Group-I, Section-D, PGPBM

1.Arka Chatterji, 2.Subhradeep Das, 3.Rakeem Baig, 4.Arindam Das

History Credits

Entered telecom business in 1985

& telecommunication in 1990

Launch cellular service in Delhi in

1992

Acquired Skycell (TN), JT Mobile(AP

& Karnataka), Spice Cell(WB) in

2000 to expand business

First company to install second ‘Mobile

switching centre’

Won Techies Award for four consecutive

years(1997-2002)

The First in Asia to deploy the multi band

feature in a wireless network for efficient

usage of spectrum.

The First to deploy Voice Quality Enhancers

to improve voice quality and acoustics.

The First telecom company in the world to

receive the ISO 9001:2000 certification from

British Standards Institute.

Largest pan-Indian cellular network One of the five most valuable cellular operators in the world

69383716, 25%

50417955, 18%

49195098, 17%37362897, 13%

27194205, 10%

26329804, 9%

11924843, 4%

4547870, 2% 3437716, 1%

1378471, 1%

342896, 0%

109744, 0%

Current Market Share

Airtel

Relaince

Vodafone Essar

BSNL

IDEA

Tata

Aircel

SpiceSource: COAI, July 2008

Including CDMA & WLL

Examine the circumstances in which Bharti launched Airtel and trace the brands initial days in the backdrop of emerging cellular market in India. In the light of ‘Leadership’ campaign, analyze why Airtel & other cell phone brands were seen as premium end offerings.

Sunil Bharti Mittal laid the foundations of the New Delhi based Bharti group in 1970s

with a small bicycle part business

1985 Bharti group entered the telecom business by establishing Bharti Telecom Ltd.

and entered into technical collaboration with Siemens AG Germany for

manufacturing electronic pushbutton telephones.

Launched cellular service in Delhi in 1992, started offering post-paid

service from Nov,1995.

Started offering VAS such as Smart mail, Fax, Call hold, Call waiting etc.

and e-commerce portals to facilitate consumers.

In the initial days due to high tariff rates cellular players had to impose high call

charges on their customers and the handsets were costly.

Naturally, they targeted the elite, up market professionals and entrepreneurs as

customers . Airtel was positioned as an aspirational and lifestyle brand .

It was pitched not merely as a mobile service, but as something that gave

consumer a badge value. The Brand was developed to connote leadership in

network, innovations, offerings and services.

The taglines like "Airtel celebrates the spirit of leadership" and "The first choice

of the corporate leaders" emphasized that stance.

The ‘Leadership’ campaign was reportedly successful and resulted in a marginal

improvement in Airtel performance.

Explain the reasons behind the ‘Leadership campaign being replaced by the ‘Touch Tomorrow’ campaign. Also critically comment on the company’s decision to replace ‘Touch Tomorrow’ with ‘Live Every Moment’.

Govt. reduced the tariffs and taxes

which led to the emergence of

huge customer base.

A brand was created that not only had

qualities like

Leadership, Performance, Dynamism

but also with supportive values like

courtesy, politeness and efficiency.

Other players also started imitating

strategies followed by Airtel, by

offering same type of schemes and

facilities

During late 1990s many national and

international players started entering

into the Indian telecom market.

In early 2000 it was observed through market surveys that the concept of leadership was undergoing a transformation resulting in it being a moderate success.

Hence Bharti decided to ‘humanize’ the brand ‘Airtel’ to gain competitive advantage.

In august 2000 Bharti launched its new ‘Touch Tomorrow’ campaign which aimed at strengthening its relationship with its customers and make the brand ‘softer’ to cater a wide variety of people across the society.

The Company adopted a three-tier brand architecture to expanded its ‘Touch Point’ network.

Special features like music download facility, SMS, permanent GPRS was introduced at a affordable price

Airtel logo during ‘Touch Tomorrow’ days

Tier-III

Freenet Long Distance Tango-Internet mobile

Tier-II

Basic TelephonyNational Long

Distance Service

Broadband

ServiceMobile Service

Tier-I

Airtel

Three-tier brand architecture

In 2002, Airtel again repositioned its brand with new tagline ‘Live Every Moment’ and changed its logo to create a brand identity that had a younger international look and feel.

Airtel also replaced its three-tier brand architecture and adopted a two-tier brand architecture where all wireless products were placed under Airtel brand

. Airtel logo after repositioning to ‘Live Every Moment’ campaign

Do you think Bharti has not been giving enough time for one positioning plank to prove effective before moving on to the next? What are the merits and demerits of frequently changing a brand’s positioning?

Rationale

In telecom industry people live a brand 24X7 so the possibilities of being tired by a continuous campaign is very high

Brand restructuring helps the company to broaden its customer base by reaching more people and offering new services

Success

Airtel is the most recognizable brand in Indian operator space, with 30.8% of respondents able to identify it as a mobile brand unaided

A member of Forbes ‘Asian Fabulous 50’

Of 10 million new subscriber sign up every month one in every 4 sign up with Airtel, not only to make calls but also to access the Web, download cricket scores and send billions of

text messages

During 2004-2005 its increased its market share from 20.5% to 21.5%

Brand perception:

Cool

28%

Creative

27%

Technically

advanced

22%

Cheap

9%

Can't Say

14%

Perception

Source: IE Market Research Corp.-14th

Oct,3006, ID-IEMR1370648

Merits Targeting different

segments of market effectively

Reduce mental fatigue towards the brand

Corporate level or product offering restructuring

Demerits Huge promotional

costs which depends upon the level of change

Risk of being alienated from loyal customers

If a new positioning fails or not executed properly brand may suffer a crisis of identity and dilution of brand image

In the light of intensifying competition in the Indian cellular telephony market and the fact that almost all players have began focusing on the marketing front, what should Bharti do to ensure that it retains its market leadership position.

Strategic

In 2003 ,Airtel changed its tagline once again and the new tagline is ‘Express Yourself’. This dynamism should be maintained in future to build a more comprehensive and stronger brand.

More focus on emotional angle to differentiate the brand

Airtel was the first cellular service provider to start customer centers (Airtel connects), thus setting a trend of effective and responsive CRM system & it should be maintained.

Innovative and low priced schemes for attracting mass

Low-priced and Youth oriented schemes (e.g. Campus pack, Student pack) are to be implemented more effectively.

Keeping the competition low by strategic alliances and acquisitions.

Aggressive rural market penetration using existing infrastructure and by implementing innovative & focused schemes.

Promotion in regional languages to tap rural market.

Technical

Widening of the network coverage area

Increasing quality of service & interconnectivity

Innovative VAS such as e-recharge, recharge using SMS

Advanced technology introduction such as 3G, M-commerce (e.g. m-check, ATM recharge)

Promotion of Blackberry and other business customer oriented services

Better use of internet and transforming it into a direct communication channel