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Strategic Marketing & Planning (Ufone)nEW
Transcript of Strategic Marketing & Planning (Ufone)nEW
Strategic Marketing & Planning
Presented By Saad Khan
Faisal Nasir Nagjee
Business Scope
• Business• Region• What Needs• Who Needs• Value Addition• Business We are Not In• Future Direction
External Analysis
CONVENTIONAL MARKET STRUCTURE
COMPANY
FRANCHISE & SERVICE CENTRE RETAILERS
DIRECT SALES
Family members/Friends/Celebrities
INFLUENCERS Admin, Colleagues & friends
PRODUCT
Jazz, Ufone Prepay, Telenor Talkshawk, Djuice, Zem
Indigo, Ufone postpay, Persona, Zahi
Price Range Rs 30/=- Rs 2,000/= Rs 2,000 onwards
END USERSYoungsters, Housewives, Price Sensitive
Business units
SEGMENT Pre-Paid Connections Post Paid Connections
FURTHER CLASSIFICATION OF MARKET STRUCTURE
COMPANY
FRANCHISE & SERVICE CENTRE
RETAILERS
Pre-Paid Connections
YOUTH AGE GROUP 15-30 YRS
HOUSEWIVES
MIDDLE AGE GROUP
URBAN MARKET RURAL MARKET
CATTLE FARMERS
YOUTH
KISAN (FARMERS)
OLD AGE GROUP
LAND LORDS AND MIDDLEMEN
HOUSEWIVES
MARKET STRUCTURE ANALYSIS
• POSTPAID SEGMENT
• PREPAID SEGMENT– URBAN– RURAL
• URBAN MARKET
ASSUMPTIONS– Segment distribution amongst
urban-rural is based on 32.34% based on the urbanization rate.
– We are also assuming that 98% of the urban population has been already catered
MARKET STRUCTURE ANALYSIS
Historical populations
Census Population Urban
1951 33,816,000 17.80%
1961 42,978,000 22.46%
1972 65,321,000 25.40%
1981 84,254,000 28.28%
1998 130,580,000 32.51%
2008 172,800,000 32.34%
URBAN MARKET
• HOUSEWIVES
– Market 11.24 million– Needs=communicating with family
member, friends or calling on food shows & talk shows.
– Average spending on calls Rs 300-900/= per month
– Product targeting this segment=jazz ladies first (Mobilink)
Total Population 172 Million
Total Urban Population (32.34%)
55.62 Million
Proportion of females in Urban Areas (51%)
28.36 Million
Women under the age of 15 years(43.4%)
12.3 million
Working women (30%) 4.82 Million
Housewives(70%) 11.24 Million
• YOUTH
– MALE/FEMALE BETWEEN 15-30 YEARS
– Market is about 16.21 Million– Needs=socialize with friends, family
members, lovers. Security need and need to help
– Average spending of Rs 300-1500 per month
– Products targeting this segment are • Djuice(Telenor), • Talkhshalk(Telenor), • uth(Ufone,• Jazz(Mobilink), • Glow (Warid)
Total youth population (29.15%)
50.14 Million
Proportion of youth population living
in urban areas(32.34%)
16.21 Million
URBAN MARKET
• OLD AGED
– Males/females above 60 years.– Market= 2.78 Million– need= to stay in touch with old
friends, family members or get driver, doctor etc
– Average spending is Rs 300-700 per month
Total Population of old aged people (5%)
8.6 Million
Proportion of old age group in Urban Areas
2.78 Million
URBAN MARKET
RURAL MARKET
• LANDLORDS
– Individuals holding more than 300 acres of land
– Market= assuming 3% of rural population
– Needs=business needs, social needs, security needs, information transfer needs
– Average spending is Rs 2000-5000 per month
Total Population 172 Million
Rural Population (67.66%)
116.37 Million
Land Lords (3%) 3.49 Million
RURAL MARKET• YOUND INDIVIDUALS
– Males/females between ages of 15-30 years
– Market 33.93 Million– Needs=social needs, since
they travel to other villages & regions they need to stay in touch with family & business partners. entertainment need
– Average spending is Rs 10-20 per day
Total Population 172 Million
Total Youth population 50.14 Million
Total youth in rural areas (67.66%)
33.93 Million
RURAL MARKET
• RURAL WOMEN
– Females who live at home & work in farms
– Market is 59.35 Million– Needs= to communicate with
other females, children & husband.
