is a stage
where the brand name itself stands for that product category. Efforts in developing
brand awareness can lead to trial or first time buying and even repeat purchase which in
turn make some consumers loyal to their brands.
Brand Awareness
David Aasker’s Awareness Pyramid
Dominant
Top High Of the
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Mind
Promotion Brand Recall Awareness
Brand Recognition
Hazy
Low
Brand awareness research is the key to creating brand equity / loyalty.
Awareness equates to traffic and prospective buyers showing up at the store without
awareness, little happens. It can be measured using both aided and unaided recall items
such as the following
Which single company comes to mind first in the cellular services market?
Which company do you view as the leader in cellular service provider?
Which other companies come to mind?
Which factors led you to mention your preferred brand as the leader?
The following questions measure different aspects of aided awareness and perceptions:-
Are you aware of offers in cellular services market? If so to what extent?
Please list the types of services that you know that your brand offer in the
market?
Based on your understanding of schemes, strategy and execution, provided by
your service provider, how do you view its market position a year from now?
BRAND ATTITUDES AND ASSOCIATIONS:-
Advertising guru, David Ogilvy, defined brand as the intangible sum
of a product’s attributes. It’s name, packaging, price, history, reputation, and the way its
advertised (1987). When marketers create a brand, they emboss a set of positive values
on the product.
Branding is probably more important for service providers than for
consumer product business because a strong company brand helps to retain customer
loyalty, even when a company keeps introducing new generations of products. Each
product becomes a reflection of the company, its values and then keep introducing new
products that reinforce the brand. As customers begin to associate a company with the
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quality products it makes, branding’s true power becomes evident.
Brand attributes and associations provides the fabric of loyalty and
equity research. Loyalty and equity are largely the result of the associations and
attributes of the brand. These brand evaluation attributes may be functional, physical,
financial, social or psychological in nature.
Its measures include product features and attribute measures, as
well as more advanced attribute.
Personal image congruence measures:-
Their services are reliable and trouble free.
Their services has features I’m looking for in cellular services market.
Their services are less expensive than most of the cellular service providers.
Their schemes are attractive.
They provide a good value for the money.
Their services are of high quality.
Associations include such areas as how the customer thinks and
feels about the product / service and personal view points about the product / service
class.
Safety and security.
Trust and confidence.
Dependability and freedom.
Peace of mind and calm.
Self esteem and success.
Congruence and compatibility.
Power and control
Psychological and psychographic associations with the product / service.
PERCEIVED QUALITY:-
Quality is king and such is a key component of all loyalty and
equity measures. Quality is not, as many researchers perceive, a uni-dimensional
construct. Quality effects are the consequences of attribute performance. The key areas
of quality, such as quality and craftsmanship are the focal point of in depth elaboration
techniques to find out what makes quality and what quality improvements can be made
to enhance brand loyalty and brand equity.
Customer care service.
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Honesty.
Innovativeness.
CUSTOMER BRAND LOYALTY MEASURES:-
Brand loyalty has been examined at great length by academicians
and practitioners alike as one of the most important factor influencing a brand’s success
or failure in the market place.
From the reevaluation of a fledging product(s) to the extension of a
mature brand, effective marketing strategies depend on a thorough understanding of the
core brand loyalty.
The brand loyalty programs can have a dynamic impact on the
success of a brand. Trust, quality, pride of association and identification with the brand’s
concept and image influence loyalty and what customers buy.
The loyalty tracking program provides an ongoing measures of
loyalty of products / services to guide any business.
SAMPLE MEASURES FOR BRAND LOYALTY:-
1. CUSTOMER LOYALTY
Overall, how satisfied you are with your service provider?
How likely are you to continue to choose or repurchase your service provider?
How likely are you to recommend your satisfied service provider to a friend /
associate?
2. TRUST IN THE BRAND
I always trust my service provider.
They always deliver what they promise.
3. QUALITY OF BRAND RELATIONSHIP
They always treat me fairly.
If a problem arises, I can always count on my service provider to reach a fair and
satisfactory resolution.
4. PRIDE OF ASSOCIATION
I feel proud to be my service provider customer.
They always treat the customer with respect.
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5. IDENTIFICATION WITH THE BRAND
My service provider’s company is the perfect company for people like me .
I can’t imagine a world without my d service provider.
CLASSIFICATION OF BRAND LOYALTY.
Dick and Basu (1994), (Bilal – 2004) classified brand loyalty into four groups termed as
Spurious loyalty, Circumstantial loyalty, Latent loyalty and Sustainable loyalty.
SPURIOUS LOYALTY :- (Low relative attitude and high relative patronage) can be
observed when despite consumer perception that the choices available are
undifferentiated, behavioral data suggests loyalty. The consumer in such cases shows
only temporary display of loyalty as he is open to competing offers and will shift the
moment he gets a better deal.
CIRCUMSTANTIAL LOYALTY: - It includes cases where temporary monopoly is
achieved due to patents, copyrights, and trademarks.
LATENT LOYALTY: - It is displayed when consumers have high regard for a company or
brand, but they don’t necessarily buy it. This can be due to inconvenient store locations
out-of-stock situations, etc.
SUSTAINABLE LOYALTY: - It exists when a customer repeatedly buys only one
particular brand or when he recommends it to friends, family, colleagues, etc. Thus
sustainable (true loyalty) loyalty occurs when there is repeat patronage, which is the
result of a conscious decision by the consumer.
Review of literature:- Prior research on the relationship of brand loyalty with various
elements of marketing strategy was examined.
Brand loyalty & Market:
Raj believes that his is the first empirical investigation into the relationship
between brand user share and brand loyalty. Since then a number of researchers have
examined this relationship. Most of them have found that high market share brands get
more brand loyalty than the other brands.
Ehrenberg it all finds that simple parameters such as penetration, purchase
frequency and market share are consumer behaviour, including brand loyalty.
Ehrenberg’s views as paraphrased by Baldinger and Rubinson are that “Marketing efforts
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in general and advertising in particular, have relatively limited effectiveness since
nothing truly important, like market share, or penetration, is likely to be effected by the
marketer’s efforts is a predictable way.
The various reasons advanced for this phenomenon of high brand loyalty for high
market share brands include better distribution, bigger advertising budget, more in store
promotion, letter advertising budget, more in store promotion, letter social acceptability,
better social acceptability, better suitability as the raw material for social interaction etc.
While the majority view is that high market share brands reap higher brand
loyalty than do the other brands there does exist research that gives the exception to
this Barnard et al use empirical date to demonstrate, that loyalty. Bhattacharya finds
that low market share brands following the niche strategy and brands bought in large
quantities also enjoy high brand loyalty, and that excess loyalty for high share brands is
more occasional than general.
Brand loyalty and Price:
Previous research shows that those whose are brand loyal differ from
those who are not brand loyal with respect to their response to various aspects of
pricing. Krishna murthy and Raj found that those who are brand loyal are less price
sensitive than those who are not brand loyal. They also found that these two categories
of buyers respond differently to a price reduction. While a price reduction can induce
those who are not brand loyal to switch brands, it induces those who are brand loyal to
buy more whereas the brand loyal customers respond to price increase or to price
decrease with the same sensitivity, the consumers who are not loyal to any brand
respond more strongly to price decrease than to price increase. Krishna Murthy et al, and
Upshaw felt that the advent of value pricing was making ‘Switehers’ out of many local
customers as they went looking for the right deal.
What sort of pricing strategy gets higher brand loyalty? Some answers are
provided by Bhattacharya it al who found that higher price brands seem to have lower
loyalty levels compared to other brands. This happens because high price brands have
higher penetration. Consumers who normally purchase low priced brands switch to high
price brands but the reverse of this will not happens. While such behaviour of the
consumer increases penetrations of the brand this increase in penetration is not
accompanied by a commensurate increase in respect buying. In addition to authors
found that brands that go in for price promotions have less loyalty than the either
brands. The authors see a different between ‘buying’ loyalty and ‘earning’ it.
BRAND LOYALTY AND SALES PROMOTION:
Does sales promotion increases brand loyalty or reduce it? While
reviewing previous research, Papatte and Krishna murty found that there was evidence
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for both positive and negative effects of promotional activity (mainly coupons) on repeat
purchase probability. However, their own empirical research as well as that conducted
by mela et al shows that affect of promotions on brand loyalty is ‘bad’ and tends to
increase price sensitivity of consumers.
Agarwal sought to understand the role of brand loyalty in the optional
promotional mix for manufacturers. He explains that advertising is a ‘defensive’ strategy
used to build brand loyal as it helps in retaining the loyal customers. On the other hand,
price promotions are an offensive strategy used to attract customers away from the rival
brand. The stronger brand plays ‘offensive’ by using more trade promotions and the
weaker plays ‘defensive’ by emphasizing advertising.
Singh found that a majority of the people would continue to stick to their
favorite brand. Only about 12% of the households would switch over to the brand
offering the deal or adopt it for trial. It is significant that many of these households were
from the lower income group.
BRAND LOYALTY AND ADVERTISING:
Bhattacharya reports contradictory research findings on the
relationship between advertising and brand loyalty, based on reviews of earlier
literature. There are researchers who propose that advertising’s main role is to sustain
repeat buying among existing customers. On the other hand, there are those who find
that advertising largely induces brand switching and not repeat purchase. Bhattacharya
own findings are that the effects of advertising are in contrast to the effects of the
promotional variables and price cuts. Perhaps advertising induces brand switching that is
not purely price related. The Indian study on the subject does not support the hypothesis
that advertising influences brand loyalty.
Mela et al assess the medium and long term impact of promotion and advertising
on two types of customers. The loyal (or relatively less price sensitive consumers ) and
the non-loyal ( or price sensitive consumers ). They found that advertising had a
powerful role in reinforcing consumer preferences for brands. A reduction in advertising
makes consumers more price sensitive and affects the non-loyal customers more,
increasing the size of the non-loyal segment.
BRAND LOYALTY AND DISTRIBUTION:
That brand loyalty is related to store loyalty is borne out by research.
Earlier research has examined the linkages between trust in a salesperson, trust in the
store, and repeat purchase intension. The findings reveal that those having an
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interpersonal relationship with the salesperson are directly linked with purchase
intention as well as indirectly linked through store attitude. For customers not having
relations with a salesperson, trust in the store leads to loyalty only indirectly through
store attitude, but it does not have a direct impact on purchase intention.
Other studies:
To explain the satisfaction loyalty conundrum, Richard Oliver investigated what
aspect of the consumer satisfaction response had implications for loyalty and what
portion of the loyalty response is due to satisfaction component. He (concluded) that
satisfaction is a necessary step in loyalty formation but becomes less significant as
loyalty begins to set through other mechanisms. These mechanisms include the roles of
personal determinism (“fortitude”) and social bonding at the institutional and personal
level. When these additional factors are brought into account ultimate loyalty emerges
as a combination of perceived product synergistic effects. As each fails to be attained or
is attainable by individual firms that serve consumer markets the potential for loyalty
erodes. A disgusting conclusion had gave is that loyalty cannot be achieved or pursued
as a reasonable goal by many provides because of the nature of the product category or
consumer disinterest for some firms satisfaction is the only feasible goal for which they
should strive ; thus satisfaction remains a community. The disparity between the pursuit
of satisfaction versus loyalty as well as the fundamental content of the loyalty response,
poses several investigate directions for the next wave of post consumptions research
Arjun Chaudhuri and Morris B. Holbreok examined two aspects of brand loyalty
purchase loyalty and attitudinal loyalty as linking variables in the chain of effects from
brand trust & brand affect to brand performance (market share & relative price ) . The
study includes product level, category- related controls & brand level controls. The
Researchers compiled an aggregate date set for 107 brands from three separate surveys
of consumers and brand managers. The results indicated that when the product and
brand-level variables are controlled for brand trust and brand affect combine to
determine purchase loyalty and attitudinal loyalty. Purchase loyalty in turn leads to
greater market share, and attitudinal loyalty leads to a higher relative price for the
brand.
K. Abdul Waheed and Neeti Yadav examine the relationships between brand personality
dimensions and brand loyalty. The examinations of brand personality will advance the
research in marketing especially the growing area of the brand-consumer relationships.
It was found that the company having a brand image of sincerity and ruggedness wins
customers loyalty. It was also found that relationship length of does not have any impact
on consumer loyalty a customer buys a company’s product for many years it doesn’t
means that he/she is loyal to the company it may also be because he/she doesn’t have
any other options.
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C. Anandan, K. Ravichandran, M. Prasanna, Mohan Raj and N.K. shetty studied
Brand Awareness and Brand Loyalty in branded commodity product. The researchers
found that Brandingh the commodities is not the end of the road, but it is upto the
commodity marketer to adapt to the customer requirememts over time and deliver value
in a consistent manner. The marketer with the help of proper application of marketing
mix can convert a basic commodity into brands which are perceived by customers as
offering total satisfaction in fulfilling the customer’s needs. The marketers must build
their brands based on key factors like quality of product and favorable brand image so
that a strong long-term loyal customer base can be created.
Subhasis Ray and Avishek Sarkar analyzed the influence of brand vis-à-vis price in
Indian mobile industry and concluded that though the schemes and offers help to attract
customers, it is the brand that ultimately reigns in decision-making. Therefore activities
like sales promotion and economizing the product should be backed up with efficient
brand building activities. Brand is an element of any firm that helps it to build intangible
and emotional association with its customers. A company can leverage this association
when a customer makes a choice or helps others to make a choice i.e. recommendations
and word of mouth.
NEED OF THE STUDY:
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OBJECTIVES OF THE STUDY:
The basic objective of the study is to assess brand loyalty is cellular
services in Andhra Pradesh. Further the sub objectives are as follows:-
1. To make an analysis of consumer profile in relation to demographic variables to
identify the broad features of the cellular service providers.
2. to know about cellular service providers operating in Andhra Pradesh in general
and AIRTEL, BSNL, IDEA, RELIANCE, TATA INDICOM INDICOM AND VODAFONE in
particular.
3. To make an analysis of various influencing factors of brand loyalty for cellular
service providers to highlight the relative importance and influence of those
factors.
4. To make an analysis of four key elements of brand loyalty:
Brand Awareness.
Brand Attributes and Association.
Perceived quality and
Brand loyalty for cellular service providers.
5. To draw conclusions based on the analysis made in the study on different
aspects.
SCOPE OF THE STUDY
The scope of the study is related to the services rendered by different
service providers in the state namely AIRTEL, BSNL, IDEA, RELIANCE, TATA INDICOM
INDICOM AND VODAFONE. This study is conducted to know brand loyalty of selected
cellular companies in selected districts of Andhra Pradesh.
PERIOD OF STUDY
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The primary data for the study was collected between the years 2006 and
2008
DATA SOURCES AND METHODOLOGY
For the purpose of the research study, both the primary and secondary
data is collected. Primary data is collected through comprehensive questionnaire
administered to the customers of selected enterprises namely AIRTEL, BSNL, IDEA,
RELIANCE, TATA INDICOM INDICOM AND VODAFONE.
Secondary data is collected from the various research publications,
journals, magazines, daily newspapers, pamphlets, published reports and published
and unpublished literature related to the above mentioned service providers.
PRE – TESTING OF QUESTIONNAIRE
The questionnaire was pre-tested on a sample of 30 customers of cellular
service providers in A.P. The pre-testing of questionnaire has helped the researchers
to modify some questions and alternative answers. Some of the respondents were
happy to reveal their experiences and asked the researcher to make provision for
other alternative answers which were duly done. The final (modified) questionnaires
after pre-testing were used for collecting the data.
SAMPLE OF THE STUDY
The customer sample size is taken as three hundred. The customer
sample is based on randomized cluster sampling technique. The area of the study is
restricted to mobile service providers operating in A.P.
All 300 respondents have been interviewed with a structured
questionnaire for the purpose of the study. The selection of the respondents was
randomly made from the districts like Vijaywada, Adilabad, Hyderabad and
Secunderabad, Karimnagar, Warangal, Tirupathi, etc.
EDITING, CLASSIFICATION, TABULATION AND ANALYSIS
The filled in questionnaires were checked to see that the respondents
answered all the questions. In addition to this, while editing the data the following
points were kept in mind as suggested by paten to see that the data were
As accurate as possible
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Consistent with other facts secured
Uniformly entered
As complete as possible
Acceptable for tabulation &
Arranged to facilitate tabulation
The classification of raw data was essential for analysis &
interpretation. The computer system was used for classification of data. As most
of the questions, included in the questionnaire were close-ended, classification
was not complex.
The classified raw data had to be displayed in compact form for analysis.
This was done through tabulation. The tabulation has been done by hand using
excel sheet in the computer. All the tables were prepared from the questionnaire
using SPSS package specially designed software cross-tabulation has also been
doe for the sake of analysis. For the data analysis various statistical techniques
such as average, percentage, graphs, diagrams, standard deviation and other
appropriate test i.e chi-square test has been employed depending upon the
requirements.
LIMITATIONS OF THE STUDY:-
Every care is taken to study the foregone objectives in detail,
however the study is subjected to the following limitations.
A deep study was not undertaken due to time constraint.
The areas selected were few & as such the scope of the study is limited.
Since the sample is represented by various strata of the universe, they
may be biased in certain responses.
The conclusion may or may not be generalized since the study is confined
to Andhra Pradesh only
The numbers which are approximated may or may not convey the exact
results.
In spite of the above limitations, the study should throw some light
on the understanding of brand loyalty in cellular services. Since this is an exploratory
study, it is hope to have the way for further research in the area.
CHAPTER LAYOUT: -
The study is presented in chapters, which are as follows:-
1. CHAPTER I : “INTRODUCTION”, this chapter will comprise of conceptual
overview of Brand loyalty, Meaning & Definitions, Need for Brand loyalty, Models of
Brand loyalty, Factors influencing brand loyalty, Loyalty phases, Obstacles to loyalty,
Measurement of Brand loyalty, Classification of Brand loyalty, Review of literature, Need
for the study, Objectives of the study, Scope of the study, Period of the study, Data
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sources & methodology pre-testing of Questionnaire, Sample of the study, editing,
Classification, Tabulation & analysis, Limitations of the study & chapter layout.
2. CHAPTER II:
1.1 INTRODUCTION:
In the present day world, the information technologies have been successful
in building a super highway for communication knowledge is supposed to be the
power generating force. Communication Technologies is found to be contributing
substantially to the development process. The process of Socio-Economic emancipation
is now considerably governed by the quality of information technologies. Information
management is an integral part of the decision making process. The information
technologies will continue to play an important role in the decision making process, it is
found sophistication in the process of communication technologies getting an important
place on the development agenda of almost all the countries.
The death of distance as a determinant of the cost of communicating will
probably be the single most important force shaping society in the century.
Technological change has the power to revolutionize the way people live, and this one
will be no exception. In ways that are only dimly imaginable, decisions about where
people work and what kind of work they do, concepts of national borders and
sovereignty, are the patterns of international trade.
But the death of distance is only one of the astonishing changes taking place as
communication and computers are combined in new ways. Fiber - optic networks
and digital compression will allow many families, to receive a personalized
communication channels. Networks are being developed that are (a) like the
telephone, "switched" so that they can used by many subscribers, (b) like television,
high capacity or "broad band" so that they can carry moving pictures and (c) Interactive,
so that, unlike with television, every user of the network can communicate with every
other part. Mobile telephones now account for almost half of all new telephone
connections world wide and few millions of people are just using electronic mails.
The world will change as a result of the communication revolution. The
death of distance loosens the grip of geography companies will have more freedom to
locate a service where it can best be produce, rather than near its market.
1.2 THE ROOTS OF REVOLUTION:
It is easy to forget how recently the communications revolution began. All three
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of i.e. Telephone, TV & Interactive today's fast changing communication technologies
have existed for more than half a century. The telephone was invented in 1876; the first
television transmission was in 1926; and the electronic computer was invented in the
mid 1940's. For much of that time, change has been slow, but in each case, a revolution
has taken place since the late 1980's. the Telephone
Since the 1980's, the oldest of the three technologies has undergone two big
transformations - an astonishing increase in the carrying capacity of much of the
long distance network and the development of mobility. They result, in the first case,
from the use of glass fibers to carry digital signals, and the second from the steep fall
in the cost of computing power. The telephone network has had the least capacity for
its most useful service long distance communication. Once a connection was made
people in the branch will stay on the phone reading books and news papers all day just
to keep the line open until it was needed.
The telephone lines at the heart of the communication revolution. In its existence
of a century and a bit, the telephone has already transformed social and economic
life beyond
anything that Alexander Graham Bell dream of back 1876. It has brought
companionship, employment and information to millions. This familiar instrument has
become the gate way to new world. The revolution now taking place has three aspects,
the collapse in the cost of providing a long distance calls; the increase in the number of
things a phone can do, and the wiring of the world. Because the telephone is so versatile
and so widely used, there changes will have profound effects.
The forces for changes are not just technological. In addition, privatization and
deregulation are bringing competition into the telephone industry in many countries, for
the first time. The richer countries of the European Union have pledged to open their
market to competition at the start of 1998 and world trade organizations (WTO)
agreement reached in early 1997, have number of other countries.
Competition will be good for customers new services emerge more often where
competition is lively. Business customers will benefit first and most, but individuals,
too; will eventually enjoy most of the concession that companies receive.
These changes will reshape the telephone business from being dominated by
monopolies a single state owned giant or a few big regional monopolies.
Telecommunication is becoming more like other fast-changing industries full of new
comers, including new comers from other countries and from other industries. It will
retain its tendency to concentration, but today's big telephone companies will find
them selves facing unprecedented commercial pressures.
Wireless Telecommunication
Most striking change in telecommunications since the early 1980's has been the
development of wireless services. It has brought innovations of three kinds. The mobile
telephone, the wireless link to a fixed point, known as "wireless local loop", and the
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tracking of moving objects.
Mobile telephones
More than one in seven of the world's telephone subscriptions are for mobile
telephones. As the use of mobile telephones continues to grow, there will be three
key trends. Mobile telephones will capture a growing share of voice traffic, the line
between a mobile and a fixed telephone will blur; and mobile telephones will acquire
many of the attributes of portable computers.
The mobile telephone is now the competitor for the telephone companies
core business of voice conversations. Most voice conversations will be received on and
sent from wireless telephone.
The shift from fixed to mobile telephony will be hastened by the falling price of
actually making calls over mobile telephones. In 1992, mobile service tariffs were, on
average, three and a half times higher than fixed - link tariffs. That rate has now fallen
to a point where the overall cost of using some mobile services is becoming competitive
with that of fixed services. General, a mass market will reached, and voice calls from
mobile services will start to overtake those from fixed services.
