8/8/2019 FINAL Project EDit Copy
1/67
Contents
1. INTRODUCTION ................................ ................................ ................................ ............................. 3
2. TELECOM SECTOR IN INDIA ................................ ................................ ................................ ............ 5
2.1 CDMA ................................ ................................ ................................ ................................ ...... 9
2.2 GSM ................................ ................................ ................................ ................................ ....... 10
3. TELECOM OPERATORS IN INDIA ................................ ................................ ................................ ... 12
3.1 POST-PAID CELLULAR SERVICES ................................ ................................ .............................. 12
3.2 PRE-PAID CELLULAR SERVICES ................................ ................................ ................................ 12
4. PRE-PAID MARKET ................................ ................................ ................................ ....................... 13
4.1. MARKET SIZE AND THE SHARE OF PRE-PAID SERVICE USERS ................................ ............. ..... 14
4.2 ARPU OF PRE-PAID CUSTOMERS................................ ................................ ............................. 15
5. ADVANTAGES AND DISADVANTAGES OF PRE-PAID CUSTOMERS ................................ .................. 16
6. CONSUMER BUYING BEHAVIOR ................................ ................................ ................................ ... 18
6.1 IMPORTANCE OF CONSUMER BUYING BEHAVIOUR ................................ ................................ 19
6.2 CONSUMER PERCEPTION ................................ ................................ ................................ ....... 20
6.3 CONSUMER ATTITUDE................................ ................................ ................................ ............ 22
6.4 WHY CONSUMERS PERCEPTION IS IMPORTANT FOR TELECOM SERVICE PROVIDERS? ........... 23
7. CRM IN THE TELECOM SECTOR................................ ................................ ................................ ..... 24
7.1 CRM ................................ ................................ ................................ ................................ ....... 26
7.2 DETERMINANTS OF CRM ................................ ................................ ................................ ........ 26
7.3 STAGES OF DEVELOPMENT OF CUSTOMER RELATIONSHIP ................................ ..................... 27
7.4 FUNCTIONS OF CRM ................................ ................................ ................................ ............... 28
7.5 CUSTOMER TOUCH-POINTS- SALES PEOPLE ................................ ................................ ............ 29
7.6 MODELS FOR CRM ................................ ................................ ................................ ................. 30
7.7 MANAGING CUSTOMER RELATIONSHIPS ................................ ................................ ................ 32
7.8 APPLICATION OF CRM IN TELECOM SECTOR ................................ ................................ ........... 34
8. REASONS FOR RETENTION OF A CUSTOMER ................................ ................................ ................ 36
8.1 WITH A PARTICULAR SERVICE (GSM / CDMA) ................................ ................................ ......... 39
8.2 WITH A SERVICE PROVIDER (AIRTEL, IDEA, VODAFONE, etc.) ................................ .................. 39
9. NUMBER PORTABILITY ................................ ................................ ................................ ................. 40
9.1 PROS & CONS ................................ ................................ ................................ ......................... 42
9. 2 BENEFITS FOR CUSTOMERS ................................ ................................ ................................ ... 44
9. 3 BENEFITS FOR THE OPERATORS ................................ ................................ ............................. 45
10. PRE-PAID SCENARIO- EXPECTED CHANGE ................................ ................................ ................... 46
8/8/2019 FINAL Project EDit Copy
2/67
11. WHAT DO CONSUMERS WANT? ................................ ................................ ................................ . 49
11.1 Research Methodology ................................ ................................ ................................ ........ 49
11. 1. A Need of the study ................................ ................................ ................................ ........ 49
11. 1. B Research objectives ................................ ................................ ................................ ..... 49
11. 1. C Scope of the study ................................ ................................ ................................ ....... 49
11. 1. D Limitations of the study ................................ ................................ ............................... 49
11. 1. E Sources of data collection ................................ ................................ ............................ 49
11. 1. F Sampling procedure ................................ ................................ ................................ ..... 50
11. 1. G Research Design ................................ ................................ ................................ .......... 50
11. 1. H Sample size ................................ ................................ ................................ ................. 50
12. DATA ANALYSIS AND INTERPRETATION ................................ ................................ ...................... 51
12. 1 Factors affecting the pre-purchase decision ................................ ................................ ........ 51
12. 2 Most used service ................................ ................................ ................................ ............... 52
12. 3 Factors important in a cellular service ................................ ................................ ................. 53
12. 4 Customers reasons for choosing the CCSP (Current Cellular Service Provider)..................... 54
12. 5 Level of satisfaction with CCSP ................................ ................................ ............................ 55
12. 6 Understanding consumers perception towards their CCSP................................ .................. 56
12. 7 Contemplation to switch to other CSP ................................ ................................ ................. 59
12. 8 Parameters influencing the switch ................................ ................................ ....................... 60
12. 9 Number portability - reason to switch ................................ ................................ ............... 61
12. 10 Reasons for switching to another CCSP ................................ ................................ .............. 62
13. SUGGESTIONS & RECOMMENDATIONS ................................ ................................ ...................... 63
13. 1 Summary of Analysis ................................ ................................ ................................ ........... 63
13. 2 Suggestions ................................ ................................ ................................ ......................... 64
BIBLIOGRAPHY ................................ ................................ ................................ ................................ . 66
LISTS OF FIGURES & TABLES ................................ ................................ ................................ ............. 67
8/8/2019 FINAL Project EDit Copy
3/67
8/8/2019 FINAL Project EDit Copy
4/67
emerging as kings in the market, as is the case with any market in a competitive
environment.
The beneficiaries of the competition being consumers, the telecom players in todays
environment are required to design and deploy customer-centric strategies not only to grab
a share in the market but also to sustain in the market in the long-run. The players have
realized the importance of constant service-quality delivery to the customers for long-run
sustainability. Customer relationship signifies identifying the needs of the customers and
stretching out ways and means to satisfy them. To be precise, it means achieving high
customer profitabilitycustomer revenues over and above customer costs, which demands
matching customer expectations with customer satisfaction.
8/8/2019 FINAL Project EDit Copy
5/67
2. TELECOM SECTOR IN INDIA
Telecom industry in India has undergone a revolution in the recent years. The country is
ranked second worldwide in terms of having the largest telecommunication network, after
China. With the ongoing investments into infrastructure deployment, the country is
projected to see high penetration of Internet, broadband and mobile subscribers.
In 1994, as per the objectives laid down in the telecom policy, the Indian government
liberalized the Telecom sector by allowing private sector participation for both basic and
value-added services. Change in economic thinking coupled with lack of resource s to
upgrade and invest in infrastructure forced this policy change. As an initial and immediate
result of privatization, the private players were given licenses to provide Cellular Services
initially in four metro cities and subsequently, they were given licenses to operate in 19
cities apart from the four metros. As for the Basic Services, the government in the
beginning, decided to adopt a duopoly strategy, by allowing only two players to operate in a
telecom circle, of which one is the private player other than the existing government owned
service provider. Despite the government making several concentrated efforts through theFive-year plans, to provide good communication system to the people of the country, due to
increasing population, non -accessibility to remote rural areas and non-availability of
adequate resources, the national tele-density stood at 1.1 in 1995-96, which was far from
the global average of 12 at the same period.
The change of government paved way for reforms in the sector and the New Telecom Policy
(NTP) of 1999 was initiated to overcome the flaws in the telecom policy announced in 1994,
and to go with the Supreme Court recommendations to allow unrestricted entry in the
telecom sector. The primary objective of the NTP was to increase the national tele-density
to 15 by the year 2010. This meant installation of 130 million more lines at an estimated
expenditure of about Rs.5000 b illion from the year 2000 to 2010. This investmentrequirement could not have been met by DoT alone. In order to meet the investment
targets, it was imperative that multiple players be allowed to compete in the market.
During the monopoly service provider regime, where only one government owned telecom
service provider existed, the market forces of demand and supply were controlled by the
monopoly service provider. The demand was very high, not adequately matched by the
supply of telephone lines. Telephones were not given on demand and people had to wait for
a telephone connection for years. Reports reveal that th e waiting time in the pre-
privatisation era was more than a year, in some areas the waiting time was more than 5
years. Lack of adequate investments in capacity improvement and exchange automation
also contributed to this long waiting time. Another factor that contributed to this was thehuge demand for telephone service in a 100-crore populated country. For one telephone
service provider to cater to the communications requirement of the entire country was an
uphill task.