– Average spending on calls is around Rs100-200 per month
Total Population 172 Million
Total Females in Pakistan( 51%)
87.72 Million
Proportion of females in Rural Areas (67.66%)
59.35 Million
Working women (20%)
11.87 Million
Housewives (80%) 47.48 Million
RURAL MARKET• FARMERS (KISAN)
– This segment consist of male/females working in the agriculture segment of Pakistan
– Market = 8.78 million Females & 17.02 million Males totaling to 30.13 million
– Needs = work related information required, social needs.
Total Rural Population
116.38 Million
Proportion of females in Rural Areas (51%)
59.35 Million
Working women (20%)
11.87 Million
Proportion of Women in Agriculture (74%)
8.78 Million
Proportion of Males in Rural Areas (49%)
57.02 Million
Working Men in rural areas(80%)
45.62 Million
Men working in agriculture (37.3%)
17.02 Million
MARKET STRUCTURE OF TELECOMMUNICATION INDUSTRY
Analysis • Cellular sector consists of
93% of the telecommunication industry, followed by the fixed lines and Wire less local loop
• WLL sector is still in the introductory stages and has been unable to grab much of the market because of their limited coverageWLL
2%
Fixed5%
Cellular93%
Market Structure Of Telecommunication Industry
*Source PTA (Pakistan Telecommunication Authority)
Market Share
2005-2006 2006-2007 2007-2008 2008-2009
MARKET SEGMENT Realized
Un-Realized Realized
Un-Realized Realized
Un-Realized
Realized
Un-Realized
Urban market
HOUSEWIVES 9.95 0.64 10.14 0.65 10.60 0.44 11.01 0.23
YOUTH (15-30 years) 14.73 0.92 14.9 0.61 15.62 0.31 15.88 0.32
MIDDLE AGED (31-60 years) 11.75 0.82 12.18 0.51 12.51 0.52 12.9 0.26
OLD AGED(60 and above) 1.98 0.11 2.06 0.08 2.11 0.1 2.18 0.04
2005-2006 2006-2007 2007-2008 2008-2009
MARKET SEGMENT Realized
Un-Realized Realized
Un-Realized Realized
Un-Realized
Realized
Un-Realized
Rural Market
Landlords 1.97 1.31 2.00 1.34 2.22 1.20 2.44 1.05
Youth 19.05 12.70 19.33 12.89 21.51 11.58 23.57 10.10
Kisan(Farmers) 24.3 16.2 24.75 16.5 27.4625 14.7875 21.09 9.03
Rural Women 33.45 22.31 34.07 22.72 37.79 20.3 41.54 17.8
Market Share
COMPETITION / SEGMENT ANALYSIS
*Source PTA (Pakistan Telecommunication Authority)
Urban Competitor's Analysis
Figures in million Current
Market Share
Housewives Youth Middile Aged Old Aged
Realized
Unrealized
Realized
Unrealized
Realized
Unrealized
Realized
Unrealized
Mobilink 30.88% 3.42
0.23
4.90
0.32
3.98
0.26
0.67
0.04
Ufone 21.20% 2.33 3.37 2.73 0.46
Warid 18.96% 2.09 3.01 2.44 0.41
Telenor 22.15% 2.43 3.52 2.86 0.48
Zong 6.77% 0.74 1.07 0.87 0.15
Instaphone 0.04% -
- 0.12 0.02
100.00%
Rural Competitor's Analysis
Figures in million
Assumed Market Share
Landlords Youth Kisan(Farmers) Old Aged
Realize
dUnrealize
dRealize
dUnrealize
dRealize
dUnrealize
dRealize
dUnrealize
d
Mobilink 52.50% 1.28
1.05
12.37
10.10
11.07
9.03
21.81
17.80
Ufone 15.00% 0.37 3.54 3.16 6.23
Warid 3.00% 0.07 0.71 0.63 1.25
Telenor 28.00% 0.68 6.60 5.91 11.63
Zong 1.50% 0.04 0.35 0.32 0.62
Instaphone 0.00% -
-
-
100.00%
UFONE DISTRIBUTION STRUCTURE
Old Structure
*Source Ufone
New structure
DISTRIBUTION STRUCTUREDISTRIBUTION STRUCTURE CONNECTION/ SIMS
SERVICE CENTER 5%
RETAILERS 90%
DIRECT SELLING 5%
TOTAL 100%
*Source Ufone
Proposed Distribution Structure
COMPANY
RETAILERS
Pre-Paid Connections URBAN MARKET
YOUTH AGE GROUP 15-25 YRS
HOUSE WIFES
MIDDLE AGE GROUP
OLD AGE GROUP
Urban Market’s Product Life Cycle
Prepaid
Prepaid
Rural Market’s Product Life Cycle
INDUSTRY DRIVING FORCESPOLITICAL
• The current political situation in Pakistan is driving investors out of the industry, the impact of which can also be seen in the telecom sector. As investors have reduced there investment share in Pakistan during last year