The fusion of fixed and mobile telephone will take place on many fronts.
Mobile telephones will become available that are not tied to one service (and tariff).
"Personal Communication Services", a new generation of wireless telephone, will be
combined in all sorts of flexible ways with cord less and fixed-wire telephones.
Wireless Local Loop
A local telephone network is expensive, "wireless local loop" offers a cheap
alternative. A mobile telephone uses a great deal of spectrum to switch from one base
station to another, a fixed antenna can be permanently tuned precisely to the correct
base station.
The main cost is that of transmission spectrum must be allocated. But maintenance
costs are low. Most faults arise at one end or the other of the network, making them
easier to repair than those in the part between exchange and customer.
Tracking moving objects
Mobile communications have another set of applications just as radical as the
mobile telephone. Locating moving objects, with the help of global positioning satellites,
a position on the globe can be pin pointed with extra-ordinary precision and with land
based wireless, moving objects can be tracked. From such technologies, a huge range of
uses is developed. Including the following.
• Inventory control system: Systems used to monitor the position of
electronically agged containers, for instance or to check stock on super market
shelves.
• Navigation System: Electronic maps that pin point the location of an
automobile, truck, or military targets or that help a hiker find atrack or a
farmer to work out which parts of a field to spray.
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• Altering System: Electronic tags that track stolen automobiles or roaming
elephants or probes that monitor that state of a patients heart to warm of an
impending attack.
• Toll Payment System: Systems for automatically assessing tolls against
automobiles passing through an electronic check point.
•
Table No.1.1: Representative costs of local loop technologies.
Competent Cost per connection ($)
Copper 200 - 2000
Fixed wireless 500
Coaxial cable * 500
Fiber to Curb 1050 upward
Fiber to Home 2000 upward
* Does not include additional cost to upgrade for interactive capability.
Source: Information Infrastructure: Regulatory requirements OECD 1997.
In building telecommunications network, poor countries have two advantages;
many new technologies reduce the cost of installing new networks and newly installed
networks will be state-of-the art, unlike those in the rich countries which now require
upgrading.
Cost saving technologies can reduce the cost and increase the reliability of
services. .Developing countries can also move to mobile telephones more rapidly that
can rich countries. Mobile operators do not need to compete against a massive
installed based of fixed wire telephone which has long been amortized, and their
spectrum is frequently less heavily used than in the rich world.
Privatisation, competition and open markets assure more important in
developing countries than in rich ones. In Chile the first Latin American company to
privatize there proportion of people with access to a telephone doubled within three
years and waiting time fell from nearly ten years to just one. Peru sold a 35% stake in
its telephone system to telefonica de Espana in 1994, a rare instance of a country
ceding effective control of its system in exchange for a large investment in it. Several
developing countries have accepted bids from foreign firms to build parts of their
network, thus US west is building a network in Southern India, AT & T is building a
mobile network in Argentina, Deutsche Telecom is building a fixed link system in
Indonesia, and Australia Telstra is installing pay phones in Phnom Penh.
Such policies make sense not only because they will allow users access to in
expensive telephone services, but for an even more important reason. Good
telephone services are especially important for poor countries because they bind the
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poorest, most distant regions into the rest of the country and they allow developing
countries to compete on the same footing as richer rivals.
1.3 BENEFITS OF TELEPHONE SERVICE TO RURAL AREAS:
People who live in the country are less than half as likely to have access to
a telephone as people who have live in cities, a perennial problem in poor countries.
Some times the discrepancy in much worse. In India 74% of the population lives in
villages, but they have only 10% of the lines. This is partly because city dwellers
have more political clout than rural dwellers and partly be cause it cost up to five times
as much to install a fixed line in a rural area as in a town and obviously to install
wireless links -"mobile or even less expensive, fixed.
In rural areas, good communication can bring news, education, medical and
agricultural advice. They also provide a disincentive to move to the city. Some of the
advantages of urban life are available to those who stay, the benefits of persuading
people to stay in the country are immense. Moreover rural telephone services
frequently, each much larger revenue than those in cities. Country dwellers make and
attract many more long distance calls than do city people. It is important to connect
cities to the rural areas and as it is to connect cities to the rest of the world.
Benefits of telephone services to competitiveness one of the powerful effects of
the enormous investment in telecommunications now under way will be to reduce
some of the gaps between developed and developing countries. Since around 1990,
international call charges in the two have been converging as developing countries cut
tariffs at a faster rate than rich countries (by roughly 3% year, to the rich countries
2%). The fast growing developing countries, especially in Asia, are now on track to
become the telecommunications power houses of the next century. Today emerging
economics account for more than 25% of global telephone traffic in the year 2005, the
ITU predicts that will rise to more than 50%, by
then China will be one of the top three sources of international traffic and India will be
close behind. The benefits from plugging developing countries into the vast global
telephone network will be enormous. Developing countries may be a low-cost
location for telecommunications services, as they now provide a low cost, rich country
may find it less expensive to reverse the direction of a call to exploit low
telecommunications costs in the developing world.
The telephone brings access to information from other parts of the world,
technological information, which can allow developing countries to catch "up with the rest
of the world in industry, health care, education and a host of other services,
commercial information, raising aspirations and transforming patterns of consumption;
and political information which will faster the spread of democracy and open to public
affairs.
In expensive telecommunications services will narrow the advantage of the
first world over the developing countries; Indeed, countries with good
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communication will be indistinguishable. They will have access to services of first -
world quality; health care, education and technical information.
1.4 SIGNIFICANCE OF THE TELEPHONE SERVICE:
The way demand for a technology will evolve is a game with a high failure
rate. Even those close to an innovation may fail to spot its significance. In few years it is
likely to see the increasing integration of the internet with both the telephone and the
television. The most immediate effect of the communications revolution will be to allow
familiar objects and be used in new unfamiliar ways. The most powerful corporate role
will be played by the telephone companies, largely free from debt, with powerful
national brands; the telephone companies have the muscle and ubiquity to exert
enormous influence over the future of communication, at least in the short run. It
takes time for a new technology to find its true market. It takes time too for new
business models to emerge. People are paying directly for telephone services although,
with toll-free calls, a growing share of the cost is carried by companies. In the short and
medium term, the way people adopt new technologies will be influenced by culture,
convenience and cost. It will also vary enormously from one country to the other.
The following factors will be among those that determine how each technology
is used in the future.
Culture: People are doing things one way, they may be slow to change, especially, like
one-fifth of the rich world's population they are over 65. Some of the developing
countries with their young population and fewer pre conceptions, may thus be quicker
than older west to spot and take advantage of new possibilities.
Convenience: Some technologies can be readily used in one situation but not in
another. Cost: Demand will be boosted when new technologies cut costs. The services
whose costs will be mostly affected can be electronically distributed from computer
software and video's to financial services and information. The broadest impacts of
new communication have been the effect will be felt in four main areas. Commerce and
the shape of the company, the economy, society, culture, the government and the
political process.
Commerce, including many kinds of retailing, will become increasingly
international. The barriers, such as customs formalities, delivery costs and different
rules of consumer protection, will gradually decline. Such global retailing will allow
many niche markets to emerge.
Companies: Companies will be able to build new links not just with customers but with
employees in different parts of the country or around the world. Employees in
different countries or regions will be able to work in teams on the same project. All
kinds of services
will be brought in communication improve it will become easier for companies to hunt
for spare capacity and low prices. A knowledge based company can buy in much more
of what it needs, design or marketing or packaging than a traditional company. There
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will be new opportunities to integrate customers and suppliers using the corporate
communications network. Suppliers will tap into their customer electronic data base to
work out what the customer need and to supply it. Technologies such as electronic
mail and computerized billing will reduce the costs of dealing with suppliers at
arm's length. The result of intensified competition will be greater emphasis a
performance, productivity and waste reduction.
Economic will benefit from the vast increase in the diffusion of knowledge and
information, the basic building block of economic growth. This revolution is especially
important because of innovation. The introduction of new production methods, new
products and new kinds of industrial organization is the main force driving growth and
living standard. The communication revolution speeds up the diffusion of innovation. It
will thus allow new competitors to spring up companies to react quickly, and individuals
to spot opportunities. Information is also essential to make markets to work well.
Society: Society too will change with the disappearance of the old demarcation
between work and home. More people will work from their homes or from purpose -
built small offices. The office may become the place for the social aspects of work such
as networking, lunch, and catching up on gossip, thus inverting the familiar roles of
home and office. Political and government will be transformed by free communication,
changing the balance of power between governments and their citizens. People will be
able to communicate their views to their government leaders and representatives more
easily. People who live under dictorial regimes will find it easier to communicative with
the rest of the world.
Growth of India’s Telecom Services(1991-2007)
The phenomenal growth of the information technology (IT) industry in India has
brought to the fore the growing importance of the country as a knowledge
powerhouse. But this competitiveness is restricted to the services sector. In fact, it is
the sector that is increasingly contributing to the high growth rate recorded in the
country. Despite showing a goad growth performance over the last three years or
four years, the manufacturing sector is still a relative non-performer although three
industries, namely, auto parts, cotton textiles and Pharmaceuticals are showing much
dynamism in terms of exports.
However India's exports have now diversified to encompass services. The
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service sector in general has come to occupy preeminent position in India's economy in
terms of its contribution to overall GDP, exports and as a destination for foreign direct
investments (Table 1). Manufactured exports are still •dominated by low and medium
technology products although, earlier some hi-tech products such as; pharmaceutical
and certain types of machine tools have crept into India’s export basket. But the growth
of IT exports and the evidence of moving up the value chain in IT, the emergence of
other high technology industries such as biotechnology, aerospace, etc, is enabling India
to be in the' league of high technology producers from the developing world.
The recent growth of research and development (R&D) outsourcing is
yet/another illustration of the country's prowess in high technology activities. An
interesting dimension, of high technology production in India is that this capability is
largely in the realm of services. However, there are indications that this capability is
slowly percolating into hi-tech manufacturing. And an industry where it is very clearly
visible is telecommunication where a revolution of sorts is taking place [Mani 2007]. In
the context, the purpose of the present paper is understand the technological
implications of the phenomenal growth of this industry.
1. Introduction
2. Telecoms and India's Growth
Communications is the fastest growing sector in India's economy. The
average compound rate of growth of the economy works out to 24.02 per cent per
annum since the turn of this millennium (Table 2). No other sector of the economy has
clocked such a rate of growth. The sector accounts for about 4 per cent of GDP and the
recent high rate of growth has contributed to about 11 per cent of the growth in
overall GDP of the country. In information and communications technology (ICT), it is
again communications that is more important. This is evident from a dataset on ICT
spending developed by World Information Technology and Services Alliance (2006), of
the total spending on ICT by India, about 63 per cent was in communications.
The communication sector comprises both services and equip-
ment manufacturing, although in the above characterisation the data refers only to
the services segment. The domestic production of telecom equipments has shown
some impressive increases during the period since 2001, but it accounts for only about
15 per cent of the total telecoms industry. With some fluctuations, the equipment
sector is slowly seeing a decrease in its share in the total revenues of the
telecommunications industry (Figure 1).
Table 1: Relative share of the service sector in India’s Economy
(1990-91-2006-07, in %)
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Real GDP Exports FDI
1990-91 40.6 20 Not available
2006-07 61.8 39 81
Table 2: Contribution of communication sector to India’s Growth Performance
(1990-91-2006-07, in %)
Share of communications in
GDP
Growth
sectorGDP Growth Contribution (%)
1999-2000 1.6
2000-01 1.9 26.9 4.1 12.47
2001-02 2.2 19.5 5.6 7.66
2002-03 2.6 25.6 3.4 19.58
2003-04 3.1 25.4 8.6 9.16
2004-05 3.5 22.8 7.5 10.64
2005-06 4 23.9 9.1 10.51
2.1 Dimensions of Growth
In 1991, India had just five million telephone subscribers. As at the end
of July 2007, there were 233 million subscribers, an average annual growth rate of over
27 per cent per annum. No other country in the world, other than China, has shown
such high rates of growth (see Table 3). Tele density too which was below one
telephone per 100 population has now risen sharply to about 20. Among the
infrastructure industries, telecommunications is the only one that has shown
significant improvements over the reform period. Consequently, it is generally opined
that a revolution of sorts is taking place in the Indian telecoms industry. There are at
least seven dimensions of this growth performance that merit our attention.
Table 3: Trends in Number of Telecom Subscribers and Tele density
(1991-2007)
Number of Telecom Subscribers
Fixe
d
Mobile
(inmillion)Total
Growth
(%)
Tele-
density
Ratio of mobile
to fixed
1991 5.07 5.07 0.6
1992 5.81 5.81 14.60 0.67
1993 6.8 6.8 17.04 0.77
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1994 8.03 8.03 18.09 0.89
1995 9.8 9.8 22.04 1.07
1996 11.98 11.98 22.24 1.26
1997 14.54 0.34 14.88 24.21 1.56 0.02
1998 17.8 0.88 18.68 25.54 1.94 0.05
1999 21.59 1.2 22.79 22.00 2.33 0.06
2000 26.51 1.88 28.39 24.57 2.86 0.07
2001 32.44 3.58 36.02 26.88 3.58 0.11
2002 41.48 13 54.48 51.25 4.3 0.31
2003 42.58 33.58 76.16 39.79 5.1 0.79
2004 45 50 95 24.74 7.04 1.11
2005 49 76 125 31.58 10.66 1.55
2006 40.43 149.5 189.93 51.94 17.16 3.70
2007(as on October
31,2007)39.41 217.14 256.55 22.52 5.28
Dominated by wireless technologies, which include cellular mobile and fixed wireless
technologies. In fact, almost the entire increase in the availability of telephones has
been contributed by wireless technologies. India has one of the highest ratios of
wireless to wireline services, which is now almost five (Table 3). In fact what is
interesting is that since 2005, the wireline services have started falling. A number of
factors explain this decrease in the popularity of fixed telephones, which has now
become a worldwide trend. This heavy reliance of wireless technologies, while
extremely positive from the availability point of view, has some implications for the
diffusion of the internet in the country. This will be analysed in some detail in one of
the subsequent sections.
(ii) Growing Market for Telecom Handsets: As a corollary of the above, it is seen
that there has been a steady increase in the average number of mobile subscribers
per month since 2003 (Table 4). In 2003, on an average 1.5 million new subscribers
were added to the existing stock. This increased to 6.4 million until September
2007. These large increases in the number of mobile handsets have strong positive
implications for the telecom equipment industry and specifically the mobile handsets
industry, which means that close to six million handsets are being sold every month.
Consequently, a huge domestic market for telecom equipment has suddenly
emerged in the country spawning the creation of a significant manufacturing base.
Chennai has become a thriving cluster for mobile handsets manufacturing and this
has important implications for the downstream industries such as the semiconductor
industry. This point will be discussed at some depth in the fourth section.
Table 4: Monthly Additions to Mobile Subscribers (2002-07, in million)
2002 2003 2004 2005 2006 2007January 0.64 1.58 1.76 4.69 6.81
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February 0.6 1.6 1.67 4.27 6.22March 0.96 1.93 0.78 5.03 3.53April 0.28 0.64 1.37 1.46 3.88 6.11May 0.29 2.26 1.33 1.72 4.25 6.57June 0.35 1.42 1.43 1.97 4.78 7.34July 0.36 2.32 1.74 2.46 5.39 8.06August 0.49 1.79 1.67 2.74 5.9 8.31September 0.37 1.61 1.84 2.48 6.07 7.8October 0.53 1.67 1.51 2.9 6.71 8.05November 0.72 1.9 1.56 3.51 6.8December 0.8 1.69 1.95 4.46 6.4Average 0.46 1.46 1.63 2.33 5.35 6.88
(iii) Increasing Privatisation: The share of the private sector in the overall telecoms
industry has been rising (Figure 2) and the ratio of private to public actually crossed
unity in 2006. This again is due to the fact that the public sector is more dominant in
wireline (or fixed) and the private sector is dominant in the wireless (mobile) seg-
ment (Table 5).
This sort of a structure is largely the product of historical reasons. The two
public sector service providers (BSNL and MTNL) dominated the wireline sector, while
the private sector was able to dominate the new wireless technology. In fact it was
only in the late 1990s, early 2000s that the government allowed the public sector
entities to provide wireless communication services.
Table 5: Telecommunications Services according to ownership
(Percentage shares as on May 31, 2007)
Wireline WirelessPublic 91 19
Private 9 81
Total 100 100
(iv) Competition - Fixed vs Mobile and GSM vs CDMA: An interesting feature of
the industry is that after a very long time, it has suddenly become very competitive.
There are three dimensions to this competition. First, it is competition between two
standards or technologies, namely, the Global System for Mobile Communications
(GSM) VS Code Division Multiple Access (CDMA) standards. Second, it is competition
between various service providers, although this competition was restricted to public
policy designed spaces or markets known as telecom circles. A yet another dimension is
the type of market. There are essentially three types of markets based on the
geographic coverage of the service. They are: (i) the local telephone market; (2) long
distance or national telecom services; and (3) foreign or the overseas market. We
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focus here on all the three dimensions of competition between the service providers.
Competition in Fixed and Mobile Technologies: The markets for mobile
services are much more competitive than the one for fixed line services. In the
latter, the incumbent service provider, BSNL continues to have the lion's share of the
market. However, the existence of mobile communication services
has made the market for fixed line services contestable and as a result despite
high concentration, the prices of fixed telecom services kept falling or kept under
check over the last five years or so.
(a) Competition in Fixed Telephone Services: If one goes by overall summary
measures of domestic competition, the market for fixed telephone services is much
more concentrated than the one for mobile services. For instance (as on May 31,
2007), the Herfindhal Index (H-Index) for fixed services for the nation as a whole
works out to 0.6899 while the one for mobile services work out to 0.1592. This national
level picture hides the level of competition that exists at the sub-national level. The
market for fixed telecom services is highly concentrated in all the telecom circles,
although in seven of them, namely, Delhi-NCR, Chennai, Madhya Pradesh, Mumbai,
Punjab and Karnataka, the H-Index has a value less than 0.8. Of course, this does not
mean that the market for fixed telecom services is not competitive. There are two
dimensions to this level of competition for fixed services. First, the consumers are
increasingly substituting mobile for fixed services, so the fixed service providers face
intense competition from mobile services. Second, the existence of the telecom
regulator too has acted as a check on the dominant service provider, Bharat Sanchar
Nigam (BSNL), from charging high prices. Instead what one sees is a significant
improvement in the performance of BSNL during this period.1 First of all, BSNL is one of
the leading profit-making central public sector enterprises in the country: in 2005-06 it
made a net profit of Rs 8,940 crore - one of the few non-oil public sector enterprises
(PSES) in the top 10 profit-making PSES in the country. Three areas where the firm has
made performance improvements are: (i) considerable reductions in the number of
consumers on the waiting list for a connection; (ii) reductions in the number of faults
per subscriber; and (iii) number of personnel per 1,000 subscribers. On all the three
indicators BSNL has made substantial progress [Department of Telecommunications
2007] and I argue that this is entirely due to the force of competition leading to
efficiency gains for this rather monopolistic firm which has had a previous history of
being completely impervious to the demands of consumers.
(b) Competition in Mobile Services Industry: Compared to the fixed services,
the mobile services industry has a number of distinguishing features. First, the
industry started as one dominated by private sector enterprises and the government
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religiously followed a policy of "managed competition" by licensing more than one
service provider in a telecom circle. In fact majority of the 28 circles have at least
four services providers and in a number of cases there are six service providers well.
In short, right through inception the government envisaged an oligopolistic form of
competition.
Second, most of these private sector enterprises had some of foreign
equity holding of sorts. Third all of them are based on new technologies that were
state-of-the art. Fourth, the conduct of the industry was, relatively speaking, more
regulated by the newly created independent regulatory agency, the Telecom Reg-
ulatory Authority of India (TRAI). Fifth, it is the rapid growth of this industry that has
catapulted the communications sector into one of the major growth-contributing
sector of India's economy. Sixth, the mobile communications industry, especially the
equipment part of the industry is the second largest in the world (next to China) and
therefore has attracted considerable FDI in the manufacture of handsets leading to
the employment of skilled manpower. Seventh, India is supposed to be having the
cheapest mobile telecom tariffs in the world. The early part of the industry was of
course riddled with much controversy pertaining to the terms and conditions under
which the licenses were issued and the spectrum allocated between various kinds of
service providers [Desai 2006]. Since all the services providers were new and had the
same vintage of technology, their competition was more in terms of price and
conditions of sale and of late these two aspects are much in public scrutiny thanks to
the timely intervention, on various occasions, by the regulator.
If one computes the H-Index for the industry, at the national level (which is not
exactly a meaningful as some of the providers are only at specific telecom circles), it
shows a mild increase: the H-Index for the industry increases from 0.1370 in 2002 to
0.1593 in 2007.
However, this increase hides considerable variations at the circle level
(Table 6). Most of the service providers have focused on specific regional markets, with
the exception of Bharti (the largest mobile service provider). In fact, there are only four
service providers who have a presence in at least 20 of the 29 circles. It is also
interesting to see that the circles where BSNL has a monopoly position are also those
with very low revenue potential. In other words, the private sector providers have
positioned themselves in the most revenue earning circles. Also it is seen that it is the
circles with high revenue earning potential where there has been an increase in the
intensity of competition - in the metros of Delhi, Mumbai and Chennai for instance.
Telecom circle Number
of
service
Herfindha
l index
Dominent Suplier (with
Market) share in %)
1 Andaman and Nicobar 3 0.49 Bharti (42)
2 Andhra Pradesh 4 0.29 Reliance (59)
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Page 36
3 Assam 4 0.28 Aircel(31)
4 Bihar 5 0.30 Bharti (38)
5 Chennai 6 0.19 Aircel (26)
6 Chhattisgarh 1 1 BSNL(IOO)
7 Delhi-NCR 6 0.19 Hutchison Essar (21)
8 Gujarat 6 0.22 Hutchison Essar (38)
9 Haryana 6 0.23 Reliance (27)
10 Himachal Pradesh 6 0.24 B5NL(30)
11 JandK 4 0.45 BSNL(55)
12Jharkhand 1 1 BSNL(IOO)
13Karnataka 6 0.23 Bharti 329)
14 Kerala 6 0.20 B5NL(29)
15 Kolkata 5 0.21 Hutchison Essar (25)
16MP 5 .0.24 Reliance (32)
17 Maharashtra 6 0.18 Idea (23)
18Mumbai 6 0.18 Hutchison Essar (25)
19 North-east-1 4 0.28 BSNL(35)
20 North-east-ll 1 1 BSNL(IOO)
21 Orissa 5 0.25 Bharti (31)
22 Punjab 7 0.20 Bharti (30)
23 Rajasthan 7 0.20 BSNLC7)
24Tamil Nadu 6 0.20 Aircel (28)
25 UP (east) 6 0.22 Hutchison Essar (22)
26 UP (west) 6 0.18 'Hutchison Essar (22)
27 Uttaranchal 1 1 BSNL(IOO)
28 West Bengal 6 0.21 Hutchison Essar (29)
India as a whole 12 0.16 Bharti (23)
Competition between Mobile Standards: It was seen above that mobile phones
were introduced in the country towards the latter half of the 1990s and specifically in
1997. Ever since that year and until the end of 2002, the market was dominated by just
one technology, namely, GSM. But in December 2002, a Reliance Info-comm launched
CDMA services across 17 circles on a countrywide basis, CDMA has since been growing
faster than GSM, although there are some year-to-year variations (see Figure 3).
