Consumer Behaviour Towards Telecom Products
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[2008] Reliance Communication Summer Project
A SUMMER TRAINING REPORT ON CONSUMER CONSUMER BUYING BEHAVIOUR WITH WITH A FOCUS ON PERCEPTION TOWARDS INTERNET DATA CARD IN RELIANCE COMMUNICATION COMMUNICATION LTD (7th July,2008-6th November, 2008)
SUBMITTED IN THE PARTIAL FULFILLMENT OF OF REQUIREMENT OF POST GRADUATE PROGRAM IN RETAIL MANAGEMENT
SUBMITTED BY
Pradipto Dey
2
1. CERTIFICATE OF THE GUIDE
10
2. STUDENT’ DECLARATION
11
3. ACKNOWLADGEMENT
12
4. EXECUTIVE SUMMERY
13
5. INTRODUCTION OF PROJECT
15
6. HISTORY OF RELIANCE COMMUNICATION
16
6.1. Foundation of Reliance Communication
17
6.2. The Vision
18
6.3. The Mission
18
7. AN ANALYSIS OF RELIANCE COMMUNICATION
19
7.1. Low-Cost Leadership Strategy
20
7.2. Differentiation Strategy
20
7.3. Organization Structure
21
7.4. External Environment
22
7.5. Global Expansion
23
7.6. Information as a Weapon
24 3
7.7. Financial Performance and Analysis
26
7.8. Ethics & Culture
27
8. TELECOM SECTOR-AN OUTLOOK
28
8.1. Industry Analysis
28
8.2. Bharti Airtel
28
8.3. Tata- Indicom
30
8.4. Bharat Sanchar Nigam Limited (BSNL)
31
8.5. Vodafone -Essar (Erstwhile Hutchison Group)
32
9. RELIANCE NETCONNECT DIVISION
33
9.1. Introduction
33
9.2. RCOM’ products in Reliance Netconnect Department
33
9.2.1. Value Based Plan
34
9.2.2. Advance Rental Plan
35
9.2.3. Time based plan
35
9.2.4. Prepaid Options
36
9.3. Evaluation criteria & parameter of competitors
36
9.4. Reliance Data Card - an insight
37
9.5. Product
38
9.6. Packaging
39 4
9.7. Price
40
9.8. Promotion
41
9.9. Bundling
41
10. MARKET RESEARCH
42
10.1. Overview of Research
42
10.2. Introduction
43
10.2.1. Problem or Opportunity
43
10.2.2. Background of the study
43
10.3. An overview of internet and wireless connectivity
44
10.3.1. Definition of internet
44
10.3.2. Common uses of the Internet
45
10.3.3. Driving growth of internet data card
46
10.3.4. The Deterrents
47
11. CONSUMER BEHAVIOUR THEORIES
48
11.1. Consumer perception and consumer behaviour
48
11.2. Consumer decision process
49
11.2.1. Predispositions (Before Purchase)
49
11.2.2. Product Need
50
11.2.3. External Search
50
11.2.4. Evaluation of Alternatives
51 5
11.2.5. Purchase Activity
51
11.2.6. Post Purchase Behaviour
52
11.2.7. Predispositions (After Purchase and Use)
52
11.3. CONSUMER PERCEPTION
53
11.3.1. Introduction
53
11.3.2. Factors in perception
53
11.4. Consumer behaviour towards internet data card
55
11.4.1. Problem recognition
56
11.5. Information Search
56
11.6. Product Evaluation
57
11.7. Purchase Activity
58
11.8. Post Purchase Activities
58
11.9. Perceived benefits of internet data card
59
11.9.1. Convenience
60
11.9.2. Time saving
60
11.9.3. Economical
60
11.10. Perceived risk of internet data card
61
11.10.1. Risk of internet connection speed
61
11.11. Research objective
62
11.12. Research question
62
6
11.13. Research boundaries
62
11.14. Research design
63
11.14.1. Validity and Reliability test of the questionnaire
64
11.14.2. Validity Test
64
11.14.3. Reliability Test
65
11.14.3.1. Cronbach’s Reliability Test
66
11.15. Research tactics
66
11.15.1. The theoretical population
66
11.15.2. Sampling Frame
67
11.15.3. Sampling procedure
67
11.15.4. Implementation
68
11.15.5. Data Collection - Phase 1
68
11.15.6. Phase 2 Final Survey
69
11.15.7. Data Processing
70
11.15.7.1. Brand Recall
70
11.15.7.2. Fishbein Analysis
72
11.15.7.3. Factor Analysis
72
11.15.7.4. Perceptual Maps
72
11.15.7.5. Brand Loyalty
73
11.15.7.6. Cluster Analysis and Segmentation
74
12. Recommendation and conclusion
76 7
12.1. Playing with the PLC
76
12.2. Recommendations 4 P’s
78
12.2.1. Product
78
12.2.2. Price
78
12.2.3. Promotions
78
12.2.4. Place
79
12.3. Continue with up gradation
80
12.4. Future Challenges
81
12.5. Store centric recommendations
81
13. Marketing strategy
83
13.1. Segmentation
83
13.2. Positioning
85
13.3. Real Positioning
87
13.4. Psychological Positioning
87
14. APPENDIX
88
14.1. Reliance communication- Timeline
88
14.2. SWOT Analysis
92
14.3. Product portfolio
95
14.4. Retail Revolution:-Reliance World
96
14.5. Customer survey questionnaire
97
8
14.6. Age Profile of Sample Population
106
14.7. Internet Data Card Preference
106
14.8. Recall Pattern
106
14.9. User Preference
107
14.10. Respondents’ preference of Internet Connection
107
14.11. Brand Satisfaction of Reliance
108
14.12. Brand Loyalty
108
14.13. Price Sensitivity in Internet data card Market
109
14.14. Fishbein Analysis
109
14.15. Average attitude perception score of each brand
110
14.16. Factor Analysis
111
14.17. Cluster Analysis
112
14.18. References
115
9
Session: 2007 - 09
CERTIFICATE OF THE GUIDE This is to certify that the Project Work titled “(CONSUMER BUYING BEHAVIOR WITH A FOCUS ON PERCEPTION OF INTERNET DATA CARD)” is a bonafide work of Mr. /Ms Pradipto Dey. Carried out in partial fulfillment for the award of diploma under my guidance. This project work is original and not submitted earlier for the award of any degree / diploma or associate ship of any other University / Institution.
PLACE: - KOLKATA DATE: - 30/10/2008 Signature of the Guide: Name and Official Address of the Guide: Designation and Experience:
10
Students’ Declaration
I, Mr. /Ms PRADIPTO DEY. hereby declare that the Project Work titled Consumer Buying Behaviour with a focus on perception of internet data card is the original work done by me and submitted to the NSHM, Kolkata in partial fulfillment of requirements for the award of Post Graduate in Retail Management (Area of specialisation) is a record of original work done by me under the supervision of Dr/Mr. Sri. OZAIR QAMAR of RELIANCE COMMUNICATION LTD. (Orgn. of the guide)
Date: 30/10/2008 Signature of the Student
11
ACKNOWLEDGEMENT
First of all I would like to thank the Management at Reliance Communication Ltd. for giving me the opportunity to do my four-month project training in their esteemed organization. I am highly obliged to Mr. RAHUL NAGARIA (HR, Reliance Web Stores Limited) for granting me to undertake my training at Reliance World, Place Kolkata I would like to express my gratitude to Mr. OZAIR QAMAR (Area Sales Manager), who has been provided me with guidance, inspiration, perspective and stimulating discussion, throughout the writing of this report. His constant review
and
excellent
suggestions
throughout
the
project
are
highly
commendable. A study like this can not be completed without help from other persons and therefore I would like to express my gratitude to Mr. G.M SAHA, (Ex. Dean of INDIAN STATISTICAL INSTITUTE, KOLKATA ) to provide me crucial guidance in the analytical part of this Project. My heartfelt thanks go to all the executives who helped me gain knowledge about the actual working and the processes involved in various departments. Finally, we would like to thank our friends and family member for giving us constant support and encouragement.
12
4. EXECUTIVE SUMMERY Growth on the Data Cards. Especially happen when business travelers, academicians as well as other professionals need to access emails and corporate applications as well as personal requirements during urgent trips and travels.
Now, what kind of a company enters an industry with competitors already entrenched? Which ones actually succeed? The answer to both the questions is Reliance Infocomm now known as Reliance Communication. Reliance Infocomm is a confident and smart company that was able to enter a saturated and highly competitive industry, and emerge at the top. The cut-throat competition in the telecommunication sector of India posed a great threat to the development of Reliance Infocomm. When Late Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999 he had a clear game plan to position itself on the platform of affordable as well as world class information and communication service highlighting unparalleled value to create customer delight and enhance business productivity.
The project aims to identify the problems faced by Reliance Communication in the internet data card market. Customers often feel that service providers do not deliver what they promise. They feel players should present the terms and 13
conditions and tariff plans/schemes in clear terms. The research we conducted also supports this fact. We have suggested a marketing plan for Reliance data card along with other suggestions for Reliance Communication to face the competition in the near future and the long run.
14
5. Introduction of Project The objective of the study is to understand the consumer’ pre, post, during perception of data card and consumer buying behaviour and attitude for Reliance data card. To understand the former part, we created a focused group questionnaire and conducted a focused Group Discussion (FGD) on data card; we analyzed the questionnaire and the FGD to create an extensive questionnaire understanding the buying behavior of consumers of Reliance data card and other brands. We had a Fishbein analysis done on the 64 respondents from Kolkata to identify how much of buying intension is due to attributes and how much due to influence by referrals. We further extended the study to understand the perceptual mapping of brands. Our analysis has revealed that the consumer is satisfied with the brand Reliance data card and its attributes. However Reliance has not performed well with the customers who are considerably concerned about internet connection speed. This following detailed analysis is presented in our assignment.
15
6. History of Reliance Communication 6.1. Foundation of Reliance Communication Dhirubhai Ambani (1932-2002) started the Reliance Commercial Corporation in a 350 Sq. Ft. room with a telephone, one table and three chairs. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices. He started his first textile mill at Naroda, in Ahmedabad in the year 1966 (The Origin Of 2007). After success in the textile industry Reliance slowly ventured into petroleum, petrochemicals, energy, finance, engineering and telecommunication sectors. Reliance was the first Indian company to be listed in the Fortune Global 500 list in 2003. RIL emerged featured in the 2007 Fortune Global 500 list of the world's largest corporations at rank 269 (500 2007).
Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999. He saw that information technology had the capacity to accelerate the growth of Indian economy leaving behind its backwardness and underdevelopment. From 1999 to 2002 Reliance Infocomm built the fiber backbone for India — 60,000 kilometers of fiber optic spreading across the entire country. Reliance Infocomm was started on December 28, 2002 (Communications, Reliance Communications 2006).
16
After the death of Dirubhai Ambani, there was a rift between his sons, Mukesh and Anil Ambani. Finally the company was split between the two brothers. Anil Ambani acquired Reliance Infocomm, which is now known as Reliance Communications. Reliance Communication is now a part of Anil Dhirubhai Ambani Group (ADAG). Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group of companies. Launched as Reliance India Mobile in December 2002, it started its commercial operations in May 2003 with one million customers in 92 cities. This organization was the result of the dream of Dhirubhai Ambani to – “Make the tools of information and communication available to people at an affordable cost [and] they will overcome the handicaps of illiteracy and lack of mobility”. Currently, Reliance Communication spans the entire telecommunication services covering mobile and fixed telephony. Apart from plain vanilla voice services, it provides broadband, national and international long distance services and data services along with an exhaustive range of value-added services and applications.
Further,
the
company
sells
communications
and
digital
entertainment products and services through its chain of Reliance Web World retail outlets. Today, Reliance is a service provider of both CDMA and GSM technologies.
17
6.2. The Vision The vision of the company is as follows:
We will leverage our strengths to execute complex global-scale projects to facilitate leading-edge information and communication services affordable to all individual consumers and businesses in India. We will offer unparalleled value to create customer delight and enhance business productivity. We will also generate value for our capabilities beyond Indian borders and enable millions of India's knowledge workers to deliver their services globally. (Communication, Reliance Communication 2006)
6.3. The Mission The mission statement of the company was, “Karlo duniya muthi mein.” It is the mission of the company to become number one in the field of telecommunication and provide high quality products and services at the cheapest possible price.
18
7. An analysis of Reliance Communication Michael E. Porter studied a number of businesses and introduced a structure enumerating three strategies: low-cost leadership, differentiation and focus (Daft 2007). According to Porter an organization either adopts low-cost or differentiation strategy to compete and position them in the market. But it can be seen Reliance have successfully adopted Porter’s both strategies.
7.1. Low-Cost Leadership Strategy Reliance Infocomm launched into the market with a package called the Dhirubhai Ambani Pioneer Offer which provided with the lowest airtime rates and value added services for free. Reliance Infocomm reduced the rates of outgoing calls, while the competitors charged at rates as high as Rs.7 (US$0.15) per minute. All incoming calls were free.
Three strategies helped in cutting call costs. Firstly, Reliance charged a higher rental, Rs.600 (US$13.3) per month, compared to the rest of the providers. But users received about 400 minutes of free talk time, while the competitors offered none. Since the incoming calls were free the user could utilize the entire 400 hundred minutes to make calls. Secondly, Reliance Infocomm reduced the pulse 19
rates to 15 seconds from the earlier one minute. For a user this meant more control over the costs, while for Reliance, it meant higher volumes of calls. The lower pulse levels allowed the low income users to pass on information through short duration calls. Thirdly, Reliance Infocomm ensured that calls to any Reliance phone in India were charged at Paise 40 (0.8 US cents) a minute, a rate which people could not even imagine before that time. For Reliance Infocomm this meant faster adoption of Reliance services across India, because of the very low long distance rates, made possible by low costs, since the calls would be carried entirely through the Reliance owned network, thus avoiding profit sharing with any other carrier.
