51511538-ufone-assignment-by-shakeel-ahmad.doc

By Shakeel Ahmad

Assignment on Ufone

CHAPTER -1 INTRODUCTION 1.1

BACKGROUND OF THE STUDY: This report is about the Ufone, specifically concentrating on the marketing

strategies of the Ufone and the Customer care, in the growing and most competitive industry of the cellular phones. In the competitive business environment of these days, the performance of an organization cannot be judge absolutely. It should be comparative. The organization’s journey towards its mission needs a continuous review of its performance on pre defined time periods. This performance must be measured against standards to indicate whether everything is going well or there is a need to take corrective actions. In this report the focus will remained on the performance of the company regarding the tough industry competition and growth and the company’s marketing strategies. It will also cover to some extent different other areas, and also the company’s strategy to remain directly in contact with its customers through customer care centers.

1.2

ANALYSIS: Ufone has very good prospects, as the growth potential of the cellular

industry in the country is enormous. Ufone has successfully reached over 180 cities and still a lot more has to be done. Ufone holds a very effective sale promotion strategy and one of the major steps it has taken in this regard is the free launch of connections on 14 august

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2004 which has boosted its customer base and sale of scratch cards. Ufone is always been consistent in lowering its prices and making mobile an affordable thing in reach of a common men.

1.3

FINDING: All the measures of true success, exceeding the revenue targets, crossing

the targeted subscriber base, providing excellent customer care, capturing a substantial expanding the size of the market and surpassing all customer expectations, have been achieved by Ufone, quite obviously. Ufone is a real success. Conclusion of the major issues based on analysis of the performance of Ufone and its market value reveals that it has a market niche of being inexpensive and reliable.

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1.4

Assignment on Ufone

RECOMMENDATIONS: Ufone should sustain its niche of being inexpensive and reliable. It should

adapt the horizontal growth strategy. It should re-organize the current structure of management at Ufone customer care centers to improve the quality of work over there.

1.5

SCOPE OF THE WORK: To manipulate and discuss each and everything of an organization is

always a difficult task. All the functional areas require a detailed discussion. Along with all other limitations, time factor is above all. So it has been tried in this report to remain specific. Main focus of the work thus, is limited to the marketing strategies of the firm and the customer relations. The performance regarding these areas might be good, average or bad. Every person in the organization, individually or collectively, as a member of the department, contributes to the overall performance of the organization. This can be promote the goodwill more or less. For service oriented company like Ufone, the credit mainly goes to the marketing and the customer care departments to maintain and of the company. So performance can be surely judge with reference to these departments, which is the main focus of this report.

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CHAPTER-2 ORGANIZATIONAL & FUNCTIONAL SETUP 2.1

A REVIEW OF THE ORGANIZATION

2.1.1

INTRODUCING THE UFONE: The world of telecommunication sector is heading towards the

wireless communication. The mobile business has big growth potential. The fact is cleared by the increasing demand of the telecom and mobile experts all around the globe. In some countries it has grown so fast that the level of mobile penetration has crossed the fixed line levels (e.g. Finland and Sweden). Ufone is a newly cellular company as compared to others like Mobilink, operating in Pakistan, providing cellular services for 7 years now. Ufone’s services are offered by Pak Telecom Mobile Limited (PTML), a 100% own subsidiary of Pakistan Telecommunication Company Limited (PTCL). PTML is a private sector organization working independently. Ufone, the brand name of the service,. Lahore, Karachi, Kohat, Jehlum, Gujranwala, Faisalabad, Shekhopura est. in addition to the road coverage on Peshawar ---- Islamabad ---Lahore secion. Till now its coverage has been extended to more than 180 cities.

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HISTORICAL BACKGROUND OF UFONE In today’s changing trends in telecom sector, all global (world class) telecos has strong cellular networks either directly or through subsidiaries. With this fact in view, there was need of PTCL as well to hae its own cellular service. Pak Telecom Mobile Limited, a wholly owned subsidiary of PTCL was therefore created keeping the same in view.4 Ufone came into existence due to concentric diversification strategy (growth through diversification out of an industry into a related industry) by PTCL. Table: 2.1 Proposed Model of Corporate Strategies

Business Strength/ Competitive Position Strong 1

2 Growth Concentration via Vertical Integration

Hi 4 Industry AttracTiveness

3

5

7

Retrenchment Turnaround 6

Growth Concentration via Horizontal Integration Stability No change in Profit strategy 8

Growth Concentric Diversification

Weak

Growth Concentration via Horizontal Integration

Stability Phase or Proceed with Caution

Med

Low

Average

Retrenchment Captive Company or Divestment

9 Growth Conglomerate Diversification

Retrenchment Bankrupley or Liquidation

Source J.D. Hunger, E.J. Flyon and T.L. Wheelen, “Contingency Corporate Strategy; A Proposed Typology with Research Proposition,” Paper presented to

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the Midwest Division of the Academy of Management, Milwaukee. Wisconsin, April 1990. In this background of growth, it was essential for PTCL to establish itself in cellular phone business before the exclusivity on fixed telephone expires. Entrance of PTCL in cellular phone industry will keep it to face the challenge of exclusivity expiry.5 Being leader in its core business of providing connections for communication through land lying phones/terminals PTCL has the capabilities needed for success in the newly industry. PTCL has a strong financial position to support its new business. It has a surplus liquidity which is placed at low interest rates. The investment in Ufone has got a big opportunity to earn huge returns for PTCL. And it is cleared of the large business Ufone has earned and its successful circulation over 180 big cities of Pakistan.