• With the budget year 2010 it was proposed by the political parties that certain laws should be passed to discourage the ill saying against the political leaders/government officials, the suggestion further included increased in the tariff rate of value added services such as SMS
*Source PTA (Pakistan Telecommunication Authority)
INDUSTRY DRIVING FORCESEconomical
• The economic condition of Pakistan has declined due to which the average income of the country is going down, considering this fact as Telecomunication industry is planning to enter the rural regions of Pakistan where Cell phone are still considered as a luxury and not a necessity, therefore the companies will find it difficult to position its product as ever day required product.
Social
• The social situation has been favorable for the telecom sector as the as now cell phones are considered as a basic necessity rather than a luxury. Besides that due to the current security threats to the country people feel comfortable while they are having cell phones which provides instinct access to all news at any given point in time
Technological
• There is a huge room in this particular industry as new technologies are already in use in western countries which are yet to be introduced in Pakistan such as 3G service which enables a person to make video calls through these mobile devices.
Internal Analysis
Lagging IndicatorsDescription 2005-06 2006-07 2007-08 2008-09
Subscribers (Mn) 7.5 14 18 20
Growth Rate- Subscribers - 87% 29% 11%
Market Share (%)- Subscribers 22% 22% 20% 21%
Revenue (Rs. In Mn) 16,098 21,867 27,466 40,062
Growth Rate- Revenue - 36% 26% 45%
Market Share (%)-Revenue 17.90 16.42 15% 18.86%
0
5
10
15
20
2005-06
2006-07
2007-08
2008-09
Ufone subscribers
0
0.2
0.4
0.6
0.8
1
2005-06
2006-07
2007-08
2008-09
UfoneSubscribersGrowth Rate
Lagging Indicators
Lagging Indicators
05,000
10,00015,00020,00025,00030,00035,000
2005-06 2006-07 2007-08 2008-09
Ufone'sRevenue(Mn)
00.050.1
0.150.2
0.250.3
0.350.4
2005-06 2006-07 2007-08 2008-09
Ufone's RevenueGrowth
S.W.O.T Analysis• STRENGTHS:
– Ufone is the subsidiary of PTCL, which is owned by Etisalat (Emirates Telecommunication Corporation), thus it has strong financial backing.
– International Roaming to more than 210 live operators across 123 countries; without any security deposit or activation charges.
– Ufone has the 1st mover advantage to cater the price sensitive customers
– Ufone is offering more and better Value Added Services (VAS) than its competitors i.e. Ufone’s Walkie talkie, Call block service etc.
• WEAKNESSES:– Ufone’s network connectivity is weak.– Operational issues in converting packages.– Ufone has comparatively lesser network coverage in rural areas.
• OPPORTUNITIES:– Reduction in the cost of Mobule Handsets making it
affordable to lower income class– Huge market potential of Women in rural Areas– Emerging technology such as 3G
• THREATS:– Further aggressive price wars by the competitors – mobile portability service enable users to switch
services without changing their numbers and codes – Political instability & poor economic condition and
direct threat to infrastructure
S.W.O.T Analysis
Confrontation MatrixS-O Strategies W-O Strategies
With great financial backing and decreasing mobile handset cost Ufone can now offer its products to lower income class also more aggressively
With this great financial backing Ufone will have an edge to reach the emerging market such as rural women.
Since Ufone has always been in the first row to implement new technologies therefore with good financial backing it will be helpful for implementing 3G
As Ufone has an brand image of low cost service provider thereforer this will give Ufne an extra edge to penetrate in Rural Markets of Pakistan
Huge potential market in the rural area of Pakistan requires good network coverage.