Value added services like voice mail, call waiting, call holding, call divert, call identification and call conferencing were charged at a premium by all the other players in the market. Reliance Infocomm offered all these services free of charge. In addition all text messaging was offered free of charge.
7.2. Differentiation Strategy Reliance Infocomm used exceptional service and new technology to distinguish their services from the others. They were the first providers to use WLL, a lower frequency band, and CDMA technology. Using CDMA helped Reliance Infocomm to accommodate large number of users, which they would have not 20
been able to do otherwise. Since they did not have to pay heavily for the license for WLL they were able to charge low rates. Thus utilizing the new technology helped them gain low costs.
When most other mobile operators focused exclusively on the provision of mobile services, Reliance Infocomm started offering all the services which could utilize their network and other resources optimally. Apart from the basic mobile services, Reliance Infocomm currently offers landline, broadband Internet, leased line, VPN (Virtual Private Network), IPLC (International Private Leased Circuit), Centrex and IDC (Internet Data Centre) services.
Thus Reliance Infocomm was able to use innovation to reduce the cost of their services. Differentiation and low-cost strategies went hand in hand for Reliance Infocomm.
7.3. Organization Structure Reliance in the beginning used the modular structure. Reliance Industries, the parent company of Reliance Infocomm, is the largest private sector corporation in India with stakes in petroleum, petrochemicals, engineering, and finance. This scale of operations provided great leverage as the company ventured into telecommunications. Reliance Infocomm, in the initial stages, shared all Reliance 21
resources to ensure cost effectiveness in every service that it provided. Reliance Infocomm operated out of existing Reliance Industries offices and utilized the capital and personnel resources to the extent possible. Reliance Engineering Associates Ltd, an associate company, made sure that the engineering and manpower costs were maintained at the bare minimum. In developed countries human resource costs account for 22 per cent of a companies’ operating cost as against 5 per cent in India. But Reliance Infocomm utilizes all their internal resources in large numbers which further reduces the cost.
Later Reliance Infocomm centralized most of its operations. 80 per cent of Reliance Infocomm’s administration and operation is centralized. Compared to the best telecom networks in the world they have deployed only half the number of people per 1,000 lines making their human resources the highest productive resource. Reliance also exploited the extensive petroleum distribution channels that it had set up in promoting and distributing Reliance Infocomm services.
7.4. External Environment By December, 2001 the user base of mobile users in India had grown to around 5 million. By the time Reliance Infocomm was launched it had grown to around 12 million. Two other service providers, who had entered the mobile market late, 22
could not cope up with the competition, and were taken over by other global service providers. Thus it can be seen that the mobile market in India before Reliance Infocomm was growing at a rapid pace, but was highly competitive and companies who could not keep up had to exit the market. Reliance Infocomm entered such a market and emerged as India's largest mobile service provider, within
7
months
of
commercial
launch
(Communication,
Reliance
Communications 2006).
At present Reliance Communication is in a very unstable and complex environment. Everyone in the market is seeking to expand and increase their subscriber base. Service providers are adding at an average of a million subscribers every month. New mobile technologies such as 3G, EDGE, and WIMAX are being introduced in India. The providers try their best to incorporate the new technologies in their services as soon as possible.
7.5. Global Expansion Within the first year of launch Reliance Infocomm entered the world markets. Its first step into global expansion was the purchase of UK based, Flag Telecom for $207 million, on October 16, 2003 (Telecom 2003). Flag Telecom is a leading 23
provider of international wholesale network transport and communications services. By taking over Flag Telecom, Reliance Infocomm acquired its established customer base of more than 180 leading operators, including all of the top ten international carriers (Telecom 2003).
It entered the US markets by purchasing Yipes Holdings Inc. for 300 million dollar cash on July 16, 2007. It bought 100% shares of Yipes Holdings Inc. by cash. Yipes is based in San Fransisco. It is a provider of managed ethernet and application delivery services, thus it offered Reliance an opportunity to tap a fast-growing market. Yipes had coverage to 14 metro cities in the United States, which Reliance plans to expand to 30 and also take it to Asia, Europe, Africa and the Middle East (ANI 2007) .
7.6. Information as a Weapon To understand the market better than its competitors and provide superior service, all while growing at a swift pace Reliance Infocomm used information technology as a strategic weapon. To start with, it laid 60,000 kilometers of optical fiber network across India. The only way to manage the challenges was to establish a scalable and adaptable decision-support system (DSS) right away. They started their DSS even before their sales side was launched. 24
The DSS architecture of Reliance Infocomm is given below:
Data from various inputs such as billing, CRM, SAP R/3 was sent to a third party server, where the data was filtered and organized. It was stored in a data repository. SAP R/3 is an enterprise resource planning software. Some of the data went directly to the SAP NetWeaver, business intelligence software. SAP NetWeaver provides business analytic applications to the management.
Even though Reliance Infocomm has such a reliable system, the users still face many customer service problems. A person may have to wait up to twenty minutes before his call is answered by their customer service representative. There is lot of billing issues with reliance Infocomm. They are trying to overcome 25
all these issues gradually by continuously updating their information technology.
7.7. Financial Performance and Analysis As compared to the industry average Reliance Communications has a very high net profit margin (NPM). It has an NPM of 70.8% against and industry average of about 19%. Although the total earnings reported by Reliance form only a miniscule part of total industry. Reliance Communications has the highest EBITDA margin expands from 39.5% to 43.0% reported for the year ended March 31, 2008. The total income reported were Rs. 19,068 crores while the industry total was Rs. 123436.52 crores, with a change of 25%. Therefore Reliance has considerable catching up to do. In FY08, Reliance’s sales jumped by 49% compared with FY07 and are expected to grow strongly in the coming years. Same trend can be witnessed in PAT, with a rise of 30% in FY08 compared with FY07. Sales in AMJ08 are expected to jump by 13% to Rs36, 453.94m from Rs32, 289.30m in AMJ07. In the coming quarters, Reliance is expected to add subscribers at the rate of more than 4m customers every quarter. Since Reliance is present in both CDMA and GSM technology, it is fast catching up with the leading company and is second largest company after the market leader in terms of subscriber base. Only company to have nationwide GSM & CDMA service in India
26
7.8. Ethics & Culture Reliance defines what is right and what is wrong, and then proposes doing the right thing. Reliance Infocomm believes that any business conduct can be ethical only when it rests on the nine core values of honesty, integrity, respect, fairness, purposefulness, trust, responsibility, citizenship and caring (Communications, Code Of Conduct 2006).
27
8. Telecom Sector-An Outlook
8.1. Industry Analysis Indian Telecom industry is one of the fastest growing telecom markets in the world. In telecom industry, service providers are the main drivers; whereas equipment manufacturers are witnessing growth and decline in successive quarters as sales is dependent on order undertaken by the companies. Airtel, Reliance, Tata and Vodafone are some of the companies that are expected to spur the growth in AMJ08, as compared to AMJ07. According to Cygnus estimates, telecom industry is expected to grow by 25% in AMJ08 as compared to AMJ07, in terms of sales. EBDITA and PAT are expected to grow by 32% and 34% respectively in AMJ08 as cost expenses are being control by major companies like Airtel and Reliance. The major booster is the wireless mobile subscriber base; crossing over 261m in March 2008. Other services like Internet subscriber base has also provided significant impetus with its subscriber base reaching over 11m in March 2008
8.1.1. Bharti Airtel Bharti Airtel is India’s leading provider of telecommunication service. Airtel Data Card is the superior PC Data Card solution which delivers wireless internet 28
capabilities to laptops and notebooks, by providing EDGE and GPRS technologies in a single PC Card package. On an EDGE network, Airtel Data Card enables connection to the Internet using EGPRS. In areas where EDGE services are not available, the Airtel Data Card still enables reliable and secure data connections over GPRS. The tariff charges of Airtel’s data card are shown below: Airtel Data Card Name of Bill Plan Monthly Charges
Datacard Datacard49 Datacard350 599 New Monthly Fixed Chaeges
49 350 599 Data Charges (Rs/Pulse) (All India) Rate Per Pulse 0.1 5 3 Pulse 10 KB 1MB 1MB Data Usage Discount Nil 500 Mb 1 GB Default Voice Charge
Datacard 999 New
999 0 1MB Unlimitted Free
Local Outgoing (Rs/Min) (Kolkata,West Bengal,Sikkim and A &M Airtel to All 1.99 1.99 1.99 1.99 STD Outgoing (Rs/Min) Airtel to All 2.99 2.99 2.99 2.99 ISD Outgoing # Slab 1 6.4 6.4 6.4 6.4 # # Row 1 9.2 9.2 9.2 9.2 # # # Row 2 40 40 40 40 SMS (Rs/SMS) Local 1 1 1 1 National 2 2 2 2 International 5 5 5 5 100 Free Local 100 Local SMS/Month Nil Nil SMS SMS
29
8.1.2. Tata- Indicom Tata-Indicom currently at leading position in wireless data card market in India. Tata Teleservices' Tata-Indicom data card sales have exceeded the 100,000 subscribers’ milestone. Using CDMA 1x technology, Tata-Indicom data cards offer wireless internet access. The recently launched Plug 2 Surf Whiz fits into a standard USB port available in most desktops and laptops. TTML's Plug 2 Surf Whiz offer is being promoted with outdoor campaigns across Mumbai and Maharashtra. The tariff charges of Tata-Indicom’s data card are shown below:
Plan Name
Highlight
Budget 150
Lowest rental
Value 325
Free 1hr/day
ME Unlimitted ME Economy ME Jumbo ME Max
Unlimitted usage Alweys On For Heavy Users
ME 6
Advanced
ME 12
Rental
Rs. /min Local STD
To TATA 50 Paise Rs. 1.69
TATA USB Modem Fixed Charge Free Usage Time Based Rs.150/month 300min
Additional Usage
1800 Min (30 Hrs)
50p/min 8AM 12AM:50p/min 12AM -8AM :25p/min
Rs.1099/month
Unlimitted
N/A
Rs. 500/month Rs. 650/month Rs. 900/month Rs. 3600/6month Rs. 6700/annum Voice Tariff To Other Rs. 1 Rs. 2.65
512MB 1GB 2GB
Rs. 2/MB Rs. 2/MB Rs. 2/MB
1GB
Rs. 2/MB
1GB
Rs. 2/MB
Rs 325/month Data Based
30
8.1.3. Bharat Sanchar Nigam Limited (BSNL) Bharat Sanchar Nigam Ltd (BSNL) is a public sector undertaking, wholly owned by the Government of India. BSNL has decided to launch its Data Services on CDMA 2000 IX by using BSNL Internet Connect Card (ICC) based on broadband connection for laptop users in India. The CDMA IX ICC will provide Internet Service @144kbps to computer users on their laptops as well as on desktops. This service will be available in all those locations wherever CDMA IX MSC based coverage is there. However, during roaming the said Internet connectivity will not work at present. The following two types of data Cards will be available for BSNL customers:
(A) Network Interface Card (NIC): For internet speed up to 144 Kbps.
(B) EVDO Card: Internet speed up to 2.4 Mbps. The Tariff of this service is around 550Rs/month for speeds upto 2.4Mbps in most cities in India. Though there are reports that the pricing differs based on cities and starts at 400Rs/month to 550Rs/month.
City Wire tariff plans charges data card are shown below: Pricing in UP Plan 1 - 1650 Down Payment + 400Rs/monthly Rent Plan 2 - 3600 Down Payment + 250Rs/monthly Rent Pricing in Jamshedpur (Jharkhand) Plan 1 - 2460 Down Payment + 750Rs/monthly Rent Plan 2 - 3600 Down Payment + 250Rs/monthly Rent Pricing in Chennai Plan 1 - 3500 Down Payment + 250Rs/monthly Rent 31
8.1.4. Vodafone -Essar (Erstwhile Hutchison Group) The Hutchison Group provided GSM mobile services in 13 circles across the country. Its main equity partner is the Essar Group. Vodafone recently launched its its wireless internet device like
Vodafone Mobile Connect Globe Trotter EDGE data card Vodafone Mobile Connect USB Modem Vodafone Mobile Connect USB Stick
Globe Trotter EDGE is the superior PC Data Card solution delivering near broadband wireless capability to laptops and notebooks by providing EDGE and GPRS technologies in a single PC Card package The tariff charges of Vodafone’s data card are shown below: Monthly rental (Rs)
499
699
Free data
500MB
1GB
Usage charges
5P/10KB
5P/10KB
32
9. Reliance Netconnect 9.1. Introduction Reliance Communication erstwhile Reliance Infocomm always remained technological, market leader in CDMA mobile business. Its high brand awareness, market acceptance as a technological, economical leader in various segment of mobile business and high brand equity were compelling reason to penetrate and develop entire value chain of the both mobile and broadband based business.
9.2. Reliance Communication’ products in Reliance Netconnect Department Reliance has range of products for both office and individual internet usage. Reliance Data card is the superior Data card solution delivering near Broadband wireless capability to laptop & desktop .Reliance Data card enables connection to the internet at data speed up to a maximum of 144 kbps. Reliance is currently the best wireless connection in India which can be used for both laptops and desktops. There are two types of Data card are presented by Reliance.
33
1) PCMCIA Card (Personal Computer Memory Card International Association) Mainly for Laptop. Which Laptop is supporting PCMCIA Slot. Data Card company is ZTE.
2) USB Data Card (Universal Serial Bus) Supporting USB Slot. For Laptop & Desktop both. Direct USB connector – no need for adaptor or cable. (ZTE) Slim, sleek and stylish Plug and Play – No need to install drivers – just connect and surf using the Windows dialer. Retraceable antenna – better signal strength in low RF areas.