EVOLUTIONARY PROCESS: The dream of PTCL to enter into the cellular phone industry is very old. Till 1995, 96 cellular connections were being provided by three different companies (which will be discussed briefly in coming chapter). The cellular phone industry was enjoying high profit margins by targeting corporate customers only. Mobile phone was considered to be symbol of status. This can be called an early growth stage of mobile phone industry in Pakistan. From the progress of these companies being in touch with PTCL for using its land lying network, it was easy for PTCL to forecast the future of the cellular phone industry. So the plan was proposed which ultimately led to the establishment of PTML in 1998 and Ufone in 2001.

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NATURE OF THE BUSINESS: It is a fully service oriented in nature.

MISSION STATEMENT: “To become the best cellular communication option available in the country for U.”

SLOGAN: “It’s all about U.”

GOALS AND OBJECTIVES: As a common practice big organizations divide their long term mission into short term goals and objectives. To attain these goals and objectives they develop strategies accompanied by policies, procedures, programs, rules and regulations. The goals and objectives have to be achieved collectively or they can be related to a specific department. So the top management can assign the goals and objectives to a single concern section or to the entire organization. As a matter of fact, these goals and objectives are secretive and are not disclose generally. However broadly speaking, the goals and objectives of Ufone are as under;  100% achievement in given target of sales.  To penetrate into the market with existing products e.g. prepaid and postpaid packages as per the segments and to build a front line services selling company image in public.

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 Concentrate to generate high quality sales and help to build trust, loyalty and sense of affection among the customers by performing and extending extra services to them.  To do all possible efforts to out class competitor’s activities from the market and to achieve the company’s goals by representing excellently as a true Pakistani company.  To sustain customer base and maintain quality to avoid sale returns.  To ensure the following personal excellence;  Product and company’s excellence.  Coordination, cooperation and reporting.  Professionalism.  Time management.  Office management.

STRATEGIES: To be recognized as the leaders in quality mobile communications, Ufone will;  Provide quality services to the customers.  Contribute in the social welfare.  Do right thing at right time.  Reward opportunities to the employees and associates.  Show creativity.  Provide harmony.  Walk the talk (say what you can do)  Respect and value the customers.  Provide integrity.

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QUALITY POLICY: At Ufone, the quality policy is defined in a very simple term that is to optimize the performance. However the areas on which the management focuses its concentration are; o Voice quality. o Connectivity. o Customer services. o Coverage. In this regard the objective of the firm can be summarized as “To retain the subscribers on board by maintaining the quality of the product.”

2.2 THE TELECOMMUNICATION SECTOR 1947---2005: At independence 1947, the Pakistan telecommunication sector was organized as a combined P&T Department as it was in India before partition. In September 1959, the minister for railways and communications decided that a detailed examination be made of the working of the Pakistan Posts and telegraph department for bringing about improvement. The Cabinet approved this decision and a major step was taken in 1962 to create the Pakistan Telephone & Telegraph department. The World Bank felt a reorganization necessary in 1968 and for that purpose appointed consultants for a study. This was also followed in 1969 by a review and a report to the Chief Marshall Law Administrator. In 1973, the Cabinet approved to setup a board to administer and control the T&T. after prolonged discussions between the Government and the World Bank during 1973 to 1979, a Presidential Order was

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issued on 30th May 1979 which gave the DG T&T enhanced administrative and fiscal powers and appointed a full time Financial Advisor. The new arrangements came into force on 1st July 1979. As a result and after reviews, the Government decided to convert the T&T into an autonomous corporation that was created as PTC by an ordinance on 15th December 1990. Government obtained the services of a consortium led by Bear Steams (USA) for study and recommendation which resulted in the promulgation of the Telecommunication Ordinance of July 1995 separating the policy, regulations and operations in the sector. While policy was reserved for the Government, the regulation of the sector was entrusted to the Pakistan Telecommunication Authority (PTA). A frequency allocation board (FAB) was created for the management of the radio frequency spectrum and for government’s

telecommunication

services;

National

Telecommunication

Corporation (NTC) was created. The PTC was converted to the Pakistan Telecommunication Company Limited (PTCL) on December 31st, 1995. In October 1996, the National Assembly enacted the Telecommunication Reorganization Act replacing the Ordinances.6

PRIVITIZATION OF PTCL: Internationally, the general trend of conducting business is inclined towards privatization, with the role of the governments limited to performing regulatory and monitoring tasks. This approach became popular during the mid eighties and has continued to be the preferable model to date. This trend has developed after the world saw the clear inability of government owned and run organizations to operate efficiently. This was evident in counties like the former Soviet Union and several of the communist states of the Eastern Europe.

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The 1970’s saw a major shift in Pakistan towards nationalization due to the policies of the government at that time, which was inclined towards a socialist welfare model. However, subsequent turn of events was to prove these policies to be seriously flawed a failure worldwide. Only a decade later, the government was advocating the privatization of everything under the sun. Superficially, it seems to be an open and shut case of a poor strategy corrected after it was proven wrong. Pakistan Telecommunication Corporation was established in Dec 1990 to take over the functions of the Pakistan Telephone and Telegraph Department. Its operations were governed by Pakistan Telecommunication Corporation Act 1991. In 1991 GOP announced its iment to privatize PTC and appointed a financial advisory team led by Bear Steams and Coopers & Lybrand based on whose advice decided to sell the 26% stake of the share capital, with management rights of PTC by converting into a limited company under the provisions of Companies Ordinance 1984.7