8/8/2019 FINAL Project EDit Copy
6/67
Subsequent to the announcement made in the NTP 1999, the government started issuing
licenses to multiple private service providers to provide services in each telecom circle. The
private service providers started their operations in the year 2000. Thus, the sector that was
characterized by a monopoly market structure slowly moved into a competitive
environment, with multiple players offering a variety of services. The competitive
environment is also witnessing a change in the preference patterns of the consumers, which
is evident from their acceptance of private products in the last four years. Thanks to
privatisation, the telecom industry of India is now witnessing a gradual and steady shift from
a monopoly market to a competitive market. The market witnesses multiple service
providers, providing the basic as well as value-added services to the subscribers.
Privatisation of the sector and the subsequent multiple entry of private service providers
into the market, have made the state owned telecom players wake up to reality and realize
the importance of satisfying a customer. BSNL and MTNL had lost 2 million fixed line
subscribers as on December 2003, and the PSUs are pulling up their sleeves to fight the
competition.
The industry is experiencing a transformation from being a monopoly market to a
competitive market. When there is monopoly, the customers are left with no choice but to
accept whatever is given by the monopoly service provider, but in a competitive
environment, consumers can exert their preferences and the service providers need to map
the consumer expectations and match them with their product and service delivery in order
to sustain in the market. The market, now with private players and a competitive
environment, has necessitated the re-structuring of the functions of players. With
liberalization and subsequent de-monopolisation in the telephone segment, the scene has
changed. The competitive environment has stolen a big share of subscribers from DoT. With
privatisation in the Indian Telecom industry, the most excited are the consumers, who are
emerging as kings in the market, as is the case with any market in a competitive
environment.
According to our new analytical study on the sector Indian Telecom Analysis (2008 -2012),
mobile telephony continues to fuel growth of th e Indian telecom sector, with mobile
subscribers projected to grow at a CAGR of around 11% between 2009-10 and 2013-14.
Other segments of the industry such as Internet and broadband are also anticipated to
witness strong growth in terms of both subscriber addition and network infrastructure
deployment over the forecast period.
Tele-density in India has improved significantly over the recent years and has reached
around 51% in the fiscal year 2009-10, owing to improving network infrastructure. The
launch of advanced telecom services like 3G and IPTV will also drive the growth in Indian
telecom subscriber base over the forecast period. Furthermore, mobile handset market isalso expected to register a robust growth in near future.
The report provides a detailed study of the Indian telecom sector and gives an analysis of
the competitive environment prevailing in the industry. The Indian telecom industry has
achieved tremendous growth consolidating a subscriber base of 560 million by end 2009.
By end 2010 we are hopeful of crossing our 11th Five Year Plan target of 600 million
connections two years ahead of schedule, said Gurudas Kamat, Indian Minister of State
for Communications & IT, speaking at the Convergence 2010 he said,
Telecommunications have emerged as a springboard of ICT applications with economy-
8/8/2019 FINAL Project EDit Copy
7/67
wide impact. A whole range of information based industry applications have come up
creating new sources of employment and earning. Kamat emphasized that the need of the
hour was enabling the mobile device to empower the masses through customized value
added services for rural applications.
India has got around 11 mobile service providers including both the GSM (Global System for
Mobile) and CDMA (Code division Multiple access) service. Among this 11, the re are 8 GSM
service providers and 3 CDMA service providers.
1) BSNL/MTNL (Bharat Sanchar Nigam Limited/ Mahanagar Telecom Nigam Limited)- It is
the largest telecom company in India with 24% market share and currently the customer
base is around 90 million. This customer base includes fixed line phones, mobiles and DSL
lines. Its an government company with market value of around 100 Billion.
2) Airtel - Bharti Enterprises - Its world's third largest single country mobile operator with
around 110 million sub scribers, the chairman of the company is Sunil Mittal. Airtel provides
fixed and mobile teleservices and it has recently launched Digital Television DTH service and
broadband service also. Airtel has around 24% market share in India.
3) Reliance Communications - This was formerly known as reliance Infocom. Its a private
company in which Anil Dhirubahi Ambani holds around 67% share. It has 17% market share
in India. Reliance had initially started with the CDMA service but now has extended it to
GSM also. It also provides service like Mobile broadband services, mobile service, fixed line
service, Internet service.
4) Vodafone Essar - Initially this was marketed under brand Hutchisson Essar, but Vodafone
took over and now it is known as Vodafone Essar. The market share is around 24% for
vodafone and it operates in 33 circles in India. It provides only GSM mobile service in India.
5) Tata Teleservices Its a part of one of the world's largest conglomerate Tata Group under
Chairman Rata Tata. It markets under 3 different brands, Tata Indicom, Virgin Mobile and
recently it started the brand Tata Docomo which is a venture between Japanese mobile
giant NTT docomo and Tata Teleservice. Tata Indicom is a CDMA provider, it provides
cellular, Mobile broadband, fixed line services. Virgin is a CDMA player which provides
cellular as well as wireless internet. Tata Docomo is a GSM player which provides only
mobile service.
6) Idea Cellular - Currently the Aditya Birla group holds about 49% share of Idea cellular. It
has a market share of about 15% in India with around 48 million subscribers. It provides
GSM mobile service and wireless Internet for laptops.
7) Aircel - It is India's 5th largest GSM service provider with subscriber base of about 27
million. Its a joint venture between Maxis Communication, Malaysia and Apollo Hospital
Group, India. It has a market share of about 13% in India. Currently it provides only GSM
mobile service.
8) Uninor - It is the 8th GSM service that started its operation in India. Its a merger between
Unitech India and Telenor, Norway.
8/8/2019 FINAL Project EDit Copy
8/67
9) MTS - Its a CDMA/GSM player which is a merger between Shyam group, India and Sistema
group, Russia.
10) Loop Mobile The cellular services provided by the BPL electronics group, although the
services are not provided PAN India but it has a fair presence in the major cities of the
country.
11) Videocon The newest to enter the competitive market of cellular service providers in
Mumbai was the Dhoot group with the same name of their other businesses as Videocon.
Functioning with the GSM technologies , Videocon offers to be best network providers in
Mumbai.
8/8/2019 FINAL Project EDit Copy
9/67
2.1 CDMA
Code division multiple access (CDMA) is a channel access method utilized by various radio
communication technologies. It should not be confused with the mobile phone standards
called CDMA-One and CDMA2000 (which are often referred to as simply CDMA), which use
CDMA as an underlying channel access method.
One of the basic concepts in data communication is the idea of allowing several transmitters
to send information simultaneously over a single communication channel. This allows
several users to share a bandwidth of different frequencies. This concept is called
multiplexing. CDMA employs spread-spectrum technology and a special coding scheme
(where each transmitter is assigned a code) to allow multiple users to be multiplexed over
the same physical channel. By contrast, time division multiple access (TDMA) divides access
by time, while frequency-division multiple access (FDMA) divides it by frequency. CDMA is a
form of spread-spectrum signalling, since the modulated coded signal has a much higher
data bandwidth than the data being communicated.
An analogy to the problem of multiple access is a room (channel) in which people wish to
communicate with each other. To avoid confusion, people could take turns speaking (time
division), speak at different pitches (frequency division), or speak in different languages
(code division). CDMA is analogous to the last example where people speaking the same
language can understand each other, but not other people. Similarly, in radio CDMA, each
group of users is given a shared code. Many codes occupy the same channel, but only users
associated with a particular code can understand each other.
Each user in a CDMA system uses a different code to modulate their signal. Choosing the
codes used to modulate the signal is very important in the performance of CDMA systems.
The best performance will occur when there is good separation between the signal of a
desired user and the signals of other users. The separation of the signals is made bycorrelating the received signal with the locally generated code of the desired user. If the
signal matches the desired user's code then the correlation function will be high and the
system can extract that signal. If the desired user's code has nothing in common with the
signal the correlation should be as close to zero as possible (thus eliminating the signal); this
is referred to as cross correlation. If the code is correlated with the signal at any time offset
other than zero, the correlation should be as close to zero as possible. This is referred to as
auto-correlation and is used to reject multi -path interference.