9.2.1. Value Based Plan Plan
Freedom
Freedom Plus
Monthly Rental (Rs)
650
900
Monthly Rental for Voice Service
NIL for NJ 149 Data, for other plans as applicable
Platinum 1500
NIL for NJ 149 Data, NIL for NJ 149 Data, for other plans as for other plans as applicable applicable
Total Free Data Usage Hrs
N.A
N.A
N.A
Free Usage Peak Hrs
N.A
N.A
N.A
Free Usage Off Peak Hrs
N.A
N.A
N.A
Free Data Usage in GB
1 GB
1.5 GB
Unlitted
Additional Data Usage Rate
Rs.2/Mb
Rs.2/Mb
N.A
34
Free SMS Per Month
100Local & National
100Local & National
100Local & National
9.2.2. Advance Rental Plan Plan Monthly Rental (Rs)
12 Months ARP 0*
24 Months ARP 0*
Zero Rental Plans 0
NIL for NJ 149 NIL for NJ 149 Data, Rs. 174 for NJ 149 Data, for other for other plans as Data, for other plans Monthly Rental for Voice Service plans as applicable applicable as applicable Total Free Data Usage Hrs
N.A
60 Hrs.
N.A
Free Usage Peak Hrs
N.A
20 Hrs
N.A
Free Usage Off Peak Hrs
N.A
40 Hrs
N.A
Free Data Usage in GB
1 GB
N.A
N.A
Rs.0.5/min
Peak Hrs Rs.0.60/min off Peak Rs. O.30/min
400 Local
N.A
Additional Data Usage Rate Free SMS Per Month
Rs.2/Mb 100Local & National
9.2.3. Time based plan Plan Monthly Rental (Rs)
Swift 40
Freedom @ Night
400 NIL for NJ 149 Data, for other plans as applicable
400 NIL for NJ 149 Data, for other plans as applicable
45 Hrs.
60 Hrs
N.A
15 Hrs
20 Hrs
N.A
30 Hrs
40 Hrs
Unlimited
N.A
N.A
N.A
Swift 03
300 NIL for NJ 149 Data, for other Monthly Rental for plans as Voice Service applicable Total Free Data Usage Hrs Free Usage Peak Hrs Free Usage Off Peak Hrs Free Data Usage in GB
35
Additional Data Usage Rate Free SMS Per Month
Rs.0.5/min Rs.0.5/min 300 Local
Rs.0.5/min
400 Local
N.A
9.2.4. Prepaid Options
Product Name
5 hours Internet 10 hours pack Internet pack
25 hours Internet pack
Unlimited Internet pack
Prepaid Data RCV including Taxes
111
202
404
1501
Core Validity Days
0
0
30
30
Netconnect Validity Days
30
30
30
30
Free Local SMS
50
100
300
300
Netconnect minutes if entire usage is in Peak hours
300
600
1500
Unlimited
Netconnect minutes if entire usage is in off Peak hours
600
1200
3000
Unlimited
9.3. Evaluation Criteria & Parameter of Competitors Used for
Reliance
Airtel
TATA Indicom
Vodafone Laptop & Laptop & Desktop Desktop
Laptop & Desktop
Laptop & Desktop
Technologies
CDMA
EDGE
Interface
USB/PCMCIA
USB/PCMCIA
USB/PCMCIA
USB/PCMCIA
Price
2820
3350
2999
Speed
Up to 144KBps
100-115KBps
Up to 153.6 KBps
5999 Up to 144 KBps
Voice Call
Yes
yes
Yes
N/A
SMS
Yes
yes
Yes
yes
National Data Roaming
Yes
yes
N/A
N/A
No of Tariff
9
4
8
2
500 MB Free
N/A
Rs, 350
N/A
Rs. 499
EDGE
Tariff
512 MB Free
N/A
N/A
Rs.500
N/A
1 GB Free
Rs.650
Rs. 599
Rs.650
Rs. 699
1.5 GB Free
Rs. 900
N/A
N/A
N/A
2 GB
N/A
N/A
Rs. 900
N/A
36
Unlimited
Rs. 1500
Rs. 999
Rs. 1099
N/A
5 Hrs Free
N/A
N/A
Rs. 150
N/A
30 Hrs Free
Rs. 300
N/A
Rs. 325
N/A
40 Hrs Free
Rs. 400
N/A
N/A
N/A
Unlimited (night)
Rs. 400
N/A
N/A
N/A
Minimum Rate
Rs. 300
Rs. 49
Rs. 150
Rs. 499
Maximum Rate
Rs. 1500
Rs. 999
Rs.1099
Rs. 699
Additional Data Usage (size)
Rs. 2/MB
For Rs. 49 - .10/10 KB For Rs. 350 - Rs.5/MB For Rs.599 - 3/MB
Rs. 2/MB
Additional Data Usage (Time)
Rs. 0.5/min
N/A
8AM - 12AM:50p/min 12AM -8AM :25p/min
Free SMS per Month
For Rs. 300 - 300 For Rs. 400 - 400 For Size - 100 Local & For Rs. 599 - 100 Local For 999 - 100 local National
N/A
Voice Call for company to company (local)
Rs. 1.79
Rs. 1.99/min
Rs. .50
Voice Call for company to Other (Local)
Rs. 1.79
Rs. 1.99/min
Rs. 1
Voice Call for company to company (STD)
Rs. 2
Rs. 2.99/min
Rs.1.69/min
Voice Call for company to Other (STD)
Rs. 2
Rs. 2.99/min
Rs. 2.65/min
9.4. Reliance Data Card - an insight Reliance data card has been developed as technologically superior. Reliance's cutting edge CDMA2000 1X technology offers pan-India coverage. Internet can be assessed in 2200 towns across in India soon to be increased to 5700 towns. These can be used to connect to the Internet from laptops as well as Desk top PCs.
37
Features:
Uninterrupted high-speed wireless Internet connectivity Better surfing speeds, with download speeds up to 144 kbps High download speed of heavy email attachments One-time installation of the dial-up software without the need to change the dial-up configuration Hassle-free connection o Connect instantly (No line busy / waiting tone) o Easy to remember username / password (your phone / card number).
38
High
Category Development Index
Low Low
Low
Brand Development Index
High
9.5. Packaging
With data card as a utility product in India, the packaging, Point of purchase plat a minor role in consumers’ mind while deciding which product to buy.
The Reliance PCMCIA card has been designed and packaged with a old Reliance Infocomm’s green and blue theme in mind .The USB modem comparatively looks much futuristic. It comes in
39
black in colour, overall new look of the new USB modem is attractive enough to grab the attention of customer at Point of Purchase.
9.6. Price
Reliance Netconnect has dropped their prices on new data cards purchased because their competitor [Tata] has offered free 2 months internet services. According to the new pricing Reliance USB Modems would now be available from 2299 Rs. rather than the old pricing of 2850Rs. This price drop is for a limited time also comes with a 2 months unlimited internet usage for free. The best part of Reliance Netconnect is that they don’t charge which on roaming and also have an excellent network services
Pricing of USB Modems: USB Modem for Laptops & Desktops: 2299 Rs. PCMCIA Card for Laptops: 2620 Rs.
9.7. Promotion Data card is a specialty product .That is why promotional activities are mainly focused around in store promotional activity as well as other 40
medium like print media, hoarding and posters. Reliance data card doesn’t have any brand ambassador as of yet. But, for the data card not been much of advertisements.
9.8. Bundling Bundling has always been the norm for reliance data card. This is mostly due to the fact that consumers have to purchase tariff plan with all data cards. There is always at least one trade promotion across both data cards throughout the year. Currently it’s giving free data card for HDFC bank card holder.
41
10. Market Research 10.1. OVERVIEW OF RESEARCH
10.1.1. Problem or opportunity?
Study and analyses of pre, during and post sales perception of consumer towards Internet Data cards especially Reliance Internet Data cards.
To understand the market segmentation in the light of Indian Data card market Gauge brand recall for various data brands, specifically Reliance Internet Data cards. Map the Data card market and competitive positioning within it. To understand the buying intention of and analyze the effect of non-attribute factors. To understand the brand loyalty of customers towards Data cards. Identify the parameters that play the most important role in a consumer’s choice of buying Data cards using Factor and Cluster analysis.
42
10.1.2. Background of the study
The Internet has grown tremendously during the past years. It radically changes the way people live, work and consume. It represents a tremendous opportunity as well as threats. Internet usage in India continues to grow at a slow but steady pace, both in breadth and depth, with the overall internet-using population in urban India reaching 30.32 million - a growth of 28% from April 2006 to April 2007. The penetration of the internet among urban Indians stands at 9% now, assuming the total urban population at 336 million (Juxt Consultant 2006) Unlike the '70s and '80s when business-related travel was not seen much, the '90s, particularly the dawn of the twenty-first century, has witnessed intensive business travels, and this is gaining momentum with time. India too is on the move and wants to stay connected anytime, anywhere-whether on a train or bus, in a hotel or conference hall, within India or abroad. Meeting this need of business travelers are data cards and USB modems that have become the preferred solution, even before wireless mobile broadband is introduced in the country. At present, there are 10 mn data cards, USB modems, and Internetenabled mobile phones in the Indian market. 43
With India on the move, the data card market is flourishing even as low, inconsistent speed remains an issue. In this already competitive market, it becomes essential for Internet data card players to understand the different factors that affect people using the Internet data card as a new wireless device for internet connection There are many benefits that attract people to choose internet data card for access to the internet
as convenience, time saving, wireless
connectivity and possibly affordable , however, many people are often hold back as fear of low speed, high usage charges and using issues in relation to internet data card usage.
10.2. An overview of internet and wireless connectivity 10.2.1. Definition of internet
The Internet is a worldwide, publicly accessible series of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP). It is a "network of networks" that consists of millions of smaller domestic, academic, business, and government networks, which together carry various information and services, such as electronic mail, online chat, file transfer, and the interlinked web pages and other resources of the World Wide Web (WWW). 44
60000000
5.00%
50000000
4.00%
40000000
3.00%
30000000
2.00%
20000000 10000000
1.00%
0
0.00% 1
2
3
4
5
6
7
8
9
% Penetration
Users
Penetration of Internet in India
10
Years Year
Users
% Pen
Source: India Online 2007, Juxt Consultant report
10.2.2. Common uses of the Internet
E-mail World Wide Web Remote Access Collaboration Streaming Media File Sharing Voice Telephony
45
10.3. Driving growth of internet data card Growing businesses in all segments, necessity to access emails and corporate applications during urgent business trips and the urge for some entertainment while on the move are some drivers increasing the demand for data card usage. Apart from these factors, as the name of Tata Indicom's data card, 'Plug 2 Surf', suggests, ease of use with plug and play factor is also a driver for growth. SP Shukla, president, Personal Business, Reliance Communications, says that faster surfing and higher download speeds, convenience of surfing the Internet while on the move, simple to use, and affordable tariffs are among the key reasons for the data card growth, in both the laptop and desktop segments. Wireline broadband connections are yet to penetrate the vast semi-urban and rural parts of the country where entrepreneurs, officials, students, etc have the need to surf the Internet for various purposes. Though the laptop penetration in these areas has not made a significant mark, desktop penetration is comparatively more. With data cards offering convenient access to the Internet, a number of companies have started to tie up with service providers to avail bulk network connections for their employees on the go and allow them to utilize their time during business travels. Since data cards can be used with desktop also, it cuts down the office infrastructure costs as well. With the data card segment witnessing steady growth, affordability will go up, which, in turn, will drive 46
growth. “As the data card growth increases, speed evolves and prices come down, affordability will go up and more users can begin to think of data card as an affordable solution,” says an Airtel spokesperson. And growth of mobile telephony in India has created users with specific needs like m-commerce that require wireless Internet, driving the wireless data card growth. Once the concept of mobile wallet and its applications hit the market in India in the near future, the wireless data card segment is also expected to witness an exponential growth. Apart from this, Internet charges in costly hotels are very high. With the availability of data cards and USB modems, frequent business travelers who stay in costly star hotels can access the Internet and corporate applications on their laptops and avoid using the Internet facility at hotels, saving on high Internet charges.
10.4. The Deterrents
All players are competing with each other to give affordable tariff rates for their data cards. But still the rates are very high when compared to countries like the UK. In the UK, wireless broadband connection through 3G technology costs about £10 per month and that too with a data download speed faster than 256 Kbps. International travelers who have used data cards with faster speed are not satisfied with data cards and USB modems services offered in India. So, in India, 47
data cards mean accessing a bare minimum net connectivity only for a sizable population. That is why it is said that data cards have not exactly taken off in India.
11. Consumer behaviour theories
11.1. Consumer perception and consumer behaviour
According to Rice (1993), perception is the initiator of behaviour. It can also be seen as a process of information extraction. Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture (Kotler, 2000). Different people tend to perceive quite differently even when they are exposed to the same reality. A set of factors, e.g. individual responses, determine an individual’s perception process and lead to individual differences. The most important is that people’s perceptions are often more important than the reality in marketing (Kotler, 2000).
The study of customer behaviour provides a sound basis for identifying and understanding the factors that influence consumers purchase on line. Schiffman and Kanuk (2000) state that the behaviour that consumers display in searching,
48
purchasing, and evaluating products/services is those that they expect to fulfil their needs. Although perception and behaviour are typically treated as two completely separate phenomena, i.e. the input and output respectively, it has been suggested that perception and behaviour are in fact two sides of the same phenomenon and are closely related to each other (Rice, 1993). In order to understand what customer perceive and how they act to affect their perceptions, study of perception and behaviour should be treated as one integral part.
11.2. Consumer decision process
At present, the consumer decision process model has been well accepted. This model of purchase as decision process is explained in more detail by Thorelli et al. (1975). Thorelli’s
decision model illustrates the type and shows there are a
series of semi-discrete steps which take place over time for the buyers and purchasers.