PTCL CURRENT ASSESMENT: o The head quarters of PTCL are at Islamabad. o The total number of employees at PTCL is around 55000. The data is from four provinces (Sindh, Balochistan, Punjab, and NWFP), and four federally controlled areas (Islamabad, Northern Areas, Azad jammu & Kashmir and FATA). o Total installed lines: o Total working connections: o Percentage digitalization: o Universal Access Network: o Mobile Telephone Base:

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o Toll Free (0800 operational) Customers: o Internet Customers: o Universal Internet Number(UIN): o Nation Wide Direct Dialing Stations: o Country Teledensity:

P.T.A Pakistan Telecommunication Authority, working under the supervision of Ministry of Science & Technology, is a Government Organization, established under Pakistan Telecommunication (Re-organization) Act 1996. PTA is working as a corporate body to regulate the telecom sector. 8 All the mobile phone operators and PTCL follow the rules & regulations of PTA, which look after keep a check on all land lying (if some company other than PTCL launches its operation) and mobile phone companies. The headquarter of PTA is in Islamabad. All sorts of licenses related to telecommunication sector are granted by PTA. The setup of the telecommunication sector in Pakistan can be understood from the following figure Figure: 2.1 Setup of Telecom Sector In Pakistan P.T.A

PTCL

Ufone

ISP Companies

Mobilink

Paktel

Insta

Sat Phone Co.

Warid

Telenor

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OVERALL CELLULAR PHONE INDUSTRY IN PAKISTAN: The introduction of the cellular phones in Pakistan is almost 12 years old. So it can be said that it is the growth stage of the industry life cycle which is expanding day by day. The number of subscribers has been increased with a huge ratio and still increasing every day and lots of opportunities for the players for growth through horizontal integration i.e. by expanding the firm’s business into other geographical locations. Pakistan is the very attractive market for the mobile phones. There are over 3 million active mobile phone users. Most of these customers belong to the key cities like Karachi, Lahore, Islamabad, Peshawar, Faisalabad etc. but now with the increase in the networks of the mobile companies in the different other big and small cities and the rapid decrease in mobile service charges, the ratio has also increased in the small cities too. A large market is still lying untouched and waiting anxiously to get the cell phone because of the fact that with a mobile phone in hand one can expand its business operations and remain in touched with his business all time. According to P.T.A the number of cell phone subscribers is expected to reach 15 million during next two years. A potential demand of around 25 million subscribers till 2018 is required to be satisfied in the country. P.T.A has so far issued 178 licenses for various telecom services, 90 licenses for Wireless Local Loop (WLL) to 15 companies for all 14 telecom regions of the country. Besides this, 76 Fixed Local Loop (FLL) licenses have been awarded to

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34 companies and 12 Long Distance & International (LDI) licenses awarded to different companies. Some of the companies which have won the WLL licenses include M/s.Telecard, M/s.Burraq Telecom, M/s.DV Com, M/s.World Call, M/s.Warid WLL, M/s.Microtech Link and others. PTA will issue as much as 108 WLL licenses to 20 companies which have won the spectrum through open bidding in August this year. The Authority received Rps. 14.121 billion against the spectrum price. After successful completion of phase-one of the deregulation process, PTA has also invited applications from Pakistani and foreign companies for the grant of Local Loop (LL) and Long Distance & International (LDI) licenses for all PTCL regions excluding Azad Jammu & Kashmir and Northern Areas on open and unrestricted basis.* At present there are four mobile companies operating in Pakistan and the upcoming new foreign companies will commence there activities soon, as they are in process to establish their setup. The present companies are Paktel, Instaphone, Mobilink, & Ufone. A brief discussion about these companies is as under;

PAKTEL Paktel is the first company that introduced the mobile phones in Pakistan. Started its operation in 1989, Paktel entered the Pakistani market with a huge investment Cable and Wireless, an American based company. Being pioneer in the mobile phone industry, Paktel at one time became a generic name for mobile phones like Coke. It has recently upgrade its network to GSM and brought a big investment in its brand and marketing setup. Some facts and figures about the company are as under;

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     

Year and first city launched: Number of cities with services: Number of exchanges or switches: Technology used: Market share: Head Office:

Assignment on Ufone

1989, Karachi Over 160 3 Switching Centers GSM 6% Islamabad

A great change in the history of Paktel is its merger with Instaphone whereby Instaphone parent company Millicom purchased 97% shares of the Cable & Wireless and owned Paktel.

INSTAPHONE: An aggressive company with very effective marketing strategies, Instaphone proved to be a customer friendly company by introducing variety of attractive packages. Instaphone’s prepaid package INSTAONE has been a very popular one till a few years back. Being a first ever prepaid mobile phone system, INSTAONE became a generic name for the prepaid card system of mobile phones. Due to the congestion problem in network, the popularity of it is gradually decreasing and if we take the competitive market of today & the technological advancements in GSM, it seems to be very far away from others. Instaphone is the brand name of Pakcom Limited., a subsidiary of Millicom International Cellular. MIC operates 30 cellular networks, carrying out its business in more than 60 countries worldwide. After taking over Paktel, the top management of Instaphone now looks after the operations of Paktel also, as the new arrival of Paktel with GSM technology needs a much more look over. Some facts and figures about the company are as under;    

Year and first city launched: Number of exchanges: Number of cities with network coverage: Technology used:

1990, Karachi 3-Switching Centers 185 DAMPS (Digital AMPS)

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 Number of active subscribers:  Market share:  Head Office:

Assignment on Ufone

Over 600,000 8% Islamabad

Officially the merger of Instaphone and Paktel took place in sep.2000. As a new setup, Pakcom has appointed franchises for Instaphone and Paktel for sales, customer care and billing. These franchises are run by private investors. Majority of the franchise holders are the ex-dealers of either Paktel or Instaphone. So far Paktel franchise is known as Paktel Point and for Instaphone is the Insta Sales, supervised by the territory managers of Pakcom.