Already Ufone has a weak network coverage and with the upcoming 3G technology Ufone will have to spent more on its network coverage in order to support it.
Since the urban markets have reached its saturation and most part of the rural markets have also been covered Ufone has to work on its network in rural areas to reach the market.
S-T Strategies W-T Strategies
Ufone should develop attractive product and packages to cover the customer base more as price war will result in the shrinkage in the Profit contribution and market will be volume base.
As market is highly competitive and % of profits per call has reduced and profitability is now more volume based therefore with less network coverage u fone is losing out on its potential customers in the rural area of country. Which will as a result effect its profits
Problem in the operation leads more customer dissatisfaction and with the introduction of MNP customer are more active in switching networks
Customer Buying Criteria Important Factors
Important Factors Urban Areas
Absolutely Critical
Very Important
Quite Important
Nice to Have
Not significant
Don’t Want it
5 4 3 2 1 0
Tariff Rates
SMS Package
MMS Package
GPRS Service
3 G service
Voice Clarity
Network Coverage
Customer Buying Criteria Important Factors
Important Factors Rural
Areas
Absolutely Critical
Very Important
Quite Important
Nice to Have Not significant
Don’t Want it
5 4 3 2 1 0
Tariff Rates
SMS Package
MMS Package
GPRS Service
3 G service
Voice Clarity
Network Coverage
NON PRICE
UFONE
TELENOR WARID ZONG
ATTRIBUTES AFFECTING WEIGHTAGE
CUSTOMER CHOICE %
MOBILINKPRODUCT
RELATED 50% Rating on the scale of 1 to 101. Tariffs 25% 9 7 9 8 92. VAS 25% 8 6 8 7 8SERVICE
RELATED 50% 1. Network
Coverage 25% 8 10 7 7 6
2. Voice Clarity 25% 8 9 9 9 6
Total 100% 82.5 80 82.5 77.5 72.5
Vision Statement
• UFONE VISION“In order to evolve with our customers and to keep pace with your needs, we rejuvenated and revamped our image by changing our visual identity.”
PROPOSED VISION OF UFONE“To become number one cellular service provider in Pakistan by gaining excellence in communication services”
Mission Statement
UFONE MISSION STATEMENT“At Ufone we understand the value of words and the need
to communicate effectively and efficiently at all levels of society, which is why our primary focus is on U, our valued customers bring strength to our company.”
PROPOSED MISSION STATEMENT“To become number one by exploring new and untapped
market increasing our customer based by providing new and unique Services”
• OBJECTIVES– Increase network coverage area atleast by 15-20% by
the end 2011– To become the leading mobile operator in the country
by achieving subscriber wise market share of 35% or more by 2011.
– To install 4500 additional cell sites to ensure customer satisfaction in terms of connectivity by year end of 2010
– To implement new distribution channel by promoting it on all major platforms starting from December 2010
STRATEGIC INTENTBecome the 1st choice of the customer in both
urban & Rural Areas
• Key issues – Network Coverage (Rural Areas)– Operational Issues (Billing & package conversion
issues)– Cultural Issue at Ufone
STRATEGIC DIRECTION• UFONE’S STRATEGIC DIRECTIONS:
– Since the urban markets have been saturated and with the ongoing price wars with the competitor on existing customer base. Ufone will have to focus on new emerging markets such as Females, Farmers, Youth in the rural areas of Pakistan
– Since the profitability in the future will be based on volume therefore it is very important for Ufone to come up with services that are unique.
– To beat its major competitor like Mobilink and the other emerging operators like Telenor and Warid, Ufone needs to increase its availability by increasing its network coverage. It needs to go into extensive expansion into the untapped markets so that it can expand its operations and also increase its market share. Ufone has finalized a network expansion contract amounting to about $50 million, which will enhance the subscriber’s capacity by 10 million.