Most Indian consumers are unaware of the nitty-gritty of the two technologies. So
the deciding factor between the two technologies is often based on price and other
conditions of offer such as the coverage of the service, ease of obtaining a new
connection and whether a handset is available at a reduced price as part of the deal.
Given this sort of a possibility of perfect substitution between the two types of
technologies, the existence of the two standards has made both the markets for GSM
and CDMA services very competitive. This is especially so when the market for CDMA
services is highly concentrated with just two service providers accounting for almost
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Page 37
the entire output. This is further indicated by the higher Herfindhal Index for CDMA
services. What is being argued here is that despite being highly concentrated, CDMA
service providers have to compete with GSM service providers and this has prevented
the CDMA service providers from wielding any excessive market power.
One of the most important institutional requirements for competition to emerge
and sustain is the introduction of number portability. Number portability allows a
customer to move from one mobile service to another within GSM, and also between
GSM and CDMA, while retaining the same number, TRAI had recommended in March
2006 to the Department of Telecommunications (DOT) that mobile number portability
be introduced by April 2007.
But it was only in October 2007 that the DOT finally announced the introduction of
number portability from April 2008, but this was strongly opposed by the GSM players.
(v) Price of Telecom Services: One of the more direct effects of this competition is
lower prices. Before the deregulation of the telecom services industry and indeed the
entry of mobile service providers, telecom consumers were periodically subjected to
increases in the tariff. This has now been effectively checked. The price of telecom
services basically follows a two-part tariff, both in the case of fixed and mobile services:
first an activation charge followed by a charge for each type of calls. For mobile
communication consumers then there is the additional cost of calls according to
whether it is post or prepaid. Based on estimates made by TRAI (2006), I have obtained
the minimum effective charge derived out of an outgoing usage of 250 minutes per
month per quarter during 2003 through 2005. This is plotted for both fixed and mobile
services as well. Although charges for both the calls have come down, a higher
reduction is noticed in the case of mobile services. In fact, India now has one of the
cheapest mobile tariffs in the world (Table 7) and this can give an additional fillip to
the growth of ICT industry in the country. If one were to plot the price of telecom
services and the number of subscribers, one can see an inverse relationship in the case
of mobile services although in the case of fixed services such an inverse relationship is
not visible. This is because of the relative advantages which mobile technology can
bestow on its user.
Table 7: Cost of mobile calls in India compared to other countries
(As of June 2004)
Country Callcharges
per minute
Minutes of
usage per
subscriber
per month
Average
revenue
per user($)
Termination rates
per minute mobile
($)
Australia 0.24 159 43 0.152(.O16)"
Brazil 0.11 92 11 0.080(0.020)
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Page 38
China 0.04 261 10 0.025(0.010)
Switzerland 0.45 119 59 0.163(0.017)
Japan 0.33 156 63 0.130(0.022)
India 0.03* 309 11 0.007(0.007)
(vi) Institutional Support: An interesting feature of the growth of
telecommunications industry in the 1990s and beyond, compared to the earlier
period is the strong public policy support that the industry has received. It was
manifested in the form of the following policies: (i) National Telecom Policy of 1994,
(ii) Telecom Regulatory Authority Act of 1997, (iii) New Telecom Policy of 1999, and (iv)
Broadband Policy of 2004.
Of these four main policies, in my view, the most important piece of legislation that
is determining the growth performance of • the industry is the establishment of the
regulatory agency TRAI.
The 10-year history of telecommunications regulation in India can be divided into two
phases: the first covering the period 1997-2000, when TRAI had just been established
and the second covering the period 2000 onward, when considerable amendments
were made to the original TRAI Act. On the whole, TRAI'S functioning has been marred
by a number of bitter disputes between it, the DO'T and the service providers, although
in more recent times (especially since 2001) it has been rather effective in shaping the
conduct of the industry in terms of pricing behaviour and indeed in quality of service.
(In late 2007, TRAI found itself once more in controversy over spectrum allocation and
pricing.) I do not attempt here to provide a detailed review of TRAI'S operations since its
inception, but a quick survey of its place in telecom regulation in India. The purpose is
essentially to illustrate the need for a more independent regulator that can effectively
oversee the functioning of an almost completely deregulated industry. The actual
benefits that the consumers have received from this regulation have been discussed in
detail elsewhere in the paper in terms of increased easy access to telecom services,
considerable improvements in both the price and quality of services and the existence
of a watchdog of the industry.
TRAI'S functions can be broadly categorised into two: recommendatory
and mandatory. It is seen that in most of the important conduct variables such as the
promotion of competition, pricing, technology and quality of service and in the effi-
cient use of spectrum, etc, the pronouncements of TRAI are merely recommendatory
and the final decision is to be taken by the government. The mandatory powers of
TRAI are restricted to a number of technical issues such as fixing the terms and
conditions of inter-connectivity between the service providers, laying down the
standards of quality of service and to ensuring that these conditions are actually
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met by the service providers and ensuring the effective compliance of the Universal
Service Obligation. This shows that the effective space that is available for the TRAI
in terms of asserting its real power is very limited. This fact has to be borne in mind
while one assess the contribution of this regulatory agency towards improving the
conduct of the industry even post 2000 than that actually prevailed in the previous
period.
After a detailed review of its functioning during the earlier period
(1997-2000), Mani (2002) referred to the TRAI as a "muddled regulator". This is
because during this phase, TRAI'S functions were poorly articulated, and it was
generally viewed as driven by the well-organised and vociferous lobby of private
phone service operators, TRAI did little to hide its pronounced contempt for the DOT
and the state-owned providers, BSNL and MTNL. At the same time, it failed to ensure
that private operators adhered to their license conditions. Its authority and credibility
were undermined by court rulings that clearly exposed its lack of power. Its
reputation suffered even more when it allowed the private operators to fight its court
battles. In short, it would not be incorrect to state that there was "regulatory capture"
during this first and initial phase of its operations.
The governmental admission of the ineffectiveness of TRAI resulted in the reinvention
of the regulator and a redefinition of its functions. This takes us to the second phase in
TRAI'S history and this thinking manifested itself in the form of the issuance of an
ordinance to replace TRAI with an appellate tribunal with judicial powers and a
reconstituted regulator that lacked one of the most important functions of any telecom
regulator, namely the power to settle disputes between the various stakeholders. This
function was vested in a newly created Telecom Dispute Settlement and Appellate
Tribunal (TDSAT). However, this was followed up with a strengthening of TRAI'S role in a
number of other areas. But it can be shown that although the amendment clarified the
precise role of the regulator by considerably reducing the grey areas, it effectively
reduced the power of the regulator.
TRAI'S recommendations to the government are binding only with respect to the non-
compliance and efficient use of the spectrum. On the crucial issues of timing and licensing
of new service providers, TRAI'S recommendations are not binding. In sum, the TRAI has
been reduced to a tariff-setting body empowered only to fix tariffs and inter-connection
charges and to set norms on quality of service. And on these two and especially on the
tariff issue, TRAI'S role is generally considered to be very satisfactory
Table 8: patents issued to Indian inventors in the US
(2001-05, number of patients)
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Page 40
Multiplexin
g
Pulse or
Digital
Telephonic Telecommunication
s
Total
2001 0 1 0 0 1
2002 2 1 0 1 4
2003 3 1 0 1 5
2004 6 2 1 0 9
2005 7 2 1 3 13
(vii) Growing R&D Outsourcing: It is generally held that India has emerged as a
major R&D hub. The Technology Information and Forecasting Assessment Council (TIFAC)
(2007) study confirmed this commonly held proposition: R&D investment worth of $ 1.13
billion has flowed into India during the five-year period 1998-2003. The total receipts
of R&D services have doubled from $ 221 million in 2004-05 to $ 519 million in 2005-
06 [Reserve Bank of India 2006, p 1355]. Telecom along with the pharmaceutical
industry is a major recipient of these investments. The innovative performance of this
segment can be gauged from the fact the number of the us patents issued to
Inventors from India (including MNCS having operations in India) in the area of telecom
technologies has increased from just one in 2001 to 13 in 2005 (Table 8).
3 Three Disquieting Features
In the previous section I have outlined several dimensions of the growth of the
industry. All these were positive features -the phenomenal growth of the industry,
significant reductions in the waiting time to get a telephone connection and indeed
in the price of telecom services. However, this growth has also been with some
disquieting features. Three such disquieting features of the growth of the industry have
been identified. They are: (1) the growing digital divide; (2) increased dependence
on imports as far as the equipment are considered; and (3) the relatively low
penetration of the internet in India.
(i) The Growing Digital Divide: Several commentators, notably Desai (2006),
had referred to the growing inequalities in the availability of telephones especially
between states and indeed between the rural and urban areas within a state. This is
so severe that the national picture that I presented above is only representative of
the urban areas of some of the states. This growing digital divide, as it is usually
referred to, is of course a reflection of the growing divides within the country as far
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Page 41
as income and wealth is considered. The ratio of urban to rural tele-density, which
was falling until 2002 has started rising again since 2003 and in 2005 was much
higher than what was in 1996, when the mobile revolution was just about to begin.
To illustrate, the ratio of urban to rural tele density increased from 14 in 1996 to
nearly 20 by the end of 2005 [Department of Telecommunications 2006].
A yet another dimension of the digital divide is the variation in tele density across the
various telecom circles (Table 9). Tele density (in 2005) ranged from as high as 60 per
100 people in the national capital region to just two in the backward state of
Chhattisgarh. The urban divide within each of the telecom circles is presented in Table
9. It shows that Kerala, Tamil Nadu (excluding Chennai) and Punjab have one of the
lowest urban-rural divides, while Uttar Pradesh, Bihar and Assam have the highest
digital divides. The table also shows that rural tele density is significantly below the
urban one across all the circles and even for the nation as whole it has remained at a
very low level. This confirms the oft-expressed view that the telecom revolution
spearheaded by the mobile phones has remained largely an urban phenomenon.
The government has put in place an institutional arrangement for
bridging the digital divide. Specifically, the National Telecom Policy of 1999
envisaged implementation of the Universal Service Obligation (USO) Fund to
provide telecom services in rural, remote areas and non-remunerative areas. This
fund is raised through an "universal access levy", which is 5 per cent of the adjusted
gross revenue earned by the service providers under various licenses. The Universal
Service Support Policy for Implementation of USO took effect from April 1, 2002. It is
administered by the DOT and it has three major components: (1) providing public
shared access; (2) providing individual access; and (3) infrastructure support for
mobile service providers. The latter policy is on the anvil and is yet to take shape. The
overall performance of the uso fund is far from satisfactory, as cumulatively speaking
only about a third of the funds accumulated have actually been disbursed (DOT,
http://www.dot.gov.in/uso/implementationstatus.htm).
The service providers, excepting for the state-owned BSNL, are rather reluctant to
provide shared access. However, the private providers are keen to participate in the
provision of individual access in rural areas as it is more profitable than providing
shared access [Department of Telecommunications 2007].
Hitherto, the uso funds have been utilised only for provision of fixed line connections.
Given the fact that the future is in mobile communications, it is prudent to involve
mobile service providers too. Some amendments made to the utilisation of uso funds
have expanded the scope of the funds to include more items.3 The following additional
four items were included: (i) Creation of infrastructure for provision of mobile services
in rural and remote areas; (ii) provision of broadband connectivity to villages in a
phased manner; (iii) creation of general infrastructure in rural and remote areas for
development of telecommunication facilities; and (iv) induction of new technological
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Page 42
developments in the telecom sector in rural and remote areas.
Only the first of four are in the form of some implementation. However, it makes a lot of
sense to extend the uso funds to provide mobile services in rural areas as increasingly
much of the growth in mobile communications have emerged from 'B' and 'c' circles. In
fact, the four metros have ceased to be the major force behind the growth of the
mobile connections in the country. Encouraging the growth of mobile communications
in the other circles and the rural areas within the circles can increase tele-density in
the country. Such increases in tele-density through mobile phones also have some
negative consequences, which is discussed below.
Table 9: Digital Divide within Telecom Circle
(as on March 31, 2006)
Urban Rural Ratio of LJ to R
Andaman and Nicobar 22.49 9.15 2.46Kerala 47.61 9.74 4.89Tamil Nadu (-) Chennai 23.1 2.86 8.08Punjab 51.57 5.34 9.66Haryana 29.21 2.9 10.07Uttaranchal 17.05 1.68 10.15Maharashtra (-)Mumbai 27.71 2.59 10.70Gujarat 30.12 2.63 11.45Himachal Pradesh 78.11 6.82 11.45North-East-ll 14.21 1.21 11.74Karnataka 31.26 2.49 12.55Andhra Pradesh 30.19 2.37 12.74North-East-I 15.93 1.24 12.85Chhattisgarh 7.18 0.46 15.61Rajasthan 22.94 1.45 15.82Kolkata 25.09Mumbai 45.81Chennai 48,03Delhi 52.09National Average 28.25 1.74 16.24West Bengal (-) Kolkata 17.14 1.05 16.32Jharkhand 8.56 0.51 16.78Orisa 21.35 1.05 20.33Jammu and Kashmir 19.87 0.78 25.47Madhya Pradesh 17.15 0.67 25.60Assam 18.22 0.67 27.19Bihar 19.71 0.57 34.58Uttar Pradesh 18.89 0.52 36.33
(ii) Import Dependence for Telecom Equipment: The country had earlier
assiduously built up a domestic telecom equipment manufacturing industry in all the
three segments of the industry, namely in switching, transmission and terminal equip-
ment. Until 1985 or so, the manufacture of telecom equipment was exclusively
42
Page 43
reserved for the public sector, when in that year certain customer premises
equipments like the Electronic Private Automatic Branch Exchanges (EPABX) were
thrown open to the private sector.
In fact, the very first public sector enterprise established in independent India,
Indian Telephone Industries (ITI) was devoted to the manufacture of telephone switch-
ing and terminal equipment. In 1985, the government established the stand-alone
laboratory, Centre for Development of Telematics (c-DOT) to develop a family of digital
switching technologies, which it licensed to both government and private sector
enterprises. In fact, Mani (2005) had argued that the C-DOT is credited with the
establishment of a modern telecom equipment industry in the country. The govern-
ment's policy of public technology procurement practiced through its DOT, which was
the only telecom service provider for a very long time until the late 1980s also
contributed to the emergence and sustenance of
a domestic manufacturing industry in telecom equipment which fitted very well with
the overall policy of import substitution that was being followed.
The deregulation of both the equipment and services industries, the liberalisation
of the economy, the virtual abandoning of the public technology procurement policy
and above all the growth of the mobile communications industry put a leash on the
growth of a domestic manufacturing industry. This is because both the research and
production components of the industry focused only on fixed telephone
technologies and with the mobile communications becoming very important, the
demand for such equipment had to be increasingly met through imports.
A self-sufficiency rate (SSR) is defined as the ratio of domestic production to total
availability, where total availability is the sum of domestic production and net imports.
Two variants of the rate, SSRI and SSR2 have been computed (Figure 4): SSRI is based on
net availability data from the World Telecom Indicators 2006 of the International
Telecommunications Union and SSR2 is based on data on net availability of telecom
equipment developed by us on the basis of data on exports and imports of telecom
equipment from India contained in the online database, UN Commodity Trade Statistics
(UN Comtrade, http://comtrade.un.org/db/ ).
Although the level of SSR as indicated by the two series is slightly at variance with
each other, the direction of movement is roughly the same although SSRI shows a
much steeper fall in the self-sufficiency rate. Suffice to say that the industry, which
was more or less self-sufficient, is now increasingly dependent on equipment imports. In
other words, the phenomenal increase in the growth of services has not really
benefited the local Indian manufacturers as most of them do not have the technological
capability to service the new technology based equipment demanded by the service
industry.
The new telecom policy of 1999 had envisaged making the country a leading centre
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Page 44
for the manufacture of telecom equipment. But as to be discussed below, this is being
achieved by opening up the market to domestic investments by MNCS. Even for IT
solutions such as for software requirement, the domestic mobile service providers are
depending on foreign vendors. Although India is a leading exporter of computer
software and indeed telecom software, its own telecom service providers are
depending on foreign sources.
(iii) Low Penetration of the Internet: Internet services in India were launched in
1995 by Videsh Sanchar Nigam (VSNL). By the end of March 1998, the number of
subscribers had barely reached 1,40,000. In November 1998, the government
recognised the need for encouraging the spread of the internet in the country and
opened the sector for provisioning of services by private operators. To date there are
389 ISP licensees, but only 135 are operational. Public sector providers dominate with
56 per cent of the market (2006). Five ISPS account for 83 per cent of the market with
the leading provider alone accounting for 42 per cent. Approximately 60 per cent of
the users still use dial-up internet access. Broadband access was introduced in
October 2004, but its diffusion remains low. According to TRAI estimates (Table 10, P
43), there were 9.27 million internet subscribers as of end March 2007 and 2.34
million broadband subscribers.
Only about a quarter of the internet subscribers have changed over to broadband
access technologies. Majority of the subscribers use the older dial-up technologies for
accessing the internet. According to a recent study on internet in the country by the
internet and Mobile Association of India (2006), almost 76 per cent of PC users have
taken internet connections. This means that the two technical reasons militating
against the higher internet diffusion in the country is the lack of ownership of PCS and
not having a fixed telephone for accessing the internet. Although it is possible to access
internet over a mobile phone, the current generation of mobile technology that is
common in the country is 2 G and 2.5 G. Of course, it is generally held that whenever the
country moves over to 3G phones, accessing the internet over mobile phones is easier.
But given the much higher prices of 3G handsets, it is not very likely that its diffusion
will be high in the initial years. So the low internet diffusion in the country is a direct
consequence of the country becoming too reliant on mobile phones.
Table 10: Diffusion of Internet in India
(1995-2007, numbers in millions)
Number of internet
subscribers
Numbers of
Broadband
subscribersAugust 1995 0.01
March 1996 0.05
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Page 45
March 1997 0.09
March 1998 0.14
March 1999 0.28
March 2000 0.95
March 2001 3.04
March 2002 3.42
March 2003 3.64
March 2004 4.55 0.04
March 2005 5.55 0.18
March 2006 6.95 1.35
March 2007 9.27 2.34
4 The Silver Lining
The silver lining is that India is becoming a major manufacturing hub
especially for mobile handsets. This has the potential of increased demand for
semiconductor devices, like for instance Digital Signal Processors (DSP), and this
increased demand can catalyse the domestic manufacturing of semiconductor
devices. However, all the players are expected to be MNCS as no local companies are
available as of now. The government responded to this prospect by announcing a
semiconductor policy in 2007.
(i) India emerging as a Manufacturing Hub:
The New Telecom Policy of 1999 had envisaged the country becoming a
major manufacturing and export hub for telecom equipment.5 But for a long time this
sounded more like an empty statement not backed by reality where, as noted above,
the country was depending heavily on imports. This was reflected in the rates of self-
sufficiency presented earlier showing a declining trend. However, this situation has
been changing very rapidly, specifically since 2006. The more proximate cause of this
change is the large size of the domestic market for mobile communication. With a
monthly sale of over five million pieces since July 2006, India has now become the
second largest market for mobile handsets in the world, which all the major mobile
handsets and other equipment manufacturers have begun manufacturing locally since
2006 (Table 13).
Domestic output of telecom equipment, although fluctuating, has shown
some significant increases over the last two years (Figure 5). Also, although the
numbers of data points are few, one can see an almost perfect positive correlation
between the growth of the services sector and the equipment sector (Table 11,). My
argument is that this correlation is bound to become more significant in the future,
given the present trends.
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However, the industry is going to be dominated by affiliates of MNCS. In
fact, the telecom industry has been one of the major recipients of FDI in the country
since 1991 (Table 12). Although much of these investments (over 50 per cent) are in
the services segment, increasingly (since 2001), the equipment sector has ' received
about a quarter of the total investment. In short the domestic manufacturing industry
will be dominated by foreign enterprises (Table 13).
Further, the import dependence of the industry will in all probability
continue to be high for a few more years as the local manufacturing of mobile
equipment is at present based largely on fully knocked down (FKD) and semi-knocked
down (SKD) kits. But as the domestic manufacturing of electronic components and
semiconductor devices increase, the import dependence is sure to come down. In this
way the experience on this count will be similar to the Indian automotive industry.
This growth of the manufacturing sector has several spillover effects
besides direct employment. One of the more important of these is the demand for
electronic components and specifically semiconductor devices, which are used in the
manufacture of these equipment. According to estimates by the Indian
Semiconductor Association (formed in 2004), the total available market (after taking
into account imports) is bound to increase from $ 0.91 billion to over $ 16 billion by
2015. Mobile handsets and equipment will be one of the larger markets. Consequent
to this thinking, a number of proposals and projects for the semiconductor
manufacturing industry have been announced.6
If all the projects announced materialize, India will soon be safely in the
"bus" that it had missed several years ago as far as electronic hardware is concerned.
The government has responded to these private initiatives by announcing on March
21, 2007 a special financial incentive package to attract investments for setting up
semiconductor fabrication and other micro and nanotechnology manufacturing
industries in the country. The incentives are in the form of capital subsidies to the tune
of 20 per cent of the total investment expenditure incurred by a fab or eco-systems
units during the first 10 years, provided that these units are located within a special
economic zone (SEZ) and 25 per cent if they are located outside a SEZ. In addition the
units are also exempted from countervailing duties. Further they will have to be
established before March 31, 2010.
In response to this incentive package, the government is expecting $
10 billion worth of investment. It remains to be seen whether or not such an
investment will fructify. Such an incentive-induced investment strategy is sometimes
criticised as the government is essentially taxing the citizens of a country and
passing on the benefits to a few private sector individuals.