MOBILINK: Before the introduction of the Paktel GSM, Mobilink was the only direct competitor of Ufone, interms of technology. Mobilink is the first company that introduced GSM technology in Pakistan. Mobilink is the joint venture of Motorola and Saif telecom, operating under the supervision of Motorola, a well known manufacturer of the computer related parts e.g. hard disk and pagers and mobile phone hand sets etc. Motorola is also the service provider company for communication in many countries. Mobilink gradually captured the market by emphasizing on advertising the basic features of the GSM technology e.g. security against scanning and voice quality. Later on by its prepaid packages like JAZZ, Mobilink rapidly captured the market share. Before the CPP (calling party pays) system, the incoming calls were charged to the subscriber of the mobile phones. JAZZ came up with a promotion of free incoming calls for a limited time. It generated a record sale for the company. With another facility of LNO (late night option) in which the out going calls made between 10:30 pm to 06:30 am were not charged, sale of postpaid

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packages also increased considerably. People with one postpaid LNO at one end and a prepaid JAZZ connection at the other end used to talk for free for the whole night. The JAZZ connections were than stopped by the company and it took almost one year before they were opened again with incoming calls being charged to the customers. But now it has remitted all charges on incoming charges from any country in Pakistan and also made every call a local call to any Mobilink connection all over Pakistan. Mobilink has also introduced the new phenomenon of blending the prepaid and post paid connections in the form of a postpaid package known as Mobilink Indigo where you can control the budget of a postpaid connection by uploading a scratch card balance. It provides the opportunity for the Mobilink customers to enjoy the postpaid facilities with a controllable budget. With very new and different ideas of marketing, Mobilink remains the Market Leader for the mobile phone industry. Some facts and figures about the Mobilink are as under;      

Date of launched and first city: Number of cities with network coverage: Technology used: Number of active subscribers: Market share: Head Office:

August 1994 Lahore Over 350 Cities GSM Over 10 Million 50% Islamabad

In 1999, Motorola and Saif Telecom sold off their shares to an Egyptian company Orascom and now Mobilink is 100% owned by Orascom. As a new setup, Mobilink has also appointed its franchises countrywide. These centers provide the facilities of sales, service and billing.

UFONE VS COMPETITORS: Broadly categorizing and keeping technology in view as a major factor, Ufone has direct and as well as indirect competitors. The term direct and indirect refers in

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terms of the technology used. Formally, Mobilink was the only direct competitor but now Paktel with GSM technology also became the direct competitor. Whereas, the Instaphone comes under the indirect competitor. The number of direct competitors are yet to get increased by the arrival of new companies like AL-WARID &

TELENOR: The table and diagram reveals the market share of each company: Table: 2.2 Market Share of different Cellular Companies Name of the Company

Number of Subscribers

Market Shares

Mobilink Ufone

Over 10 Million 5 Million

50% 23%

Paktel

Over 500,000

6%

Instaphone

Over 600,000

8%

Others

Over 1,200,000

13%

Figure 2.2 Market Share of the 4 Cellular Companies

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2.3 HISTORY OF MOBILE TELEPHONES: The mobile phones are basically the result of the combination of two of the greatest inventions of the history i.e. Radio & Telephone. The afterwards developments gave birth to different types of wireless devices. Police started using two way radios as early as 1921, which were named Wireless or WalkieTalkies and are still used for variety of applications. Some of the disadvantages or limitations of these devices include half duplex sound, one person can talk at one time, push to talk, limited range and limited frequency. In 1977, first license for AMPS (Advance Mobile Phone Syatem) network was granted to IIImots Bell Telephone in Europe. Mobile phones rapidly started making their place in various countries with every country using its own type of network technology. (AMPS, TACS, CNET, NMT etc.)9

EARLY TRENDS AND DEVELOPMENTS: First cellular networks were introduced in late 70s, these were basically analogue systems having lots of limitations and deficiencies including voice quality, security of the communication etc. however, different standards in different areas of the world were being used e.g. 

Four different standards in USA.



A variety of standards in Europe.



Another standard in Japan.

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All these standards were incompatible and ineffective. US allowed growth of different standards to encourage a free market and innovations. The Europeans however got together in early 80s to develop a common pan European standard.

THE GSM SUCCESS STORY: Group special mobile or GSM was the standard in mobile phones adopted by Europeans. The objective, as mentioned earlier, was to provide a wider market for mobile phone operators. The first GSM network was introduced in Europe in 1981. later on this standard expanded quickly to become the premier world standard and thus GSM got the meaning as Global System for Mobile Communications. The GSM proved to be the robust technology soon after its introduction due to its major features like:  Security against the scanning and cloning.  SIM (Subscriber Identification Module) card facility enabling the customer to store his valuable data.  Freedom to change the handset and shift the database easily.  Seamless connectivity worldwide through international roaming with same number contact ability.  Near wire like sound quality.  Economies of scale.

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So all these factors made possible for GSM to become the only leading standard for mobile phones. Therefore now; o 55% of the global cellular market (380m) uses the GSM standard. o 500 organizations in 158 countries offer GSM. o 4 new customers are added every second. o 1 out of 16 people in the world has a GSM connection. o 1 billion subscribers were expected by 2005. o In 1999, PC growth rate was 22% while GSM growth rate was 77%.

3G AND SATELLITE TELEPHONY: 3G or third generation, the third step from analogue to the latest one is based upon the GSM platform.  1st Generation Analogue.  2nd Generation Digital.