11.2. 1Predispositions (Before Purchase): According to Thorelli et al (1975), the prospective buyer possesses a certain stock of cognitive content, including his own personality or self-concept, attitudes and 49
opinions both in general and on specific products, and stored information and past experience. This stock has been formed as a result of his interaction with his environment over time, and it will help determine the environment in which he places himself in the future as well as influence his perceptions of that environment.
11.2.2. Product Need: As a result of either cognitive activity or some environmental stimulus, the buyer recognizes a need which is capable of being satisfied by a product or service. In other words, the need is often triggered by internal or external stimuli. Some authors also take this need recognition stage as the entry point. Chaston (2001) argues that the potential consumer will not implement any of the other steps in the buying process until need recognition has happened.
11.2.3. External Search: Thorelli et al (1975) describe that this stage represents all search of the external environment for alternative solutions as well as for information helpful in evaluating these alternatives. The search for information occurs on an internal and external basis (Gilbert, 1999). The internal search for information from previous experience might be relevant to the present purchase situation. The extent and nature of external search for information likely in any given purchase 50
has been the subject of a great deal of research. When searching for information in the external environment (e.g., friends and family), consumers focus on those relevant attributes that are available and are diagnostic (Dick et al., 1990).
11.2.4. Evaluation of Alternatives: This stage consists of the physical and cognitive activities involved in comparing alternatives on the basis of information gathered from external search above. According to Kotler (2000), the consumer arrives at attitudes toward the various brands through an attribute evaluation procedure and most buyers consider several attributes in their purchase decision. These attributes used by consumers for evaluation are also called choice criteria. Jobber (2001) has made a good summary of these choice criteria. In fact, consumers attempt to optimize the trade-off between product benefits, product costs, the desired personal utilities and other variables. 11.2.5. Purchase Activity: Purchase activity involves the actual final decision and physical activities involved in making (or not making) the purchase. This stage includes the actual transaction. However, as suggested by Kotler (2000), perceived risks of a consumer can heavily influence his decision to modify, postpone, or avoid a purchase decision. Therefore it is necessary for marketers to understand factors
51
that might provoke perceived risk in consumers and work out solutions to reduce that. 11.2.6. Post Purchase Behaviour: This step is concerned primarily with the buyer’s use of the product purchased. After purchasing the product, the consumer will experience some level of satisfaction or dissatisfaction which will influence a consumers’ subsequent behaviour. Dissatisfied consumers may abandon or return the product, they may even complain to the other group (Kotler, 2000). It is clear that satisfactions and dissatisfactions created by product performance will be important determinants of attitudes and information stored as inputs to future purchase decisions.
11.2.7. Predispositions (After Purchase and Use): This stage suggests that following the purchase process, the buyer (or non-buyer) is left with cognitive content which may be quite different from that which was present at the beginning of the process. Buyers may change their attitudes, information and experience due to reasons of time and events. All of these may serve to change substantially the nature of the decision process for future purchases of the same type.
52
11.3. Consumer perception
11.3.1. Introduction Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. This works well, for example, when we “see” a friend three hundred feet away at his or her correct height; however, our perception is sometimes “off”—for example, certain shapes of ice cream containers look like they contain more than rectangular ones with the same volume.
11.3.2. Factors in perception Several sequential factors influence our perception. Exposure involves the extent to which we encounter a stimulus. For example, we are exposed to numerous commercial messages while driving on the freeway:
bill boards, radio
advertisements, bumper-stickers on cars, and signs and banners placed at shopping malls that we pass. Most of this exposure is random—we don’t plan to seek it out. However, if we are shopping for a car, we may deliberately seek out advertisements and “tune in” when dealer advertisements come on the TV
Exposure is not enough to significantly impact the individual—at least not based on a single trial (certain advertisements, or commercial exposures such as the “Reliance communication” logo, are based on extensive repetition rather than 53
much conscious attention). In order for stimuli to be consciously processed, attention is needed. Attention is actually a matter of degree—our attention may be quite high when we read directions for getting an income tax refund, but low when commercials come on during a television program. Note, however, that even when attention is low, it may be instantly escalated—for example, if an advertisement for a product in which we are interested comes on.
Weber’s Law suggests that consumers’ ability to detect changes in stimulus intensity appear to be strongly related to the intensity of that stimulus to begin with. Several factors influence the extent to which stimuli will be noticed. One obvious issue is relevance. Consumers, when they have a choice, are also more likely to attend to pleasant stimuli (but when the consumer can’t escape, very unpleasant stimuli are also likely to get attention—thus, many very irritating advertisements are remarkably effective). One of the most important factors, however, is repetition. Consumers often do not give much attention to a stimuli—particularly a low priority one such as an advertisement—at any one time, but if it is seen over and over again, the cumulative impact will be greater.
Surprising stimuli are likely to get more attention—survival instinct requires us to give more attention to something unknown that may require action. A greater contrast (difference between the stimulus and its surroundings) as well as
54
greater prominence (e.g., greater size, center placement) also tend to increase likelihood of processing.
Subliminal stimuli back in the 1960s, it was reported that on selected evenings, movie goers in a theater had been exposed to isolated frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie. These frames went by so fast that people did not consciously notice them, but it was reported that on nights with frames present, Coke and popcorn sales were significantly higher than on days they were left off. This led Congress to ban the use of subliminal advertising. First of all, there is a question as to whether this experiment ever took place or whether this information was simply made up. Secondly, no one has been able to replicate these findings. There is research to show that people will start to giggle with embarrassment when they are briefly exposed to “dirty” words in an experimental machine. Here, again, the exposure is so brief that the subjects are not aware of the actual words they saw, but it is evident that something has been recognized by the embarrassment displayed.
11.4. Consumer behaviour towards Internet data card When consumer purchase internet data card they still perform a similar sequence of tasks: searching for information about different products, evaluating these 55
alternatives, and transacting the chosen alternative. However, the family and friends has great impact on these activities.
11.4.1. Problem recognition: The starting point is feeling the need or recognition of a problem. The need for accessing internet at anywhere can trigger the recognition of a need or problem and can have significant impact by encouraging customers to begin the information search process (Breitenbach and van Doren, 1998).
11.5. Information Search: Once customers identify the need they may seek information about retailers or products to help them satisfy. Customer search regarding internet data card could be limited because it’s a specialty product. Our analysis has shown that in terms of internet data card customer mostly refer to family and friend as reference group. These reference groups affect buying decision offering information like price, tariff plan availability and so forth. Providing rewards for specific purchasing behaviors for instance friends could appreciate that you could access internet at anywhere if you are carrying a laptop. By identifying and affiliating with reference groups, consumers create, enhance, and maintain their self-image. Customers who want to create an image of mobile, technologically 56
updated person as well as want to be seen as members of a higher social class might buy internet data card from Reliance or other competitor’s products.
11.6. Product Evaluation: During this stage, consumers process different product information and make a final value judgment. The multiattribute model provides a useful way for summarizing how customers use the information they have about alternative brands of internet data card. From our consumer behaviour analysis we have found out that
on this stage customer evaluate data card on its several
attributes like price, net speed, tariff plan which come along with, looks etc and they also decide which attributes are most important for them. The multiattribute model shows that how a consumer gives weights of importance to the various attributes of a data card. A sample multiattribute model which is actually has been taken from one of our questionnaire shown that how a consumer gives importance to different product attributes of data card. No.
Attributes/Benefits
Rating
1.
Price
4
2.
Easy handling
3
3.
Net Speed
5
4.
Signal Strength
5
5.
Availability in store
3 57
6.
Tariff plan
4
Total evaluation score for each attributes is 5.From the above sample table we can see that consumer is giving more importance to net speed and signal strength. So marketer should put more focus of highlighting these two attributes
11.7. Purchase Activity: Its not necessary that customer will always purchase a brand or data card with evaluation. The data card offering benefits (having the highest evaluation) may not be available in the store, or the customer may feel that the risks outweigh the potential. During purchasing customer also may feel that their data card might not be able to meet their expectations. Therefore retailer should ensure that their sales persons are knowledgeable enough and they are also skilled presenter of their product, otherwise it could raise confusion in customers’ mind during purchasing of data card. Reducing the actual and perceived time of purchasing.
11.8. Post Purchase Activities: As we know buying process doesn’t end when a customer purchase a product. From focus group interviews we have come to know that after making a purchase of data card, customer evaluate their experience on the basis of net 58
speed, signal strength amount of money they have spent. Customers often feel that service providers do not deliver what they promise. They feel players should present the terms and conditions and tariff plans/schemes in clear terms. Mentioning every small detail regarding the tariff plans must be included in the bill. For example, if a company intends to collect an advanced monthly rental from customers, then it has to mention that in its tariff plan, so that customers are not shocked when they see a bill that includes monthly advance rentals as well. This kind of practice might keep customers away from going for a particular brand.
11.9. Perceived benefits of Internet data card
Among the process there are various factors that might influence consumers¡¯ purchase during their purchasing process. Many of these factors also reflect the advantages and disadvantages of Internet as a shopping medium. The advantages or benefits currently conceived by people are described as the followings.
59
11.9.1. Convenience: From our questionnaire survey and focus group discussion we have come to know that when a customer thinks to purchase a data card for accessing internet they mostly its convenient to access internet at any where at any time. Especially those who have to extensively traveling its quite convenient for them to get connected with World Wide Web!
11.9.2. Time saving: Some time data card also proves time saving from the customers especially for business executives who have to travel extensively due to their job purpose. If they are using a data card for accessing internet they don’t have to find out a cyber café at an unknown place.
11.9.3. Economical: From our secondary research we have found that for younger group of consumers (age group of 18-28) who generally spend a lot of time for downloading different kind of materials like music, picture, data, due to availability of some attractive tariff plans offered by the different players (Reliance’s Freedom plus) along with their respective data cards, its seems a must have utility device for all young laptop users. 60
11.10. Perceived risk of Internet data card Perceived risk can be defined as the uncertainty that consumers face when they cannot foresee the consequences of their purchase decision.
Customer
perception of risk varies depending on individuals, situation and product. The degree of risk that consumers perceive and their own tolerance for risk taking, are factors that influence their purchase strategy (Schiffman and Kanuk, 2000). Individuals tend to reduce perceived risk to some acceptable level in any given purchase situation.
11.10.1. Risks of internet connection speed: Internet connection speed refers to the data transfer rate from the Internet to your computer. Basically that means the amount of time it takes your computer to download a given amount of data. Internet connection speeds are usually measured in Kbps (kilobits per second, or thousands of bits per second) or KBps (kilobytes per second). According to our study, consumers already have a predisposition that data card do not provide good internet connection speed, so during products evaluations and purchasing activities they mostly think about product attributes e.g. internet connection speed, signal strength. Therefore here implication for management is during product evaluation; purchase activities, retailers must take some 61
necessary measures to reduce the uncertainty in the customer mind by aggressive promotional strategies, especially focusing on innovating below the line (BTL) marketing activities, giving excellent product demonstrations during purchase and most importantly reducing the cognitive dissonance during post purchase behaviour by giving enough assurance about product qualities, warranty as well as excellent after sale service.
11.11. Research Objective 11.12. Research Question What is the inter-brand recall of Internet data card and their existing image in the consumer’s mind? What is the effect of non-attribute factors on the purchasing decision of Internet data card? How strong is the brand loyalty of customers towards Internet data card? What are the factors that play the most important role in a consumer’s choice of buying Internet data card?
11.13. Research Boundaries
62
The research was conducted in Howrah and the respondents were chosen on the basis of their usage of Internet data card.
11.14. Research Design
Problem
Causes of the problem
Exploratory research
Descriptive research
Causes of the problem
Phase One -> Secondary Data In the initial phase of the project we focused on secondary data collection. The data collection primarily focused on
History of Reliance Communication The financial results of Reliance Communication Products of Reliance Communication 63
Organizational structure The competitors in the market The strategy adopted by Reliance Communication and its competitors in the market. The secondary data collected in the first phase of the project helped the group in getting better understanding of the Internet business and the various brands competing in this market.
Phase Two -> FGD After the secondary data collection was complete, two focused group discussions were done. A group of 3 people and a group of 5 people were used for the two FGDs. Through these FGDs, the various attributes that a person looks for in the data card were listed down. FGDs also helped the group in understanding the buying behavior, the consumption pattern, the influencers etc which further helped in preparation of the questionnaire.
Phase Three -> Questionnaire From the results of FGDs, a pilot questionnaire was formed. The purpose here was to get an accurate snapshot of particular aspect of the market environment hence the pilot study was a descriptive research that identified all possible problems and factors influencing buyer behavior. An analysis of the pilot questionnaire was done.
11.14.1. Validity and Reliability test of the questionnaire
11.14.2. Validity Test Validity tests how well an instrument that is developed measures the particular concept it is supposed to measure. According to Sekaran (1992), validity tests can 64
be grouped under three broad headings: content validity, criterion-related validity, and construct validity. Face validity is a basic, and a very minimum, index of content validity. After consulting with people that are acquainted with the topic, it proves that the dimensions and elements of the concept have been well delineated. This is further confirmed by the results from pilot study.