Major operators in India with CDMA technology: -
y Reliancey Tata- Indicom, Virgin.
y MTS
8/8/2019 FINAL Project EDit Copy
10/67
2.2GSM
GSM, Global System for Mobile Communications: originally from Groupe Spcial Mobile, is
the most popular standard for mobile telephony systems in the world. The GSM Association,
its promoting industry trade organization of mobile phone carriers and manufacturers,
estimates that 80% of the global mobile market uses the standard. GSM is used by over 3
billion people across more than 212 countries and territories. Its ubiquity enables
international roaming arrangements between mobile phone operators, providing
subscribers the use of their phones in many parts of the world. GSM differs from its
predecessor technologies in that both signalling and speech channels are digital, and thus
GSM is considered a second generation (2G) mobile phone sys tem. This also facilitates the
wide-spread implementation of data communication applications into the system.
The ubiquity of implementation of the GSM standard has been an advantage to both
consumers, who may benefit from the ability to roam and switch carriers without replacing
phones, and also to network operators, who can choose equipment from many GSM
equipment vendors. GSM also pioneered low-cost implementation of the short message
service (SMS), also called text messaging, which has since been suppor ted on other mobile
phone standards as well. The standard includes a worldwide emergency telephone number
feature (112).
Newer versions of the standard were backward-compatible with the original GSM system.
For example, Release '97 of the standard added packet data capabilities by means of
General Packet Radio Service (GPRS). Release '99 introduced higher speed data transmission
using Enhanced Data Rates for GSM Evolution (EDGE).
GSM networks operate in a number of different carrier frequency ranges (separated into
GSM frequency ranges for 2G and UMTS frequency bands for 3G), with most 2G GSM
networks operating in the 900 MHz or 1800 MHz bands. Where these bands were alreadyallocated, the 850 MHz and 1900 MHz bands were used instead (for example in Canada a nd
the United States). In rare cases the 400 and 450 MHz frequency bands are assigned in some
countries because they were previously used for first-generation systems. Most 3G GSM
EDGE networks in Europe operate in the 2100 MHz frequency band. Regardless of the
frequency selected by an operator, it is divided into timeslots for individual phones to use.
This allows eight full-rate or sixteen half-rate speech channels per radio frequency. These
eight radio timeslots (or eight burst periods) are grouped into a TDMA frame. Half rate
channels use alternate frames in the same timeslot. The channel data rate for all 8 channels
is 270.833 kbit/s, and the frame duration is 4.615 ms. The transmission power in the
handset is limited to a maximum of 2 watts in GSM850/9 00 and 1 watt in GSM1800/1900.
GSM has used a variety of voice codec to squeeze 3.1 kHz audio into between 6.5 and 13
kbit/s. Originally, two codec, named after the types of data channel they were allocated,
were used, called Half Rate (6.5 kbit/s) and Full Rate (13 kbit/s). These used a system based
upon linear predictive coding (LPC). In addition to being efficient with bitrates, these codec
also made it easier to identify more important parts of the audio, allowing the air interface
layer to prioritize and better protect these parts of the signal.
8/8/2019 FINAL Project EDit Copy
11/67
GSM was further enhanced in 1997[13] with the Enhanced Full Rate (EFR) codec, a 12.2
kbit/s codec that uses a full rate channel. Finally, with the development of UMTS, EFR was
re-factored into a variable-rate codec called AMR-Narrowband, which is high quality and
robust against interference when used on full rate channels, and less robust but still
relatively high quality when used in good radio conditions on half -rate channels.
GSM has used a variety of voice codec to squeeze 3.1 kHz audio into between 6.5 and 13
kbit/s. Originally, two codecs, named after the types of data channel they were allocated,
were used, called Half Rate (6.5 kbit/s) and Full Rate (13 kbit/s). These used a system based
upon linear predictive coding (LPC). In addition to being efficient with bitrates, these codec
also made it easier to identify more important parts of the audio, allowing the air interface
layer to prioritize and better protect these parts of the signal. GSM was further enhanced in
1997[13] with the Enhanced Full Rate (EFR) codec, a 12.2 kbit/s codec that uses a full rate
channel. Finally, with the development of UMTS, EFR was re-factored into a variable-rate
codec called AMR-Narrowband, which is high quality and robust against interference when
used on full rate channels, and less robust but still relatively high quality when used in good
radio conditions on half-rate channels.
8/8/2019 FINAL Project EDit Copy
12/67
3. TELECOM OPERATORS IN INDIA
The major telecom operators in India are near to 15 in numbers, but all of them are not
present all across the country but a decent competition exists between 11 of the top listed
cellular services providers. Amongst these 11 operators the giants are from both the
government and the private sectors. From the government sector the major players areMTNL and BSNL. They offer services in both the technologies like GSM and CDMA. Their
services are available in both post-paid and pre -paid.
Similarly from the private sector the major operators a re from TATA, Reliance, Bharti, Aditya
Birla groups. They also provide services in CDMA & GSM. In terms of payment they also
provide options of post-paid and pre-paid. The customers have various options of payment,
they can choose from a wide spectrum of service providers and payment modes. Usually it is
observed that the customers chose to purchase the pre-paid services more than the post
paid services. During the research done as the part of this report this information came out
as a fact.
3.1 POST-PAID CELLULAR SERVICES
Most of the telecom operators provide Post-paid services to their customers; the customers
are majorly from the corporate sectors and the people who require communicating
uninterruptedly to their business partners. The telecom operators provides these clients
with various schemes and discounts so as to create a long term relationship that results into
profits of the company due to increased MOU. The companies usually have different
departments dealing with their post-paid customers, but there are some companies which
only deal with post-paid customers only. To name a few companies that provide post-paid
services are; Airtel, Vodafone, Idea, Aircel, Tata -DoCoMo, MTNL, BSNL, LOOP, Videocon, etc.
3.2 PRE-PAID CELLULAR SERVICES
All the telecom operators provide pre-paid services. The pre-paid services are widely
preferred because it gives a chance to the customers to get to know the service provider
and also test the services of the operator. The companies fight for the market share in this
segment and have different departments to deal with the different needs of the customers.
The schemes and promotional offers that is provided to the customers are much more
lucrative than the post-paid service this is done to get the market share of other operators.
The pre-paid calling and communication are not the main source of revenue for the
companies but the data and others services used by the customers generate the revenue.
The companies which provide pre-paid services in Mumbai are; Airtel, Vodafone, Idea, BSNL/MTNL, Reliance, Tata-DoCoMo, Aircel, Virgin mobile, MTS, Loop Mobile, Tata- Indicom, Videocon.
8/8/2019 FINAL Project EDit Copy
13/67
4. PRE-PAID MARKET
The total number of cellular service users in the country can be divided into two; Pre -paid &
Post-paid. Here in this report our concern revolves around the needs and expectations of
the pre-paid cellular service users. The sample of the research also comprises of the same so
as to give a clear idea of pre-paid customers. Since the risk is near to nothing on switching toone operator to other in such competitive market, what can be the reasons for the
customers to stick or switch to any other operators? When the market is such that on
paying only a small amount of Rs. 50 a customer can change his service provider what
makes him stay and the same can be asked as he switches from one operator to other. In
such cases the frequency of changing the operators has not been taken into account along
with the multiple service users, as it is assumed that the loyalty to a particular operator is
not existent in that segment of the customers they are simply price sensitive and tend t o get
a better deal. It has been observed that the main revenue generation doesnt happen
through the pre-paid customers rather it happens through the post-paid customers yet the
companies give utmost importance to their pre-paid customers and try to lure them with
attractive schemes and promotional offers. The ARPU and the MOU come into play whileaccounting the revenue generated from the customers. Comparatively the pre-paid market
is far bigger than the post-paid market and the number of customers keeps on changing
from one brand to other brand yet the numbers increase in the companys portfolio
because of the potential users joining in everyday in number of millions and the rural
market being explored as the technical hurdles getting lowered. As these ru ral markets are
exploring the cellular services for the first time they tend to purchase the pre -paid
connections from a variety of operators coming in everyday. So as the companies explore
these rural markets they tend to play the initial game of customer acquisition on the basis of
competitive pricing and offer cut throat competition to other operators. The best prices till
date in the pre-paid market have been provided by the Reliance communications group and
have been giving competition to the other players but the other operators dont tend toagree to this and rightly so because most of them are competing on a different
technology(GSM) whereas the technology used by RIL is CDMA which is a cheaper mode of
communication and was not primarily meant for mobile communication but the technical
advancement and some modification made it possible and RIL ventured into the business at
the right time and changed the whole scenario of communication in India.