0110000010100111

 3rd Generation Mobile Multimedia. 3G is a quantum leap in available capacity. It provides the ability to transmit high volumes of data along with voice thus making the cell phone a mobile device with video and internet services. It is possible to download data at breath taking speeds. Licenses for 3G have been issued in Europe. OK raised approximately $30 b through 3G licenses. Everyone seeking the license wants to concert the

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explosion in data traffic into revenues. Having already committed themselves to spending more than $30 b on their licenses and seen their share prices and credit ratings slide as a result. West European operators are now facing up to the need to spend roughly as much again on infrastructure --- with more big sums to come in areas such as marketing and sales. The satellite telephony, another milestone, entered into the world of communication because the cellular coverage as a percentage of Earth’s area is still small. Coverage through the satellite gives a global footprint.

2.4

MANAGEMENT REVIEW:

REGIONAL SET UP

There are three functional switching centers of Ufone in cities Islamabad, Lahore and Karachi. As a common practice and for monitoring the performance effectively, the country has been divided into three regions, North, Central and South. The following figure shows the regional setup and the cities included in the regions.

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Figer: 2.3 Regional Setup of Ufone Head Office Islamabad

North

Central

Peshawar-Jehlum

Jehlum-Punjab (end)

South Karachi-Sindh (Interior)

Ufone Customer Service Center

Franchise

Franchise

Franchise

From above figure it is clear that there is a centralized system of organization structure of Ufone. All the regions and the cities with are under the command and supervision of headquarter.

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CHAPTER -3 ANALYSIS 3.1

ANALYSIS OF SALES PROMOTION ACTIVITIES:

Sales promotion consists of a diverse collection of incentives tools, mostly short run, designed to stimulate quicker and greater purchase of particular products/ services by customers.1 Ufone is a service oriented firm and it target different promotion activities in short or long run e.g. sales promotion, business promotion etc. it is difficult to cover up all the activities done by Ufone at once but the major promotion activities which had come up with outstanding and satisfactory results are;

SALES PROMOTION ACTIVITIES: Ufone being a service oriented firm mainly focus on the sales promotion activities. The major sales promotion activities undertaken by Ufone are;

FREE CONNECTIONS: Ufone come with a very bold decision in promoting its brand by offering free connections to the people in different big cities like Peshawar, Islamabad, Karachi, Lahore, Rawalpindi, Faisalabad, Haiderabad, etc. at the occasion of independence day of Pakistan from 14 august till 17 august for three days. This was a very big surprise for the people of these cities as no mobile company had come up with such a major decision ever. People greatly appreciated this step and rushed to the Ufone customer centers and dealers outlets. This activity resulted in

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500,000 new customers for Ufone and the biggest ever recorded sale of its scratch cards which has increased by 60%. This activity not only resulted in its product promotion but also the promotion of Ufone’s business. But the big flaw in this activity, which the management never realized before was the management of the crowd. The panic created by the people in order to get a connection resulted in the destruction of the Ufone office in Peshawar and also the injuries of the most of the employees. This also resulted in frustration of many people who didn’t have the connections. Ufone management should have done different precautionary arrangements before announcing this campaign.

DECREASE IN CONNECTION CHARGES: After offering free connections, the second major decision taken by the Ufone management was the decrease in prices for the new connection as it has always been consistent in gradually decrease in its connection charges with the decrease in Govt. Tax. Now Ufone is charging only 199 Rps for a connection. This has also brought a revolutionary increase in its customer base.

DECREASE IN TARIFFS: Ufone has also decrease its tariff for outgoing calls. This is also a good step in giving its customers a relief from the big charges for the different calls made. In the first step it has decreased these charges from 5.70rps/ minute to 4.70rps/minuteOn 5th February 2005, Ufone came up with another major step decreasing the call charges from Ufone to Ufone up to 3 Rps/minute & with a late night option of 1.30 Rps/minute after 10pm. This is another great step by Ufone management in promoting its product.

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REMOVAL OF ROAMING CHARGES: Ufone in response to its competitors has also come up with the removal of all the roaming charges throughout the country. Now with zero balance one can attend a call from any city of Pakistan. This is also a major step in promoting its sales and people visiting the customer care greatly appreciated this decision which has resulted in the greater brand loyalty of the Ufone customers.

SPECIAL PACKAGE FOR MMS: Ufone is now mainly focusing in attracting new customers by promoting its Value Added Services like Multi Media Messaging (MMS) and GPRS as it’s the only mobile company offering these services. Ufone in collaboration with United Mobile (a mobile set selling company) has offered free 50 multi media messages, free activation of the MMS service and a free Ufone connection on the purchase of a MMS enabled set from the any outlet of the company or temporary stalls arranged for this purpose in different areas. This is also a good step in attracting youngsters as they are more interested in these sorts of things.

FREE ACTIVATION OF GPRS AND MMS SERVICE: Ufone till now was offering the free activation of its GPRS and MMS services with the free settings in the customers’ mobile set’s configuration at any customer acre center or through call center. But now these services are offered on the payment of only 70rps at the customer service centers.

PRIZES:

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Ufone also announce different cash prizes contest for its customer on different occasions like Eid, Cricket matches etc. These prizes are usually given to those customers who have the MMS service. Like on Eid ul Adha , the Bakra contest, where customers could win a cash prize of 100000 Rps. The cricket contests on different big matches of Pakistani team.