Overall, the growth of the telecom services industry seems to be leading
to the emergence of not just the telecom equipment industry, but also the electronic
components and semiconductor devices that are required for the manufacture of
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these equipments. Thus, the Indian telecom industry is an excellent example of the
growth of the services leading to the emergence of an attendant manufacturing
industry as well.
Table 11: Growth of services and Equipment Segments
(2002-03 to 2005-06, in Rs billion)
Telecom Equipment Telecom services
2002-03 144 480
2003-04 140 610
2004-05 160.9 800
2005-06 178.33 1,000
Table 12: FDI Inflows into India’s Telecom Industry
(1991-2007, in Rs million)
Total
FDI
Inflow
FDI
Inflow in
Telecom
Industry
Share
of FDI
in
Total
FDI
Cumulative
FDI
Cumulative
FDI for
Telecom
Industry
Share of
Telecom
FDI in
Total FDI
2003-
04
1,21,170 5,320 4.39 11,96,600 107,250 8.96
2004-
05
1,71,380 5,880 3.43 13,67,980 1,13,130 8.27
2005-
06
2,46,130 30,230 12.28 16,14,110 1,43,360 8.88
2006-
07
7,06,300 23,550 3033 23,20,410 16,6,910 7.19
Table 13: India as a Manufacturing Hub for Mobile Telecom Equipment (2007)
Name of manufacturer Facility and location
1 EricssonGSM Radio base station facility-Jaipur R&D
centre in Chennai
2 Elcoteq Contract manufacturer-Bangalore
3 Nokia Mobile handsets-Chennai
4 LG Electronics Mobile handsets-Pune
5 Flextronics Contract manufacturer-Chennai
6 Foxconn Contract manufacturer-Chennai
7 Motorola Mobile handsets R&D centres
8 Sony Ericsson Mobile handsets through Flextronics and
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Foxconn
9 ITI
GSM facility with Alcatel at Nainital and
Manakapuri UP CDMA with ZTE, China at
Bangalore
NOTES
BSNL's sales revenue emanate from two major segments: basic services
and cellular services. Of the two, although the share of basic services has gone down
even in 2005-06, its share was over 80 per cent of the total. So the performance of
BSNL depends to a large extent the way it manages fixed telephone services although
with the growth of mobile services the relative importance of fixed telephone
services is likely to come down over time. See the Annual Report 2005-06 of BSNL
at http://www.bsnl.co.in/company/results2oo5-o6/resultcomplete_o6.pdf (accessed
on August 25 2007)
In working out the ideas contained in this subsection, I have relied on my
own writings on the topic in Mani (2002) and also Desai (2006) and TRAI (2007c).
An Ordinance was promulgated on October 30, 2006 as the Indian Telegraph
(Amendment) Ordinance 2006 to amend the Indian Telegraph Act, 1885 in order to
enable support for mobile services and broadband connectivity in rural and
remote areas of the country. Subsequently, an Act has been passed on December
29, 2006 as the Indian Telegraph (Amendment) Act 2006 to amend the Indian
Telegraph Act, 1885. It may be pointed out that there is no consensus on the
number of internet and indeed broadband subscribers in the country. There are a
plethora of estimates widely diverging from each other. For a detailed account of
these various estimates, see Chandrasekhar (2006).
The policy had stated, "With a view to promoting indigenous telecom
equipment manufacture for both domestic use and export, the government would
provide the necessary support and encouragement to the sector, including suitable
incentives to the service providers utilising indigenous equipment". See the New
Telecom Policy of 1999 at the DoT web site: http://www.dot.gov.in/ntp/ ntp1999.htm
(accessed on August 27, 2007) These proposals are: Semlndia promoted by Vinod
Agarwal - $ 3 billion (12" fab) at Hyderabad; (ii) NANO-TECH Silicon India (NSTI)
promoted by Jun Min - $ 0.6 billion (8 fab) at Hyderabad; (iii) Hindustan
Semiconductor Manufacturing Co.
(HSMC) promoted by Deven Mehta - $ 4.5 billion (8 fab) - location to be
confirmed; (iv) India Electronics Manufacturing Corp IEMC promoted by Rajendra
Agarwal - $ 3.0 billion (12 fab) - location to be confirmed; (v) A number of chip companies
from around the world have established research centres in India. Qualcomm Inc, the
largest chip design house by revenue and a major US mobile chip company, has also
opened a software and chip development lab in India. The company uses it as a base
for research and development as well as a place from which to promote its CDMA
according to its web site; (vi) The state-owned semiconductor complex at Chandigarh
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(which has been taken over by the the department of space), is drawing up a road map
for a new project. It expects to rejuvenate SCL and put India on the 0.35-micron map in
the foreseeable future; (vii) The Indian Semiconductor Association has close to 100
members (2007).
REFERENCES: -
Central Statistical Organisation (2007): National Accounts Statistics 2007, Ministry of
Statistics and Programme Implementation, New Delhi.
Chandrasekhar, C P (2006): 'India Is Online but Most Indians Are Not',
Macroscan, September 25, http://www.macroscan.com/cur/sepo6/cur
26o9o6India_Online.htm.
Department of Telecommunications (2006): Annual Report 2005-06, Government of
India, New Delhi. - (2007): Annual Report 2006-07, Government of India, New Delhi.
Desai, Ashok (2006): India's Telecommunications Industry, History, Analysis, Diagnosis,
Sage Publications, New Delhi.
Indian Semiconductor Association (2006): Summary of the Frost and Sullivan Report
on Indian Semiconductor Industry and Its Eco System, Indian Semiconductor
Association, Bangalore.
Internet and Mobile Association of India (2006): Internet in India 2006, Mapping
the Indian Internet Space, IMRB International and IAMAI, New Delhi.International Telecommunications Union (2006): World Telecom Indicators 2006 on
CD-ROM, International Telecommunications Union, Geneva. Mani, Sunil (2002): 'Private
Financing Initiatives in India's Telecom Sector' in Sanford V Berg, M G Pollitt and
Masatsugu Tsuji (eds), Private Initiatives in Infrastructure, Edward Elgar, Cheltenham,
UK, Northampton, US, pp 118-39.
- (2005): Innovation Capability in India's Telecommunications Equipment Industry' in
A Saith and M Vijayabaskar (eds), ICT's and Indian Economic Development, Sage
Publications, New Delhi, pp 265-322.
- (2007): 'Revolution in India's Telecommunications Industry’, Economic & Political
Weekly, VolXLII, No 7, pp 578-80. Reserve Bank of India (2006): 'Invisibles in
India's Balance of Payments, Reserve Bank of India Bulletin, November, pp 1339-
74.
- (2007): Annual Report 2006-07, Reserve Bank of India, Mumbai. Technology
Information and Forecasting Assessment Council (TIFAC 2007): FDI in the R&D
Sector, Study of Its Pattern 1998-2003, TIFAC, New Delhi. Telecom Regulatory
Authority of India (TRAI) (2005): 'Study Paper on Indicators for Telecom Growth',
Study Paper No 2/2005, Telecom Regulatory Authority of India, New Delhi.
- (2006): 'Consultation Paper on the Review of Internet Services',
Consultation Paper No: 19/2006', Telecom Regulatory Authority of India,
New Delhi.
- (2007a): Annual Report 2005-06, Telecom Regulatory Authority of India, New Delhi.
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- (2007b): 'Draft Recommendations on Growth of Broadband', Telecom Regulatory
Authority of India, New Delhi.
- (2007c): A Journey towards Excellence in Telecommunications', Telecom
Regulatory Authority of India, New Delhi.
- (Various issues): Press releases dealing with monthly additions to subscriber
base, Telecom Regulatory Authority of India, New Delhi. World Information
Technology and Services Alliance (2006): Digital Planet 2006, The Global Informa-
tion Economy, Arlington, VA. World Markets Research Centre (2006): WMC Country
Reports: India (Telecoms).
1.5 SERVICES MARKETING - AN OVER VIEW:
Services dominate the development of any economy. The history of developed
economies show that services played major role in their economic development.
Approximately 70% of the GNP is from the services. Services act as catalyst in the
generation of income and employment, thus in then leads to expansion of market for
special products & services. Services are no longer an industrial by product. But has
become a powerful economic engine where the jobs are created and the energy for
gaining acceleration for economic growth is provided. Marketing orientation for services
is a need of present day business, service marketing plays a critical role in the
creation and delivery of customer focused services. Organizations which are engaged
in any line of business including specialized services have to lay major emphasizes on
services marketing. In the present day context no organization can think of surviving
without emphasizes on services.
A major shift from product orientation to customer orientation compiled
organization to set into customer relationship management (CRM), supply chain
management (SCM), pre-sales services, post sales services and a set of interactive
customer care services. Also a major shift in the life styles necessitated the business to
offer specialized services. Such as financial services, money management services,
Insurance product services, personal care services and a whole gamout of services
which are not linked to the product but to the customer needs. As such marketing of
services, play a strategic role in the survival and success of business entities.
Concepts of Services: The American Marketing Association defines services as
"activities, benefits or satisfaction which are offered for sale or provided in connection
with the sales of goods. In 1963 proposed by Regan suggested that services
represent either intangibles yielding satisfactions directly or intangibles yielding
satisfactions jointly when purchased either with commodities or other services.
Lehtinen in 1983 defined services as "an activity or a service of activities which
takes place in interaction with a contact person or a physical machine and which
provides consumer satisfaction".
Kotler and bloom in 1984 defined services as "Any activity or benefit that one
party can offer to another that is essentially intangible and does not result in the
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ownership of anything. Its production may or may not be tied to a physical product".
Gummension defined "services as something which can be bought and sold
which you can't drop on your foot".
In 1990 Gronross proposed working definitions: According to him " A service is an
activity or services of activities of more or less intangible that normally, not necessarily,
take place in the interactions between the customer and service employees and / or
physical resources or goods and / or system of the service provider, which are provided
as solution to customer problems".
Customer Services: The modern marketing concept mainly emphasizes on
customer services. According to this concept, all business decision in organizations are
to be based on consumer orientation. It is only by satisfying the customer needs that an
organization can survive and prosper in this competitive world, much more so, in the
growing dominance of consumer movement. Customer services assume vital important
in the marketing programs of all modern organization including service organizations.
Service marketing requires that service organizations should devote much of their
attention on offering efficient services to the customer. As the services are hidden and
invisible, they can gain confidence and good will through economic, efficient and
prompt customer services only. Customer is the most important person under modern
marketing. He is the central figure and axis around which all business activities revolve.
The main philosophy of any business organization is the treatment to be given to
customer is rightly described by Mahatma Gandhi as " A customer is the most important
visitor on our premises. He is not dependent on us, we are not doing him a favour by
serving him. He is doing us a favour by giving us an opportunity to do so".
Customer services means, satisfying the needs of a customer at the right time
and in the right manner. The customer service broadly includes giving expeditions
assistance, explaining various policies and systems answering each and every query
with balancing judgments and opinions giving due importance and respect to him. The
very objective of the service marketing requires that the service organization should
devote more attention offering efficient service to the customer. As services are
invisible they can gain confidence and goodwill through efficient and prompt customer
service only. Among the services organizations, telecommunications services are
largest with the widest network. Telecommunication services are more a public and
private utility service and a commercial organization. Therefore service orientation is an
imperative of its policies and operations.
The general trends in business organization in India consider customer relation
as an additional attempt to keep customer in good humour. And possibly this thinking
comes in the way of development of true and professional relationship with customers.
Customer relationship is necessity, not a luxury for business success. The Indian
Telecommunication is under going significant transformation with regard to its network
and technological up gradation. With the introduction of improved technologies
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and high degree of competitiveness, it has become more important for any
organization to take competitive advantage by providing better services to
customers. With proliferation of organization involved in the same line of business,
more and more customers are becoming alert about the competitive quality of the
product and services marketed by organizations. In the west, particularly in United
States of America, the management expects are constantly engaged in finding ways and
means for maximizing customer satisfaction. Seminars research has been initiated to
find how an organization can render. Telecom services taken an edge over its
competitive organizations in achieving higher growth rates.
Service Marketing: In modern times service marketing is gaining vital importance
particularly in view of the role of tertiary sector in economic development of a
country. Though same marketing principles and concepts are to be followed for
marketing of tangible goods and services, the practices and strategies vary to a
significant extent. This is mainly due to the unique nature and characteristics of
services as compared to the products which are tangible and verifiable.
1.6 NATURE AND CHARACTERISTICS OF SERVICES:
A service is any act or performance that one party can offer to another that
is essentially intangible and does not result in the ownership of any thing. Its
production may or may not be tied to a physical product1. Attending a play, calling the
police for assistance, traveling on public transportation, seeing a mental health
counselor and attending any place for recreation - all of them involve receiving a
service. Services have a number of unique characteristics that make them so different
from products some of the most commonly accepted characteristics are2
(i) In tangibility: Services are intangible, unlike physical products they cannot be
seen, tasted, felt, heard of smelled before they are brought. Thus, a patient getting
plastic surgery cannot seen the result before the purchase and prosper cannot
experience the service before he bought the life insurance under these
circumstances, purchase requires having a confidence in the service provider.
(ii) Inseparability: A service is inseparable from the source that provides it. Its
very act of being created requires the source, whether a person or machine, to be
present. In other words, production and consumption occur simultaneously with
services. This is in contrast to a product which exists whether or not its source is
present.
(iii) Variability: A service can be highly variable, depending on who is providing it,
and even when it is being provided. Purchasers of services are aware of their high
variability and engage in normal risk reducing behaviour by talking to others and
trying to learn who the best provider is. Service firms should make an effort to deliver
high and consistent quality in their service offers. The major step is to develop a good
personal selection and training program. Another step for the service providers is to
develop adequate customer satisfaction monitoring system. The main tools for this are
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suggestion and complaint systems, customer surveys and comparison shopping.
(iv) Perish ability: Services cannot be stored. While a car can be kept in inventory
until it is sold the revenue on an un occupied theater seat is lost for ever. The perish-
ability of services is not a problem when demand is steady, because it is easy to staff
the services in advance. When demand fluctuates heavily, service firms have difficult
problems. (v) Ownership: When one buy a product one becomes the owner be it a
pencil, book, shirt, refrigerator or car. In case of service, one may pay for its use but
one never own it. By buying a ticket, a customer can see the evening film show in the
local cinema theatre; but paying wages one can hire the services of a chauffeur who will
drive his car. In the care of a service, the payment is not for purchase, but only for the
use or access to or for hire of items or facilities.
Offer of Services: The service component can be minor or a major part of the total
offer. In fact, the offer can range from a pure "good" on the one hand to a pure service
on the other hand. Four categories of offer can be distinguished.
i) A Pure tangible good: Here the offer consists primarily of a tangible good such
as
Soap, tooth paste or salt. No services accompany the product.
ii) A tangible good with accompanying services:
Here the offer consists of a tangible good accompanied by one or more services
to enhance its consumer appeal. For example an automobile manufacturer sells an
automobile with a warrant, services and maintenance instructions, and so on. Levitt
observes that "the more technically sophisticated the generic product (Ex: Cars and
computers), the more dependent are its sales on the quality and availability of its
accompanying customer services (Ex. Display rooms, delivery, repairs and maintenance,
application aids, operator training, installation advice, warrants fulfillment)4
iii) A major service with accompanying minor goods and services: Here the
offer consists or a major service along with some additional services and / or
supporting goods. For example, air line passengers are buying transportation services.
They arrive at their destinations with out anything tangible to show for their
expenditure, however the trip includes some tangibles such as food and drinks, a ticket
stub, and an air line magazine. The service requires a capital intensive goods called an
aero plane for its realization. But the primary item is a service.
iv) A pure service: Here the offer consists primarily of a service examples include
psychotherapy and messages. The psychoanalyst gives a pure service, with any
tangible elements consisting of an office and couch. As a consequence of this
varying goods to service mix, it is difficult, to generalize about services unless some
further destinations are made. First, services vary as to whether they are people -
based or equipment - based. Equipment - based services vary in turn depending on
whether they are automated or monitored by unskilled or skilled operators. People
based services also vary by whether they are provided by unskilled, skilled or
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professional workers. Some of the services required the client's presence. Thus brain
surgery involves the client's presence, but a car repair does not. If the client must be
present, the service provider has to consider his or her needs. Thus beauty shop
operators will invest in their shop's decor, play background music, and engage in light
conversation with the client. Services differ as to whether they meet a personal need
(Personal Services) or a Business need (Business Services). Physicians will price physical
examination differently for private patients versus company employees on a retainer.
Service providers typically develop different marketing programs for personal and
business markets.
Finally, service providers differ in their objectives (Profit or non-profit) and
ownership (private or public) there two characteristics, when crossed, produced four
quite different types as private profit, private non-profit, public profit and public non-
profit organizations.
1.7 APPLICATION OF MARKETING FOR MANUFACTURING AND SERVICE FIRMS:
Service based organizations typically lag behind manufacturing firms in their
development and use of marketing. George and Barksdale surveyed four hundred
service and manufacturing firms and arrived at following conclusions.
In comparison to manufacturing firms, service firms appears to be
a) Less likely to have marketing mix activities carried out in the
marketing department.
b) Less likely to perform analysis in the offering area.
c) More likely to handle their advertising internally rather than go to
outside agencies.
d) Less lively to have an overall sales plan.
e) Less likely to develop sales training programs.
f) Less likely to use marketing research firms and marketing consultants and
g) Less likely to spend as much on marketing when expressed as a
percentage of gross sales.
There are several reasons for the negligence of marketing. Many service
organizations are small and do not use management techniques such as marketing which
they think would be expensive. Many professional and non-profit organizations are
antagonistic to the idea of marketing believing that it is unprofessional to apply any
marketing planning to their services and even prohibiting it in their codes of ethics.
Some service organizations had so much demand for years that they had no need for
marketing until recently.
Today, as competition intensifier, costs rise, productivity stagnates, and
service quality goes down, an increasing number of services organizations are taking
an interest in marketing. In service industries such as stock brokerages, insurance,
lodging, law, telecommunications and accounting, the marketing concept have come
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unevenly.
1.8 TASK OF SERVICE ORGANIZATION:
Service companies face three tasks, those of increasing their (i) Competitive
differentiation (ii) Service Quality and (iii) productivity. Although there interact and to
some extent compete, we will examine each separately.
(i) Managing Differentiation: Services marketers frequently complain about the
difficulty of differentiating their services from those of competitors. The deregulation
of several major service industries - communication, transportation, energy,
banking precipitated intense price competition. To the extent that customers view a
service as fairly homogeneous, they care less about the provider than the price. The
solution to price competition is to develop a differentiated offer and image. The service
company can add innovative features to distinguish its offer. What the customer
expects is called the primary service package, and to this can be added secondary
service features.
The only problem is that most service innovations are easily copied. Few of them
are pre-emptive in the long run. Still, the service company that regularly
researches and develops service innovations will gain a succession of temporary
advantages over its competitors and through earning an innovative reputation, may
retain customers who want to go with the best. Service companies can also work on
differentiating their image, specially through symbols and branding.
(ii) Managing Service Quality: One of the major ways to differentiate a service
firm is to deliver consistently higher quality service than competitors. The key is to
meet or exceed the target customer's service quality expectations. Their expectations
are formed by their past experiences, word of mouth, and service firm advertising.
The customers choose providers on this basis. After receiving the service, they compare
the perceived services with the expected service. If the perceived service falls below
the expected service, customers lose interest in the provider. If the perceived service
meets or exceeds their expectations, they are apt to use the provider again.
Berry and Parasuraman suggested five general dimensions that influence
customer's assessment of service quality. They are
Reliability : The ability to perform the promised service dependably and
accurately.
Tangibles : The appearance of physical facilities equipment, personnel and
Communication strategies.
Responsiveness: The willingness to help customer and to provide prompt service.
Assurance : The knowledge and courtesy of employees and their ability to
Convey trust and confidence.
Empathy : The provision for caring individual attention to customers.
Therefore, the service provider needs to identify target customers, wants in the
way of service quality unfortunately, service quality is harder to get agreement on the
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quality of a haircut than on the quality of a hair dryer yet, customers will make
judgments about service quality, the service providers need to know customer
expectations in order to design effective services. Clearly, customers will be satisfied if
they get what they want, when they want it, where they want it, and how they want it.
Still, it is necessary to research the specific customer criteria for any specific service.
Thus, a bank customer / or a telecom customer may expect on a trip to a bank or to a
customer service center that they will not wait in line more than five minutes, that
the feller or the clerk will be courteous, knowledgeable and accurate, and that the
computer will not break down, service providers must do their best to identify the
expectations of their target customers with respect to each specific services. This does
not mean that the service provider will be able to meet the customer's wishes. The
service provider faces trade - off s between customer satisfaction and company
profitability. What is important is that the service provider clearly defines and
communicates the service level that will be provided, so that the employees know that
they must deliver and the attracted customers know what they will get.
(iii) Managing Productivity: Services firms are under great pressure to increase
productivity. Since the service business is highly labour intensive, costs have been
rising rapidly. There are six approaches to improve service productivity. The first
is to have service provider work harder or more skillfully for the same pay. Working
harder is not a likely solution, but working more skillfully can occur through better
selection and training programs. The second is to increase the quantity of service by
surrendering some quality. The third is to "Industrialize the service" by adding
equipment and standardizing production. Levitt recommended that companies adopt a
"manufacturing attitude" towards producing services as represented by Me Donald's
assembly - line approach to fast food retailing culminating in the "Technological
Hamburger7" commercial dishwashing, jumbo jets, multiple - unit motion picture
theatres - all represent technological expansion of services.
The fourth is to reduce or make absolute the need for a service by inventing a product
solution. For example, television substituted for out-of-home entertainment, the wash-
and-wear shirt reduced the need for commercial laundry, and certain antibiotics reduced
the need for tuberculosis sanitariums. The fifth is to design a more effective service.
How to-quit-smoking clinics and jogging may reduce the need for expensive medical
services later on. Hiring paralegal workers reduces the need for expensive legal
professionals. The sixth is to give customers incentives to substitute company labour
with their own labour for example. Business firms that sort their own mail before
delivering it to the post office pay lower postal charges. Companies must avoid pushing
productivity so hard that it reduces perceived quality. Some productivity steps, by
standardizing quality, increase customer satisfaction, other productivity steps lead to
too much standardization and not the customer of customized services.