Other big players in the market which provide a good pric e for the customers are; Vodafone,
Airtel, Idea and some new entrants like Tata-DoCoMo & Aircel promises good deals for the
customers. The market share is predominantly calculated on the two differentiating types of
technology i.e. GSM & CDMA. In CDMA Reli ance gets the maximum share and in GSM it is
Airtel from the Bharti group who manages to be in the sweet spot.
8/8/2019 FINAL Project EDit Copy
14/67
4.1. MARKET SIZE AND THE SHARE OF PRE-PAID SERVICE USERS
India at present has more than 500 million subscribers and the major market share is o wned
by private players. Every quarter the TRAI releases a compiled report of every operational
quarter. In the last quarter the telecom companies have faced losses in the revenues but the
subscriber base has increased.
Here is a quick peek into the market share [MS] of various mobile companies in India at the
end of Dec-2009. Read Subscriber MS as SIM based MS.
y Bharti Airtel Subscribers 22.6% while Revenue is the highest at 29.1%, saw a
decline of 1.1% in the Dec quarter.
y Reliance Communications Subscribers 17.9% and Revenue of 15.2%
y Vodafone India Subscribers 17.4% and Revenue of 20.8% managed to buck the
trend and gain 0.3% revenue market share.
y BSNL Subscribers 12% and Revenue of 9% is unable to arrest the downfall.
Witnessed 0.5% decline in QoQ of revenue market share
y Idea Cellular Subscribers 11% and Revenue of 12.7% had a successful quarter
amidst the Per Second Billing Chaos as it increased its revenue market share by
100bps during the quarter.
y Tata Teleservices Subscribers at 10.9% while Revenue share was at 7.1% .
y Aircel Performance was better as it managed to have a subscriber market share of
5.9% and a revenue market share of 4% with the latter witnessing a growth of 0.3%
QoQ.
Source TRAI, AUSPI,COAI and company reports.
According to latest available data i.e. TRAI report after Dec09, these were the relative
findings.
y Total wireless subscribers at the end of this quarter are 525.09 million.
y Percentage change over the previous quarter was 11.31%.
y The Urban subscribers were more than double of the Rural Subscribers.
y The GSM subscribers exceeded 3 times the CDMA subscribers.
y Till date the Tele-density of the country is yet to reach 50% and found to be 44.72%.
y Whereas the urban Tele-density is 103.20% and Rural was 19.95%. Huge scope in the
rural market to expand for the Telecom companies.
y Percentage of pre-paid subscribers is way more than that of Post-paid subscribers
i.e. 95.18%.
8/8/2019 FINAL Project EDit Copy
15/67
4.2 ARPU OF PRE-PAID CUSTOMERS
ARPU or the Average Revenue per User is the basis term for the accounting of revenue in
Telecom sector. The ARPU is based on the MOU i.e. the Minutes Of Usage. The major
revenue is generated through the calling and roaming facilities provided by the operators.
The revenue is calculated QoQ. The pre-paid ARPU contributes to the blended ARPU.
Table 1: ARPU of Pre-paid customers
Circle category Postpaid Prepaid Blended ARPU
Circle A 513 128 149
Circle B 465 122 132
Circle C 487 117 128
Metro 615 121 184
All India 530 124 144
The revenue generated can be allocated to different heads as per their generation patterns.
The revenue for an operator can come from many resources such as the calling, roaming,
rentals, SMS etc. The break up for the last quarter has been provided here along-with the
comparison of earlier quarter.
Table2: Total Revenue Increase
Item Sep-09 Dec-09
Rental Revenue 26.6% 27.6%
Revenue from Calls 56.0% 56.1%
Revenue from Roaming 1.9% 1.5%
Revenue from SMS 5.1% 5.6%
Other Revenues * 10.4% 9.1%
* Other revenue includes revenue from other value added services, installation etc.
8/8/2019 FINAL Project EDit Copy
16/67
5. ADVANTAGES AND DISADVANTAGES OF PRE-PAID CUSTOMERS
Is it worthwhile signing a contract with a cell phone carrier?
This is the most important question that comes into a customers mind before making a
purchase decision of a cellular service provider. How does the customer reach to a decisionis a critical thing to be analysed. There are a set of questions he asks to himself.
y Do I need my cell phone for work?
y Will I be calling mainly friends and family?
y Will I be making out of state calls or international calls?
Prepaid cell phones are ideal for people who do not intend signing contracts and do not
intend to use the cell excessively. There many advantages and disadvantages with using this
type of cell phone.
The main advantage of prepaid cell phones is the combination of freedom and control thatthey offer. With a prepaid cell phone, you're not locked into a multi -year plan with a set
number of minutes per month during specific calling times, additional charges if you exceed
the limit and a costly fee if you break the contract. You're free to talk whenever you want,
as long as you want, until you run out of minutes. And you don't have to pay a month ly bill.
Talking one month and less the next makes no difference, and leftover minutes roll over
from one month to the next. Plus, if you want to change to a different type of plan, a
prepaid phone gives you the freedom to switch whenever you want.
The main advantage of prepaid cell phones is the lack of a contract. Because you are not
tied to any specific company or monthly rate, you can spend as much or as little as yourbudget allows. If you don't use your phone much, prepaid cell phones make a lot of se nse,
as you don't have to pay a fixed amount for minutes that go to waste.
Another good advantage of prepaid cell phones is that there is no credit check required to
open an account. This is great for teenagers or for those with no credit history.
Prepaid cell phones don't require a deposit to open an account, unlike many other plans.
Prepaid cell phones are a great option for parents who want their children to have a phone
but want to have control over how much they spend.
8/8/2019 FINAL Project EDit Copy
17/67
Theseadvantagesmakea prepaid phone work particularly well for:
y Occasional cell phone users: If you only use a cell phone for emergencies and
perhaps a few calls a week, you don't need a fancy phone or a complicated billing plan. A
prepaid phone may work well, but make sure you know about any time limit on unused
minutes.
y Short-term users: Buy it, use it on vacation or while your regular cel l phone is missing
or broken and then throw it away.
y Trial users: Before committing to a long-term cell phone plan, use a prepaid phone
for a month or two to gauge what your (or your teenager's) actual usage will be. Then you
can find a plan with the minutes and calling times to match.
y Young adults and others with no credit history or credit card debt : Buying a prepaid
cell phone doesn't require a long-term contract and credit check, so students with part-time
jobs or older adults with no use of credit or a less -than-perfect credit record can get a phone
easily.
Inagistthemainadvantages ofusinga prepaid cell phone:
y No credit check required
y No deposit required
y No monthly rental fee
y No termination fee if you decide not to use your phone again
y No service fee
y A large selection of phones available including camera cell phones
y Always in control of call costs
While a prepaid cell phone offers many advantages, it also can present problems for its
users. One of the biggest problems is the cost per minute, a serious disadvantage for anyone
who talks a lot on a cell phone.
y Prepaid cell phones are more expensive to use. The cost per minute is usually 2-3
times higher than the price per minute under contract plans.
y Unless you are organized and keep track of your credit, you run the risk of running
out of minutes when you most need them.
y Calls and SMS Text will be more expensive per minute than using a bill phone.
y Some carriers will put a time limit on your credit (you will need to use it up within a
certain time or else it will be classed as invalid).
8/8/2019 FINAL Project EDit Copy
18/67
6. CONSUMER BUYING BEHAVIOR
Consumer Buying Behavior is the behavior that a consumer display while buying the product
or a service. Each and every consumer has his/her own buying behavior that he displays it
during purchase of different products. This behavior displayed by the consumer is the result
of a number of influences which he/she receives from the environment. These influencescan be categorized into four factors viz. Cultural factors, Social factors, Personal factors and
Psychological factors.