PUBLIC RELATIONS: Public Relations (PR) is another important marketing tool. Not only must the company relate constructively to its customers, suppliers, and dealers, but also relate to large set of interested public. A public is any group that has an actual or potential interest or impact on a company’s ability to achieve its objectives.2 Ufone also gives an important emphasize on establishing and promoting its PR. It is always in touch with its customers through its customer service centers and dealers. The different tools Ufone uses in promoting its PR are;

EVENTS: Companies can draw attention to new product or other company activities by arranging special events or sponsoring many. These events include concerts, sports tournaments, contests and competition etc. Ufone has always been ahead in arranging and sponsoring many events like Cricket matches of Pakistan team, Basant festivals in Islamabad and Lahore, Annual Animal shows in Islamabad, Musical Concerts taking place in different cities etc.

NEWS: One of the major tasks of PR professionals is to find or create favorable news about the company, its products, and its people. A good PR media director

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Assignment on Ufone

understands the press’s needs for stories that are interesting and timely and for press releases that are well written and attention getting. Ufone always gives special attention towards these and have come up with many interesting ideas. Like on the removal of roaming charges, Introduction of MMS and GPRS first time in the market, Ufone has tried its level best to take advantage of this opportunity and make people aware of these in best possible way.

IDENTITY MEDIA: In an over communicated society, companies have to compete for attention. They should strive to create a visual identity that the public immediately recognizes. This is carried by company’s Logos, stationary, brochures, signs, business forms, cards, building, uniform and dress codes etc. Ufone has been ahead in arranging all these tools for it promotion.

3.2

CRITICAL ANALYSIS:

Strategy formulation is often referred as long term planning. The process is primarily analytical not action oriented. Thomas and David in their book “strategic management and business policies” write: “Formulation process is concerned with developing a corporation’s mission, objectives, strategies and policies. In order to do this, strategy makers must analyze the corporation’s strategic factors. (Key Strengths, weaknesses, opportunities, and threats) in light of the current situation”3. Ufone is comparatively a new organization in the mobile industry but its over all performance is excellent in terms of meeting the sales targets and maintaining the quality of its services. Thus it won the trust and confidence of its customers and increased its goodwill with effective marketing strategies. A review of the management, organizational, marketing, accounting, and financial and information system shows satisfactory results.

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By Shakeel Ahmad

Assignment on Ufone

UFONE WITH A PROPITIOUS NICHE William Newman suggests that a corporation should seek a propitious niche in its strategy formulation process. Wheelen and Thomas elaborate this in detail by explaining this niche. They say, “This niche is a corporation’s specific competitive role. It should be so well suited to the firm’s internal and external environment that the other corporations are not likely to challenge or dislodge it. The corporation thus has a distinctive competence that enables it to take advantage of specific environmental opportunities”.4 Finding such a niche is not always easy. As firm’s management must be always looking for strategies windows that is market opportunities. According to a study of high performing, mid-sized growth companies, It was found that these successful corporations have four characteristics in common. 

They innovate as a way of life.



They compete on the value not price.



They achieve leadership in niche markets.



They build on their strengths by competing in related niches.

In summary, research reveals that corporate performance is strongly influenced by how well a company position itself within an industry. A specific niche in which a corporation’s strengths fit well with environmental opportunities is thus a desired outcome of situation analysis and a valuable means for a corporation to gain competitive advantage. Before going further here is an example which has a close relationship with the propitious niche of Ufone.

National College Sciences 29

By Shakeel Ahmad

Assignment on Ufone

EXAMPLE: Fadal Engineering Company Finds a Propitious Niche

The machine tool industry in 1990 was not a very attractive enterprise for most of the U.S. companies. Led by Japanese corporations, importers were responsible for 43% of the $4 billion industry. U.S. companies such as Cincinnati Milicron and Gidding & Lewis had been successful by catering to multi billion-dollar customers like Caterpillar and Boeing, but were also threatened by foreign competition. All in all, this did not appear to be a good industry for a small family run business. When Francis de Caussin, a Detroit machinist, moved his famiuly to North Hollywood, California, in 1953, he formed a company whose name was the acronym of the first intials of the founder and his sons Adrian, David and Larry: Fdal Engineering Company (pronounced fuhdal). From their garage, the family built a business by making high precision machine parts. Early in the 1980’s the family branched into the machine tool business. After considerable work, they made a no-frills vertical-machining center to drill, bore and mill metal pieces. Compared with the machine tools made for the big manufacturers, Fadal’s machine had fewer parts and simpler electronic controls. The company soon expanded into another machine tools that were designed to appeal to smaller manufacturers that could not afford the more sophisticated, complex machines made by larger outfits. The machines made by Fadal were functional and durable, but far cheaper than the typical lowest priced competing machine. Since Fadal generally used U.S. made standard parts, repairs were usually a simple matter. By 1990, Fadal’s sales reached the $80 million range, ten

National College Sciences 30

By Shakeel Ahmad

Assignment on Ufone

times what they were in 1985. The company controlled nearly 20% of the $400 million metal working machine market tailored to the needs of small manufacturers. Why was a small family-run machine tool maker successful in a relatively unattractive industry? Given its small size and the fact that existing competition was ignoring the small manufacturer’s needs, Fadal took the advantage of the market opportunity. The company designed products with a minimum of parts and frills, making its machines inexpensive and reliable. It kept overhead low, R&D was minimal. Only 20 of its 200 employees were salaried. The company has prospered. According to Adrian de Caussin, the eldest brother and Fadal’s electronic chief, “we have vigor. Big, old time toolmakers have lost that and if lose ours, we’ll go the same way.”5 As discussed before Ufone mostly targeted the prospects with the lower income. In its advertisements on TV, students, taxi drivers, mechanics, businessmen, housewife, people working abroad away from their homes, people in rural areas etc were targeted. Another emphasize in these advertisements was the connectivity of Ufone service which was a major issue and lots of problems in this regard were faced by other companies.