1.9 MARKETING MIX IN THE CASE OF SERVICE MARKETING:
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Marketing is an art, and the marketing manager, as a head, must creatively
marshal all his marketing activities to advance, both the short and the long run interests
of his firm8. In essence, a marketer is a "mixer of ingredients' who blends various
marketing activities in a manner that further the interests of the firm. The crux of any
marketing strategy is to bring about the desired operations in the light of prevailing
circumstances. The strategy basically involves the utilization of the available tools, and
their planned manipulation to get optimum results in a limiting environment. The
phrase "Marketing mix" was first used by Neil H. Borden. The most regular 4 Ps' frame
work is suggested by McCarthy with the marketing mix variables - product, place,
promotion and price. Since the marketing mix tools originated from the study of the
manufacturers i.e., the organization engaged in production and marketing of goods —
it is more oriented to deal with goods marketing situations. However, service
characteristics are significantly different from goods, and so are the challenges in
their marketing. Therefore, the conventional marketing mix needs to be modified and
broadened. Given the service characteristics and activities in service firms, a seven P's
frame work for services has been proposed9. The additional prescribed Ps in this
framework refer to activities that are essential to meet the challenges posed by
intangibility, service provider, customer interaction and customer involvement in service
consumption and production. The service marketing MD is as follows
Service core, levels, additional services branding.
Price discounts, terms of payment.
Location channels of distribution, coverage.
Advertising, promotion, publicity.
Customer - provider, relationship, training culture, skills, and
attitudes.
Physical Evidence: Ambience, appearance, equipment machines,
buildings, physical facilities.
Process: Activity sequence, quality management, customer participation, delivery
process.
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Bharti Airtel
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti
Group has a diverse business portfolio and has created global brands in the
telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail
Pvt. Ltd. under a MolJ with Wal-Mart for the cash & carry business. It has successfully
launched an international' venture with EL Rothschild Group to export fresh agri
products exclusively to markets in Europe and USA and has launched Bharti AXA Life
Insurance Company Ltd under a joint venture with AXA, world leader in financial
protection and wealth management.
Airtel comes to you from Bharti Airtel Limited, India's largest integrated and the first
private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel
since its inception has been at the forefront of technology and has steered the course of
the telecom sector in the country with its world class products and services. The
businesses at Bharti Airtel have been structured into three individual strategic business
units (SBU's) - mobile services, broadband & telephone services (B&T) & enterprise
services. The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the B&T business offers' broadband &
telephone services in 94 cities. The Enterprise services provide end-to-end telecom
solutions to corporate customers and national & international long distance services to
carriers. All these services are provided under the Airtel brand.
Bharti Airtel offers GSM mobile services in a l l the 23-telecom circles of India and is the
largest mobile service provider in the country, based on the number of customers. The
group offers high speed broadband internet with a best in class network. With Landlinc
services in 94 cities & help to stay in touch with friends & family and the world. The
group focuses on delivering telecommunications services as an integrated offering
including mobile, broadband & telephone, national and international long distance and
data connectivity services to corporate, small and medium scale enterprises. The
Company compliments its mobile and broadband & telephone services with national and
international long distance services. It has over 35.016 route kilometers of optic fibre on
its national long distance network. For international connectivity to east, it has a
submarine cable landing station at. For international connectivity to the west, the
Company is a member of the South East Asia-Middle East-Western Europe -4 (SEA-ME-
WE-4) consortium along with 1 5 other global telecom operators.
Profile
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Bharti Airtel is one of India's leading private sector providers of telecommunications
services based on an aggregate of 50,950,700 customers as on October 31. 2007.
consisting of 53,014,758 GSM mobile and 2,106,122 broadband & telephone customers.
The businesses at Bharti Airtel have been structured into three individual strategic
business units (SBU's) - mobile services, broadband & telephone services (B&T) &
enterprise services. The mobile services group provides GSM mobile services across
India in 23 telecom circles, while the B&T business group provides broadband &
telephone services in 94 cities. The enterprise services group has two sub-units - carriers
(long distance services) and services lo corporates. All these services are provided under
the Airtel brand.
Company shares are listed on The Stock Exchange. Vlumbai (BSE) and The National Slock
Exchange of Ind ia Eimitcd (NSE),
Partners
The company has a strategic alliance with SingTel . The investment made by SingTel is
one of the largest investments made in the world outside Singapore, in the company.
The company's mobile network equipment partners include Ericsson and Nokia. In the
case of the broadband and telephone services and enterprise services (carriers),
equipment suppliers include Siemens, Nortel, Corning, among others. The Company also
has an information technology alliance with IBM for its group-wide information
technology requirements and with Nortel for call center technology requirements. The
call center ■operations for the mobile services have been outsourced to TBM Daksh.
llinduja TMT, Tcletcch & Mphasis.
Shares
The equity shares of Bharti Airtel are currently listed on National Stock Exchange of India
Limited (NSE) and The Stock Exchange, Mumbai, (BSE). Bharti Airtel offered 185,336.700
equity shares in the initial public offering (IPO) and raised Rs 8,340.15 million through this
process. The shares were over subscribed 2.56 times.
With th is IPO, Bharli Airtel established certain important landmarks in the history of the
Indian capital market. Together with being the first 100% book building process that this
country has seen, the listing was completed within a record time often working days, of
the close of the issue. Moreover the process of allotment and issue of shares was also
completed within one day of the last day of pay-in.
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The book running lead managers for the IPO were JM Morgan Stanley and DSP Merrill
Lvnch and the registrars to the issue was Karvv Consultants Limited.
BSNL (Bharat Sanchar Nigam Ltd) :
Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest
Telecommunications Company providing comprehensive range of telecom services in
India:
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Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN.
VSAT. VoIP services. IN Services etc. Within a span of five years it has become one of the
largest public sector unit in India.
BSNL has installed Quality Telecom Network in the country and now focusing on
improving it. expanding the network, introducing new telecom services with ICT
applications in villages and wining customer's confidence. Today, it has about 47.3
million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity,
more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC
Cable, 63730 Rkrn of Microwave Network connecting 602 Districts, 7330 cities/towns and
5.5 Lakhs villages.
BSNL is the only service provider, making focused efforts and planned initiatives to
bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in
the country to beat its reach with its wide network giving services in every nook & corner
of country and . operates across India except Delhi & Mumbai. Whether it is inaccessible
areas of Siachen glacier and North-eastern region of the country. BSNL serves its
customers with its wide bouquet of telecom services. •
BSNL is numero uno operator of India in all services in its license area. The company
offers vide ranging & most transparent tariff schemes designed to suite every customer.
BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering
24 percent of a l l mobile users as its subscribers. That means that almost every fourth
mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead
of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the
subscriber base and 92 percent share in revenue terms.
BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who
access Internet through various modes viz. Dial-up. Leased Line, DIAS, Account Less
internct(CLl). BSNL has been adjudged as the NUMBER ONE ISP in the country.
BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure
that provides convergent services like voice, data and video through the same Backbone
and Broadband Access Network. At present there are 0.6 million DataOne broadband
customers.
The company has vast experience in Planning, Installation, network integration and
Maintenance of Switching & Transmission Networks and also has a world class ISO 9000
■ certified Telecom Training Institute.
Scaling new heights of success, the present turnover of BSNL is more than Rs.351,820
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million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US S 2.26 billion)
for last financial year. The infrastructure asset on telephone alone is worth about
Rs.630,000 million (US $ 14.37 billion).
BSNL plans to expand its customer base from present 47 millions lines to 125 million lines
by December 2007 and infrastructure investment plan to the tune of Rs. 733 cores (US$
16.67 million) in the next three years.
The turnover, nationwide coverage, reach, comprehensive range of telecom services and
the
Desire to excel has made BSNI. The No. 1 Telecom Company of India.
VISION
To become the largest telecom Service Provider in Asia.
MISSION
I. To provide world class State-of-art technology telecom services to its customers
on demand at competitive prices.
II. To Provide world class telecom infrastructure in its area of operation and to
contribute to the growth of the country's economy.
OBJECTIVES
To be a Lead Telecom Services Provider.
To provide quality and reliable fixed telecom service to our customer and there by increase customer's confidence.
To provide mobile telephone service of high quality and become no. 1 GSM operator in its area of operation.
To provide point of interconnection to other service provider as per their
requirement promptly.
To facilitate R & D activity in the country.
Contribute towards:
i. National Plan Target of 500 million subscriber base for the country by December
2010.
ii. Broadband customers base of 20 million in India by 2010 as per Broadband
Policy 2004.
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iii. Providing telephone connection in villages as per government proposition.
iv. Implementation of Triple play as a regular commercial proposition.
Cellular Service Overview
India's fastest growing cellular service , along with postpaid and prepaid services
brings cellular telephony to the masses, through innovative technology and
strategic pricing.
This ambitious service uses state-of-the-art GSM technology to attain global
excellence and leadership in business. Their entry into this sector has brought GSM
cellular service at an affordable cost to the common man. All serving a single
objective, to provide better communication to millions across India.
Customers have reposed tremendous faith in BSNL and it has enrolled over 30 Lakh Cellular
customers within ten months of launch of Cellular service, an unprecedented mark in Indian
Cellular Market.
BSNL Service_Plus.
CeliOne provides a number of Value Added Services. These services helps BSNL
serve you better & enhance the ease & quality of communication thus bringing
global connectivity at doorstep.
Voice Mail Service
Value Added Services S|M_Based_sffirvi££- SyviSjtassd Services
Short Message Service (SMS)
Group Messaging
National & International tariffs
Call forwarding
Corporate Virtual Private Network
Call conferencing
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Friend and Family Talk
Call waiting and Call holding facility
Minified Messaging Services: This provides Voice mail, FAX, e-mail, text to
voice services on your mobile phone. So stay in touch with your nears and
dears by means you like the most.
Wireless Application Protocol (WAP): Surf WAP enabled websites on Internet
using this service.
Telephone
BSNL is the largest telecom operator in India and is known to everybody for
Basic Telephony Services for over 100 years. Presently the Plain old, countrywide
telephone service is being provided through 32,000 electronic exchanges, 326 Digital
Trunk Automatic Exchanges (TAX), Digitalized Public Switched Telephone Network
(PSTN) all interlinked by over 2.4 lakh km of Optical Fiber Cable, with a host of Phone
Plus value additions to our valued Customers. BSNL's telephony network expands
throughout the vast expanses of the country reaching to the remotest part of the
country.
BSNL is in the process of commissioning of a world class, multi-gigabit,
multi-protocol, convergent IP infrastructure through National Internet Backbone-II
(NIB-II), that wil l provide convergent services through the same backbone and
broadband access network.
The Broadband service will be available on DSL technology (on the same
copper cable that is used for connecting telephone), on a countrywide basis spanning
198 cities.
In terms of infrastructure for broadband services NIB-II would put India
at par with more advanced nations. The services that would be supported include
always-on broadband access to the Internet for residential and business customers,
Content based services,-Video multicasting, Video-on-demand and Interactive
gaming, Audio and Video conferencing, IP Telephony, Distance learning, messaging:
plain and feature rich, Multi-site MPLS VPNs with Quality of Service (QoS) guarantees.
The subscribe will be able to access the above services through Subscriber Service
Selection System (SSSS) portal.
Key Objectives
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To provide high speed Internet connectivity (upto 8 Mbps)
To provide Virtual Private Network (VPN) service to the broadband customers
To provide dial VPN service to MPLS VPN customers.
To provide multicast video services, video-on-demand, etc, through the
Broadband Remote Access Server (BRAS).
To provide a means to bill for the aforesaid services by either time-based or
Volume-based billing. It shall provide the customer with the option to select
the services through web server
To provide both pre-paid and post paid broadband services
Technical Capability of the Backbone
The Broadband Service will be given through the state of the art Multi Protocol Label
Switching (MPLS) based IP Infrastructure, which is designed to provide reliable routes
to cover all possible destinations within and outside the country. Layer 1 of the
network will consist of a high speed Backbone comprising of 24 powerful Core
Routers connected with high speed 2.5 Gbps (STM-16) links. The routers are located
on the national DWDM network interfacing at STM-16 optical level to provide for high
transmission speeds. ** Services available through Broadband
High speed Internet Access: This is the-always-on Internet access
service with speed ranging from 256 kbps to 8 Mbps.
Bandwidth on Demand: This will facilitate customer to change band
width as per his / her requirement. For example a customer with 256kbps
can change to Mbps during the video Conferencing session.
Multicasting: This is to provide video multicast services for application in
distance education, telemedicine etc
Dial VPN Service: This service allows remote users to access their private
network securely over the NIB-II infrastructure.
Video and Audio Conferencing:
Content based Services: Like Video on Demand, Interactive Gaming,
Live and line shifted TV
The Broadband Service has been launched in Bangalore, Chennai, Hyderabad and
Kolkata from 14th January 2005. Soon, it will be extended to more than 200 cities.
Wireless in Local Loop (WLL) Mobile Telephone Connections:
BSNL WLL-M is a communication system that connects customers to the BSNL Landline
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network using radio frequency signals instead of conventional copper wires, for the full or
part connection between the subscriber and the exchange this comes with superior voice
quality and high speed data capabilities. CDMA is popular with more than 100 million
subscribers worldwide, and the number keeps on increasing exponentially.
Internet
BSNL is India's no. 1 Internet service provider with more than 17 lakh subscribers,
providing Internet service throughout the entire country (except in New Delhi and
Mumbai) under the brand name of "Sancharnet". Sancharnet provides free all India
roaming and enables, it's users to access their accounts, using the same access code
(172233) and user ID from any where in the Country. In order to make Internet
available through out the length and breadth of the Country Internet Dhabas are
being commissioned at all the Block Headquarters. BSNL has also started D1AS and
Account free internet access (CLI based) facility on few select cities recently.
© BSNL has launched "SANCHARNET CARD" recently. The Sancharnet Card " prepaid
Internet Access Card with following features for customers:
Is a Self-register for internet access with your choice of userid Renew your existing
Sancharnet Account Wide Range of Internet Access Packages
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IDEA:
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE) in March 2007.
As India's leading GSM Mobile Services operator, IDEA Cellular has licenses
to operate in all 22 Service Areas. Presently, operations exist in 11 Service Areas
covering Delhi, Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh,
Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh, UP-East, Rajasthan and
Kerala. With a customer base of over 26 million, IDEA Cellular's footprint currently covers
approximately 60% of India's telecom population.
A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has
the distinction of offering the most customer friendly and competitive Pre Paid offerings,
for the first time in India in an increasingly segmented market.
Customer Service and Innovation are the drivers of this Cellular Brand. A
brand known for their many firsts, Idea is only operator to launch GPRS and EDGE in the
country. Idea has received international recognition for its path-breaking innovations
when it won the GSM Association Award for "Best Billing and Customer Care Solution" for
2 consecutive years.
IDEA Cellular is part of the Aditya Birla Group, a US$ 24 billion corporation
with a market cap of US$ 31.5 billion and in the league of Fortune 500. Anchored by an
extraordinary force of over 100,000 employees belonging to 25 different nationalities,
over 50% of its revenues flow from its overseas operations. The Group has been
adjudged ‘The Best Employer in India and among the Top 20 in Asia' by the Hewitt-
Economic Times and Wall Street Journal Study 2007.
The combined holding of the Aditya Birla Group companies in IDEA stands at around 57
percent.
With ambitious future plans, the company is poised for rapid growth across the whole
country.
Our Service Areas
The Indian telecommunications market for mobile services is divided into 22 "Service
Areas" classified into "Metropolitan", Category "A", Category "B and Category "C "service
areas by the Government of India. These classifications are based principally on a
Service Area’s revenue generating potential.
Idea operational 11 Service Areas are broken up into Established and New Service Areas.
Established Service Areas
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The established service areas are Delhi, Andhra Pradesh, Gujarat and Maharashtra,
Haryana, Kerala, Madhya Pradesh and Uttar Pradesh (West).
Licenses for the Maharashtra and Gujarat Service Areas were awarded in
December 1995, with network rollout and commercial launch achieved in 1997. In
January 2001 the mobile operations in Andhra Pradesh Service Area were integrated with
IDEA through a merger with Tata Indicom Cellular Limited. In June 2001, the mobile
operations in Madhya Pradesh Service Area were fully integrated with IDEA through an
acquisition of RPG Cellcom Limited. In October 2001, the license for Delhi Service Area
was acquired during the fourth mobile license auction, with network rollout and
commercial launch in November 2002. In January 2004, Escotel Mobile Communications
Private Limited ("Escotel"), was acquired with its original licenses in the Service Areas of
Haryana, Uttar Pradesh (West) and Kerala. All these Service Areas were re-branded and
integrated with IDEA in June 2004.
New Service Areas
The New Service Areas are Uttar Pradesh (East), Rajasthan and Himachal Pradesh.
Licenses for these New Service Areas were acquired through the acquisition of Escotel
(Escorts Telecommunications Limited).
Following significant investment in the roll-out of network in the New Service Areas,
amounting to approximately Rs. 4,678 million upto September 30, 2006, a full
commercial launch of mobile services was achieved in the New Service Areas between
September and November 2006 in a manner which also met the network roll-out
requirements of the licenses in 2007.
Brand Information
The brand Idea. It is almost impossible to disintegrate brand Idea from the
corporate Idea. Brand values are the company values and vise versa.
Brand Vision: It goes without saying that the brand vision of idea mirrors the
company’s vision. The brand mission statement is...... To be the most customer-focused
mobile service brand, continuously innovating to help liberate our customers from the
shackles of time & space.
IDEA - Brand Values Innovate, Stimulate, Liberate ....
It is these brand values, which have made us a formidable player in the telecom
industry. Innovations that stimulate the customer and liberate him from the shackles of
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time and space are the core of our brand. This is what we strive for. Nothing, more,
nothing less, nothing else.
IDEA - Brand Mission
The India footprint Idea Any where connectivity-bringing India closer. The
Technology Advantage Idea Tomorrow's technology to enrich today. The Customer Focus
Idea Make a single interaction a lasting relationship. The Employee Focus Idea Nurture
the roots that nurture our ideas.
Brand Initiatives -
Our aim, through media buying and planning, is to create year round
impact. With the objective of strengthening our brand, we work with strategic
communication partners on campaigns like sponsorship of the Idea International Indian
Film Academy awards and the television programs “Idea Rocks India”, “Idea Star Singer”
and “Idea Andhra Idol”. We seek engagement with subscribers on a variety of levels,
from major celebrity fashion shows to small local events timed to coincide with new
product offerings.
Since August 2003, we have commissioned a Brand Track Index Study to
evaluate the health of our brand. The Brand Track Index Study is a monthly study
conducted by TNS, a marketing consultant engaged by us to evaluate our brand using
face-to-face interviews on a random sample of mobile users a well as those intending to
purchase mobiles within the next three months. According to the study our brand is
perceived as “reliable/trustworthy” and one that “offers cheaper and good promotional
offers”. We have improved our rating in the Brand Track Index calculated by the study in
the past year reflecting, we believe, the growing strength of our brand.
The main communication medium for the Idea brand is television, where
we seek strategic Idea brand coverage in various formats. Billboards and hoardings are
used as a secondary medium, customized for specific regional preferences to
communicate effectively at the local level. We also use other mass communication
media such as the press and radio to communicate price plans and other tactical and
customer information.
All our key initiatives are subjected to a rigorous testing and launch
process to ensure accountability for all advertising spend and improve the chances of
success of a new product. This process is followed up with extensive briefing of call
center agents and sales personnel and real-time tracking of the impact of the
communication and feedback from subscribers.
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Reliance
A dream come true The Late Dhirubhai Ambani dream of a digital India an India
where the common man would have access to affordable means of information and
communication. Dhirubhai, who single-handedly built India's largest private sector
company virtually from scratch, had stated as early as 1999: "Make the tools of
information and communication available to people at an affordable cost. They w i l l
overcome the handicaps of illiteracy and lack of mobility."
It was with this belief in mind that Reliance Communications (formerly Reliance
Infocomm) started laying 60,000 route kilometres of a pan-India fibre optic backbone.
This backbone was commissioned on 28 December 2002, the auspicious occasion of
Dhirubhai's 70th birthday, though sadly after his unexpected demise on 6 July 2002.
Reliance Communications has a reliable, high-capacity, integrated (both wireless and
wireline) and convergent (voice, data and video) digital network. It is capable of
delivering a ranee of services spanning the entire infocomm (information and
communication) value chain, including infrastructure and services for enterprises as
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well as individuals, applications, and consulting.
Today, Reliance Communications is revolutionizing the way India communicates
and networks, truly bringing about a new way of life.
Few men in history have made as dramatic a contribution to their country's
economic • fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani.
Fewer still have left behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the
true
Genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud
patriot,
The leader of men, the architect of India's capital markets, the champion of
shareholder interest.
But the role Dhirubhai cherished most was perhaps that of India's greatest wealth
creator.
In one lifetime, he built, starting from the proverbial scratch, India's largest private
sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed
capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades,
he converted this fledgling enterprise into a Rs 60,000 crorc colossus—an
achievement which earned Reliance a place on the global Fortune 500 list, the first
ever Indian private company to do so.
Dhirubhai is widely regarded as the father of Ind ia 's capital markets. In
1977, when Reliance Textile Industries Limited first went public, the Indian stock
market was a place patronised by a small club of elite investors which dabbled in a
handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail
investors to participate in the unfolding Reliance story and put their hard-earned
money in the Reliance Textile IPO, promising them, in exchange for their trust,
substantial return on their investments. It was to be the start of one of great stories
of mutual respect and reciprocal gain in the Indian markets.
Under Dhirubhai's extraordinary vision and leadership, Reliance scripted one of the
greatest growth stories in corporate history anywhere in the world, and went on to
become India's largest private sector enterprise.
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Through out th is amazing journey. Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires out of
many of the initial investors in the Reliance stock, and creating one of the world's
largest shareholder families.
VISION
"We will leverage our strengths to execute complex global-scale projects to facilitate
leading-edge information and communication services affordable to all individual
consumers and businesses in India.
We will offer unparalleled value to create customer delight and enhance
business productivity.
We will also generate value for our capabilities beyond Indian borders and enable
millions of India's knowledge workers to deliver their services globally."
BUSINESS
India "s leading integrated telecom company Reliance Communications is the flagship
company of the Anil Dhirubhai Ambani Group (A DAG) of companies. Listed on the
National Stock Exchange and the Bombay Stock Exchange, it is India's leading
integrated telecommunication company with over 38 mi l l i on customers.
Our business encompasses a complete range of telecom services covering mobile and
fixed l ine telephony. It includes broadband, national and international long distance
services and data services along with an exhaustive range of value-added services
and applications. Our constant endeavour is to achieve customer delight by
enhancing the productivity of the enterprises and individuals we serve.
Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002,
coinciding with the joyous occasion of the late Dhirubhai Ambani's 70th birthday,
was among the in i t ia l iniiiatives ofRelianee Communications. It marked the
auspicious beginning of Dhirubhai's dream of ushering in a digital revolution in India.
Today, we can proudly c la im that we were instrumental in harnessing the true power
of information and communication, by bestowing it in the hands of the common man
at affordable rates.
We endeavour to further extend our efforts beyond the traditional value chain by
developing and deploying complete telecom solutions for the entire spectrum of
society.
Looking back, looking forward
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Reliance Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by
Shri Dhirubhai H Ambani (1932-2002), ranks among India's top three private sector
business houses in terms of net worth. The group has business interests that range
from telecommunications (Reliance Communications Limited) to financial services
(Reliance • Capital Ltd) and the generation and distribution of power (Reliance
Energy Ltd).
Reliance ADA Group's flagship company. Reliance Communications is India's largest
private sector information and communications company, with over 38 mi l l ion
subscribers. It has established a pan-India, high-capacity, integrated (wireless and
wireline), convergent (voice, data and video) digital network, to offer services
spanning the entire infocomm value chain.
Other major group companies Reliance Capital and Reliance Energy are
widely acknowledged as the market leaders in their respective areas of operation.
Anil D. Ambani regarded as one of the foremost corporate leaders of
contemporary India,Shri Anil D Ambani, 48, is the chairman of all listed companies
of the Reliance ADA Group, namely, Reliance Communications, Reliance Capital,
Reliance Energy and Reliance Natural Resources limited.
Free talk time with Reliance prepaid
Reliance Infocomm is slated to nationally launch its prepaid mobile service between
January 15 and 18.
To give the GSM operators a run for their money. Infocomm is l ikely to offer a
minimum Rs 1,500 worth of free talk-time as part of its prepaid promotional offer for
an undecided span.
The free prepaid talk-time options ( in the Rs 1,500-Rs 4,000 range) will be bundled
with multiple CDMA handset offers. Which means, a l l Infocomm prepaid customers will
have to pay upfront the full price of the handset of their choice to activate their
connections.
Reliance prepaid customers, it is learnt, will be allowed to use their free talk-time to
make local and STD calls besides sending SMS. They will be unable to make ISD calls
with such free talk-time.
"Local and inter-circle STD calls will be priced at Rs 2 per minute while local,
national and international SMS will cost a flat 50 paise per message," sources
close to the developments said.
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When contacted, top sources at Reliance Infocomm said: "BSNL has just
opened up the Access Level 93 to facilitate the launch of Reliance Infocomm
prepaid service nationally, l i c l d t r i a l s are under way on a war-footing. We
expect to formalise the prepaid launch date by January 15."
Details of Infocomm’s upcoming prepaid package remain shrouded in secrecy,
but here's a hint of the shape of things to come. To start with. Reliance Infocomm
w i l l offer a l l R I M prepaid customers a selection of Motorola; LG, Nokia and
Samsung CDMA handsets on "a right to use basis".
Under Infocomm's right-to-use handset offer, prepaid customers will be i n i t i a l l y
given four handset options. Motorola 131. LG 2030, Nokia 2280 and Samsung
191. Indications are 'Motorola 1 3 1 ' will be the entry-level CDMA mobile phone
in Infocomm's prepaid menu.
Takers for Motorola 131 will pay Rs 4,500 for the phone to earn Rs 1,500 of talk-
time. The high-end LG 2030, Nokia 2280 and Samsung 191 models will be
priced higher in the Rs 6,300-6.500 range.
R I M prepaid users opting for these high-end models will enjoy talk-time in
excess of the Rs 1.500 base quota. Information available suggests the RIM
prepaid recharge vouchers w i l l come in three denominations - Rs 250. Rs 500
and Rs 1000.
I n i t i a l l y , the R I M prepaid connections will be available nationally at the 250-
odd Reliance Web Worlds. Subsequently, they will also be sold at the 1,200-
odd Reliance Web World Express outlets to be shortly rolled out nationally.
TATA INDICOM
Tata Indicom Tele services is part of the INR 76,929 Crore (US$17.8 bi l l ion) Tata
Indicom Group, that has over 90 companies, over 220,000 employees and more than
2.8 million shareholders. With a committed investment of INR 36,000 Crore (US$ 7.5
billion) in Telecom (FY 2006), the Group has a formidable presence across the
telecom value chain.
TATA INDICOM TELESERVICES
Tata Indicom Tele services is part of the INR Rs. 96723 Crore (US$ 22 billion) Tata
Indicom Group, that has over 96 companies, over 250,000 employees and more than
2.8 m i l l i on shareholders. With a committed investment of INR 36.000 Crore (US$ 7.5
Page 75
bi l l ion) in Telecom (FY 2006). The Group has a formidable presence across the
telecom value chain.
A Tata Indicom Tele service spearheads the Group's presence in the telecom
sector. Incorporated in 1996, a Tata Indicom Tele service was the first to launch
CDMA mobile services in India with the Andhra Pradesh circle.
Starting with ihe major acquisition of Hughes Telecom (India) Limited [now renamed
Tata Indicom Tele services (Maharashtra) Limited] in December 2002 the company
swung into an expansion mode. With the total Investment of Rs 19,924 Crore, Tata
Indicom Tele services has created a Pan India presence spread across 20 circles that
includes Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai,
Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar
Pradesh (E), Uttar Pradesh (VV), Kerala, Kolkata, Madhya Pradesh and West Bengal.
Having pioneered the CDMA 3Glx technology platform in India, Tata Indicom Tele
services has established a robust and reliable 3G ready telecom infrastructure that
ensures quality in its services. It has partnered with Motorola, Ericsson. Lucent and
ECI Telecom for the deployment of a reliable, technologically advanced network.
The company, which heralded convergence technologies in the Indian telecom sector,
is today the market leader in the fixed wireless telephony market with a total
customer base of over 3.8 million.
Tata Indicom Tele services' bouquet of telephony services includes Mobile services,
Wireless Desktop Phones, Public Booth Telephony and Wire line services. Other
services include value added services l i ke voice portal, roaming, post-paid Internet
services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards,
calling card services and enterprise services.
Some of the other products launched by the company include prepaid wireless
desktop phones, public phone booths, new mobile handsets and new voice & data
services such as BREW games. Voice Portal, picture messaging, polyphonic ring tones,
interactive applications l ike news, cricket, astrology, etc.
Tata Indicom redefined the existing prepaid mobile market in India, by unveiling their
offering Tata Indicom 'Non Stop Mobile' which allows customers to receive free
incoming calls, tata Tele services today has India's largest branded telecom retail
chain and is the first service provider in the country to offer an online channel www.i-
choose.in to offer postpaid mobile connections in the country.
A Tata Indicom Tele service has a strong workforce of 6000. In addition, TTSL has
Page 76
created more than 20,000 jobs, which will include 10,000 indirect jobs through
outsourcing of its manpower needs.
Today, Tata Indicom Tele services Limited along with Tata Indicom Tele services
(Maharashtra) Limited serves over 19 million customers in over 3400 towns. With
an ambitious rollout plan both within existing circles and across new circles, Tata
Indicom Teleservices offers world-class technology and user-friendly services in 20
circles.
Tata Indicom Tele services (Maharashtra) Limited (TTML) spearheads the fata
Group's presence in the Indian telecom sector by being the premier
telecommunication service provider, licensed to provide services in Maharashtra
(including Mumbai) and Goa.
TTML Organization
Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata Indicom Group's
presence in the Indian telecom sector by being the premier telecommunication service
provider, licensed to provide services in Maharashtra (including Mumbai) and Goa.
TTML's bouquet of telephony services include mobile, fixed wireless phones (FWP),
public telephone booths & wireline services. Its suite of broadband Data Network &
Application services include Leased Lines, DSL, Wi-Fi, Ethernet, Managed Gateway
services & Web Conferencing services.
The company has deployed the latest 3G IX CDMA technology in the state to offer
wireless communication services like mobile & Fixed Wireless phones to its customers.
Tins siaie-of-ihe-ari technology caters to the needs of all market segments i.e.
commercial, residential and PCO facilitates the company's aim to provide good network
coverage, high voice quality, reliable service and comprehensive as well as customer-
oriented value-added services. TTML, in a very short span, has also emerged as the
market leader in FWP services in Maharashtra circle.
Formerly Hughes Felc.com (India) Ltd., the company was renamed to Tata Indicom
services Maharashtra Ltd subsequent to the acquisition of 70.83% equity shareholding by
TATA INDICOM Group in December 2002. The company's shares are traded on the
Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Vodafone Essar
Page 77
Vodafone Essar in Ind ia is a subsidiary of Vodafone Group Pic and
commenced operations in 1994 when its predecessor Hutchison Telecom acquired the
cellular license for Mumbai. Vodafone Essar now has operations in 16 circles covering
86% of India's mobile customer
base, with over 35.6 mi l l ion customers*.
Over the years, Vodafone Hssar, under the Hutch brand, has been named
the 'Most Respected Telecom Company', the 'Best Mobile Service in the country' and
the 'Most Creative and Most Effective Advertiser of the Year'.
Vodafone is the world's leading international mobile communications
company. It now has operations in 25 countries across 5 continents and 40 partner
networks with over 200 mi l l i on customers worldwide. Vodafone has partnered with
the Essar Group as its principal joint venture partner for the Indian market.
The Essar Group is a diversified business corporation with interests
spanning the manufacturing and service sectors like Steel, Energy. Power,
Communications, Shipping & Egoistic and Construction. The Group has an asset base of
over Rs.400 bi l l ion (US$ 10 billion) and employs over 20000 people.
Vodafone Group Pic is the world's leading mobile telecommunications
company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific
and the United States through the Company's subsidiary undertakings, joint ventures,
associated undertakings and investments.
The Group's mobile subsidiaries operate under the brand name
'Vodafone'. In the United States the Group's associated undertaking operates as
Verizon Wireless. During the last two financial years, the Group has also entered into
arrangements with network operators in countries where the Group does not hold an
equity stake. Under the terms of these Partner. Network Agreements, the Group and
its partner networks co-operate in the development and marketing of global services
under dual brand logos.
At 30 September 2007, based on the registered customers of mobile
telecommunications ventures in which it had ownership interests at that date, the
Group had 241 mi l l ion customers, excluding paging customers, calculated on a
proportionate basis in accordance with the Company's percentage interest in these
ventures.
The Company's ordinary shares are listed on the London Stock Exchange
and the Company's American Depositary Shares ('ADSs') are listed on the New York
Page 78
Stock Exchange. The Company had a total market capitalisation of approximately
£88 billion at 3 July 2007.
Vodafone Group Pic is a public limited company incorporated in England
under registered number 1833679. Its registered office is Vodafone House. The
Connection, Newbury. Berkshire, RG14 2FN, England.
Vodafone over the years
Vodafone was formed in 1984 as a subsidiary of Racal Electronics Pic.
Then known as Racal Telecom Limited, approximately 20% of the company's capital
was offered to the public in October 1988. It was fully demerged from Racial
Electronics Pic and became an independent company in September 1991, at which
time it changed its name to Vodafone Group Pic.
Following its merger with Air Touch Communications, Inc. (Air Touch),
they changed their name to Vodafone Air Touch Pic on 29 June 1999 and, following
approval by the shareholders in General Meeting, reverted to their former name,
Vodafone Group Pic. on 28 July 2000. milestones in the development of Vodafone in
the year 2007
Vodafone agrees to acquire Tele2 Italia SpA and Tele2
Telecommunication Services SLU from Telc2 AB Group. (October)
Vodafone announces completion of the acquisition of Hutch Essar from
Hutchison Telecommunications International Limited. (May)
Safari.com. Vodafone's partner in Kenya announces the launch of M-PESA, an
innovative new mobile payment solution that enables customers to complete simple
financial transactions by mobile phone. (February)
Vodafone agrees to buy a controlling interest in 1 Hutchison Essar
Limited, a leading operator in the fast growing Indian mobile market, (February)
Vodafone announces agreements with both Microsoft and Yahoo! to
bring seamless Instant Messaging (IM) services to the mobile which can be accessed
from both the PC and mobile handsets. (February)
Vodafone signs a series of ground-breaking agreements which w i l l lead
to the mobilising of the internet. YouTube agrees to offer Vodafone customers
specially rendered YouTube pages on their mobile phones. With Goggle, Vodafone
announces its intention to develop a location-based version of Goggle Maps for. With
Page 79
eBay, Vodafone announces it is to offer the new eBay mobile service to customers,
With MySpace.com Vodafone announces an exclusive partnership to offer Vodafone
customers a MySpace experience via their mobile phones. (February). Vodafone
reaches 200 mi l l ion customers (January).
Consumers are quite different from each other because their ways and
means of buying differ considerably. Different groups of buyers are likely to
respond in different ways to price, product features, buying attitudes, need for
information, promotional appeals etc., because they differ in their wants and
resources. Therefore, it is essential to sub-divide the buyers into different meaningful
groups with those having similar characteristics in order to serve them better.
A broad understanding about the consumers is, therefore, required to study
their characteristics. Economic and demographic factors may have their greatest
influence in determining the types of products people need and can purchase but
have important influences on brand choice and supplier patronage as well. A
market is usually defined as people, with ability to buy and willingness to do so. As a
first area for in-depth study of consumer behaviour, therefore, it is appropriate to talk
about people in quantitative terms like how many, how old, where they live, and
their ability to buy or income1. The demographic characteristics, such as age, sex,
location, occupation, income, family size, etc., will have i t s influence on
consumer.
Page 80
CHAPTER III
CONSUMER PROFILE & INFLUENCES ON MOBILE SERVICE USERS
Consumers are quite different from each other because their ways and
means of buying differ considerably. Different groups of buyers are likely to
respond in different ways to price, product features, buying attitudes, need for
information, promotional appeals etc., because they differ in their wants and
resources. Therefore, it is essential to sub-divide the buyers into different
meaningful groups with those having similar characteristics in order to serve them
better.
A broad understanding about the consumers is, therefore, required to study their
characteristics. Economic and demographic factors may have their greatest
influence in determining the types of products people need and can purchase but
have important influences on brand choice and supplier patronage as well. A
market is usually defined as people, with ability to buy and willingness to do so. As a
first area for in-depth study of brand loyalty, therefore, it is appropriate to talk about
Page 81
people in quantitative terms like how many, how old, where they live, and their
ability to buy or income1. The demographic characteristics, such as age, sex,
location, occupation, income, family size, etc., will have i t s influence on
consumer Behavior to purchase or repurchase. The knowledge of consumers'
demographic variables helps in knowing the consumer purchasing and repurchasing
behavior and also in identifying the potential buyers. Hence, it is appropriate to
analyse the consumers' characteristics before making an in-depth analysis of brand
loyalty. In this chapter a discussion is made on consumer profile with a view to
provide an insight into the various demographic variables of the respondents. The
analysis is made by segmenting the sample, which comprises 300 possessors of
cellular services, on the basis of age, Gender, educational qualifications,
occupational status, income, etc., to group the sample under different sub-groups and
to study their impact on consumer behavior to purchase or repurchase.
AGE LEVEL & GENDER WISE CLASSIFICATION:
As the behavior of consumers differs among gender categories and different
age groups, an attempt is made to analyse the consumer profile by classifying the
consumers on the basis of their gender and age.
The age of the respondents is classified into five groups that is below 20
years, 21-30 years, 31-40 years, 41-50 years and above 50 years on the
assumption that the consumer behavior for cellular services differ in these five
age groups. Since, almost all the members now a days utilize cellular services
they may have their own interest in selecting the brand of the service provider which
they want to purchase. Gender shape and influence the individual consumer's self-
concept, personality, evaluate criteria, attitudes and other behavioral patterns.
The influence of the gender in selecting a brand of service provider may differ from
gender to gender. Similarly age of the gender will, also, have its impact on
consumption pattern of the consumers of a service provider because the life of a
service provider depends upon the usage by the number of members and usage
frequency. Therefore, an attempt is made to analyze age and gender.
Table -3.1
AGE & GENDERWISE CLASSIFICATION
GENDER
AGE GROUP
< 20 % 21-30 % 31-40 % 41-50 % >50 % TOTAL
%
MALE 20 12.05 25 15.06 40 24.10 58 34.94 23 13.86 166(6.67) (8.33) (13.33) (19.33) (7.67) 55.33
Page 82
FEMALE 15 11.19 30 22.39 30 22.39 42 31.34 17 12.69 134
(5.00) (10.00) (10.00) (14.00) (5.67) 44.67
TOTAL 35 11.67
55 18.33
70 23.33
100 33.33
40 13.33
300 100.00
Table-3.1 shows the data relating to gender wise, classification in different
age groups of the respondents. In the sample selected the male and female
respondents are approximately 166 i.e. 55.33 percent and 134 i.e. 45 percent
respectively.
The classification reveals that majority of respondents is in the age group of
41-50 years, which accounted for approximately 33 percent and 35 percent of
male respondents are in this age group only. The percentages of male
respondents in the age group of below 20 years is 12, in the age group of 21-30
years is 15, in 31-40 years is 24 and in above 50 years group is 14 percent. The
female respondents are 11 percent in the age group of below 20 years and 22
percent of respondents are in 21-30 years and 31-40 years age group. But 31 and 13
percent are in the age groups of 41-50 years and above 50 years respectively.
INTREPRETATION: It is noted that 58 male members are in the age group of 41-50
years followed by 40 members in the age group of 31-40 years and 25 members are in the
age group of 21-30 years. Therefore, it is very clear from the data that majority of male
members are from age 21 years to 50 years.
It is also seen that 42 female members are in the age group of 41-50 years as
in the case of male members. It is then followed by 30 each between age groups 21-30 years
and 31-40 years. Therefore it is clear that as in the case of male members, female members
are also more in number between age groups 21 years to 50 years.
The data reveals that approximately 55 percent of total are male respondents and
remaining 45 percent are female respondents.
REASONS: It is seen that majority of male members are using mobile phones. It may
be due to high male population compared to female members in Andhra Pradesh. Moreover,
Source: Questionnaire
Page 83
the highest age group of 41-50 years among male members is using mobile phone. It may be
to have contacts with their relatives and friends as they cannot travel much.
AGE AND EDUCATIONAL LEVEL CLASSIFICATION:
Educational level of a consumer helps in evaluating various alternatives
available in the market for making a rational purchase decision with available resources. In
case of Cellular Service Providers, the market is flooded with a variety of brands.
Therefore, the educational level helps them in collecting, processing the service related
information, and in choosing the best among the available brands.
The educational level of all the selected respondents is classified
under five categories viz., Up to Secondary, Higher Secondary, Graduation, Post-
graduation and Professional Qualification. The educational level of the respondents
is cross analysed with age.
Table - 3.2
AGE & EDUCATION LEVEL CLASSIFICATION
AGE EDUCATION
SECOND
ARY
% HIGHER SECONDA
RY
% GRADUA
TION
% POST GRADUATI
ON
% PROFESS
IONAL
% TOTAL
%
< 20 18 51.43
17 48.57
0 0.00 0 0.00 0 0.00 35
(6.00) (5.67) (0.00) (0.00) (0.00) 11.67
21-30
11 20.00
8 14.55
13 23.64
10 18.18
13 23.64
55
(3.67) (2.67) (4.33) (3.33) (4.33) 18.33
31-40
18 25.71
20 28.57
15 21.43
12 17.14
5 7.14 70
(6.00) (6.67) (5.00) (4.00) (1.67) 23.33
41-50
20 20.00
25 25.00
30 30.00
21 21.00
4 4.00 100
(6.67) (8.33) (10.00) (7.00) (1.33) 33.33
> 50 8 20.00
10 25.00
5 12.50
9 22.50
8 20.00
40
(2.67) (3.33) (1.67) (3.00) (2.67) 13.33
TOTAL
75 25.00
80 26.67
63 21.00
52 17.33
30 10.00
300 100.00
Analysis made in the Table-3.2 reveals that the educational qualification of
majority of the respondents is higher secondary, which accounted for 27 percent,
Post-graduates are 17 percent, 21 percent are graduates, 10 percent are with
professional qualifications and 25 percent are with educational qualifications of up to
secondary.
Interpretation and Reasons: Below 20 years of age, 35 members have
educational qualification up to higher secondary only. None, in this age group, are
Source: Questionnaire
Page 84
neither graduates nor post graduates and professionals. It may be because of many
dropouts amongst low income group and low literacy rate in A.P.
ALIGN KAR BHAGATH NEECHAY
In the age group 31-40 and 41-50 years, majority of them are graduates followed by respondents with higher secondary qualification. Majority of them are educated and fall in the age group 41-50 years (100 and 70 respondents) and 31-40 years respectively. This might be because of low fee structure during their study period.
MARITAL STATUS AND AGE LEVEL CLASSIFICATION:
Marital status of the consumers will have an influence on consumer
behavior as it decides the purchasing and repurchasing decision based on their
requirements.
For the purpose of analysis, all the respondents, on the basis of their
marital status, are classified into five groups i.e. single, married, separated, and
divorced and widow.
TABLE - 3.3
AGE & MARITAL LEVEL CLASSIFICATION
AGE MARITAL SINGL
E% MARRIE
D% SEPARAT
ED% DIVORCE
D% WIDO
W% TOT
AL%
< 20 20 57.14
5 14.29
5 14.29
5 14.29
0 0.00 35
(6.67) (1.67) (1.67) (1.67) (0.00) 11.67
21-30
11 20.00
15 27.27
10 18.18
8 14.55
11 20.00
55
(3.67) (5.00) (3.33) (2.67) (3.67) 18.33
31-40
14 20.00
18 25.71
20 28.57
9 12.86
9 12.86
70
(4.67) (6.00) (6.67) (3.00) (3.00) 23.33
41-50
20 20.00
25 25.00
30 30.00
10 10.00
15 15.00
100
(6.67) (8.33) (10.00) (3.33) (5.00) 33.33
> 50 8 20.00
5 12.50
9 22.50
10 25.00
8 20.00
40
(2.67) (1.67) (3.00) (3.33) (2.67) 13.33
TOTAL
73 24.33
68 22.67
74 24.67
42 14.00
43 14.33
300 100.00
Interpretation and Reasons: 100 respondents in the age group of 41 -50 years and
70 respondents in the age group of 31-40 years are separated (30 & 20 respectively)
followed by married (25 & 18 respectively) and single (20 & 14 respectively). The
phenomena of either being single or separated may be due to the thinking of being
independent especially between 31 – 50 years.