11.14.3. Reliability Test It is necessary that scales are reliable when they are included in the study. One of the most important aspects of reliability concerns the scale’s internal consistency which actually indicates how the items measuring a concept hang well together (Pallant, 2002). Cronbach’s alpha coefficient is a commonly used indicator of internal consistency. It reflects how well the items in a set are positively correlated to one another. The closer Cronbach’s alpha is to 1, the higher the internal consistency reliability (Sekaran, 1992). According to Pallant (2002), the ideal Cronbach’s alpha coefficient of a scale should be above 0.70. Internal consistency is firstly checked for the questionnaire scale of Section A. The Cronbach’s alpha coefficient for it is 0.8257, which means that scales are reliable. Questionnaire scales of Section B are also checked for the internal consistency. The result shows that Cronbach’s alpha coefficient is 0.7871; the value is also higher than 0.70, which indicates that reliability is good (See Table ). Table : Cronbach’s Alpha for Each Group of Questions 65
Number of questions- 17
11.14.3.1. Cronbach’s Reliability Test Perception towards Reliance data card
0.8257 Good
Perception towards Other brands
0.7871 Good
From the analysis, the redundant variables, hard to analyze variables etc were removed so that people could easily fill in the questionnaire. After the pilot test, the final questionnaire was formed. The questionnaire was designed to capture both quantitative and qualitative information. The overall design of questionnaire has tried to capture data in the following areas: To answer the question of what are the predominant elements of internet data card consumers in terms of: Profile and age Buying Behavior and Decision-making process and to answer how Reliance data card compares with competition and what should it be targeting to be able to grow Relative importance of different attributes Brand awareness and preference Brand switching behavior/ Brand Loyalty
11.15. Research Tactics Questionnaire (Refer section ) Sampling Plan 11.15.1. The theoretical population: All people aged 16-80 in Kolkata who have purchased internet data card. 66
11.15.2. Sampling Frame: Company own operated outlets, cyber café, institutions are places where the respondents where drew our respondents were interviewed.
11.15.3. SAMPLING PROCEDURE:
Calculation of the sample size by the help of the pilot survey. Sample size of the pilot survey: 30 Formula use
Mean (μ): X bar ± 1.96 σ/√n
1.96 For 95% confidence level X bar σ = Standard Deviation of the population μ = Mean of the population Length of the Confidence Interval = 2×1.96×σ ≈ 4σ/ 2 Here √n ≈ 4σ =2σ n = 4σ² (from the scale of five σ ≈4) n= 64 Therefore, the sample size for the final survey is 64
67
11.15.4. Implementation Data Collection - Phase 1: FGDs
The FGDs were aimed at helping us to
Define the target segments better
Identify the important attributes that add in the target customer’s internet data card usage experience
The FGD questionnaire is given in section 14.5 A preliminary definition of main two segments is:
Experimenters and Adopters (EA): This category of consumer comprises of both males and females from the age group 18-24 years. These are the people who are willing to try new brands. These people are internet users and willing to pay for anything if net speed is concern.
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These people generally spend a lot of time to access internet. They tend to prefer surf any time of the day.
Suspicious Traditionalists (ST): These are men who are more traditional and not very much willing to try new brands. They are a slightly older age group (33-55 years) whose main concern is the ease of use, speed, affordability, availability of proffered product. They also show a preference for broadband connection which they are using.
11.15.6. Final Survey The Final Survey helped us to collect data on Main influencers towards the purchase data cards, Benefits that are most important for each segment of customers, Comparative brand and benefit perceptions, Trade-offs between price and quality, Preferred point of purchase, Consumer’s position within the Needs Hierarchy Model (Awareness, Knowledge, Liking, Preference, Commitment and Conviction) with respect to own and competitive brands and consumer satisfaction.
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11.15.7. Data Processing Age profile, product preference and place of purchase of the surveyed sample are mentioned in section 11.15.1 and 11.15.3 respectively.
Data Analysis
11.6.7.1. Brand Recall A sample of customers, which is representative of the Kolkata population, was surveyed and the first unaided recall of the brands by these customers was recorded. (Refer section 14.5) It was observed that Reliance data cards had the highest brand recall amongst all the competing brand of Internet data card. This can be attributed to various reasons like brand perception, usage pattern, advertisement expenditure etc. some of which would be analyzed in the subsequent sections. Buying Intention The survey administered had questions which measured the importance of various attributes like price, net speed, signal strength, offers & discounts of various data cards and specifically for Reliance data card.
11.6.7.2. Fishbein Analysis: The survey also measured the attribute scores for other competing brands like, Tata-Indicom, Vodafone, BSNL and Airtel. Along with the data card for Reliance, 70
an average attribute score was computed across the 64 samples for each attribute for each of the data cards brand. Fishbein analysis was performed by converting the Likert scale from 1 to 3 to -3 to -1. Consumer’s attitude about each brand was calculated and plotted as shown on below. (Section 14.15)
Average Perception Score of Each Brand 35 30 25 20 Series1 15 10 5 0 Series1
Tata-Indicom
BSNL
Airtel
Reliance
Vodafone
30.348
22.938
25.733
28.235
22.334
Chart: Consumer attitude about each brand
Tata-Indicom had the highest consumer perception score of 30.348 followed by Reliance and Airtel with a score of 28.235 and 25.733 consequently. But taking a look at individual consumer attitude score, we found that Reliance was preferred by almost 42% of the people surveyed and Tata-Indicom by 28%.
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11.6.7.3. Factor Analysis A factor analysis was carried out to obtain the group of attributes which can be grouped together. Hence 3 factors were obtained as follows – Factor 1 Product attributes (Net speed, Signal strength and Ease of Use)
Factor 2 Price Sensitivity (Tariff plan And Offers/Discounts)
Factor 3 Point of Purchase (Availability in Stores )
11.6.7.4. Perceptual Maps Attribute scores were averaged under each factor for each of the internet data card. Then graphs were plotted (Refer section 14.15) for the perceptual map along the dimensions as shown
Observations:
In Kolkata surveyed samples perceive that Reliance primarily targets consumers which are more focused on the product attributes like net speed, signal strength, ease of use etc whereas the perception of price sensitive consumer towards was found to be of an over priced brand.
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For price sensitive customer’s products like Airtel, Vodafone’s data card is less satisfying than Reliance.
The surveyed sample considered Reliance to have the best tariff plans among all the brands. This feature highlights the fact that offer and promotion is an important factor for the internet data card
market and
Reliance has been outperforming other competitors on this particular factor.
High satisfaction in the availability in stores further shows the robust distribution system that has put into place to cater to diversified markets.
Although not much differentiation can be introduced in the product per se (low satisfaction scores for all brands), still Reliance is found to be seen as a brand which brings out products with new features like free data card for HDFC credit card holder, bundling with other products like laptop etc.
11.7.5. Brand Loyalty The questionnaire had specific questions to measure the brand loyalty for the brand that the consumer was using at that point of time. From the graphs shown, 73
it can be concluded that the Brand loyalty in the internet data card segment is only 75% where customers would stick to it irrespective of the availability other data card with high speed with reasonable price. This figure says that 75% of the customers would rather go to some other retailer in search for their preferred internet data card than to buy some other brand from the other company’s outlet. Price sensitivity measured along the lines of a hypothetical price and change in tariff plans increase in their preferred brand was around 25%. This figure indicates that 75% of the customers do not shift from their preferred brand to some other brand because of a price hike in their preferred brand, provided it’s a reasonable price hike whereas 25% would move to some other brand. (Refer section 14.12)
11.7.6. Cluster Analysis and Segmentation K-means segmentation was performed based upon the factors thus obtained from factor analysis. The cluster analysis showed 3 clear segments. Description of the segments is as below Cluster 1 46% percent of respondents formed a part of this segment. With age group of 2328 years, this cluster formed the young age group segment. The majority of
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people in this segment (66%) use internet data card. In this segment 27.42% were Reliance customers and the rest 72.58% used competitor brands. With an average usage time of 240 minutes per day, this segment clearly forms a part of high usage cluster. They were passive information seekers yet skimmed through a lot of sources for seeking information about their purchase decision. Word of mouth formed the best source of information for this segment.
Cluster 2 29% percent of respondents formed a part of this segment. An average age of 30 years means this segment formed the middle age group cluster. 76% of the customers in this segment were business customers, i.e. use data card for business purposes. The business customers surveyed were primarily in Reliance R World; hence this segment may be interpreted appropriately. With 32% Reliance customers, among the rest, Tata-Indicom and Airtel were the competitor brands preferred among users in this segment (52% users). The level of information search was extremely low and thus can be said to be low involvement segment of the market. They did not refer to many sources and also had low importance ratings to the sources being referred to for seeking information about the product to aid their purchase decision.
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Cluster 3 25% percent of respondents were a part of this segment. The lowest average age of 38 years means this segment formed the aged Customers. Almost 96% of the customers in this segment used data card for personal purposes. This segment had 64% Reliance users and the competitor brands seem least preferred to this segment and can be said to form a big part of the reliance customer base. The customers used data card to access information and other personal purposes, and with a heavy usage rate is the opportunity segment for Reliance. The level of information search was extremely high among this group and thus can be said to be Intensive information seekers in the market. Among the sources they referred to, TV advertisements seem to be the most important source for this segment besides word of mouth. This was the only segment that gave credibility to ads on internet as a source of information. Relailer’s recommendation too formed a part of their purchase decision.
12. Recommendation And Conclusion 12.1. PLAYING WITH THE PLC:
Reliance has the widest internet data cards range and the deepest product line in internet data card market, its also has broadband business as well as internet 76
connection GPRS .This is a double edged sword because of the variety Reliance offer and the cannibalization that can occur. The segments thus formed and the components extracted indicate that different buyer groups have different decision variables, use data card for accessing internet for different purposes and have varied perceptions about brands. All the segments require different pricing strategies and hence Reliance should come out with different plans specifically targeting different groups. Reliance having several types of tariff plan but it would have improved network connectivity along with aggressive promotional strategies’ be an unbeatable advantage in upgrading the consumer throughout his lifetime and also making him brand loyal in the process. From the perception maps, we see that Reliance has an image of having high choice of tariff plans rates and usage costs. Further, it comes out that Reliance is not a user friendly service provider. Users have taken to Reliance essentially because of high recommendation from friends and family. According to our research weak signal strength and slow net connection speed could be a deterrent for Reliance data cards.
Hence, Reliance should aim to providing
higher network coverage, good signal strength, and more efficient response requests. This could be done by setting up more network towers and having a more customer friendly focus in store as well out store activities.
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Our analysis indicates clearly reliance is popular among the youth because of low usage rate. These users use data card mostly for entertainments. This target segment can be attracted by advertising in Television and internet. Also, word of mouth publicity clearly scores above all forms of information search, primarily because of its convenience and source credibility. Everybody whom we surveyed believed in consulting their “circle” for opinions while buying connections
12.2. Recommendations 4 P’s 12.2.1. Product: The products launched should focus on improving service response i.e. better customer service and greater network connectivity.
12.2.2. Price: It should keep focus on reducing usage rates and be a price leader for price sensitive heavy usage segments.
12.2.3. Promotions: One important finding of our FGDs and Consumer Survey was that not a single consumer was aware of the fact that Reliance has different tariff plans. This can be attributed to one or more of the following reasons:
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The brand equity of Reliance data card is very high (42% TOMR in our study). But the brand development is pretty low. The consumers have low involvement and do not search for information. This implies that wireless data card is becoming a commodity. Reliance has spent on advertisements mostly for the mobile business, not on internet data cards. Hence the information available to public is limited.
To discommodities the category, to increase customer loyalty and repeat purchase, promotions have to be done on a bigger scale than what is currently been done. The promotions should have more of a pull effect in the advertisements that communicate not just the price and offers/discounts but also the values, attributes which the consumer can relate to. In short, more information has to be communicated to the consumer through ads, To left the sales of internet data card Reliance can think to adopt of innovative give away strategy, for instance design laptops with manufactures in such a way that there will be a built in Reliance internet data card. It should focus on Television advertising and Internet ads primarily. Print ads do not seem to have that effective influence in purchase decisions of the sample. Our analysis has shown that word of mouth (WOM) marketing has a excellent effect on the consumer purchasing decision of internet data card. So 79
promotional strategies could be given focus on viral marketing campaign like on SMS, e-letters or blogs and so forth.
12.2.4. Place: Reliance should strengthen its distribution network and also focus on creating more web worlds with easy accessibility outside cities as they are perceived to be authentic by consumers.
Note: The recommendations have limitations of a small sample size and a simple sampling.
12.3. CONTINUE WITH UPGRADATION Reliance has been very successful in its strategy of upgrading the consumer in the mobile business segment. Reliance has made sure that it makes its consumers move up the product chain by introducing new, technologically superior products and phasing their PLC very well. But sadly, this approach is missing in the wireless data card segment. Though there are 3 variants, there has been no effort made to communicate to the consumer of the superior quality and attributes.
Hence, we suggest that Reliance adopt its “upgrading the consumer” strategy for the internet data card segment also. This up gradation has 2 main advantages 80
We can fully leverage the Product life cycle and the individual phases of the products in different markets
We can make the consumer loyal to the brand over his lifetime.
12.4. Future challenges
Introduce a product which would be designed specifically for Indian consumer and satisfy aspiration of youths.
To match the increased demand patterns in the country.
Launching of innovative products in regular and short intervals
Reliance products are descending the customer value hierarchy from that of a potential product towards an expected product. Competitors like Tata-Indicom, Vodafone, are moving up the hierarchy. So, Reliance will find it tough to charge the moderately high price it has tilled now charge.
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It is also highly likely that Reliance may not fully absorb the consumers who upgrade from slow speed internet connection device USB modem to broadband. Hence, Reliance’s market share might not grow as good as their competitor Tata-Indicom or BSNL.
Reliance’s major challenge lies in entering the premium market through an upgraded version of wireless data card the way it did in mobile business.
12.5. Store Centric Recommendations In order to increase the Reliance wireless data card sales in exclusive R worlds and other franchisees across the country management has to take some aggressive steps to ensure that customers who are evaluating alternatives are coming in store for purchasing a Reliance data card. According to our research outcomes some following measures can be taken Management has to ensure that C3 executives especially those who are dealing with internet connections and data cards and also other telecom products, have exhaustive knowledge about their own products. C3 executives should be given special behavioral training to recognize the customers’ expectations and convey the all benefits of the product accordingly. 82
Management has to ensure that their sales persons are updated with new schemes regarding product. Product knowledge as well as sales techniques of the sales personnel should be reviewed frequently by the senior management. C3 executives should be remained motivated through various incentives which are only proportionate to their target achievements.