Cultural Factors
Culture, subculture and social classes are particularly important in buying behavior. Culture
is the fundamental determinant of a persons wants and behavior. Each culture consists of
smaller subcultures that provide more specific identification a nd socialization of its
members. Subculture includes nationalities, religions, racial groups and geographic regions.
Social Factors
In addition to cultural factors a consumers behavior is influenced by such social factors asreference groups, family and social roles and statuses. A persons reference group consists
of all the groups that have a direct (face to face) or indirect influence on the persons
attitudes or behavior. Groups that have direct influence on a person is called as membership
groups. Some membership groups are also called as primary groups, such as family, friends,
neighbors and coworkers with whom the person interacts fairly continuously and informally.
People also belong to secondary groups such as religious, professional and trade union
groups which tend to be more formal and require less continuous interaction. Aspirational
groups are those a person hopes to join; dissociative groups are those whose values and
behavior an individual rejects. The family is the most important consumer buying
organization in society, and family members constitute the most influential primary
reference group. A person participates in many groups-families, clubs, organizations. Thepersons position in each group can be defined in terms of role and status. A role consists of
the activities a person is expected to perform. Each role carries a status.
Personal Factors
A buyers decisions are also influenced by personal characteristics. These include the buyers
age in the life cycle, occupation, economic circumstances, lifestyle and personality and self
concept. People buy different goods and services over a lifetime. They eat baby food in the
early years, most foods in the growing matured years and special diet in the later years.
Occupation also influences consumption patterns. A blue collar worker may buy work
clothes, work shoes and lunch boxes. A company president may buy expensive suits, air
travel and country club membership. People from same subculture, social classes andoccupation may lead quite different lifestyles. A lifestyle is a persons pattern of living in the
world expressed in activities, interest and opinions.
Psychological Factors
A persons buying choices are influenced by four major factors viz. motivation, perception,
learning, believes and attitudes.
8/8/2019 FINAL Project EDit Copy
19/67
6.1 IMPORTANCE OF CONSUMER BUYING BEHAVIOUR
The study of consumer behavior focuses on how individuals make their decisions to spend
their available resources (time, money, effort) on consumption related items or
consumption related aspects (What they buy? When they buy? How they buy?). It is also the
study of individuals, or organizations and the processes consumers use to search, select, use
and dispose of products, services, experience, or ideas to satisfy needs and its impact on the
consumer and society.
The consumer buying decision goes through the following stages:
y Problem recognition
y Information search
y Evaluation of alternatives
y Purchase decision
y Purchase
y
Post purchase evaluation
Buyer behavior is deeply rooted in psychology with dashes of sociology thrown in just to
make things more interesting. Since every person in the world is different, it is impossible to
have simple rules that explain how buying decisions are made. But those who have spen t
many years analyzing customer activity have presented us with useful guidelines in how
someone decides whether or not to make a purchase. The evaluation of marketing concept
from mere selling concept to consumer oriented marketing has resulted in buyer behavior
becoming an independent discipline.
The growth of consumerism and consumer legislation emphasizes the importance that is
given to the consumer. Some consumers are characterized as being more involved in
products and shopping than others. A consumer who is highly involved with a product
would be interested in knowing a lot about it before purchasing. Hence he reads brochures
thoroughly, compares brands and models available at different outlets, asks questions, and
looks for recommendations. Thus consumer buying behavior can be defined as heightened
state of awareness that motivates consumers to seek out, attend to, and think about
product information prior to purchase. Consumer behavior is important to successfully
market to different market segments to survive in the market.
8/8/2019 FINAL Project EDit Copy
20/67
6.2 CONSUMER PERCEPTION
It is selection, organization, and interpretation of marketing and environmental stimuli into
a cohesive picture. Perception is a mental process, whereby an individual selects data or
information from the environment, organizes it and draws significance or meaning from it.
Perception is basically a cognitive or thinking process and an individuals activities,
emotions, feelings etc. are based on his perception of his perception of his surroundings or
environment. Perception being an intellectual and cognitive process will be subjective in
nature. This means that different people may perceive the same environment differently.
Characteristics affecting perception:
Characteristic effecting perception can be divided into sensory elements and structural
elements. The sensory elements are as follows.
Color: Color has important sensory connotations. Evidence suggests that red is regarded as
warm, sensual and not intimidating. Blue is seen as conforming and is re garded to be color
that attempts to convey friendlier image. Pepsi attempt to cash on the blue color of the
Indian cricket team during the recent World Cup cricket matches has received a similar
response. Many retailers in Mumbai call it Ghaslet Pepsi. This is because Indians are more
used to identify blue with kerosene and their long term association with blue color of
kerosene led to call blue Pepsi as Ghaslet.
Taste: Taste is another sensory factor that will condition consumers brand perceptions. The
importance of taste is illustrated by P&G blunder when it first introduced Pringles potato
chips. The chips were packed in an easy-to-stack cylindrical can to avoid breakage of chips.
The consumers responded by saying that the packaging resembles a tennis ball can. Further
consumers felt that the chips tasted like tennis ball.
Smell: Smell is important for food products and cosmetics products. In one study, two
fragrances were added to the same facial tissue. Consumers perceived one facial issue as
elegant and expensive and the other as a product to use in the kitchen.
Sound: Sound is another important sensory stimulus. Advertisers have traditionally used
accent to convey status and authority. Even in case of serials, voice is being used to create
an impact on the masses.
Feel: The feel of certain products will also influence consumers perceptions. Softness is
considered a desirable attribute in many paper products. Feel is also a means of
determining quality. Consumer often use of a textile fabric, clothing, carpeting, or furnitureto evaluate quality. For example, a smooth, velvety feel in textile fabrics is considered an
indication of quality.
8/8/2019 FINAL Project EDit Copy
21/67
Thestructuralelementsareas follows:
Intensity and Size: The brighter and advertisement and larger the size, more it is able to
attract the attention of potential consumers. Such large advertisements can be in the form
of full page advertisements in newspapers or in the form of large hoardings on the road.
Position: Attraction towards and advertisement depends largely on the place where it is
positioned. Positioning includes the page of a newspaper. Similarly, the placement of
product for display on shelves at the retail outlet plays an important role in attracting the
attention of the consumers.
Contrast: A black and white advertisement with a small spot used by Jet Airways is likely to
attract attention. A quite commercial after a loud program can attract attention like the
advertisement of De Beers diamond after listening to a frantic rock show.
Novelty: It is observed that anything which is different from what is normally expectedtends to attract attention like an unusual bottle shape or different packaging material.
Repetition: Advertisements are repeated often to enable consumers to brand recall as well
as stimulate them and create a strong desire for interest in the purchase of the product.
Repetition is particularly important in case of low involvement convenience goods like soaps
and toothpastes.
8/8/2019 FINAL Project EDit Copy
22/67
6.3 CONSUMER ATTITUDE
Consumers attitude is a hypothetical construct that represents an individual's degree of like
or dislike for an item. Attitudes are generally positive or negative views of a person, place,
thing, or event- this is often referred to as the attitude object. People can also be confl icted
or ambivalent toward an object, meaning that they simultaneously possess both positive
and negative attitudes toward the item in question. Attitudes are judgments. They develop
on the ABC model (affect, behavior, and cognition). The affective response is
an emotional response that expresses an individual's degree of preference for an entity.
The behavioral intention is a verbal indication or typical behavioral tendency of an
individual. The cognitive response is a cognitive evaluation of the entity that constitutes an
individual's beliefs about the object. Most attitudes are the result of either direct experience
or observational learning from the environment
Attitudes can be changed through persuasion and we should understand attitude change as
a response to communication. Experimental researches into the factors that can affect the
persuasiveness of a message include:
Target Characteristics: These are characteristics that refer to the person who receives and
processes a message. One such trait is intelligence - it seems that more intelligent people
are less easily persuaded by one-sided messages. Another variable that has been studied in
this category is self-esteem. Although it is sometimes thought that those higher in self-
esteem are less easily persuaded, there is some evidence that the relationship between self-
esteem is actually curvilinear, with people of moderate self-esteem being more easily
persuaded than both those of high and low self -esteem levels (Rhodes & Woods, 1992). The
mind frame and mood of the target also plays a role in this process.