Here can be found a major

relationship between Ufone and above mentioned example. Ufone claims of being inexpensive and reliable and this is basically the propitious niche of Ufone.

3.3

SWOT ANALYSIS:

SWOT analysis is a mean of summarizing a firm’s strategic factors. It illustrates how the external opportunities and threats facing a particular organization can be matched with that corporation’s internal strengths and weaknesses to result in four sets of possible strategic alternatives.6

National College Sciences 31

By Shakeel Ahmad

Assignment on Ufone

Table 3.1 TOWS Matrix for Generating a S.W.O.T.

Internal

Strengths (S)

Weaknesses (W)

Factors (IFAS)

-----------------------------

----------------------------External

-----------------------------

Line 5-10 Internal

Line 5-10 Internal Weaknesses here

Strengths here

Factors (EFAS) Opportunities (O)

SO Strategies

WO (Strategies)

-----------------------------

----------------------------

-----------------------------

List 5-10 External

Generates Strategies here that use Strengths to take advantage of Opportunities

Threats (T)

ST ( Strategies)

Generates Strategies here that use Strengths to take advantage of Opportunities by over coming weaknesses ST ( Strategies)

-----------------------------

-----------------------------

-----------------------------

List 5-10 External Threats here

Generates Strategies here that use strengths to avoid threats.

Generates Strategies here that minimize weaknesses and avoid threats.

Opportunities here

Source: Adapter from H.Weihrich, “The TOWS Matrix-A Tool for Situational Analysis,” Long Range Planning (April 1982), p.60 Copyright © 1982 by Pergamon Press.

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By Shakeel Ahmad

Assignment on Ufone

SWOT ANALYSIS OF UFONE:

STRENGHTS

WEAKNESSES

* Connectivity

* lengthy procedures for decision making * SMS problems * Lack of R&D department * Limited staff at Customer center * Connectivity problems at Peak timings * Limited capacity at Call center * Call drops * Connectivity problems in GPRS

* System Up-gradable * PTCL & Govt. support * Best available system * WAP * Multi Media Messaging * GPRS * Latest and tested equipment * Public support being a Pakistani firm * Strong Marketing wing * Experienced top management. OPPORTUNITIES

THREATS

* Rapid growth in mobile Industry

* Privatization policy

* Many potential cities still waiting

* Upcoming foreign

for mobile service

companies

* Reduction in tax on mobile phone

* Satalite Phones

connections * Car tracking system

*Political Unrest and Terrorist activities in Pakistan

* Potential market of Afghanistan

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Assignment on Ufone

PROPOSED CORPORATE STRATEGIES FOR UFONE SO STRATEGIES 

Launch of mobile service in many cities where mobile service is not available and PTCL exchanges are already present.



Introduction of WAP and internet available sets in collaboration with any mobile set company like NOKIA.



Sustain “Penetration price” strategy. It will enable the company to have a lead from other companies and gradually the company will become the market leader.



Start negotiating with Afghan Govt. to establish a subsidiary or joint venture over there.

WO STRATEGIES: 

Get hold of present Ufone cities and make sure that the sales of connection remains continued as in present.



Restructure the customer service center and appoint new skilled staff to improve customer satisfaction.



Introduce more and attractive packages for new and existing customers with reduction in tariffs.



Reduce the charges for GPRS and MMS.

ST STRATEGIES: 

Engage the dealers of others companies and free lancers to sale Ufone connection and reward them with attractive packages.



Invest more in social welfare activities.

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

Assignment on Ufone

Arrange programs, functions, and seminars in favor of Govt. to attract it for more investment in IT & mobile sector.



Arrange programs in favor of peace and stability in economic development of Pakistan.



Pursue “meet the competition” pricing strategy.

WT STRATEGIES: 

Give more authority to the authorized dealers and engage them in others activities e.g. SIM change, Sale of scratch cards and activation of GPRS and MMS.



Improve the quality of service at service centers or just close down the customer service centers and appoint the staff at dealer’s offices. It will reduce the fixed cost.



Merge with the upcoming foreign companies to expand its network and utilize their experience to become the market leader.

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Assignment on Ufone

REFERENCES 1. Marketing Management by Philip Kotler (1994) Published by PrenticeHall International, Inc New Jersey. P 664. 2. Ibid

P. 671

3. Ibid

P.678-679

4. Wheelan Thomas L. and Hunger D.J. (1992). Strategic Management and Business Policies. California: Addison Wesley Publishing Company P.156 5. Ibid

P. 162

6. Ibid

P. 161

7. Ibid

P. 162

8. Ibid

P..159

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By Shakeel Ahmad

Assignment on Ufone

CHAPTER -4 FINDINGS AND RECOMMENDATIONS By interviewing different people, users as well as non users of the mobile phone in order to find out the general opinion of the people in terms of advantages and disadvantages of the mobile phone, revealed following interesting facts;

ADVANTAGES: 

An easy way to remain in touch with the business, family and friends.



A symbol of modernism.



Entertainment device.(Games, messages)



Cheap way to give any message through SMS



A show off device.



A sense of security and satisfaction.



A solution to talk to a friend/girl friend at any time.



Schedule developer device.



A device to access internet through GPRS.



A device to exchange multi media messages through MMS.

DISADVANTAGES: 

Wastage of money.



Lack of privacy.



One of the causes of stress.



Injurious to health (harmful electromagnetic waves)

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Assignment on Ufone



Uneasy to carry all time.



Worry of being lost or theft.



Causes of accident due to the diversion of concentration while driving.