13. Marketing Strategy
13.1. Segmentation
In the wireless data card market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of upgraded version of wireless data card for instance Vodafone recently launched wireless data card (Globe totter) specially meant for those who frequently travel abroad would help Reliance identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point
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of purchase decision makers and customers influenced by additional features are the factors on which we will segment the upgraded internet data card market.
Segment one-> is most prices sensitive and values additional feature the least. This segment has one third of our sample size. As Reliance is an economic brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will be a strategically appropriate decision.
Segment two-> is more influenced by attributes of the products and is not a price sensitive segment. Reliance through its wireless data card is currently catering to this segment. This segment has more than one fourth of the survey sample.
Segment three-> is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample.
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13.2. Positioning Market research
Market research results have been analyzed in section 12 of the report. The following conclusions from the survey help us in identifying the positioning of the Upgraded version of wireless data card:
Target market: - The target market has been identified as the customers who are concerned about the attributes of the internet data card but are not willing to shift from the current price band to a higher price band.
Competitor Brands: - The competitor brands have been discussed in Section 8 The upgraded data card will be competing with brands like Tata-Indicom and Vodafone. Choice Criteria: - As per our findings (Section 11.15.7.3.) the 3 factors on grouping attributes post factor analysis that contribute to the data card Purchase decisions are:
Factor 1 Product attributes (Net speed, Signal strength, Ease of Use)
Factor 2 Price Sensitivity (Price, Tariff plans And Offers/Discounts) 85
Factor 3 Point of Purchase (Availability in Stores and Package Design)
Customer Evaluation: - Perceptual maps in the section show how the customers evaluate Reliance with respect to competitive brands.
Perceptual map 4
, TataIndicom, 3.6
Price Sensitivity
3.5
, Reliance, 3.4 , Vodafone, 2.9 , BSNL, 2.5
3 2.5
, Airtel, 2.8
2 1.5 1 0.5 0 0
1
2
3
4
5
6
Attributes
Reliance data card needs to position itself above Tata-Indicom in order to attract the target segment.
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Perceptual Map 4.5
Tata-Indicom, Vodafone, 4.2 4 Reliance, 3.8 Airtel, 3.6
Product attributes
4 3.5 3
BSNL, 2.9
2.5
Series2
2
Series1
1.5 1 0.5 0 0
1
2
3
4
5
6
Attributes
13.4. Real Positioning In the survey conducted, Reliance had the top of the mind recall of 42%. This shows that Reliance has an excellent real positioning in the wireless data card market and Reliance data card leverage this positioning in the target market.
13.5. Psychological Positioning Reliance data card will primarily alter the attributes importance in the target segment by increasing the importance of attributes internet speed, signal strength etc and decreasing the importance of price. This will be consistent with its strategy of moving the customers up the value chain.
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14. Appendix
14.1. Reliance communication- Timeline
1999- Reliance Infocomm started its Project Planning. Mr. Dhirubhai Ambani understood it very well that information technology had the capacity to accelerate the growth of Indian economy leaving behind its backwardness and underdevelopment.
2000- Mr. Dhirubhai Ambani’s dream started to take in a shape. Optic fiber laying process commences in Gujarat, Andhra Pradesh & Maharashtra
2001- First Media Convergence Node made "Ready for Electronics" at Jaipur
2002-It’s a true gala time for Reliance Infocomm. First Base Transceiver Station (BTS) made "Ready for Electronics". Its obtained Obtains International Long Distance License from Govt. of India. Commissioned 1st 60,000 route kilometers Optic Fiber Backbone ring. Its established 1st Point of Interconnect (POI) in New Delhi. Hon'ble Prime Minister of India, Atal Behari Vajpayee e-inaugurates 88
Reliance Infocomm Hon'ble Union Minister for Parliamentary Affairs, Information Technology and Communications, Pramod Mahajan, inaugurates NNOC
2003- Reliance Infocomm Introduced Dhirubhai Ambani Pioneer Offer for Reliance India Mobile service. Launched Reliance Web World in top 16 cities as well as International Long Distance Services. Launched Reliance India Mobile Service commercially in top 92 cities with one million customers and India's first wireless Point of Sale (POS). Introduced "Monsoon Hungama" Offer: Instant multimedia mobile phone and connection for just Rs 501.Sets world record acquires one million customers in 10 days. Launched R Connect Internet connection cable. Reliance became India's largest mobile service provider within 7 months of commercial launches.
2004-International wholesale telecommunications service provider, FLAG Telecom amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocomm. Reliance Infocomm receives the Most Promising Service Provider of the Year 2003 (Asia Pacific) award at the Asia Pacific Technology Awards instituted by Frost & Sullivan. Introduced Railway Ticket booking from R World data applications suite of Reliance India Mobile. Reliance Infocomm
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bagged the CDMA Development Group's 3G CDMA Industry Achievement Award for International Leadership. 2005- Reliance introduced first e-recharge facility in CDMA in India. Reliance India Mobile announced mega rural plan to cover 4 lakh villages and 65 crore Indians by December 2005. XLRI’s Post-Graduate Certificate program in Logistics Supply Chain Management (PGCLSCM) launched on Reliance Web World's virtual classroom platform. First of its kind e-learning program in India. Reliance Communications, UK launched Reliance India Call service in England and Wales enabling callers to make high-quality calls to India from any landline or mobile phone at economical rates. Apollo Hospital and Reliance Infocomm join hands to provide top class healthcare service to millions of Indians in over a hundred Indian cities. Reliance Infocomm and China Telecom sign agreement for telecom services to provide direct telecommunication service, including a global hubbing service, to subscribers in the two countries.
2006-Reliance Infocomm launched "One Nation, One Tariff" to enable Reliance India Mobile prepaid users to call anywhere in India at Re one per minute. Reliance Infocomm introduced R World in Hindi to become the world's first operator to offer mobile data services in more than one language on the same handset. This will make it possible for millions of Indians to access the popular R World with hundreds of every-day-use applications in the national language. 90
Reliance Communications launched India’s first Talking Message Service (TMS) enabling its mobile users to send voice messages to not only other mobiles but also fixed wireless phones (FWP) and landlines. Reliance Communications launches Free Group Term Life Cover for its CDMA subscribers.
2007-Reliance Communications added a record 1.4 million subscribers in December ’06. Search Jobs & Classified Ads from Reliance Mobile World Reliance Communications ties up with Naukri.com. Reliance Classic' Makes Music - FM Radio Phones Launched at just Rs.1888. RCOM and QUALCOMM Collaborated on CDMA2000 Expansion. Reliance Communications adjudged World’s Top CDMA Operator at the Global CDMA Industry Achievements Awards Fete.
2008- Reliance Communications received Started-up GSM Spectrum. HDFC Bank tied up with RCOM, turns every Reliance Mobile into a credit card. One of the main strategic dimension of RCOM is extensive focus on all type segment of customers, in order to do that its recently started a religious portfolio by tying up with Sadhana TV. Keeping eye on Internet data card market scenario its also drop the data card price.
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14.2. SWOT ANALYSIS
Strengths Reliance has fully integrated IP-enabled infrastructure platform thus implying application convergence, service convergence and network convergence.
It has been successful in building right alliances in the form of network alliances with Ericsson and Cisco Systems, IT alliances with HP Compaq, interconnecting alliances. Thus it can focus on its main business of marketing its service.
Reliance has been able to maintain a strong distribution capability. It has a selling capacity of 25 million per annum as compared to Nokia’s 20 million per annum. It has 90000 handset outlets as compared to Nokia’s 42000. It has presence in 5000 towns serviced by 1500 distributors as compared to Nokia’s presence in 4600 towns serviced by 250 distributors/micro-distributors.
It can leverage its strength in wireless connectivity in the future to offer mobile telecom services. It has wireless connectivity available in 4500 towns with a speed of 144kbps.
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Backing by a healthy balance sheet of the parent company helps in investing in assets for long term growth. Also the Reliance culture focuses on financial conservatism, thus providing it with good human skills at managing capital.
Weaknesses The Reliance network does not deliver on the Quality of Service parameters as decided by Telecom Regulatory authority of India (TRAI). Due to this it suffers from high call dropping rates and a reduction in brand equity.
Reliance has a major presence only in C’ Circle. It needs to establish itself also in other circles so that it can compete with player like Bharti on a national scale.
Opportunities A strong economy and a growing market: The Indian telecommunication industry is amongst the fastest growing telecom markets in the world and is poised to deliver solid growth as a result of several economic reforms that have lead to strong GDP growth pegged at approximately 9.1% for FY 2007-08. Increasing per capita income supported by increased consumption is resulting in a greater-than-proportionate impetus for telecom growth. As India still remains
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one of the lowest penetrated markets, it is one of the most attractive telecom markets in the world today.
New technologies and paradigms: The trend towards adoption of Next Generation Networks (NGN) is global and the discussions in India are still at a preliminary stage. Technologies like Triple Play, wherein a single cable can deliver voice, data, video on demand and IPTV provide us with a unique opportunity to an integrated player who is well positioned to deliver this service.
Strong strategic partnerships: Strong strategic alliances with network companies may help Reliance Communication to focus on marketing its services. Alliances provide the service provider the access to technological know-how as well as best practices to enhance customer experience. It is important to leverage the strengths of our partners and benefit from their experience and know-how.
Introduction of number portability: Number portability would allow customers to retain their telephone numbers even after switching service providers or networks. Companies with better service delivery and customer care platforms stand to gain over their competitors. Extensive network coverage, coupled with aggressive pricing and innovative products and services would help in gaining a larger share of the market. Given a competitive position and focus on customer 94
delight, Reliance may be positioned to attract subscribers presently on other networks, as and when number portability gets introduced in the market.
Threats Regulatory decisions and changes: On the regulatory front, reduction in the entry fee and the annual license fee for National Long Distance and International Long Distance (ILD), combined with the impending implementation of Carrier Access Code (CAC) would lead to greater competition in the Long Distance segment. The implementation of Carrier Access Code would make it easier for customers to choose their long distance carrier, regardless of the access provider. A focus on offering value-for-money services to consumers would stand to gain from the introduction of CAC.
14.3. Product portfolio Reliance communication has the following consumer product lines ü ü ü ü ü ü ü ü ü ü ü
Mobile Wireless Phone Wireless Terminal Blackberry Broadnet Roaming Reliance Landline Reliance Netconnect Reliance Mobile Reliance India Call Reliance Passport
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Reliance communication has the following enterprise product lines ü ü ü ü ü ü ü ü ü ü ü ü
BlackBerry Office Centrex One Office Due Audio conference Reliance PCO Toll-Free ITFS Broadband Business Broadband Internet Leased Line>Virtual private network>IPLC Video Conferencing Internet Data Centre[IDC]
14.4. Retail Revolution:-Reliance World What a wonderful world -- Reliance World Reliance World (formerly Reliance Web World) first of its kind a retail store with telecom products and services in India, is a world-class nationwide chain of retail outlets for products and services of the Reliance – Anil Dhirubhai Ambani Group. It is designed to give the customer a delightful experience of the digital world of information, communication, entertainment and utility services. All Reliance World outlets are connected to Reliance’s countrywide optic fibre network. The Broadband Centre at Reliance World leverages this broadband network to bring you innovative digital services. With 242 Reliance World outlets across 105 cities in the country 96
14.5. Customer Survey Questionnaire
Customer Survey: Questionnaire Name: Date: Name of interviewer:
1. What is your age? Less Than 18 18-23 years
23-28 years
28-45 years
Greater Than 45
2. What is your occupation? Government Service
Private Service
Business Self-Employed
Student
Homemaker
Others (please specify) __________
3. How often do you get connected to Internet? At irregular intervals
Once a day
Twice a day
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4. What type of data card you preferred to buy? USB Modem
PCMCIA Card
5. From where did you buy your data card? Company own outlets
Other place
6. Which brands of data card you are aware of? (TOM)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
7. Which brands of data card you are aware of (Aided recall)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
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8. Which brands of data card you are aware of (Unaided recall) Reliance Tata-Indicom
Vodafone
Airtel
BSNL
9. Which of the following brands do you use personally? (Tick only one)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
10. Please rate the following sources of information according to the level of importance of each source (1 – Least Important; 5 – Most Important) Friends ___
Family ___
Retailer ___
Advertisements___
Packaging ___
Magazines or newspapers ___
Cyber café ___
Any Other ___
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11. How satisfied are you with Reliance Data card? (If used) Highly Satisfied
Moderately Satisfied
Neither satisfied nor dissatisfied
Moderately Dissatisfied
Highly dissatisfied
13. If your FIRST preference is not available then what do you do? Purchase some other brand from the same shop/ store.
Purchase the same brand from some other store.
14. If the price of your most preferred data card as well as tariff charges increases what would you do? Shift to another options or different brands of data card
Will be using the same brand
15. If you choose to shift then which Brand will you prefer? Tata-Indicom
Vodafone
Reliance
Airtel
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BSNL
16. Please rate the factors given below on scale of 1 – 5 based on the s importance they hold for you in purchase decision of Data card. (1 least important to 5 most important)
No. Attributes/Benefits 1.
Price
2.
Easy handling
3.
Net Speed
4.
Signal Strength
5.
Availability in store
6.
Tariff plan
Rating
7. Offer/Discounts 17.Please rate the following brands on the scale of 1-5 for the attributes mentioned below i.e. write 5 if you feel the attribute is good enough to fully satisfy you and mark 1 if you feel the attribute could not satisfy you. (1 fully dissatisfied to 5 fully satisfied – Show cards with the ratings on them)
No.
Attributes
1.
Price
2.
Easy handling
3.
Net Speed
4.
Signal Strength
5.