Source Characteristics: The major source characteristics are expertise, trustworthinessand interpersonal attraction or attractiveness. The credibility of a perceived message has
been found to be a key variable here; if one reads a report about health and believes it
came from a professional medical journal, one may be more easily persuaded than if one
believes it is from a popular newspaper. Some psychologists have debated whether this is a
long-lasting effect and Hovland and Weiss (1951) found the effect of telling people that a
message came from a credible source disappeared after several weeks (the so-called
"sleeper effect"). Whether there is a sleeper effect is controversial. Perceived wisdom is that
if people are informed of the source of a message before hearing it, there is less likelihood
of a sleeper effect than if they are told a message and then told its source.
Message Characteristics: The nature of the message plays a role in persuasion. Sometimespresenting both sides of a story is useful to help change attitudes.
8/8/2019 FINAL Project EDit Copy
23/67
6.4 WHY CONSUMERS PERCEPTION IS IMPORTANT FOR TELECOM SERVICE
PROVIDERS?
Perception is our way of looking at things. Perception is the trigger or the immediate cause
which leads to product being sold. When a consumer wants to buy a product, he does a lot
of research on it regarding the benefits he can acquire from it. One of the main reasons asto why a consumers perception towards a service provider is so important is because if he
doesnt have any knowledge about the service/ brand, how it performs, then how is going to
end up buying it if he intends to. Even if he isnt a potential customer, it is always good to
have an idea about what the consumer thinks about the service in the competitive cellular
service market. Whether the consumer perceives it as an honest brand, an imaginative
brand, an innovative brand, a successful brand or a reliable brand speaks about the brand
personality of the service provider. Consumers might want the brand to give splendid
mobile connectivity pleasure; might want the brand to add an image to his/her lifestyle;
might want the service to be technologically up-to-date; might want the brand to give
excellent network both in the city as well as in the highway and might also want it to give
excellent pricing options. So it is always good to know how consumers perceive the brand/service as it gives an idea on how to make the service better so that it does well in the
market.
8/8/2019 FINAL Project EDit Copy
24/67
7. CRM IN THE TELECOM SECTOR
With the Indian economy showing signs of a continued and robust growth in the coming
years, telecom cannot have a different outlook. Recent developments in the Indian telecom
sector have brought the world focus on what is being pronounced as the fastest growing
telecom market in the world. While crossing the landmark 500 million subscribers hasindeed brought Indian telecom sector in the big league telecom markets, the best ever rate
of growth that we see is the added silver lining. No wonder the world focus is on India,
which in all modesty is bound to become the second largest telecom sector in the world,
after China. The telecom story unfolding in India has enough spice for any aggressive player
because the market is just growing and will continue to see more action.
The telecommunications market, in the last few years, has seen incredible Technological
advancement, which has fuelled massive consumer adoption and brutal competition driven
by commoditization. To drive profits operators must increase the average lifetime value per
customer and minimize the service cost even as service choices increase. Common to all of
our customers in the telecom sector is an abiding belief in delivering the best service tocustomers by investing in technology that empowers consumers and service agents to have
intelligent, productive conversations. In a marketplace where consumers are increasingly
aware of their choices, consistent service quality is the foundation of a durable brand.
An effective CRM system includes tools such as a skilled customer care staff and leading
edge automation and workflow management software platforms. With this tool, it is
possible for a telecom company to track sales enquiries, trouble tickets, emails, telephone
calls, and customer satisfaction surveys.
Telecom, especially mobile telecom, is a highly competitive and increasingly mature market.
As network coverage, handsets, and price plans become less important as differentiators,customer service is increasingly seen as the key factor in customer acquisition and customer
retention. Mobile telephony providers face a significant challenge to introduce and support
the range of new products and services such as email, multimedia messaging, and
synchronization with handheld devices, etc. For such an amount of service offering service
quality has to be that the subscribers can relate to and stick to the brand. Organizations
would like to reduce the costs of customer care by deflecting calls to web -based service
channels, preferably to self-service. With the commoditization of products and services,
fuelled by greater access to competitive information over the web, customer service is one
of the few ways organizations can themselves and increase market share.
The National
Telecom Agency's Decisions By Complaints Boards:-
a. The Telecommunications Complaints Board
The Telecommunications Complaints Board processes and makes the final administrative
decision in cases involving complaints about the National Telecom Agency's decisions and
case processing, which, under statutory provisions or rules laid down in pursuance thereof;
belong under the Telecommunications Complaints Board. This includes the Agency's
decisions regarding competitive conditions and interconnection in the telecommunications
sector and fixing of maximum prices.
8/8/2019 FINAL Project EDit Copy
25/67
b. The Telecommunications Consumer Board
The Telecommunications Consumer Board processes and makes the final administrative
decision in cases involving complaints about the National Telecom Agency's decisions and
related case processing, which, under statutory provisions or rules laid down in pursuance
thereof, belong under the Telecommunications Consumer Board. This includes TDC's
compliance with subscription terms, the terms for handling the universal service obligation
and compliance with fixed maximum prices.
Need for CRM in Telecom Sector:-
The beneficiaries of the competition being consumers, the telecom players in todays
environment are required to design and deploy customer-centric strategies not only to grab
a share in the market but also to sustain in the market in the long-run. The players have
realized the importance of constant service-quality delivery to the customers for long-run
sustainability. Customer relationship signifies identifying the needs of the customers and
stretching out ways and means to satisfy them. To be precise, it means achieving high
customer profitabilitycustomer revenues over and above customer costs, which demandsmatching customer expectations with customer satisfaction. The high cost of customer
acquisition is making todays businesses understand the importa nce of retaining the
customers for long-run sustainability.
Customer Relationship Management (CRM) aims at narrowing the gap between the
company and its customers. In Telecom Sector, CRM plays a vital role in not only bringing
the customers close to the company, but also in identifying the changing behavioural
pattern of the customers. In technology-dynamic markets like telecom, an efficient CRM
system is essential, since the customer attrition is high due to the presence of close
substitutes and near-zero switching costs. The book aims at throwing light on the CRM
practices commonly followed in the telecom sector and their applicability to several aspectsof the service delivery process.
8/8/2019 FINAL Project EDit Copy
26/67
7.1 CRM
The most important question to be asked at this point of time is What is Customer
Relationship Management (CRM)?
CRM is the development and maintenance of mutually beneficial long-term relationships
with strategically significant customers. It is an IT enhanced value process, which identifies,
develops, integrates and focuses the various competencies of the firm to the voice of the
customer in order to deliver long-term superior customer value, at a profit to well identified
existing and potential customers.
CRM is understood for the benefits of the custome rs but it has an underlined benefit for the
companies also, as it increases the much needed trust and faith in the customer and
provider relationship. When this trust and faith is attained the churning or the switch to
other providers doesnt take place.
CRM is a business philosophy based on upon individual customers and customised products
and services supported by open lines of communication and feedback from the participating
firms that mutually benefit both buying and selling organisations.
The buying and selling firms enter into a learning relationship, with the customer being
willing to collaborate with the seller and grow as a loyal customer. In return,, the seller
works to maximize the value of the relationship for the customers benefit.
In short, CRM provides selling organisations with the platform to obtain a competitive
advantage by embracing customer needs and building value-driven long-term relationships.
7.2 DETERMINANTS OF CRM
Trust
The willingness to rely on the ability, integrity, and motivation of one company to serve the
needs of the other company as agreed upon implicitly and explicitly.
Value
The ability of a selling organisation to satisfy the needs of the customer at a comparatively
lower cost or higher benefit than that offered by competitors and measured in monetary,
temporal, functional and psychological terms.
In addition to trust and value, salespeople must understand customer needs and problems,
meet their commitments, provide superior after sales support, make sure that the customer
is always told the truth (must be honest) and have a passionate interest in establishing and
retaining a long-term relationship (e.g., have long-term perspective).
8/8/2019 FINAL Project EDit Copy
27/67
7.3 STAGES OF DEVELOPMENT OF CUSTOMER RELATIONSHIP
The Pre-relationship Stage
The event that triggers a buyer to seek a new business partner. You must evaluate at what
front your services were not up to the expectation of the customers and what went wrong.
