Background of Celcom

CELCOM, known as CELCOM AXIATA BERHAD, is the oldest telecommunication

company in the mobile telecommunication services industry in Malaysia currently. CELCOM

is one of a member of the Axiata group of companies, which is one of the leading

telecommunication companies in Asia. In 1988, CELCOM started its operation as STM

Cellular Communications with Fleet Group and Telekom Malaysia as shareholders. As one of

the telecommunication companies in Malaysia, to originally obtain a cellular phone license, it

introduced mobile telephony in Malaysia through ART-900 (Automatic Radio Telephone)

services successfully. The ETACS (Extended Total Access Communication System) ART-

900 was started using the prefix “010”. However, in 1995, when the cellular phone market

was opened up, CELCOM used dialling prefix identifier of “013” and “019” and offer digital

GSM (Group Special Mobile), an originally European standard, now largely a world standard

for mobile communications. Then, CELCOM upgraded to the GSM900 service and quickly

grew to become the largest mobile phone company in Malaysia. 

Brands Product

Celcom has provided several brand products. The first product is postpaid services

which is the Celcom Exec. This product has divided into a few packages which is Celcom

Exec 20, 50, 250 and also 1+5 plan that targeted different categories of people and also fulfill

different customer needs. Besides, customer also can choose Celcom Exec plan that comes

with the Blackberry Smartphone. These plans offer the customer several features which

allows the customer connected to the internet and chat by using the Blackberry Messenger,

Window Live Messenger and so on. It also enables the customer to view their e-mail and

attachment.

The second product is the prepaid services. There are two packages under this service

which are Xpax and Celcom Blue. Xpax more focus on the teenagers who are between the

ages of 12 to 25, while the Celcom Blue focus on the user above age of 25 and offer longer

credit validity period.

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Lastly is the broadband services provided by the Celcom Company which is the No.1

mobile broadband in Malaysia and offer the widest coverage that over 71% Malaysia’s

populated area. There are a few plan under this services which is you can either paid daily,

weekly or monthly. This services also has the plan with device which is offer the customer a

special price for the device if purchase their broadband services.

Brand Identity

The brand identity of the Celcom broadband is "you’ll have nothing but peace of mind

from the moment you sign up". Celcom broadband offer you the widest coverage, affordable

price and a dedicated customer services.

However, the brand identity for Celcom Biz Intelligent is “Maximize the reach of your

business with Celcom, Malaysia’s leading mobile network service provider with the widest

nationwide coverage”. Celcom Biz Intelligent is to fulfill needs and wants of businesses in

today’s demanding landscape, such as workforce mobility and connectivity, cost effective

solutions, and intelligent operation and management systems.

Meanwhile, the identity for the Celcom Exec postpaid is “Celcom Exec postpaid plan

will prove to be absolutely everything you need and more”. This package provides the

customer low rates and bigger discounts designed to simplify and ease the customer mobile

lifestyle.

The brand identity for the Celcom Blue is “It is loaded with indescribablebablebable,

rates, bonuses and reward”. Celcom Blue provide the customer lowest rate to all networks.

Lastly, the brand identity for the Xpax is “Got X, Got it All”. Xpax is a prepaid plan which

allows you to enjoy the best rates, best bonuses and best mobile broadband and download in

town.

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Brand Strategies

In order to build strong brand identity, Celcom has adapted the major brand strategy

decisions which are the brand development and brand sponsorship. First, is the brand

development. The brand development strategies used by Celcom is the line extension. Celcom

has added new packages under prepaid services category to attract more customers. Example,

Celcom has launched packages such as “School of X” and “University of X” that pack with

different features under the same product category, with the existing brand name, which is

Xpax prepaid services in order to satisfy customer come from different age group.

Moreover, Celcom used the brand extension strategy too. Celcom has come out new

services in new product category, which is the broadband services, using the same brand name

“Celcom”.

Next, is the brand sponsorship. The brand sponsorship strategy used by Celcom is the

co-branding strategy. Celcom has cooperated with Citibank and launched Citibank Celcom

credit card. This credit card is an innovative credit card that gives customer benefits such as

cash rebate, reward point and airtime rebate. Besides, Celcom also collaborate with AirAsia

Bhd. Both the companies has announced the launch of a RM4.99 AirAsia-Celcom prepaid

starter pack that can only be bought at Celcom Service Centre in Kuala Lumpur International

Airport (KLIA) and also in all AirAsia in-flight sales. The purpose for Celcom launches the

AirAsia- Celcom prepaid starter pack is to break new market ground and gain more market

share.

Segmentation

Celcom has divided their market into several segments in order to earn more profit and

compete with their competitors. First, is demographic variable. Demographic variables show

that the company segments the market by difference in age. They also segment based on

different income such as high income group and low income group. The company will also

segment their market into different stage of life cycle such as children, teenager, adult and

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old people. Company also will divide their market based on their customer occupation

whether they is business man, office staff, student or foreign workers.