FINDINGS:  Ufone acme up with an effective marketing strategy which introduced it as a good mobile phone company in general public.  An affordable mobile phone service being inexpensive and reliable.  GSM technology with latest systems and equipment.  The company believes in quality not quantity.  For technical support and assistance, the mobile phones companies especially GSM, depends entirely upon foreign companies.  In Pakistan the land lying phone industry is at the stage of low attractiveness.  Ufone is been warmly welcomed by general public because of being a Pakistani company.

RECOMMENDATIONS:  Business plan must be reviewed on pre-defined times to change the strategies or take corrective actions. Ufone should also make quick actions in terms of change in market actions and change in competitor’s strategies.  Ufone should excel in technical side of the cellular phone industry so that in future it has to depend little on foreign firms and consultants. 

Decision making process should be made swift and easy in other to avail the opportunities on time.

 Ufone must sustain its niche of being inexpensive, reliable and economical and it must maintain its prices as low as possible in future.

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By Shakeel Ahmad

Assignment on Ufone

 In future the company must upgrade its quality of service with time and must make it sure that the service quality remains good.  It should make its dealers confidence in the company stronger and reward them on showing good performance.  Restructuring of the customer centers is required because of many problems faced by the customers while visiting any. A plan is proposed for resolving this problem.

PLAN FOR REORGANIZING THE MANAGEMENT ATCUSTOMER CENTERS: As it is discussed earlier in chapter.02 that the customer care center has a very key role in polishing and strengthening the company’s image and goodwill in customers mind. Company is in direct contact with the customer through these outlets. No matter Ufone has a wide network of customer care centers in cities with the mobile phone service with efficient and well trained staff. But many deficiencies were observed at these centers. A few important one’s are; o Limited staff with respect to burden of work. o Un-equal distribution of work among representatives. o No refreshment breaks for staff members during tough working hours. o Appointment of un-skilled workers. Due to these deficiencies a panic situation is usually observed during peak timings. Due to which customers as well as staff members face many problems. As the burden of work has increased due to the rapid increase in the customer base of Ufone, customer care centers requires few changes in the style of work they are up to.

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By Shakeel Ahmad

Assignment on Ufone

Few recommendations are given below for resolving these problems;  Increase the number of customer center representatives at places where the daily visitors are much high.  Prepare a proper schedule having suitable short breaks for the employees to refresh which will make employees enjoy their work and their concentration.  End the sale of scratch cards to sellers at customer centers and ensure that the sale is done only through the sale staff in the market. This will decrease the number of people visiting customer center every day.  Reorganizing the staff and categorizing different activities separately like sale of connections, SIM change etc. 

Create different counters for separate group of activities and appoint separate staff who can do the job more efficiently. The different kinds of counters which are suggested to be created are

in the form of;

COUNTER 1: This counter should deal the sale of connections only. As it is not a difficult task, so only one person is enough to handle it. COUNTER 2: This counter will deal in different queries about the MMS and GPRS only like the activation, deactivation, customer information etc. the number of representatives here may vary from 1-2 according to the requirement.

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Assignment on Ufone

COUNTER 3: The representatives at this counter will deal only in the SIM related issues e.g. issuing new SIM, customer verification, blocking and unblocking of service etc.

COUNTER 4: This counter will deal only in the balance adjustment and other related issues like restoration of balance in case of balance drops, approving security waivers, adjusting customer security deposits etc. The distribution of work will reduce the burden of work and customer’s wastage of time. By this way the customer centers will also become more efficient and quick. This will also increase the company’s goodwill and customer trust in the firm and its service and thus make the brand loyalty stronger. This re-organization can also be presented in the form of chart given;

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By Shakeel Ahmad

Assignment on Ufone

Figure: 4.1 Reorganization of Customer Care

Manager

Incharge Customer Care

Incharge Finance

Finance Officer

CCR

Counter 1

CCR

Counter 2

Incharge Sales

Finance Officer

CCR

Counter 3

Incharge Eng& IT

Assist: Officer

CCR

Sales Officer

Assist: Officer

Sales Officer

Counter 4

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Assignment on Ufone

REFERENCES 1. Interview from different peoples, users as well as non users of mobile phones. Dated : January 12, 2005.

2. Interview from Mr. Naeem Dad Khan, customer care representative, Rawalpindi. Dated : January 20, 2005.

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By Shakeel Ahmad

Assignment on Ufone

CHAPTER -5 CONCLUSION 5.1

CONCLUSION: Ufone has showed a remarkable performance up till now. Achievement of

5 Million customer base till now is an appreciating figure to be proud off. Extending its coverage to over 180 cities in short time of about 7 years is an outstanding achievement. With an effective marketing plan, it has introduced mobile as an affordable device in reach of a common man. It has also taken the full advantage of Govt. support to cellular industry and provided the benefit to its customers of low connection charges, reduce tariff rates, latest technological advancements etc. but there is still a lot to do. There are still a lot of potential customers & Ufone has a better opportunity to get maximum of them due to increase in its popularity among general public as an economical service. P.T.A has awarded licenses to several foreign companies and two new operators of cellular industry are expected to commence their operations this year. It will bring a tough competition in the market. So it is recommended for Ufone to sustain its niche of being inexpensive and reliable. There is also a need of new and a strongly reviewed marketing plan to hold strong grip on the market. Ufone should also try to come over its weaknesses as soon as possible. There is a much need of a Research and Development department in Ufone. So that it could quickly find out the market opportunities to grab them and needs to change in its marketing plan on time. This will help it to become the market leader soon in future.

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By Shakeel Ahmad

Assignment on Ufone

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