Only after you know what were the reasons for your customers to look out for a new
operator you can take corrective measures.
The Early Stage
Experience is accumulated between the buyer and seller although a great degree of
uncertainty and distance exists. The seller must always tend to decrease these gaps and
distances, for this purpose he can make use of the SERVQUAL model of service marketing.
By the application of this model it becomes easier for the marketer to understand the needs
and wants gaps existing between the two parties involved in the business and hence the
corrective measures can be taken be taken. But it is rather suggested to have preventive
measures than having corrective measures because when the customers gets irritated no
matter what corrective measures are taken it is hard to earn him back therefore the
management must get into CRM even before there is a need.
The Development Stage
Increased levels of transactions lead to a higher degree of commitment and the distance is
reduced to a social exchange. When the commitment is higher, then the performance needs
to be more than expected. When this is done the customer is not just satisfied he is
delighted and this will eventually help in beneficial mutual long-term relationship.
The Long-term Stage
Characterised by the companies mutual importance to each other. The companies must
need to take extra care of their already existing customers because they have showed their
faith in the company and they need to be benefited for this. This can be done by giving extraprivilege for these key accounts. There are various types of key account management
principles applied in different organizations but in telecom sector this privilege is given only
to the corporate clients and not to all the customers who have been there with the
company for nearly a decade, the companies should also take into consideration, these
customers.
The Final Stage
The interaction between the companies becomes institutionalized. Once the companies
manage to get the customer to the final stage then the customers gets habituated to your
services and product and the promotion, advertisement and schemes become noise.
8/8/2019 FINAL Project EDit Copy
28/67
7.4 FUNC
N
OF C
Dire
t f
ti
The bas c re re e s of a companythat is necessary to s rvive in thecompetitive market
place
y Profity Volume
y Safe uard
Indire
t f
ncti
ns
The actions that is necessary to convince thecustomer to participate in various marketing
activities !
y Innovation
y Market
y Scout
y Access
Fi"
u#
$
1Valu$
Creation Pro%
ess
8/8/2019 FINAL Project EDit Copy
29/67
8/8/2019 FINAL Project EDit Copy
30/67
7.6 MODEL&
FOR CRM
Over theyears many marketing geniuses havecreated models CRM. These modelscome to
great use when the companies are trying to provide their customers with the ultimate
e'perience ofservice.
a) The Evans andL(
skin (1994) m)
delf)
reffective Relati)
nshi0
Marketing
Fi1
ure2 Effe2
ti3
e Relationship Marketin1
This model suggests that relationship marketing is an important source for CRM. The inputs
that the service providers need to give aresources that procure the understanding of the
customer e 4 pectations once they are well in place the ne 4 t step is to build beneficial
relationships with the service partners who actually are the face of the company. The
employeesshould also be given the decision making power and theyshould not bound with
the standardisation process i.e. empowering employees to take decision in favour of
customers always. This needs to be done keeping in mind that the total quality of theservice or the product should not be hampered at any point in time. Once all of this is
achieved the results are fruitful, it will givecustomer loyalty and satisfaction, quality of the
service will increase with definite increase in profitability.
Once all this is done the most important thing to do is taking customer feedback and then
integrating it for further improvements once all the customer feedbacks are positive the
motive of CRM will be fulfilled.
8/8/2019 FINAL Project EDit Copy
31/67
b) The Br5
ckandBarcklay (1999) m5
delofselling partnerrelationship effectiveness
Fi6
ure 3:Bro7
kandBar7
klay Model- Seller Partnership
The model of Brock and Barcklay is a representation of the benefits that are achievable
when the selling partners share a good rapport and understanding with the company.
Generally in theservicesectors theselling partners become the face of thecompany, e.g. if
you order a burger at Mc Donald and thesales representative getsyou the wrong burger
you will alwayssay that Mc Donald did the mistake for you the sales representative isMc
Donald itself. Thesame is applicable to cellular service provider, seldom is thecustomer in
direct contact with the company even when he is talking to the customer care he is not
talking to thecompany but a bunch of outsourced call centre guys.Thus this modelsshows
the way on how to make the relationship with theselling partners more beneficial which inorder will provide the base for CRM and better relationships with thecustomer.
8/8/2019 FINAL Project EDit Copy
32/67
7.7 MANAGING CUSTOMER RELATIONSHIPS
The global salesperson must be involved in the following activities in order to initiate,
develop and enhance the process that is aimed at building trust and commitment with the
customer.
Initiating the relationship
y Engage in strategic prospecting and qualifying
y Gather and study pre-call information
y Identify buying influences
y Plan the initial sales call
y Demonstrate an understanding of the customers needs
y Identify opportunities to build a relationship
y Illustrate the value of a relationship with the customer
The global salesperson must be involved in the following activities in order to initiate,
develop and enhance the process that is aimed at building trust and commitment with thecustomer.
Developing the relationship
y Select an appropriate offering
y Customise the relationship
y Link the solutions with the customers needs
y Discuss customer concerns
y Summarize the solution to confirm benefits
y Secure commitment
The global salesperson must be involved in the following activities in order to initiate,develop and enhance the process that is aimed at building trust and commitment with the
customer.
Enhancing the relationship
y Assess customer satisfaction
y Take action to ensure satisfaction
y Maintain open, two-way communication
y Work to add value and enhance mutual opportunities
8/8/2019 FINAL Project EDit Copy
33/67
Qualifying prospectsforrelationship building:-
Everycustomer cant be and will never beyour loyal customer therefore it is advised that
you must prospect theclientsyou want to build relationships with. There are many ways to
identifyyour potential clients, a model for thesame is being provided below.
The model works on two parameters i.e. Opportunities for value addition and Potential
profitability of thecustomer.It isveryessential to take the profit into account before going
for a CRM. CRM involves a lot of monetarye 8 penditures but it will guaranty the benefits in
the future but everycompanyshould evaluate those profitsvia a measurable metricso that
they dont overspend in the areas which are unnecessary and can be avoided.
Fi9
ure 4: Identifyin9
PotentialClients
Relationship networks
The ultimate outcome of a successful CRM strategy is the creationof a unique company
asset known as a relationship network.A relationship network consists of thecompany and
its major customers with whom the company has established long and enduring business
relationships. The additional aspects of a global salespersonsjob are to:
y Managecustomer value
y Act ascustomer advocate
y Enhancecustomer loyalty and build a healthy& profitable network of relationships.
8/8/2019 FINAL Project EDit Copy
34/67
7.8 APPLICATION OF CRM IN TELECOM SECTOR
The telecommunications market, in the last few years, has seen incredible Technological
advancement, which has fuelled massive consumer adoption and brutal competition driven
by commoditization. To drive profits in this business, you must increase the average lifetime
value per customer and minimize the service cost even as service choices increase. Common
to all of our customers in the telecom sector is an abiding belief in delivering the best
service to customers by investing in technology that empowers consumers and service
agents to have intelligent, productive conversations. In a marketplace where consumers are
increasingly aware of their choices, consistent service quality is the foundation of a durable
brand.
An effective CRM system includes tools such as a skilled customer care staff and leading
edge automation and workflow management software platforms. With this tool, it is
possible for a telecom company to track sales enquiries, trouble tickets, emails, telephone
calls, and customer satisfaction surveys. By the introduction to technology in telecom
operations it is also important to induce some tools that are able to measure the customer
satisfaction and their expectations from the organization. There are many companies who
have tools of CRM implemented in their organization but the lack of understanding about
the customer requirements fails them to act the way they were meant to be, this report
attempts to be an indicator of the customer requirements and hence provides details of the
pre purchase and post purchase states of mind of the customers.
Telecom, especially mobile telecom, is a highly competitive and increasingly mature market.
As network coverage, handsets, and price plans become less important as differentiators,
customer service is increasingly seen as the key factor in customer acquisition and customer
retention.
Mobile telephony providers face a significant challenge to introduce and support the rangeof new products and services such as email, multimedia messaging, and synchronization
with handheld devices, etc. By implementing all this they are inducing the customers to
have an option of getting them associated with the service provider with a wider range of
offerings and once the customer starts using all the services its rare that he would consider
any other service provider.