Product Plan
RURAL MARKET
YOUTH
KISAN (FARMERS)
LAND LORDS AND MIDDLEMEN
HOUSEWIVES
Product
hUm-Jawan
hUm-Kisan
hUm-Karobar
hUm-Aurat
Product Pricing
• 25 pc per 30 Seconds on any network• 1 hour free after 2 mins• 24 FM services free• Free Sports update • 5 Friends and family numbers (Rs 10 per addition charges)
– 45 pc per Minute all day• On per minute incoming call subscriber will get 10 Pc
YOUTHhUm-Jawan
Product Pricing
• 65 pc per Minute• Comodity Market Updates (Pricing) (Rs 100 per month charges)• 24 hours FM services free• Free Sports update• News Updates (Rs 50 activation charges) and monthly Rs 10• 100 free minutes per month Ufone to Ufone only • F & F services totaling 7
– 55 pc per minute
Land lordshUm-Karobar
Product Pricing
FarmershUm-Kisan
• 25 pc per 30 Seconds on any network• 24 FM services free• Free weather updates• Experts opinion for agriculture in local languages• 5 Friends and family numbers (Rs 10 per addition charges)
– 45 pc per Minute all day• On per minute incoming call subscriber will get 10 Pc
Product Pricing
HouswiveshUm-Aurat
• 35 pc per 30 Seconds on off network• 20 pc per 30 seconds on on network• 24 FM services free• Free Cooking recipes • Health & Care advices • 5 Friends and family numbers
– 45 pc per Minute all day• On per minute incoming call subscriber will get 10 Pc
MARKET SEGMENTATION & PRODUCT POSITIONINGAssumption:We are assuming that out of 100% of Ufone’s market share, 85% is urban and 15% is rural
Market Segment
Current Revenue Projected Growth Existing/new packages
Contribution in Profitability
%
Prepaid Urban 34,053 M 1.5%
Prepay existing-Ufone Prepaid-Ufone Super Ghanta -Ufone Ghanta Package-U Fone Life Plus -Uth Package-Tension free package -Ufone Paanch Ka Pandrah-Ufone Uwon
90%
Prepaid Rural 6,009 M 20%
Prepay New-Hum Jawan-Hum Karobar-Hum Kisan-Hum Aurat
10%
Proposed Distribution Structure
YOUTH
LAND LORDS AND MIDDLEMEN
HOUSEWIVES
KISAN (FARMERS)
Pre-Paid Connections RURAL MARKET
RETAILERS
COMPANY
• Marketing in the Rural• Step 1:• Free distribution of SIMS & Cell phones with local languages targeted to different
segments differently– Kisan: collaboration with various agri products like pestisides, fertilizer etc– Rural Females: Door to Door our female sales representative will distribute free cell phones
by competition
– Youth: Introductory Mela will be organized to target this segment and we will distribute free phones by simple competitions like one leg race, Kabadi Match etc
– Landlords: This segment will be targeted by our senior sales representative.
• The main aim behind organizing the carnival and other activities is with the sole purpose of breaking into the market and expanding the customer base
• Step 2:• Offering insentives to the existing subscribers as and when they introduce a new
subscriber to Ufone, by doing so Ufone will save the cost of developing a sales team in rural areas and in return the subscriber will also benefit. This will help create a sense of belongingness to our customer with Ufone making them a more brand loyal person and making the customer not just customer but an integral part of the Ufone Family
• The following diagram represents how our customers will work as a sales men and in return both the company and subscriber will benefit
• With the introduction of every new customer(A) by existing subscriber(B) will get Rs 20 balance and going forward every call that Customer A does Subscriber B will get 5 Bonus points which he can utilize at various places acting as discount
ACTION PLANWhat How Who When
Business Scope
Increase the coverage to Rural regions
Installing new infrastructure which will enable to reach rural market customers
Engineering and finance CFO of U Fone
Jan-11
Market structure / Distribution
o Conventional and outdated structure
o Reducing the role of middle men from the structure
o Head of Marketing and distribution
Jun-11
Conventional distribution structure is not appropriate for the rural market
Targeting the new market with entirely new method
Product manager and sales managers
Market Share By introducing new products for each identified market segments and working our way into these segment.
Sales team initially and followed by our new distribution method by which ever subscriber will at as our salesmen
Jun-11
Markets in the rural areas are in the Growth stage
showing huge potentials
New Product
hUm Jawan New packages specially design for the targeted segments
Ufone – Marketing, Sales & Distribution Department
Jun-11
hUm Karobar
hUm Kisan
hUm Aurat
Infrastructure
Expanding network coverage area
Setting up new cell sites in rural areas
Ufone technical Department Jan-11