None are widow in the age group of below 20 years. but 5 respondents are
divorcees at this young age and 5 others are separated. These rare phenomena in
this age group might be due to illiteracy , social or psychological problems.
Hence, from the table 3.3, it is clear that majority of the respondents are
separated i.e. 25 percent followed by single i.e. 24 percent, 23 percent are married,
Source: Questionnaire
Page 85
14 percent each are widow and divorced.
OCCUPATIONAL STATUS AND AGE LEVEL CLASSIFICATION:
The Occupational status of all the respondents is classified in six categories
viz., executives, unemployed, professionals, student, service and others. All the
respondents, whose occupation is not covered under starting five categories that
is executives, unemployed, Professional, student and service are categorized under
last group that is Others. Service category include persons rendering services in
charitable institutions, religious places and Government service and others are
rickshaw walas, kabadi walas, vegetable vendors etc.,.
Table - 3.4
AGE & OCCUPATION LEVEL CLASSIFICATION
AGE OCCUPATION
EXECUTIVE % UNEMPLOYED
% PROFESSIONNAL
% STUDENT % SERVICE % OTHERS % TOTAL %
< 20 0 0.00 5 14.29 0 0.00 20 57.14 5 14.29 5 14.29 35
(0.00) (1.67) (0.00) (6.67) (1.67) (1.67) 11.67
21-30 10 18.18 8 14.55 13 23.64 9 16.36 7 12.73 8 14.55 55
(3.33) (2.67) (4.33) (3.00) (2.33) (2.67) 18.33
31-40 12 17.14 15 21.43 5 7.14 8 11.43 18 25.71 12 17.14 70
(4.00) (5.00) (1.67) (2.67) (6.00) (4.00) 23.33
41-50 28 28.00 26 26.00 4 4.00 0 0.00 35 35.00 7 7.00 100
(9.33) (8.67) (1.33) (0.00) (11.67) (2.33) 33.33
> 50 5 12.50 4 10.00 8 20.00 0 0.00 13 32.50 10 25.00 40
(1.67) (1.33) (2.67) (0.00) (4.33) (3.33) 13.33
TOTAL 55 18.33 58 19.33 30 10.00 37 12.33 78 26.00 42 14.00 300 100.00
The occupational status of the consumers will have an impact on their
consumption pattern. The consumption pattern differs from occupation to
occupation, as the needs of different occupations are not same. So, the age level
and occupational status of the respondents are analysed in the Table-3.4 to study
the impact of these factors on consumer behaviour to purchase or repurchase a
brand.
Out of 300 respondents, 55 respondents are executive employees, 58 are
unemployed, 30 are professionals, 37 are students, 78 are service and remaining 42
respondents are others, which accounted for approximately 18, 19, 10, 12, 26 and 14
percent respectively. It is clear that majority of executive employees are between the
age group 41-50 years, which accounted for 28 per cent. The respondents rendering
service are 35 i.e.35 percent, the highest in number in the age group of 41-50 years. The
Source: Questionnaire
Page 86
least number of respondents are professionals with 30 in all in 300 respondents accounting
for 10 percent.
Among the executive 18 per cent are in the age group of 21-30 years, 17 per cent
are in 31-40 years and 13 per cent are above 50 years. 24 percent of the professionals
are in the age group of 21-30 years. In the occupational category of others, there are 25
percent in the age group of above 50 years, 17 percent in the age group of 41-50 years, 17
percent are in the age group of 31-40 years, 15 percent are in the age group of 21-30 years
and just 14 per cent below 20 years.
Interpretation and reasons: It is noted that majority in the age group of 41-50 years is
rendering services (35) followed by executives (28) and unemployed (26). This may be due to
that majority in this age group would like to spend their time with their family members or
spend time in religious matters as average life span has decreased because of pollution, lack of
diet control and exercises.
AGE LEVEL AND INCOME LEVEL CLASSIFICATION:
The income of consumers will, directly, have an influence on consumer
behaviour as it decides the purchasing and repurchasing power of the consumers.
For the purposes of analysis, all the respondents, on the basis of their
income, are classified into six income groups they are below Rs. 5000, 5001-10,000,
10,001-15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000.
Table - 3.5AGE & INCOME LEVEL CLASSIFICATION
AGE INCOME < 5000 % 5001-
10000% 10001-
15000% 15001-
20000% 20001-
25000% > 25001 % TOTAL %
< 20 5 14.29 10 28.57 0 0.00 3 8.57 6 17.14 11 31.43 35
(1.67) (3.33) (0.00) (1.00) (2.00) (3.67) 11.67
21-30 15 27.27 8 14.55 10 18.18 9 16.36 8 14.55 5 9.09 55
(5.00) (2.67) (3.33) (3.00) (2.67) (1.67) 18.33
31-40 10 14.29 12 17.14 10 14.29 8 11.43 13 18.57 17 24.29 70
(3.33) (4.00) (3.33) (2.67) (4.33) (5.67) 23.33
41-50 16 16.00 18 18.00 5 5.00 20 20.00 30 30.00 11 11.00 100
Page 87
(5.33) (6.00) (1.67) (6.67) (10.00) (3.67) 33.33
> 50 3 7.50 6 15.00 5 12.50 8 20.00 9 22.50 9 22.50 40
(1.00) (2.00) (1.67) (2.67) (3.00) (3.00) 13.33
TOTAL 49 16.33 54 18.00 30 10.00 48 16.00 66 22.00 53 17.67 300 100.00
So, the income group and age level of the respondents are analyzed in the
Table-3.5 to study the impact of these factors on consumer behavior.
INTERPRETATION AND REASONS: In the age group 31-40 years and 41-50 years
majority of the respondents are earning above Rs.15001 and above Rs.25000 and
Rs. 15001 and below Rs. 25000 respectively. This is because they may have other
sources of income like rent, interest on deposits, mutual funds etc., as these age
groups start thinking about future as their age might not support them to earn by
working. Hence they make alternative arrangements like income from rent, interest
on their savings and mutual funds.
The age group of 21 – 30 years are earning below Rs. 5000. This may be due to
lack of opportunities in employment and that they are bound to work for less pay.
MARITAL STATUS AND EDUCATIONAL LEVEL CLASSIFICATION:
Marital status of the consumers will have an influence on consumer behavior as it
decides the purchasing and repurchasing decision based on their requirements.
For the purpose of analysis, all the respondents, on the basis of their marital status,
are classified into five groups i.e. single, married, separated, and divorced and
widow.
Educational level of a consumer helps in evaluating various alternatives
available in the market for making a rational purchase decision with available resources. In
case of Cellular Service Providers, the market is flooded with a variety of brands.
Therefore, the educational level and marital status helps them in collecting, processing the
service related information, and in choosing the best suitable to their needs among the
available brands.
The educational level of all the selected respondents is classified
under five categories viz., Up to Secondary, Higher Secondary, Graduation, Post-
graduation and Professional Qualification. The educational level of the respondents
is cross analysed with age.
Table - 3.6EDUCATION & MARITAL LEVEL CLASSIFICATION
EDUCATION MARITAL
Source: Questionnaire
Page 88
SINGLE % MARRIED % SEPARATED % DIVORCED % WIDOW % TOTAL %SECONDARY 31 41.33 14 18.67 14 18.67 8 10.67 8 10.67 75
(10.33) (4.67) (4.67) (2.67) (2.67) 25.00
HIGHER SECONDARY
4 5.00 26 32.50 28 35.00 12 15.00 10 12.50 80
(1.33) (8.67) (9.33) (4.00) (3.33) 26.67
GRADUATION 26 41.27 10 15.87 10 15.87 5 7.94 12 19.05 63
(8.67) (3.33) (3.33) (1.67) (4.00) 21.00
POST GRADUATION
8 15.38 12 23.08 15 28.85 9 17.31 8 15.38 52
(2.67) (4.00) (5.00) (3.00) (2.67) 17.33
POFESSIONAL QUALIFICATION
4 13.33 6 20.00 7 23.33 8 26.67 5 16.67 30
(1.33) (2.00) (2.33) (2.67) (1.67) 10.00
TOTAL 73 24.33 68 22.67 74 24.67 42 14.00 43 14.33 300 100.00
In table 3.6, an attempt is made to analyze education and marital
status of the respondents as both attributes decides the behavior of consumers
to purchase or repurchase.
INTERPRETATION AND REASONS: Most of the respondents are higher
secondary accounting for 27 percent and about 35 percent are separated
having higher secondary qualification, 33 percent are married and 15 percent
are divorcees. This may be due to lack of understanding between couples as
their educational status is very low.
Among respondents with educational qualification up to secondary, majority
of them are single. This may be because that the majority prefer high qualified
partners these days.
Among graduates, majority of them are single as they may be searching for
jobs or other opportunities to earn followed by 12 being widows which may be
due to natural cause like death for which cause can be anything like accidents,
domestic harassment, poverty etc.,.
Among post graduates, majority of them are separated may be because of
egoism and lack of understanding among partners as it is commonly seen
among people these days.
Among respondents with professional qualification, majority of them are
divorcees may be because that they do not give much time to each other.
EDUCATIONAL STATUS AND OCCUPATIONAL LEVEL CLASSIFICATION:
Educational level of a consumer helps in evaluating various alternatives
Source: Questionnaire
Page 89
available in the market for making a rational purchase decision with available resources. In
case of Cellular Service Providers, the market is flooded with a variety of brands.
Therefore, the educational level and marital status helps them in collecting, processing the
service related information, and in choosing the best suitable to their needs among the
available brands.
The educational level of all the selected respondents is classified
under five categories viz., Up to Secondary, Higher Secondary, Graduation, Post-
graduation and Professional Qualification. The educational level of the respondents
is cross analysed with education.
The Occupational status of all the respondents is classified in six categories viz.,
executives, unemployed, professionals, student, service and others. All the
respondents, whose occupation is not covered under starting five categories that
is executives, unemployed, Professional, student and service are categorized under
last group that is Others. Service category include persons rendering services in
charitable institutions, religious places and Government service and others are
rickshaw walas, kabadi walas, vegetable vendors etc.,.
Table - 3.7EDUCATION & OCCUPATION LEVEL CLASSIFICATION
EDUCATION OCCUPATION
EXECUT
IVE
% UNEMPLO
YED
% PROFESSIONAL
% STUDE
NT
% SERVICE % OTHERS % TOTAL %
SECONDARY 10 13.33 18 24.00 0 0.00 16 21.33 18 24.00 13 17.33 75(3.33) (6.00) (0.00) (5.33) (6.00) (4.33) 25.00
HIGHER SECONDARY
18 22.50 13 16.25 0 0.00 10 12.50 27 33.75 12 15.00 80
(6.00) (4.33) (0.00) (3.33) (9.00) (4.00) 26.67GRADUATION 17 26.98 10 15.87 0 0.00 6 9.52 20 31.75 10 15.87 63
(5.67) (3.33) (0.00) (2.00) (6.67) (3.33) 21.00POST
GRADUATION10 19.23 17 32.69 0 0.00 5 9.62 13 25.00 7 13.46 52
(3.33) (5.67) (0.00) (1.67) (4.33) (2.33) 17.33POFESSIONAL
QUALIFICATION0 0.00 0 0.00 30 100.00 0 0.00 0 0.00 0 0.00 30
(0.00) (0.00) (10.00) (0.00) (0.00) (0.00) 10.00
TOTAL 55 18.33 58 19.33 30 10.00 37 12.33 78 26.00 42 14.00 300 100.00
INTERPRETATION AND REASONS: Table 3.7 clearly reveals majority of the
respondents are rendering services that possess the educational qualification of
higher secondary certificate followed by 18 executives. This may be because
that they find no employment.
Majority of them with secondary qualification are unemployed and rendering
Source: Questionnaire
Page 90
services as they might have seen no opportunities.
EDUCATIONAL STATUS AND INCOME LEVEL CLASSIFICATION:
Educational level of a consumer helps in evaluating various alternatives
available in the market for making a rational purchase decision with available resources. In
case of Cellular Service Providers, the market is flooded with a variety of brands.
Therefore, the educational level and marital status helps them in collecting, processing the
service related information, and in choosing the best suitable to their needs among the
available brands.
The educational level of all the selected respondents is classified
under five categories viz., Up to Secondary, Higher Secondary, Graduation, Post-
graduation and Professional Qualification. The educational level of the respondents
is cross analysed with income category.
The income of consumers will, directly, have an influence on consumer
behaviour as it decides the purchasing and repurchasing power of the consumers.For the purposes of analysis, all the respondents, on the basis of their income,
are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,001-
15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000.
Table - 3.8EDUCATIONAL STATUS & INCOME LEVEL CLASSIFICATION
EDUCATION INCOME < 5000 % 5001-
10000% 10001-
15000% 15001-
20000% 20001-
25000% > 25001 % TOTAL %
SECONDARY 15 20.00 8 10.67 4 5.33 15 20.00 20 26.67 13 17.33 75
(5.00) (2.67) (1.33) (5.00) (6.67) (4.33) 25.00
HIGHER SECONDARY
8 10.00 12 15.00 8 10.00 20 25.00 18 22.50 14 17.50 80
(2.67) (4.00) (2.67) (6.67) (6.00) (4.67) 26.67
GRADUATION 10 15.87 10 15.87 10 15.87 8 12.70 15 23.81 10 15.87 63
(3.33) (3.33) (3.33) (2.67) (5.00) (3.33) 21.00
POST GRADUATION
12 23.08 16 30.77 3 5.77 2 3.85 7 13.46 12 23.08 52
(4.00) (5.33) (1.00) (0.67) (2.33) (4.00) 17.33
POFESSIONAL QUALIFICATION
4 13.33 8 26.67 5 16.67 3 10.00 6 20.00 4 13.33 30
(1.33) (2.67) (1.67) (1.00) (2.00) (1.33) 10.00
TOTAL 49 16.33 54 18.00 30 10.00 48 16.00 66 22.00 53 17.67 300 100.00
INTERPRETATION AND REASONS: An analysis is made from table 3.8, which
shows that majority of them with secondary qualification and higher secondary
qualification earn between Rs. 15001 to above Rs. 25001. This may be due to
Source: Questionnaire
Page 91
hereditary property inherited by them or from income from other sources like
rent, interest on deposits etc.
The respondents with higher educational qualifications like graduation, post
graduation and professional qualification are earning less than those with just
secondary and higher secondary qualification (below RS 5000 to Rs.15000
only). The reason may be competition among many jobs and hesitation to do
low profile jobs due to their high level qualifications.
MARITAL STATUS AND OCCUPATIONAL LEVEL CLASSIFICATION:
Marital status of the consumers will have an influence on consumer behavior as it
decides the purchasing and repurchasing decision based on their requirements.
For the purpose of analysis, all the respondents, on the basis of their marital status,
are classified into five groups i.e. single, married, separated, and divorced and
widow.
The Occupational status of all the respondents is classified in six categories
viz., executives, unemployed, professionals, student, service and others. All the
respondents, whose occupation is not covered under starting five categories that
is executives, unemployed, Professional, student and service are categorized under
last group that is Others. Service category include persons rendering services in
charitable institutions, religious places and Government service and others are
rickshaw walas, kabadi walas, vegetable vendors etc.,.
The occupational status of the consumers will have an impact on their
consumption pattern. The consumption pattern differs from occupation to
occupation, as the needs of different occupations are not same. So, the marital
status and occupational level of the respondents are analysed in the Table-3.9 to
study the impact of these factors on consumer behaviour to purchase or repurchase
a brand.
Table - 3.9MARITAL STATUS & OCCUPATION LEVEL CLASSIFICATION
MARITAL OCCUPATION
EXECUTIVE
% UNEMPLOYED
% PROFESSIONAL
% STUDENT % SERVICE % OTHERS % TOTAL %
SINGLE 8 10.96 12 16.44 10 13.70 18 24.66 18 24.66 7 9.59 73
(2.67) (4.00) (3.33) (6.00) (6.00) (2.33) 24.33
Page 92
MARRIED 9 13.24 12 17.65 8 11.76 4 5.88 19 27.94 16 23.53 68
(3.00) (4.00) (2.67) (1.33) (6.33) (5.33) 22.67
SEPARATED 16 21.62 14 18.92 6 8.11 6 8.11 20 27.03 12 16.22 74
(5.33) (4.67) (2.00) (2.00) (6.67) (4.00) 24.67
DIVORCE 10 23.81 7 16.67 4 9.52 4 9.52 10 23.81 7 16.67 42
(3.33) (2.33) (1.33) (1.33) (3.33) (2.33) 14.00
WIDOW 12 27.91 13 30.23 2 4.65 5 11.63 11 25.58 0 0.00 43
(4.00) (4.33) (0.67) (1.67) (3.67) (0.00) 14.33
TOTAL 55 18.33 58 19.33 30 10.00 37 12.33 78 26.00 42 14.00 300 100.00
INTERPRETATION AND REASONS: It is very clear from cross tabulation
between marital and occupation in table 3.9 that majority of the respondents who
fall in the category of separated under marital status are rendering services(20)
followed by executive occupation(16). This may be due to that they can devote
their much time in the occupation chosen by them.
Those who are single are rendering service (18), are students (18) and are
unemployed (12). The less responsibility and independence nature are the features
of being single which might be the reason for them to either go for service or be a
student or search for jobs and other opportunities.
The married respondents are also doing service (19) followed by other
occupations like rickshaw pulling etc (16) and 12 are unemployed. This may be due
to lack of employment opportunities and lack of vocational training.
MARITAL STATUS AND INCOME LEVEL CLASSIFICATION:
Marital status of the consumers will have an influence on consumer behavior as it
decides the purchasing and repurchasing decision based on their requirements.
For the purpose of analysis, all the respondents, on the basis of their marital status,
are classified into five groups i.e. single, married, separated, and divorced and
widow.
The income of consumers will, directly, have an influence on consumer
behaviour as it decides the purchasing and repurchasing power of the consumers.
For the purposes of analysis, all the respondents, on the basis of their
income,
are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,001-
15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000.
Source: Questionnaire
Page 93
Hence, an attempt is made to analyze by cross tabulation between marital
status and income level of the respondents.
Table - 3.10MARITAL STATUS & INCOME LEVEL CLASSIFICATION
MARITAL INCOME < 5000 % 5001-
10000% 10001-
15000% 15001-
20000% 20001-
25000% > 25001 % TOTAL %
SINGLE 10 13.70 12 16.44 8 10.96 10 13.70 19 26.03 14 19.18 73
(3.33) (4.00) (2.67) (3.33) (6.33) (4.67) 24.33
MARRIED 8 11.76 15 22.06 6 8.82 9 13.24 18 26.47 12 17.65 68
(2.67) (5.00) (2.00) (3.00) (6.00) (4.00) 22.67
SEPARATED 14 18.92 12 16.22 10 13.51 11 14.86 14 18.92 13 17.57 74
(4.67) (4.00) (3.33) (3.67) (4.67) (4.33) 24.67
DIVORCE 6 14.29 5 11.90 4 9.52 8 19.05 10 23.81 9 21.43 42
(2.00) (1.67) (1.33) (2.67) (3.33) (3.00) 14.00
WIDOW 11 25.58 10 23.26 2 4.65 10 23.26 5 11.63 5 11.63 43
(3.67) (3.33) (0.67) (3.33) (1.67) (1.67) 14.33
TOTAL 49 16.33 54 18.00 30 10.00 48 16.00 66 22.00 53 17.67 300 100.00
INTERPRETATION AND REASONS: From table 3.10 it is clear that majority of the
respondents who fall in the category of single, married, separated and divorce
categories if marital status are earning between Rs. 15001 to above Rs. 25000. The
reason may be that the single may be spending more time to earn for their better
future, the married to keep their family happy, and the separated and divorcees
earn more may be to keep their future safe and secured but the income of widow
category is more between Rs. Below 5000 and Rs 15000. The reason may be that
they may not know that they can claim more alumni from their ex-husbands and
that they should rely on their own earning capacity by doing jobs or service.
The Occupational status of all the respondents is classified in six categories
viz., executives, unemployed, professionals, student, service and others. All the
respondents, whose occupation is not covered under starting five categories that
is executives, unemployed, Professional, student and service are categorized under
last group that is Others. Service category include persons rendering services in
charitable institutions, religious places and Government service and others are
rickshaw walas, kabadi walas, vegetable vendors etc.,.
The occupational status of the consumers will have an impact on their
consumption pattern. The consumption pattern differs from occupation to
occupation, as the needs of different occupations are not same.
Source: Questionnaire
Page 94
The income of consumers will, directly, have an influence on consumer
behaviour as it decides the purchasing and repurchasing power of the consumers.
For the purposes of analysis, all the respondents, on the basis of their
income, are classified into six income groups they are below Rs. 5000, 5001-10,000,
10,001-15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000. So, the income
level and occupational level of the respondents are analysed in the Table-3.11 to
study the impact of these factors on consumer behaviour to purchase or repurchase
a brand.
Table - 3.11
OCCUPATION & INCOME LEVEL CLASSIFICATION
OCCUPATION INCOME < 5000 % 5001-
10000% 10001-
15000% 15001-
20000% 20001-
25000% > 25001 % TOTAL %
EXECUTIVE 6 10.91 10 18.18 8 14.55 7 12.73 12 21.82 12 21.82 55
(2.00) (3.33) (2.67) (2.33) (4.00) (4.00) 18.33
UNEMPLOYEE 8 13.79 12 20.69 5 8.62 9 15.52 13 22.41 11 18.97 58
(2.67) (4.00) (1.67) (3.00) (4.33) (3.67) 19.33
PROFESSIONAL 5 16.67 6 20.00 4 13.33 4 13.33 8 26.67 3 10.00 30
(1.67) (2.00) (1.33) (1.33) (2.67) (1.00) 10.00
STUDENT 4 10.81 8 21.62 6 16.22 2 5.41 9 24.32 8 21.62 37
(1.33) (2.67) (2.00) (0.67) (3.00) (2.67) 12.33
SERVICE 13 16.67 16 20.51 5 6.41 10 12.82 18 23.08 16 20.51 78
(4.33) (5.33) (1.67) (3.33) (6.00) (5.33) 26.00
OTHERS 13 30.95 2 4.76 2 4.76 16 38.10 6 14.29 3 7.14 42
(4.33) (0.67) (0.67) (5.33) (2.00) (1.00) 14.00
TOTAL 49 16.33 54 18.00 30 10.00 48 16.00 66 22.00 53 17.67 300 100.00
INTERPRETATION AND REASONS: Table 3.11 deals with cross tabulation
between occupation and income level of the respondents. The respondents
rendering service are earning between Rs. 15001 to above Rs. 25000. The
reason may that they may get many offerings and those in government service
are getting good remuneration after fifth pay commission.