Availability in store
6.
Tariff plan
Brands 1
2
3
4
5
TataIndicom
Airtel
Vodafone
BSNL
Reliance
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Focus Group Discussion Format Introduction Presentation of the Purpose Discussion of the procedure
Focus Group Discussion (FGD) We conducted two FGD for our product-Reliance Data card. We also conducted Telephonic interviews with existing customer from company’s data base Focus Group 1: PG students from NSHM, Kolkata (Age: 18-24) Focus Group 2: Faculty members NSHM, Kolkata (Full time) (Age: 38-55)
Following are the questions that helped us in moderating the entire discussion and the answers that majority in the group agreed to:
1) Type Net connection have been used FG 1: The PG students now use mostly USB modem and data card for surfing FG 2: The faculty members now use broadband for surfing 2) What product first comes to your mind when I say Internet connection? FG 1: The PG students said Airtel, Reliance data card and BSNL internet connection FG 2: The Faculty members mostly use BSNL broadband 3) Different type of net connections you are aware of? FG 1: Came up with Airtel GPRS connections and also Reliance Netconnect FG 2: Came up with mostly BSNL and Reliance Netconnect,
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5) The reason for using data card? FG 1: Sometimes just for peer pressure and convenient for using anywhere FG 2: Extensive traveling and easy access to internet 6) Does the data card really matter for net surfing? FG 1: no. only it can be taken anywhere. FG 2: not really.
8) Have you switched data card’s brands? FG 1: yes, once FG 2: no. not very recently. 9) If so, why? FG 1: just for bad speed FG 2: only sometimes. Better connectivity and charges of usage 10) Where do you purchase? FG 1: Company’s own outlets. FG 2: Company’s own outlets 11) Currently which type of net connection do you use? Are you satisfied? FG 1: Airtel GPRS, Reliance data card, BSNL broadband connection FG 2: Reliance data card, BSNL broadband connection 12) Information search? FG 1: ads don’t influence. Decision is made at the point of purchase FG 2: ads don’t influence. Many times decision is made before coming to store.
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14) Have you seen an ad for Data card? FG 1: No, not really. Charges are not important like net speed as well as download speed FG 2: Yes, did 15) What do you expect from your net connections? (Speed, free usage etc.) FG 1: Speed. Dialup connection FG 2: Good offers, easy to handle, good coverage 16) The attributes you look for in your data card? FG 1: Good net speed, affordable price, Wire less connectivity FG 2: Affordable price, Ease of use 17) What do you expect from net connections? FG 1: Speed FG 2: Strong network (if USB modem and data card) quick connectivity, affordability.
19) Do you know the difference in pricing of Reliance data card plans? FG 1: The group wasn’t surprised with the price catalogue we provided FG 2: The group was surprised 20) Would you like to buy Reliance data card even if the price and tariff was further raised? FG 1: Depends on the budget we have FG 2: Yes 21) What do you think of Reliance data card? FG 1: Not sure
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FG 2: Better compared to others
22) Why Reliance data card? FG 1: Good speed, attractive tariff plans, recommended by family and friends FG 2: Worth of money, recommended by family and friends
The two groups together came up with 7 attributes of data card after a few minutes. They had 3 attributes that overlapped as shown.
FG 1: Price Net speed Availability in stores Offers/Tariff plans Wire less connectivity FG 2: Ease of Use Availability in stores Quick connectivity Offers/Tariff plans Lasting Net Speed
COMMON ATTRIBUTES: Speed, availability in stores, offers/tariff plans,
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14.6. Age Profile of Sample Population
8%
9%
14%
<18 23%
18-23 23-28 28-45 45>
46%
14.7. Internet Data Card Preference
11%
5% 28%
TATA INDICOM RELIANCE
14%
AIRTEL VODAFONE BSNL 42%
14.8. Recall Pattern
Unaided Recall of Reliance Brand 67% Aided Recall of Reliance Brand
89%
Top of the Mind Recall of Reliance Brand 77% 106
14.9. User Preference
11%
5% 28%
TATA INDICOM RELIANCE
14%
AIRTEL VODAFONE BSNL 42%
14.10. Respondents’ preference of Internet Connection
Preferrence of Internet Connection
11% Broadband 23%
pcmcia card 53%
usb modam General net connection
13%
107
14.11. Brand Satisfaction of Reliance
Satisfaction Level-Reliance Highly satisfied 11%
6% Moderately Satisfied
14%
41%
Neither Satisfied nor Dissatisfiefd Moderately Dissatified
28% Highly Disstisfied
14.12. Brand Loyalty Brand Loyalty in Internet Data Market If your FIRST preference is not available then what do you do? Option 1 Purchase some other brand from the same shop/ store Option 2 Purchase the same brand from some other store
Brand Loyalty
25% Other Brand Same Brand 75%
Price Sensitivity in Internet data card Market If the price of your most preferred brand increases what would you do? (Q 14) 108
Option 1 Shift to another brand Option 2 Still buy the same brand
Price Sensitivity
13%
Stick to current brand Other brand 87%
14.13. Fishbein Analysis Fishbein Attitude Model
Where,
Ab = Attitude toward the object (brand)
Wi = belief about the brand’s possession of the attribute
Xib = evaluation of the attribute as being good or bad n = there are a limited number (n) of attributes which the person will consider
109
Preferred Brand on basis of individual Attitude Score
17%
23%
Tata-Indicom BSNL Airtel
22%
Reliance
18%
Vodafone
20%
14.14. Average attitude perception score of each brand
Initial Eigen values Total
% of Variance
Extraction Sums Loadings
Cumulative%
Total
% of Variance
Cumulative%
1
2.705
24.201
24.401
2.805
24.542
23.294
2
1.881
14.443
31..768
1.798
16.547
41.643
3
1.431
13.563
52.338
1.502
13.516
54.543
4
1.124
9.688
64.075
1.543
10.872
63.098
5
.827
8.032
70.221
6
.435
6.437
78.334
7
.768
6.407
82.451
110
Average Perception Score of Each Brand 35 30 25 20 Series1 15 10 5 0
Tata-Indicom
BSNL
Airtel
Reliance
Vodafone
30.348
22.938
25.733
28.235
22.334
Series1
14.15. Factor Analysis Component 1
2
3
Price
-.328
.634
-.067
Easy handling
-1.20
.028
-.076
Net speed
.458
.327
.326
Signal strength
.336
.122
.398
Availability in store
.776
-.096
-.064
Tariff plan
.451
-.078
-.043
Offers/Discount
.169
-.112
.418
111
Score plot 3
Eigenvalue
2.5 2 1.5
Series1
1 0.5 0 1
2
3
4
5
6
7
Component number
14.16. Cluster Analysis Two Cluster Analysis Cluster 1
2
Attributes
4.5
3.9
Price Sensitive
3.7
2.9
Point of Purchase Additional factors
2
1
3.1
1.2
112
Number of Cases in each Cluster Cluster
1
42.000
2
38.000
Valid
89.000
Missing
.000
Three Cluster Analysis Final Cluster Centers Cluster 1
2
3
Attributes
2.8
3.3
2.9
Price Sensitive
2.5
3.0
2.1
Point of Purchase
3.4
3
2.8
Additional Factors
3.1
3.4
2.9
Number of Cases in each Cluster
Cluster
1
38.000
2
23.000
3
19.000
113
Valid
Missing
89.000
.000
114
Reference • • •
Berman, B Evans, JR Retail Management, A Strategic Approach, McMillan Publication 2001. Levy & Weitz, Tata McGraw-Hill Publishing Company Limited, 2006. Philip Kotler, K. K. (2006) Marketing Management, New Jersey, Pearson Education Australia.
•
Daft, Richard L. Organization Theory & Design. Thomson/ SouthWestern, 2007.
•
Ambani, Dhirubhai. Reliance Communication. 1999. http://www.rcom.co.in/Communications/Aboutus/aboutus_home.html.
•
Reliance communication- Timeline http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus _milestones.jsp
•
Products http://www.rcom.co.in/webapp/Communications/rcom/index.jsp
•
ANI. Andhra News. July 16, 2007. http://www.andhranews.net/Business/2007/July/16-Reliance-Communicationbuys-8239.asp.
•
Communications, Reliance. "Code Of Conduct." Reliance Communications. 2006. http://www.rcom.co.in/Communications/Aboutus/pdf/Code_of_Conduct.pdf.
•
http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus _business.jsp
•
Miller, Chris. SAP NetWeaver Magazine. 2006. http://www.netweavermagazine.com/archive/Volume_02_(2006)/Issue_02_(Sprin g)/v2i2a09.cfm.
115
A SUMMER TRAINING REPORT ON CONSUMER CONSUMER BUYING BEHAVIOUR WITH WITH A FOCUS ON PERCEPTION TOWARDS INTERNET DATA CARD IN RELIANCE COMMUNICATION COMMUNICATION LTD (7th July,2008-6th November, 2008)
SUBMITTED IN THE PARTIAL FULFILLMENT OF OF REQUIREMENT OF POST GRADUATE PROGRAM IN RETAIL MANAGEMENT
SUBMITTED BY
Pradipto Dey
2
1. CERTIFICATE OF THE GUIDE
10
2. STUDENT’ DECLARATION
11
3. ACKNOWLADGEMENT
12
4. EXECUTIVE SUMMERY
13
5. INTRODUCTION OF PROJECT
15
6. HISTORY OF RELIANCE COMMUNICATION
16
6.1. Foundation of Reliance Communication
17
6.2. The Vision
18
6.3. The Mission
18
7. AN ANALYSIS OF RELIANCE COMMUNICATION
19
7.1. Low-Cost Leadership Strategy
20
7.2. Differentiation Strategy
20
7.3. Organization Structure
21
7.4. External Environment
22
7.5. Global Expansion
23
7.6. Information as a Weapon
24 3
7.7. Financial Performance and Analysis
26
7.8. Ethics & Culture
27
8. TELECOM SECTOR-AN OUTLOOK
28
8.1. Industry Analysis
28
8.2. Bharti Airtel
28
8.3. Tata- Indicom
30
8.4. Bharat Sanchar Nigam Limited (BSNL)
31
8.5. Vodafone -Essar (Erstwhile Hutchison Group)
32
9. RELIANCE NETCONNECT DIVISION
33
9.1. Introduction
33
9.2. RCOM’ products in Reliance Netconnect Department
33
9.2.1. Value Based Plan
34
9.2.2. Advance Rental Plan
35
9.2.3. Time based plan
35
9.2.4. Prepaid Options
36
9.3. Evaluation criteria & parameter of competitors
36
9.4. Reliance Data Card - an insight
37
9.5. Product
38
9.6. Packaging
39 4
9.7. Price
40
9.8. Promotion
41
9.9. Bundling
41
10. MARKET RESEARCH
42
10.1. Overview of Research
42
10.2. Introduction
43
10.2.1. Problem or Opportunity
43
10.2.2. Background of the study
43
10.3. An overview of internet and wireless connectivity
44
10.3.1. Definition of internet
44
10.3.2. Common uses of the Internet
45
10.3.3. Driving growth of internet data card
46
10.3.4. The Deterrents
47
11. CONSUMER BEHAVIOUR THEORIES
48
11.1. Consumer perception and consumer behaviour
48
11.2. Consumer decision process
49
11.2.1. Predispositions (Before Purchase)
49
11.2.2. Product Need
50
11.2.3. External Search
50
11.2.4. Evaluation of Alternatives
51 5
11.2.5. Purchase Activity
51
11.2.6. Post Purchase Behaviour
52
11.2.7. Predispositions (After Purchase and Use)
52
11.3. CONSUMER PERCEPTION
53
11.3.1. Introduction
53
11.3.2. Factors in perception
53
11.4. Consumer behaviour towards internet data card
55
11.4.1. Problem recognition
56
11.5. Information Search
56
11.6. Product Evaluation
57
11.7. Purchase Activity
58
11.8. Post Purchase Activities
58
11.9. Perceived benefits of internet data card
59
11.9.1. Convenience
60
11.9.2. Time saving
60
11.9.3. Economical
60
11.10. Perceived risk of internet data card
61
11.10.1. Risk of internet connection speed
61
11.11. Research objective
62
11.12. Research question
62
6
11.13. Research boundaries
62
11.14. Research design
63
11.14.1. Validity and Reliability test of the questionnaire
64
11.14.2. Validity Test
64
11.14.3. Reliability Test
65
11.14.3.1. Cronbach’s Reliability Test
66
11.15. Research tactics
66
11.15.1. The theoretical population
66
11.15.2. Sampling Frame
67
11.15.3. Sampling procedure
67
11.15.4. Implementation
68
11.15.5. Data Collection - Phase 1
68
11.15.6. Phase 2 Final Survey
69
11.15.7. Data Processing
70
11.15.7.1. Brand Recall
70
11.15.7.2. Fishbein Analysis
72
11.15.7.3. Factor Analysis
72
11.15.7.4. Perceptual Maps
72
11.15.7.5. Brand Loyalty
73
11.15.7.6. Cluster Analysis and Segmentation
74
12. Recommendation and conclusion
76 7
12.1. Playing with the PLC
76
12.2. Recommendations 4 P’s
78
12.2.1. Product
78
12.2.2. Price
78
12.2.3. Promotions
78
12.2.4. Place
79
12.3. Continue with up gradation
80
12.4. Future Challenges
81
12.5. Store centric recommendations
81
13. Marketing strategy
83
13.1. Segmentation
83
13.2. Positioning
85
13.3. Real Positioning
87
13.4. Psychological Positioning
87
14. APPENDIX
88
14.1. Reliance communication- Timeline
88
14.2. SWOT Analysis
92
14.3. Product portfolio
95
14.4. Retail Revolution:-Reliance World
96
14.5. Customer survey questionnaire
97
8
14.6. Age Profile of Sample Population
106
14.7. Internet Data Card Preference
106
14.8. Recall Pattern
106
14.9. User Preference
107
14.10. Respondents’ preference of Internet Connection
107
14.11. Brand Satisfaction of Reliance
108
14.12. Brand Loyalty
108
14.13. Price Sensitivity in Internet data card Market
109
14.14. Fishbein Analysis
109
14.15. Average attitude perception score of each brand
110
14.16. Factor Analysis
111
14.17. Cluster Analysis
112
14.18. References
115
9
Session: 2007 - 09
CERTIFICATE OF THE GUIDE This is to certify that the Project Work titled “(CONSUMER BUYING BEHAVIOR WITH A FOCUS ON PERCEPTION OF INTERNET DATA CARD)” is a bonafide work of Mr. /Ms Pradipto Dey. Carried out in partial fulfillment for the award of diploma under my guidance. This project work is original and not submitted earlier for the award of any degree / diploma or associate ship of any other University / Institution.