Besides, Celcom also adapt psychographic variables in their market segmentation.

Psychographic variables stated that the company divides a market into different group based

on social class whether they are in lower class, middle class, or upper class. Moreover, they

also divide their customer group according to their lifestyle whether they have an active

lifestyle or inactive lifestyle.

Furthermore, Celcom has adapted the behavioral variables in their market segmentation

too. Behavioral variables are about dividing a market into groups based on consumer

knowledge, attitudes, usage or response to a product. Examples are segmentation by

occasion which is offer special promotion during holidays, user status, usage rate and

loyalty status.

Brand Positioning

Celcom mobile broadband brand positioning is high speed broadband, connectivity

anytime, anywhere. Celcom broadband has the widest coverage in Malaysia which is over

71% of Malaysia’s populated area. With the help of the technology such as 3G and HSDPA,

Celcom broadband’s user can easily connect to the internet by just using the USB stick.

Furthermore, Celcom is Malaysia’s first prepaid data only mobile broadband pack with no

registration.

Moreover, Celcom also provide wide range of plans which is affordable and flexible

for the customer to choose. Customers can choose what plan they want according to their

usage and financial needs. Celcom mobile broadband has brought many benefits for those

customers who seldom stay at home and indoor. They can easily access to the internet at

outdoor without using cable since they are portable. The features above have explained well

the meaning of "you’ll have nothing but peace of mind from the moment you sign up."

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Targeting

Celcom Company chooses to use the differentiated marketing strategy from the four

targeting strategies. Based on the demographic variable, Celcom Company more focuses on

age group that between ages of 12 to 25. They are very consumptive and willing to spend

for their social life. They are also technology savvy and change their mobile phone

according to the trend. Moreover, the teenagers nowadays usually use Internet and text

messaging service to communicate with each others. Therefore, Celcom Company has

offering Xpax package that provides awesome features such as download games and

application and low SMS and calling rate to the teenager in order to fulfill their needs and

wants.

Secondly, is the psychographic variable. Celcom Company targets those users who

have active social lifestyles and they need to communicate regularly with their colleagues,

friends and family. Therefore, Celcom Company has offering Celcom Blue prepaid services

which promise the customer low rates to all network and additional features, such as free

airtime, birthday bonuses , and advance credit provider to satisfy those customer within this

segment.

The third segmentation adapt by Celcom is the behavioral segmentation. Celcom has

targeted their customer based on their usage rate in the broadband services they provided.

Celcom has provided several plans for their customer to choose based on their usage which

is lite, basic and advances. If the customer is a heavy user of internet, they can consider to

choose the advance plan which have the bigger Gigabits volume quota to fulfill their needs.

Besides, Celcom also provide plan such as prepaid broadband services, daily or weekly

payment services and so on to fits different usage rate customer needs and wants.

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Product

Product is anything that can be offered to a market for attention, acquisition, use or

consumption and that might satisfy a want or need. The product classification can be divide

into three categories which are consumer product, industrial product and other market

offering. Celcom broadband is categorized under the unsought goods. Celcom broadband is a

new innovation and does not often thought about by the consumer. Therefore, Celcom need to

do a lot of marketing and advertising in order to attract more customers to buy their product

and introduce their broadband to the market.

Celcom put effort in the individual product and services decisions which is the product

attributes, branding, packaging, labeling and product support services. First, is the product

attributes. Celcom has maintained their broadband quality by provide features such as widest

coverage in Malaysia and also fastest speed in surfing internet to their customer. Celcom has

launched several packages to customers which are Celcom Broadband Lite, Celcom

Broadband Basic and Celcom Broadband Advance. Besides, Celcom recently also introduced

their limited edition USB modem which is the “Fortune Mask” to their customer. Customer

can choose their own modem design according to their zodiac sign.

Next, is the branding. Celcom has registered their brand name and also the broadband

logo. The purpose of doing this is to prevent others from imitating their products and also

provide protection for unique product features. Besides, they can also prevent their customer

from buying imitate and faulty product. The quality of the products can be maintained so the

customers can have the same features and quality each time they buy the product.

Moreover, Celcom also put effort in designing their broadband’s packaging. They

have design their broadband in small size, portable and light so that the customer can easily

bring the broadband to anywhere they go. Furthermore, the cover of the Celcom broadband

are also environmental friendly and recyclable. While, in the labeling part, Celcom

broadband’s cover has clearly stated about the broadband serial number, manufacture place,

logo and also others information that related to the broadband on the cover of the broadband.

This makes the customer have the peace of mind to use their product safely.