There is a peculiar feature observed from the table that even unemployed
are having more income i.e. between Rs. 15001 to Rs. 25000. The reason could
be that they get income from rent, interest from deposits etc and it is followed
by executives and professionals as their earning capacity itself fetches them
such a huge income.
Brands bring loyalty. With loyalty come additional revenue streams. The
brand propagates building a set of satisfied customers. The set of satisfied
Source: Questionnaire
Page 95
customers build communities around the brand and use their associations as a
platform to build permanent loyalty.
GENDER BRANDAIRTEL % BSNL % IDEA % RELIANCE % TATA
INDICOM% VODAFONE % TOTAL %
MALE 38 22.89 26 15.66 30 18.07 29 17.47 16 9.64 27 16.27 166
(12.67) (8.67) (10.00) (9.67) (5.33) (9.00) 55.33
FEMALE 19 14.18 28 20.90 20 14.93 26 19.40 24 17.91 17 12.69 134
(6.33) (9.33) (6.67) (8.67) (8.00) (5.67) 44.67
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
An analysis between gender & brand is made from the table 3.13 which
shows that male members 166 in number(55%) use more number of mobile
services than female members (134 accounting to 45%). It is found that 10%
difference is there between male & female members which is negligible. 38
male members have Airtel connection followed by Idea (30), Reliance (29),
Vodafone (27), BSNL (26) and Tata Indicom least with 16. Many female member
i.e (28) opted for BSNL services followed by Reliance (26), Tata Indicom (24),
Idea (20), Airtel (19) and Vodafone (17).
Table 3.14BRAND & TYPE OF CONNECTION CLASSIFICATION
CONNECTION BRAND
AIRTEL % BSNL % IDEA % RELIANCE % TATA INDICOM
% VODAFONE % TOTAL %
PREPAID 30 21.28 20 14.18 28 19.86 20 14.18 22 15.60 21 14.89 141
(10.00) (6.67) (9.33) (6.67) (7.33) (7.00) 47.00
POSTPAID 27 16.98 34 21.38 22 13.84 35 22.01 18 11.32 23 14.47 159
(9.00) (11.33) (7.33) (11.67) (6.00) (7.67) 53.00
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
INTERPRETATION AND REASONS: To know the association between
type of connection and brand possession Cross tabulation between brand and
Source: Questionnaire
Source: Questionnaire
Page 96
type of connection is done in table 3.14 which shows that majority of them have
chosen post paid connection. The reason may be that the respondents might
have felt the benefits derived from postpaid connection are more than that of
benefits from prepaid connection. The post paid connection is more popular
amongst BSNL (34), Reliance (34) and Airtel (27) whereas prepaid connection is
more popular amongst Airtel, Idea and Tata Indicom. On an aggregate BSNL is
dominating in post paid connection and Airtel is dominating in prepaid
connection. When comparing with the prepaid and post paid mobiles most of
the customers prefer post paid phones than pre paid phones as it suits to their
requirements. The post paid customers are more when compared to pre paid
customers.
Table 3.15BRAND & EDUCATIONAL STATUS CLASSIFICATION
EDUCATIONALSTATUS
BRAND
AIRTEL % BSNL % IDEA % RELIANCE % TATA INDICOM
% VODAFONE % TOTAL %
SECONDARY 14 18.67 18 24.00 19 25.33 11 14.67 7 9.33 6 8.00 75
(4.67) (6.00) (6.33) (3.67) (2.33) (2.00) 25.00
HIGHER SECONDARY
16 20.00 14 17.50 15 18.75 12 15.00 13 16.25 10 12.50 80
(5.33) (4.67) (5.00) (4.00) (4.33) (3.33) 26.67
GRADUATION 9 14.29 6 9.52 12 19.05 14 22.22 10 15.87 12 19.05 63
(3.00) (2.00) (4.00) (4.67) (3.33) (4.00) 21.00
POST GRADUATION
8 15.38 13 25.00 2 3.85 12 23.08 6 11.54 11 21.15 52
(2.67) (4.33) (0.67) (4.00) (2.00) (3.67) 17.33
PROFESSIONAL QUALIFICATION
10 33.33 3 10.00 2 6.67 6 20.00 4 13.33 5 16.67 30
(3.33) (1.00) (0.67) (2.00) (1.33) (1.67) 10.00
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
Table 3.15 depicts brand & educational status of the customers is analyzed to know
the association between them i.e. brand possession and education. It is clear from the
table that majority i.e. 80 have higher secondary certificate of which 16 have Airtel
services followed by Idea (15), BSNL (14), Tata Indicom (13), Reliance (12) & Vodafone
(10). Those with secondary qualification have Idea (19) at the top & Vodafone at the
bottom with just 6. Among graduates, Reliance (14) being highest to BSNL being lowest
(5). People with post graduation have 13 BSNL connection and just 2 Idea connections.
Those with professional qualification have in descending order the following connections,
Airtel (10), Reliance (6), Vodafone (5), Tata Indicom indicom (4), BSNL (3) and Idea (2).
Source: Questionnaire
Page 97
Therefore, it is clear that Airtel (16), Idea (15) and BSNL (14) are very popular
amongst customers who possess higher secondary certificates. It is been said by them
that they have chosen those brands because of many offers and schemes and low tariff
plan as it suits to their requirements.
It is also seen that the brands Airtel, BSNL and Idea are very popular amongst
customers who have Secondary certificates as it suits to their requirements.
Amongst Graduates, the brands Reliance, Tata Indicom and Vodafone are very
popular. It may be due to low tariff plans and their ability as graduate to compare and
contrast among all the available brands in the market which may lack with people up to
higher secondary level as they just rely on their friends or relatives to choose a brand.
Table 3.16BRAND & MARITAL STATUS CLASSIFICATION
MARITAL BRAND AIRTEL % BSNL % IDEA % RELIANCE % TATA
INDICOM% VODAFON
E% TOTAL %
SINGLE 14 19.18 12 16.44 14 19.18 14 19.18 9 12.33 10 13.70 73
(4.67) (4.00) (4.67) (4.67) (3.00) (3.33) 24.33
MARRIED 7 10.29 14 20.59 18 26.47 10 14.71 10 14.71 9 13.24 68
(2.33) (4.67) (6.00) (3.33) (3.33) (3.00) 22.67
SEPARATED 16 21.62 15 20.27 11 14.86 12 16.22 8 10.81 12 16.22 74
(5.33) (5.00) (3.67) (4.00) (2.67) (4.00) 24.67
DIVORCED 12 28.57 7 16.67 4 9.52 8 19.05 5 11.90 6 14.29 42
(4.00) (2.33) (1.33) (2.67) (1.67) (2.00) 14.00
WIDOW 8 18.60 6 13.95 3 6.98 11 25.58 8 18.60 7 16.28 43
(2.67) (2.00) (1.00) (3.67) (2.67) (2.33) 14.33
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
Brand & marital status are cross tabulated in table 3.16 which shows that those
single have more number of connection (14) and less number of Tata Indicom connection
(9). Those who are married have more number of idea providers (18) and least number
of airtel (7). Those separated have 16 Airtel, 15 BSNL, 12 Reliance & Vodafone, 11 Idea
and just 8 Tata Indicom indicom connections. Among divorced group, many have Airtel
connection and very few have Idea connection. That widow group has more number of
Reliance connections (11) & least number of Idea connections.
So, it is clear that Airtel, BSNL, Reliance and Vodafone are very popular brands
among those customers whose marital status is separated. The reason may be that
these brands are providing those schemes suited to their different classes of customers
like low tariff plans, recharge cards with lowest denominations etc.
Source: Questionnaire
Page 98
Almost all the brands are popular among those customers who are single but Airtel,
Idea and Reliance are most popular. The reason could be same as what the separated
have stated, low tariff plans, recharge cards with lowest denominations etc.
Airtel, BSNL, Reliance and Vodafone are very popular among those customers who
are separated; Idea and Tata Indicom indicom are very popular amongst married
customers and Airtel is very popular amongst divorced and widow category of
customers.
On an aggregate, Airtel and BSNL are popular in almost all the categories of
customers with different marital status i.e. their schemes and plans suits to all the
categories of customers.
Table 3.17BRAND & OCCUPATIONAL STATUS CLASSIFICATION
OCCUPATION BRAND
AIRTEL % BSNL % IDEA % RELIANCE % TATA INDICOM
% VODAFONE % TOTAL %
EXECUTIVE 16 29.09 12 21.82 9 16.36 8 14.55 6 10.91 4 7.27 55
(5.33) (4.00) (3.00) (2.67) (2.00) (1.33) 18.33
UNEMPLOYEE 6 10.34 11 18.97 11 18.97 10 17.24 14 24.14 6 10.34 58
(2.00) (3.67) (3.67) (3.33) (4.67) (2.00) 19.33
PROFESSIONAL 8 26.67 6 20.00 5 16.67 4 13.33 3 10.00 4 13.33 30
(2.67) (2.00) (1.67) (1.33) (1.00) (1.33) 10.00
STUDENT 8 21.62 3 8.11 6 16.22 9 24.32 6 16.22 5 13.51 37
(2.67) (1.00) (2.00) (3.00) (2.00) (1.67) 12.33
SERVICE 15 19.23 16 20.51 12 15.38 11 14.10 7 8.97 17 21.79 78
(5.00) (5.33) (4.00) (3.67) (2.33) (5.67) 26.00
OTHERS 4 9.52 6 14.29 7 16.67 13 30.95 4 9.52 8 19.05 42
(1.33) (2.00) (2.33) (4.33) (1.33) (2.67) 14.00
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
To understand the association between the occupational status and brand
possession data presented in table 3.17 is analyzed. Airtel is very popular
amongst the respondents who are executives and who are in service category.
BSNL seems to be equally popular among all the categories of occupations. Idea
seems too popular amongst those who are in service category followed by
unemployed category. Reliance is seen popular amongst others category which
includes rickshaw walas, vegetable vendors etc. Tata Indicom is popular
amongst unemployed category and Vodafone is popular amongst service
category.
Source: Questionnaire
Page 99
It is found that almost all the brands are popular in respondents who are in
service category followed by unemployed category. The reason may be that the
brands and their schemes suits to their requirements.
Table 3.18BRAND & INCOME LEVEL CLASSIFICATION
INCOME BRAND AIRTEL % BSNL % IDEA % RELIANCE % TATA
INDICOM% VODAFON
E% TOTAL %
< 5000 10 20.41 12 24.49 8 16.33 7 14.29 9 18.37 3 6.12 49
(3.33) (4.00) (2.67) (2.33) (3.00) (1.00) 16.33
5001-10000
12 22.22 14 25.93 7 12.96 6 11.11 5 9.26 10 18.52 54
(4.00) (4.67) (2.33) (2.00) (1.67) (3.33) 18.00
10001-15000
5 16.67 4 13.33 3 10.00 8 26.67 6 20.00 4 13.33 30
(1.67) (1.33) (1.00) (2.67) (2.00) (1.33) 10.00
15001-20000
10 20.83 8 16.67 9 18.75 7 14.58 8 16.67 6 12.50 48
(3.33) (2.67) (3.00) (2.33) (2.67) (2.00) 16.00
20001-25000
13 19.70 12 18.18 13 19.70 14 21.21 4 6.06 10 15.15 66
(4.33) (4.00) (4.33) (4.67) (1.33) (3.33) 22.00
> 25001 7 13.21 4 7.55 10 18.87 13 24.53 8 15.09 11 20.75 53
(2.33) (1.33) (3.33) (4.33) (2.67) (3.67) 17.67
TOTAL 57 19.00 54 18.00 50 16.67 55 18.33 40 13.33 44 14.67 300 100.00
From the table 3.18, it is seen that those with less than Rs. 5000 income level
have more BSNL (12) brand and least i.e. 3 Vodafone brand. Those respondents
whose income is between Rs.5001 to Rs. 10,000 also have more BSNL brand and
least Tata Indicom indicom brand (5). Those respondents whose income is between
Rs. 10,001 to Rs. 15,000 have Reliance at the top and Idea at the bottom. Those
respondents, whose income is between Rs. 15,001 to Rs 20,000, have more Airtel
brand and least Vodafone brand. Those respondents whose income is between Rs.
20,001 to Rs. 25,000, Reliance brand is found more and Tata Indicom the least and
those above Rs.25,001 have more Tata Indicom brand and least BSNL brand.
Source: Questionnaire
Page 100
It is clear that Airtel, Idea, Reliance and Vodafone are popular in the income
group of Rs.20001 to Rs 25000. BSNL seems to be equally popular in all the income
categories. Tata Indicom indicom is popular among those respondents whose
income is below Rs 5000. BSNL is best suited to all the respondents of all income
groups followed by Airtel.
Table - 3.19
NATURE OF SCHEME & GENDER LEVEL CLASSIFICATION
GENDER NATURE OF SCHEMEPREPAID % POSTPAID % TOTAL %
MALE 77 46.39 89 53.61 166
(25.67) (29.67) 55.33
FEMALE 64 47.76 70 52.24 134
(21.33) (23.33) 44.67
TOTAL 141 47.00 159 53.00 300 100.00
The nature of scheme & gender is cross tabulated in table 3.19 which shows that
54 percent male & 52 percent female members have post paid connection whereas 48
percent female & 46 percent male have prepaid connection respectively.
It is clear from the table that post paid is dominating among both the genders i.e.
male and female respondents whereas prepaid connection is more popular among male
gender than female gender.
On an aggregate pre paid and post paid are popular among both the genders. The
post paid connection is dominating among male and female genders. The reason may be
that they have selected according to their requirements.
Table - 3.20NATURE OF SCHEME & OCCUPATION LEVEL CLASSIFICATION
NATURE OF
SCHEME
OCCUPATION
EXECUT
IVE
% UNEMPLO
YED
% PROFESSIONAL
% STUDE
NT
% SERVICE % OTHERS % TOTAL %
PREPAID 30 21.28 29 20.57 15 10.64 18 12.77 30 21.28 19 13.48 141
(10.00) (9.67) (5.00) (6.00) (10.00) (6.33) 47.00
POST PAID 25 15.72 29 18.24 15 9.43 19 11.95 48 30.19 23 14.47 159
(8.33) (9.67) (5.00) (6.33) (16.00) (7.67) 53.00
TOTAL 55 18.33 58 19.33 30 10.00 37 12.33 78 26.00 42 14.00 300 100.00
Table 3.20 depicts the association between nature of scheme and
occupational level of the respondents. The pre paid and post paid connection
Source: Questionnaire
Source: Questionnaire
Page 101
are very popular amongst executives, unemployed and service category of
occupation. Amongst students and others category, post paid is dominating. On
an aggregate post paid scheme is popular in almost all the occupational level of
the respondents as it suits to their requirements.
Table -3.21
NATURE OF SCHEME & INCOME LEVEL CLASSIFICATION
Bhagath 25001 – 3000 ka column nahi haiNATURE
OFSCHEME
INCOME
<5000 % 5001-10000
% 10001-15000
% 15001-20000
% 20001-25000
% >30000 % TOTAL %
PREPAID 25 17.73 32 22.70 12 8.51 24 17.02 32 22.70 16 11.35 141
(8.33) (10.67) (4.00) (8.00) (10.67) (5.33) 47.00
POST PAID 24 15.09 22 13.84 18 11.32 24 15.09 34 21.38 37 23.27 159
(8.00) (7.33) (6.00) (8.00) (11.33) (12.33) 53.00
TOTAL 49 16.33 54 18.00 30 10.00 48 16.00 66 22.00 53 300 100.00
To find the association between nature of scheme and the income level of
the respondents data presented in the form of cross tabulation is analyzed. It is
found that pre paid connection is popular amongst those respondents whose
income is between Rs. 5001 to Rs. 10000 and Rs.20001 to Rs. 25000 whereas
post paid connection is popular among high income group i.e. between Rs.
20001 to Rs. 25000 and above Rs.30000.
Table - 3.23
NATURE OF SCHEME & MARITAL STATUS CLASSIFICATIONNATURE
OF SCHEME
MARITAL
SINGLE % MARRIED % SEPARATED % DIVORCE % WIDOW % TOTAL %PREPAID 38 26.95 43 30.50 34 24.11 20 14.18 6 4.26 141
(12.67) (14.33) (11.33) (6.67) (2.00) 47.00
POST PAID 35 22.01 25 15.72 40 25.16 22 13.84 37 23.27 159
(11.67) (8.33) (13.33) (7.33) (12.33) 53.00
TOTAL 73 24.33 68 22.67 74 24.67 42 14.00 43 14.33 300 100.00
To know the association between nature of scheme and the marital status,
cross tabulation is done to analyze. It is observed from the table that the pre
paid connection is very popular amongst those respondents who are single,
married and separated whereas post paid connection is popular amongst those
Source: Questionnaire
Source: Questionnaire
Page 102
respondents who are widow, separated and single.
Therefore it is clear that pre paid and post paid connections are popular
among those who are single and those who are separated. The reason could be
that they have selected as per their requirements.
It is also seen that there is no much difference in selecting the nature of
connection/ scheme among all the categories of marital status. Therefore
marital status does not effect much to the respondents to choose between pre
paid and post paid connections (6% difference between post paid and pre paid
which is negligible).
Table 3.24NATURE OF SCHEME & EDUCATION LEVEL CLASSIFICATION
NATURE OF
SCHEME
EDUCATION
SECONDARY % HIGHER SECONDARY
% GRADUATION % POST GRADUATION
% PROFESSIONAL QUALIFICATION
% TOTAL %
PREPAID 40 28.37 30 21.28 23 16.31 25 17.73 23 16.31 141
(13.33) (10.00) (7.67) (8.33) (7.67) 47.00
POST PAID 35 22.01 50 31.45 40 25.16 27 16.98 7 4.40 159
(11.67) (16.67) (13.33) (9.00) (2.33) 53.00
TOTAL 75 25.00 80 26.67 63 21.00 52 17.33 30 10.00 300 100.00
In order to analyze the association between nature of scheme and education
level of the respondents, cross tabulation between them is drawn. It is seen
that pre paid connection is popular among those respondents who completed
secondary schooling and higher secondary education whereas post paid
connection is popular among higher secondary respondents as well as
graduates. Those with professional qualification certificates preferred pre paid
to post paid may be due to have control over their monthly bills. Those
respondents who possess post graduation certificates preferred post paid to pre
paid so as to enjoy the services of having a mobile phone.
On an aggregate pre paid and post paid connection are popular among all
the categories of educational level as seen from the negligible difference of 6
per cent between them. They have chosen the connection as per their
requirements.
TABLE 3.25
Source: Questionnaire
Page 103
ANOVA BETWEEN BRAND & NATURE OF SCHEMESource of variation
Sum of Squares
df Mean Square
F Sig.
Between Brands
113.000 5 22.600 .558 .731
Within nature of scheme
243.000 6 40.500
Total 356.000 11
To test the hypothesis that, “there is no association between brands and type of
connection”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 6) degrees of freedom
is 0.558.
The table value of F at 5% level of significance is 4.39. The calculated value is
less than the table value. Therefore the hypothesis is accepted i.e. there is no
association between brands and type of connection.
It can be concluded that the effects of the different types of connection which
cause variation in selection of a brand are the same.
TABLE 3.26
ANOVA BETWEEN BRAND & GENDER
Source of variation
Sum of Squares
df Mean Square
F Sig.
Between Brands
113.000 5 22.600 .425 .817
Within Gender
319.000 6 53.167
Total 432.000 11
To test the hypothesis that, “there is no association between brands and gender”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 6) degrees of freedom is 0.425.
The table value of F at 5% level of significance is 4.39. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
gender.
It can be concluded that the effects of the different genders which cause variation in
selection of a brand are the same.
TABLE 3.27ANOVA BETWEEN BRAND & AGE
Source of variation
Sum of Squares
df Mean Square
F Sig.
Between Brands
45.200 5 9.040 .345 .880
Source: Questionnaire
Page 104
Within Age groups
628.800 24 26.200
Total 674.000 29
To test the hypothesis that, “there is no association between brands and age”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is
0.345.
The table value of F at 5% level of significance is 2.62. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
age.
It can be concluded that the effects of the different age groups which cause variation in
selection of a brand are the same.
TABLE 3.28ANOVA BETWEEN BRAND & EDUCATION
Source of variation
Sum of Squares
df Mean Square
F Sig.
Between Brands
45.200 5 9.040 .387 .853
Within Education
560.800 24 23.367
Total 606.000 29
To test the hypothesis that, “there is no association between brands and education”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is
0.387.
The table value of F at 5% level of significance is 2.62. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
education.
It can be concluded that the effects of the different education level which cause variation
in selection of a brand are the same.
Table 3.29ANOVA BETWEEN BRAND & MARITAL STATUS
Source of variation
Sum of Squares
df Mean Square
F Sig.
Between Groups
45.200 5 9.040 .622 .684
Within Groups 348.800 24 14.533
Total 394.000 29
To test the hypothesis that, “there is no association between brands and marital status”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is
Source: Questionnaire
Source: Questionnaire
Source: Questionnaire
Page 105
0.622.
The table value of F at 5% level of significance is 2.62. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
marital status.
It can be concluded that the effects of the different marital status groups which cause
variation in selection of a brand are the same.
Table 3.30ANOVA BETWEEN BRAND & OCCUPATION
Source of variation
Sum of Squares
df Mean Square
F Sig.
Between Brands
38.368 5 7.674 .420 .831
Within Occupation
547.542 30 18.251
Total 585.910 35
To test the hypothesis that, “there is no association between brands and occupation”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 30) degrees of freedom is
0.420.
The table value of F at 5% level of significance is 2.53. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
occupation.
It can be concluded that the effects of the different occupation groups which cause
variation in selection of a brand are the same.
Table 3.31ANOVA BETWEEN BRAND & INCOME
Source of variation
Sum of squares
df Mean Square
F Sig
Between Brand 37.667 5 7.533 .680 .642
Within Income 332.333 30 11.078
Total 370.000 35
To test the hypothesis that, “there is no association between brands and income”,
One-way analysis of variance (ANOVA) is used.
The calculated value of F at 5% level of significance for (5, 30) degrees of freedom is
0.680.
The table value of F at 5% level of significance is 2.53. The calculated value is less than the
table value. Therefore the hypothesis is accepted i.e. there is no association between brands and
income.
It can be concluded that the effects of the different income groups which cause variation in
selection of a brand are the same.
Source: Questionnaire
Source: Questionnaire