Organizations would like to reduce the costs of customer care by deflecting calls to web-
based service channels, preferably to self-service. The self-service may sound a bit different
in the telecom sector but it is going to help in the long run to retain the customers. By
inducing self service we are actually getting the customer to interact more with the brand
and in this process a relationship is build. Once this self service is induced customer gets afeel of attachment towards the brand and considers it to be a part of life.
8/8/2019 FINAL Project EDit Copy
35/67
With the commoditization of products and services, fuelled by greater access to competitive
information over the web, customer service is one of the few ways organizations can
themselves and increase market share. There are more than 13 odd players in Mumbai
circle and the mobile phones have more or less become a commodity, in a scenario like this
the only differentiator that the customers are going to experience is the different peoples
approach and the level of customer service in different organizations providing the cellular
service.
There are solution providers like SAS which help in customer retention tools. SAS Customer
Retention for Telecommunications provides ready-to-deploy models and a
telecommunications-specific data architecture that enables your organization to quickly gain
a better understanding of the variables that influence customer churn allowing you to
determine not only which customers are likely to leave, but why.
The solution offers:
Accurate reporting on who is leaving your company.
Insights into the major factors influencing the decision to leave.
Industry-leading accuracy for predicting who is likely to churn in the near future.
Flexible and scalable technology that can keep up with your company's growth.
Pre-built analytical data and process models that speed up implementation and ROI.
The government has set up agencies that concentrate its resources for the benefits of the
consumer of telecom services.
1. The Telecommunications Complaints Board
The Telecommunications Complaints Board processes and makes the final administrative
decision in cases involving complaints about the National Telecom Agency's decisions and
case processing, which, under statutory provisions or rules laid down in pursuance thereof;
belong under the Telecommunications Complaints Board. This includes the Agency's
decisions regarding competitive conditions and interc onnection in the telecommunications
sector and fixing of maximum prices.
2. The Telecommunications Consumer Board
The Telecommunications Consumer Board processes and makes the final administrative
decision in cases involving complaints about the National Telecom Agency's decisions and
related case processing, which, under statutory provisions or rules laid down in pursuance
thereof, belong under the Telecommunications Consumer Board. This includes TDC's
compliance with subscription terms, the terms for handling the universal service obligation
and compliance with fixed maximum prices.
8/8/2019 FINAL Project EDit Copy
36/67
8. REASONS FOR RETENTION OF A CUSTOMER
In the competitive world of telecommunications, customer churn remains a pressing
concern and an expensive one. Global competition has raised the cost of acquiring new
customers, making it imperative to determine which customers are likely to churn, and
which you'd like to keep, so you can take the necessary steps to prevent them from leaving.Predicting churn and then designing cost-effective strategies to reduce it, however, are
extremely difficult undertakings for most telecommunications companies. Such projects
require organizing and analyzing huge volumes of data that are often difficult to access and
consolidate. Many telecom organizations simply lack the ability to support the complex data
mining and analytical tasks that are essential to combating churn.
Customer loyalty is viewed as the strength of the relationship between an individuals
relative attitude and repeat patronage. The relationship is seen as mediated by social norms
and situational factors. Cognitive, affective, and cognitive anteced ents of relative attitude
are identified as contributing to loyalty, along with motivational, perceptual, and behavioral
consequences (Dick and Basu , 1994).
In the customer centred business, survival remains to the degree that customer satisfaction
is met. Previous research studies have shows that the repurchase intent was the main
benefit of customer retention. However, some had identified multiple benefits like
repurchase intent, price tolerance, willingness to recommend etc. In reaching retention,
vendors should manage satisfaction and consequences of Customer Loyalty (Naranyandas,
1998). Loyalty too has a pyramid effect that suggests of having hierarchy in loyalty levels
between customer and vendor. Change in loyalty level will manifest itself in the pr esence of
specific attitude and behavior (Aaker, 1991).
Customer loyalty and satisfaction are integral part of customer retention process. CustomerRetention is a primary measure of loyalty. There is a positive relationship between changes
in satisfaction and share of wallet. In particular, the initial satisfaction level and the
conditional percentage of change in satisfaction significantly correspond to changes in share
of wallet. Income and length of the relationship negatively moderate this relationshi p (Cooil
et al., 2007). Loyalty and retention although positively moderate with share of wallet it is
necessary to examine the cost of maintaining the particular customer. It is not guaranteed
that every customer retained will generate contribution. Therefore the concept of Customer
Lifetime Value (CLV) plays an important role.
In creating loyalty and thereby CLV, it would be prudent to explore qualities of loyalty. Two
types of primary loyalty qualities had been identified in the previous researches, i.e.Attitudinal Loyalty and Behavioral Loyalty, out of which attitudinal loyalty could be the most
important dimension for marketers to monitor (Rundel Thiele, 2005).
8/8/2019 FINAL Project EDit Copy
37/67
Rust et al., (1999) discuss the Customer Perceived Quality and Role of Customer
Expectation Distribution. According to them exceeding customer expectation will still be
required if the company seeks to delight customer. In the event of having low expectation of
service quality and meeting it, researchers had found, had raised preference. Given the
option to general customer two equally priced options, the customer will choose the one
with higher expected quality, the research had established. They argued that a company
should always focus on its most loyal customers. Retention point of view, less loyal
customers tendency to defection is grater hence that sector should be defended with force.
This research further suggested greater the experience a customer with a service provider
greater the chances of meeting expectation in perceived value, hence retention.
Services Quality is considered as a major determinant in customer retention and building
value relationship (Venetis and Ghauri, 2004). The quality of the service has various
elements namely; a) Reliability b) Responsiveness c) Assurance d) Empathy e) Tangibles.
as identified by Parasuraman et al.(1985).
According to Lovelock and Wright (2001), marketing managers in service organizations make
decisions regarding 8Ps i.e. Product, Place, Promotion and Education, Price and other user
outlays, Process, Productivity and Quality, People and Physical evidence.
Finally, since this research focused on ICT used by businesses it is appropriate to cite what
business to business (B 2 B) transactions means. Business customers means, those buy
goods and services for use in producing their own products and services or for resale to
others (Kotler and Armstrong, 2005).
The importance of ICT as a strategic tool is a moderating factor in determining the customer
loyalty. The information revolution is sweeping through the economies. No company can
escape from its effects. Dramatic reduction in the cost of obtaining, processing and
transmitting information is changing the way business is done (Porter and Millar, 1985).They have further elaborated that IT changes the rules of competition. Advances in IT itself
is changing the industry structure. It has become an increasingly important lever that
companies can use to create competitive advantage. In addition IT developments have
created a set of new businesses such as call centres and business processing outsourcing.
Relationship Marketing
In competitive business environment where there is an ongoing / continues desire for a
particular product or services , organizations focus their strategies not only on acquiring
customers, but also keeping them as long as possible and encouraging them to increase
purchase frequency by developing lasting relationships Relationship marketing recognizeslong term value to the company of keeping customers.
Berry (1983), defined relationship marketing as attracting, maintaining, and enhancing
customer relationships. He further emphasized that relationship marketing can be
applied: when there are competitive product alternatives for customers to choose from an d
when there is an ongoing and periodic desire for the product or servic es.
In service industry particularly in ICT industry such strategies play a very critical role in
enhancing retention. Attraction of new customers is an intermediate step in marketing
8/8/2019 FINAL Project EDit Copy
38/67
process. Solidifying relationship and transforming them as loyal customers, serving
customers as clients too should be a part of marketing (Berry, 1983).
Subsequent thinking on relationship marketing further expanded and stressed on
profitability of relationship management. Companies are building customer relationship
management to build profitable, long term relationship (Kotler and Armstrong, 2005). It
implies discouragement to maintain relationship in the event profits are not foreseen.
Relationship marketing in recent past has emerged as a leading strategic element of
business. It has a direct effect on firms objective performance and also suggests that
relationship marketing is more effective when the relationships are more critical to
customers. Furthermore effectiveness is greater when relationships are built with an
individual than a firm/ institution (Robert et al., 2006)
Payne and Holt (2001) dealt in to diagnosing