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In the product support services part, Celcom broadband has provided some extra

services to delight their customer. Examples, Celcom broadband provide services such as

“Celcom’s Money-back Guarantee” to their customer. Customer may take back their money

within 7 days after they have subscribed the broadband due to dissatisfaction toward their

services or poor coverage in their living area.

Pricing

Celcom is in the oligopolistic competition market. This is because there are only a few

companies involved in the mobile telecommunication industry which is Maxis, Digi and U-

mobile. Due to there is an intense competition among the companies, customers are sensitive

to the company’s product price. Customer tends to purchase product from company which

offer lower price since all the company within the mobile telecommunication industry

offering the same product function.

The pricing strategy used by Celcom broadband is the market penetration strategies.

Broadband with low price and good quality are offered by Celcom to the market. Few years

ago, Celcom launched its new Broadband packages that start from as low as RM48 per

month, as compared with RM68 per month previously. During the promotional period, all

new signups for Celcom Broadband packages will be offered a RM10 discount, bringing the

price even lower to RM38, for the first three months. The Entry Package also comes with free

USB modem, offering volume of 1GB at 384Kbps. By using this strategy, Celcom can attract

a large number of buyers quickly and win a large market share.

While in the pricing mix strategy, Celcom has adapted product line pricing strategies.

Celcom set their different broadband packages in different price. For example, Celcom

Broadband Lite package is RM48 per month, Celcom Broadband Basic package is RM 68

month and the Celcom Broadband Advance is RM98 per month. Each broadband packages

also pack with different features and suitable for different categories of customer. Examples,

Celcom Broadband Lite suitable for those light users. While, Celcom Broadband Basic

suitable for normal usage user and the Celcom Broadband Advance is suitable for those heavy

users.

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Moreover, Celcom also apply the promotional pricing strategies in their business. In

order to increase their short run sales, Celcom will temporarily reduce their product price for a

certain period. For example, Celcom recently has reduced their broadband volume purchase

price. In the past, customer need to pay RM50 in order to purchase 5GB of volume quota but

now they only have to pay RM38.88 to purchase it.

Promotion Mix

The promotion mix is a specific combination of promotional methods, used to bring

about exchanges by informing, educating, persuading and reminding the targeted market with

a company’s products and services. The promotion mix is using several different types of

communication to support marketing goals which include advertising, personal selling,

publicity, public relations, direct mail, sponsorship and sales promotions. Celcom promotes

their business through promotional mix which is advertising, Internet marketing, sales

promotion and public relation, in order to generate more profits.

First, Celcom used advertising method. Advertising can be defined as placing your

message in any form of paid media, such as newspapers, magazines and journals, television,

cinema, radio, outdoor advertising such as poster. In the advertisement, Celcom is trying to

tell the readers about their specialty, their unique and superior value, the information and

show their differences with other telecommunication company and also convinces the

customers to choose their products at the same time in the local newspaper such as China

Press newspaper, Star newspaper and Berita Harian newspaper. Another example is in Golden

Screen Cinema, everytime before a movie starts, the advertisement of Celcom will be played

and let the audiences know about the class of that particular movie. Besides, Celcom has

invited Taiwan artist, Lee Hom to become their spokesperson in order to promote the product

and also capture the customers’ attraction especially teenagers.

Next, second tool used by Celcom to promote Celcom Broadband is Internet

marketing, which also called as I-marketing, web-marketing and online-marketing. Internet

marketing promotes the products or services over the internet. Celcom used the power of

internet wisely because they can promote, inform, get attention, and persuade the internet

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users to use their broadband in a cheaper and efficient way, as the expensive printed cost can

be eliminated. Moreover, Celcom has their own group or page in some popular social

networking site like Facebook, Twitter and Friendster. In addition, Celcom had joined

Nuffnang, which is a blog advertising community. Through Nuffnang, Celcom can do their

advertisements on the famous bloggers’ blogs with a single picture or a slogan. When the

internet users are surfing their favourite blogs, they will see the advertisement that made by

Celcom and it can links them from the blog to Celcom’s official website for further

informations by just clicking it. This is the easiest and efficient way for Celcom to promote

their Celcom Broadband because most of the people nowadays really rely on Internet and they

can updates the latest promotion or information by their finger.

Moreover, Celcom also used the public relations as one of their advertising strategies.

In order to build good relationship, obtaining favorable publicity and build a good corporate

image, Celcom has sponsor for special event such as GoMobile 2010, Euro 2008 and also the

Blue Ribbon Campaign (BRC) which is a campaign that educate the public about the

childhood cancer. Through the sponsorship done by Celcom, Customer will found out that

Celcom is a company that trustworthy and they will consider to purchase products and

services from Celcom when they need it. Besides, Celcom broadband also use public relation

to announcement regarding management, speculation, and current issue.

