Airtel Repositioning

Group-I, Section-D, PGPBM 1.Arka Chatterji, 2.Subhradeep Das, 3.Rakeem Baig, 4.Arindam Das

Entered telecom business in 1985 & telecommunication in 1990

First company to install second ‘Mobile switching centre’ Won Techies Award for four consecutive years(1997-2002)

Launch cellular service in Delhi in 1992

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. Acquired Skycell (TN), JT Mobile(AP & Karnataka), Spice Cell(WB) in 2000 to expand business

History

The First telecom company in the world to receive the ISO 9001:2000 certification from British Standards Institute.

Credits

 

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

Current Market Share 4547870, 2% 11924843, 4%

3437716, 1%

342896, 0%

1378471, 1%

26329804, 9%

69383716, 25% 109744, 0%

Airtel Relaince

27194205, 10%

Vodafone Essar BSNL IDEA 37362897, 13%

Tata 49195098, 17%

Source: COAI, July 2008 Including CDMA & WLL

Aircel 50417955, 18%

Spice

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, permane nt GPRS was introduced at a affordable price Airtel logo during ‘Touch Tomorrow’ days

Tier-I Airtel

Tier-II Basic Telephony

National Long Distance Service

Broadband Service

Mobile Service

Tier-III Freenet

Long Distance

Tango-Internet mobile

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:

Can't Say 14%

Perception

Cool

28%

Cheap

9%

Technically

Creative

advanced

27%

22% 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, Mcommerce (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