The last strategy used to promote Celcom Broadband is sales promotion. Celcom

takes on consumer-oriented which targeted to the ultimate users of a product or service

through rebates, contests, and discounts. For example, Celcom Broadband has come out with

a great discount which customer can choose their limited edition “Fortune Mask USB

Modem”. Customer also can sign up Celcom Broadband with 12 months contract to enjoy

discount with any of the devices such as Mini Router, HP G42 Notebook, or HP Mini 110

Netbook. Those promotions make the customer feel worthy enough to sign up Celcom

Broadband and they will take the initiative to sign up the Celcom broadband packages.

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Marketing Channel and Retailing Strategies.

The marketing channel used by Celcom broadband is the indirect channel. From the

indirect channel, Celcom has chosen retailer channel as their marketing channel. Celcom

distributes their broadband through the intermediate which is the retailer. The reason for

Celcom using the retailer channels is because the retailer can help them to promote their

products face-to face with the customers. Celcom’s retailer sells the product and services

directly to the customer for personal or business use.

The product line of Celcom broadband is classified under specialty store. Celcom

broadband is considered as the narrow product lines with deep assortment. Celcom has set up

their specialty stores, “Blue Cube”, which is the mobile telecommunication retailer outlet for

Celcom products and solutions in Malaysia. Celcom has arranged trained and experience sales

person in their “Blue Cube” stores to provide professional services to satisfy the customer.

Moreover, in the Celcom “Blue Cube” store, they have provided full services that

related to the Celcom products to the customers. Customers can go to any retailer store or

dealer if they had faced any problem in using their product. Moreover, Celcom “Blue Cube”

also provides services such as postpaid bill payment, broadband registration, mobile phone

repairing and more to the customers.

Besides, locations of the store also play an important role in promoting the Celcom

broadband. Celcom usually set up their retailer center at those crowded places such as

shopping complex, roads, streets and so on. As a result, they can attract more customers to

purchase their product. Customers also can find their store easily no matter where the

customer is and more convenience for them if they have any inquiry toward the Celcom

products and services.

Meanwhile, Celcom also promoting their broadband by set up temporarily store during

the PC fair such as Pikom PC fair. By set up store in the PC fair, Celcom can attract more

people to purchase their broadband and increase the short run sales. They usually will do a lot

of promotion and lower down the broadband price in order to attract more customers to

purchase it.

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Critiques of the Strategies and Recommendations

After studying and analyzing Celcom Company, we found that there are some

weaknesses and obstacles that they faced and these weaknesses and obstacles will really do

affect their business performance. Therefore, in order to increase the sales of the company,

Celcom should improve their weaknesses. Below are some suggestions and

recommendations that might help Celcom to improve their sales.

First, in the product and services part, the weakness should improve is the network

coverage of Celcom broadband especially in rural areas which only have 2G connection

service. In outskirt of town, the network coverage is poor, and the speed is limited.

Sometimes, due to the geographical reasons, the users cannot access the Internet when they

need it. Celcom need to improve the internet connection in the rural area. We believe that

users will more believe and have confidence with them once they improve their features and

function of the Celcom broadband.

Moreover, Celcom should improve their broadband network system. Celcom should

improve their speed and upgrade their 3G services to 4G services since the 4G service is

now launching in Malaysia. The 4G service is much faster and smoother for the users to surf

Internet so Celcom should have this 4G service to improve their services in order to attract

more customers and compete with other competitors.

In the pricing part, Celcom should offer more promotions to the customer. They can

come out with different plans and package in low price to fulfill the users’ needs, regardless

which class, which age and which group of people. For example, the cheapest package that

Celcom offer is RM48 per month. However, this broadband only provides the limited speed

which is 384 kbps only. Therefore, Celcom should come out broadband packages with low

price but pack with the fastest speed to the customers in order to bring the greatest

satisfaction to the customers.

In other hand, Celcom should set up more specialty store which is “Blue Cube” retailer

store in the location that always have many people such as shopping complex. These outlets

played important roles because if these outlets are located in everywhere, it is much more

convenient for the customers to pay the bills, to register, to repair, and also customer services.

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By increasing the number of outlets, people in that particular place can get the latest

information, can consult the promoters for customer services, and also pay their bills without

going here and there just for searching the limited outlets.

Last, is the promotion part. Celcom need to emphasize more in advertising. Most of

the people do not know what newest and latest plans and promotions that Celcom is offering

now because of lack of advertising. The rivals of Celcom like Maxis and Digi, always

emphasizes in their advertising efforts as their roadway shows can always be seen easily in

different shopping complex, different crowded places, across different states. Compare to

Maxis and Digi, Celcom is more inactive and passive in this aspect. Therefore, Celcom

should improve in the advertising part through organizing more roadway shows, and

actively involved in the PC fair in order to gain more market share.

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