PLACE: - KOLKATA DATE: - 30/10/2008 Signature of the Guide: Name and Official Address of the Guide: Designation and Experience:
10
Students’ Declaration
I, Mr. /Ms PRADIPTO DEY. hereby declare that the Project Work titled Consumer Buying Behaviour with a focus on perception of internet data card is the original work done by me and submitted to the NSHM, Kolkata in partial fulfillment of requirements for the award of Post Graduate in Retail Management (Area of specialisation) is a record of original work done by me under the supervision of Dr/Mr. Sri. OZAIR QAMAR of RELIANCE COMMUNICATION LTD. (Orgn. of the guide)
Date: 30/10/2008 Signature of the Student
11
ACKNOWLEDGEMENT
First of all I would like to thank the Management at Reliance Communication Ltd. for giving me the opportunity to do my four-month project training in their esteemed organization. I am highly obliged to Mr. RAHUL NAGARIA (HR, Reliance Web Stores Limited) for granting me to undertake my training at Reliance World, Place Kolkata I would like to express my gratitude to Mr. OZAIR QAMAR (Area Sales Manager), who has been provided me with guidance, inspiration, perspective and stimulating discussion, throughout the writing of this report. His constant review
and
excellent
suggestions
throughout
the
project
are
highly
commendable. A study like this can not be completed without help from other persons and therefore I would like to express my gratitude to Mr. G.M SAHA, (Ex. Dean of INDIAN STATISTICAL INSTITUTE, KOLKATA ) to provide me crucial guidance in the analytical part of this Project. My heartfelt thanks go to all the executives who helped me gain knowledge about the actual working and the processes involved in various departments. Finally, we would like to thank our friends and family member for giving us constant support and encouragement.
12
4. EXECUTIVE SUMMERY Growth on the Data Cards. Especially happen when business travelers, academicians as well as other professionals need to access emails and corporate applications as well as personal requirements during urgent trips and travels.
Now, what kind of a company enters an industry with competitors already entrenched? Which ones actually succeed? The answer to both the questions is Reliance Infocomm now known as Reliance Communication. Reliance Infocomm is a confident and smart company that was able to enter a saturated and highly competitive industry, and emerge at the top. The cut-throat competition in the telecommunication sector of India posed a great threat to the development of Reliance Infocomm. When Late Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999 he had a clear game plan to position itself on the platform of affordable as well as world class information and communication service highlighting unparalleled value to create customer delight and enhance business productivity.
The project aims to identify the problems faced by Reliance Communication in the internet data card market. Customers often feel that service providers do not deliver what they promise. They feel players should present the terms and 13
conditions and tariff plans/schemes in clear terms. The research we conducted also supports this fact. We have suggested a marketing plan for Reliance data card along with other suggestions for Reliance Communication to face the competition in the near future and the long run.
14
5. Introduction of Project The objective of the study is to understand the consumer’ pre, post, during perception of data card and consumer buying behaviour and attitude for Reliance data card. To understand the former part, we created a focused group questionnaire and conducted a focused Group Discussion (FGD) on data card; we analyzed the questionnaire and the FGD to create an extensive questionnaire understanding the buying behavior of consumers of Reliance data card and other brands. We had a Fishbein analysis done on the 64 respondents from Kolkata to identify how much of buying intension is due to attributes and how much due to influence by referrals. We further extended the study to understand the perceptual mapping of brands. Our analysis has revealed that the consumer is satisfied with the brand Reliance data card and its attributes. However Reliance has not performed well with the customers who are considerably concerned about internet connection speed. This following detailed analysis is presented in our assignment.
15
6. History of Reliance Communication 6.1. Foundation of Reliance Communication Dhirubhai Ambani (1932-2002) started the Reliance Commercial Corporation in a 350 Sq. Ft. room with a telephone, one table and three chairs. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices. He started his first textile mill at Naroda, in Ahmedabad in the year 1966 (The Origin Of 2007). After success in the textile industry Reliance slowly ventured into petroleum, petrochemicals, energy, finance, engineering and telecommunication sectors. Reliance was the first Indian company to be listed in the Fortune Global 500 list in 2003. RIL emerged featured in the 2007 Fortune Global 500 list of the world's largest corporations at rank 269 (500 2007).
Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999. He saw that information technology had the capacity to accelerate the growth of Indian economy leaving behind its backwardness and underdevelopment. From 1999 to 2002 Reliance Infocomm built the fiber backbone for India — 60,000 kilometers of fiber optic spreading across the entire country. Reliance Infocomm was started on December 28, 2002 (Communications, Reliance Communications 2006).
16
After the death of Dirubhai Ambani, there was a rift between his sons, Mukesh and Anil Ambani. Finally the company was split between the two brothers. Anil Ambani acquired Reliance Infocomm, which is now known as Reliance Communications. Reliance Communication is now a part of Anil Dhirubhai Ambani Group (ADAG). Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group of companies. Launched as Reliance India Mobile in December 2002, it started its commercial operations in May 2003 with one million customers in 92 cities. This organization was the result of the dream of Dhirubhai Ambani to – “Make the tools of information and communication available to people at an affordable cost [and] they will overcome the handicaps of illiteracy and lack of mobility”. Currently, Reliance Communication spans the entire telecommunication services covering mobile and fixed telephony. Apart from plain vanilla voice services, it provides broadband, national and international long distance services and data services along with an exhaustive range of value-added services and applications.
Further,
the
company
sells
communications
and
digital
entertainment products and services through its chain of Reliance Web World retail outlets. Today, Reliance is a service provider of both CDMA and GSM technologies.
17
6.2. The Vision The vision of the company is as follows:
We will leverage our strengths to execute complex global-scale projects to facilitate leading-edge information and communication services affordable to all individual consumers and businesses in India. We will offer unparalleled value to create customer delight and enhance business productivity. We will also generate value for our capabilities beyond Indian borders and enable millions of India's knowledge workers to deliver their services globally. (Communication, Reliance Communication 2006)
6.3. The Mission The mission statement of the company was, “Karlo duniya muthi mein.” It is the mission of the company to become number one in the field of telecommunication and provide high quality products and services at the cheapest possible price.
18
7. An analysis of Reliance Communication Michael E. Porter studied a number of businesses and introduced a structure enumerating three strategies: low-cost leadership, differentiation and focus (Daft 2007). According to Porter an organization either adopts low-cost or differentiation strategy to compete and position them in the market. But it can be seen Reliance have successfully adopted Porter’s both strategies.
7.1. Low-Cost Leadership Strategy Reliance Infocomm launched into the market with a package called the Dhirubhai Ambani Pioneer Offer which provided with the lowest airtime rates and value added services for free. Reliance Infocomm reduced the rates of outgoing calls, while the competitors charged at rates as high as Rs.7 (US$0.15) per minute. All incoming calls were free.
Three strategies helped in cutting call costs. Firstly, Reliance charged a higher rental, Rs.600 (US$13.3) per month, compared to the rest of the providers. But users received about 400 minutes of free talk time, while the competitors offered none. Since the incoming calls were free the user could utilize the entire 400 hundred minutes to make calls. Secondly, Reliance Infocomm reduced the pulse 19
rates to 15 seconds from the earlier one minute. For a user this meant more control over the costs, while for Reliance, it meant higher volumes of calls. The lower pulse levels allowed the low income users to pass on information through short duration calls. Thirdly, Reliance Infocomm ensured that calls to any Reliance phone in India were charged at Paise 40 (0.8 US cents) a minute, a rate which people could not even imagine before that time. For Reliance Infocomm this meant faster adoption of Reliance services across India, because of the very low long distance rates, made possible by low costs, since the calls would be carried entirely through the Reliance owned network, thus avoiding profit sharing with any other carrier.
Value added services like voice mail, call waiting, call holding, call divert, call identification and call conferencing were charged at a premium by all the other players in the market. Reliance Infocomm offered all these services free of charge. In addition all text messaging was offered free of charge.
7.2. Differentiation Strategy Reliance Infocomm used exceptional service and new technology to distinguish their services from the others. They were the first providers to use WLL, a lower frequency band, and CDMA technology. Using CDMA helped Reliance Infocomm to accommodate large number of users, which they would have not 20
been able to do otherwise. Since they did not have to pay heavily for the license for WLL they were able to charge low rates. Thus utilizing the new technology helped them gain low costs.
When most other mobile operators focused exclusively on the provision of mobile services, Reliance Infocomm started offering all the services which could utilize their network and other resources optimally. Apart from the basic mobile services, Reliance Infocomm currently offers landline, broadband Internet, leased line, VPN (Virtual Private Network), IPLC (International Private Leased Circuit), Centrex and IDC (Internet Data Centre) services.
Thus Reliance Infocomm was able to use innovation to reduce the cost of their services. Differentiation and low-cost strategies went hand in hand for Reliance Infocomm.
7.3. Organization Structure Reliance in the beginning used the modular structure. Reliance Industries, the parent company of Reliance Infocomm, is the largest private sector corporation in India with stakes in petroleum, petrochemicals, engineering, and finance. This scale of operations provided great leverage as the company ventured into telecommunications. Reliance Infocomm, in the initial stages, shared all Reliance 21
resources to ensure cost effectiveness in every service that it provided. Reliance Infocomm operated out of existing Reliance Industries offices and utilized the capital and personnel resources to the extent possible. Reliance Engineering Associates Ltd, an associate company, made sure that the engineering and manpower costs were maintained at the bare minimum. In developed countries human resource costs account for 22 per cent of a companies’ operating cost as against 5 per cent in India. But Reliance Infocomm utilizes all their internal resources in large numbers which further reduces the cost.
Later Reliance Infocomm centralized most of its operations. 80 per cent of Reliance Infocomm’s administration and operation is centralized. Compared to the best telecom networks in the world they have deployed only half the number of people per 1,000 lines making their human resources the highest productive resource. Reliance also exploited the extensive petroleum distribution channels that it had set up in promoting and distributing Reliance Infocomm services.
7.4. External Environment By December, 2001 the user base of mobile users in India had grown to around 5 million. By the time Reliance Infocomm was launched it had grown to around 12 million. Two other service providers, who had entered the mobile market late, 22
could not cope up with the competition, and were taken over by other global service providers. Thus it can be seen that the mobile market in India before Reliance Infocomm was growing at a rapid pace, but was highly competitive and companies who could not keep up had to exit the market. Reliance Infocomm entered such a market and emerged as India's largest mobile service provider, within
7
months
of
commercial
launch
(Communication,
Reliance
Communications 2006).
At present Reliance Communication is in a very unstable and complex environment. Everyone in the market is seeking to expand and increase their subscriber base. Service providers are adding at an average of a million subscribers every month. New mobile technologies such as 3G, EDGE, and WIMAX are being introduced in India. The providers try their best to incorporate the new technologies in their services as soon as possible.
7.5. Global Expansion Within the first year of launch Reliance Infocomm entered the world markets. Its first step into global expansion was the purchase of UK based, Flag Telecom for $207 million, on October 16, 2003 (Telecom 2003). Flag Telecom is a leading 23
provider of international wholesale network transport and communications services. By taking over Flag Telecom, Reliance Infocomm acquired its established customer base of more than 180 leading operators, including all of the top ten international carriers (Telecom 2003).
It entered the US markets by purchasing Yipes Holdings Inc. for 300 million dollar cash on July 16, 2007. It bought 100% shares of Yipes Holdings Inc. by cash. Yipes is based in San Fransisco. It is a provider of managed ethernet and application delivery services, thus it offered Reliance an opportunity to tap a fast-growing market. Yipes had coverage to 14 metro cities in the United States, which Reliance plans to expand to 30 and also take it to Asia, Europe, Africa and the Middle East (ANI 2007) .
7.6. Information as a Weapon To understand the market better than its competitors and provide superior service, all while growing at a swift pace Reliance Infocomm used information technology as a strategic weapon. To start with, it laid 60,000 kilometers of optical fiber network across India. The only way to manage the challenges was to establish a scalable and adaptable decision-support system (DSS) right away. They started their DSS even before their sales side was launched. 24
The DSS architecture of Reliance Infocomm is given below:
Data from various inputs such as billing, CRM, SAP R/3 was sent to a third party server, where the data was filtered and organized. It was stored in a data repository. SAP R/3 is an enterprise resource planning software. Some of the data went directly to the SAP NetWeaver, business intelligence software. SAP NetWeaver provides business analytic applications to the management.
Even though Reliance Infocomm has such a reliable system, the users still face many customer service problems. A person may have to wait up to twenty minutes before his call is answered by their customer service representative. There is lot of billing issues with reliance Infocomm. They are trying to overcome 25
all these issues gradually by continuously updating their information technology.
7.7. Financial Performance and Analysis As compared to the industry average Reliance Communications has a very high net profit margin (NPM). It has an NPM of 70.8% against and industry average of about 19%. Although the total earnings reported by Reliance form only a miniscule part of total industry. Reliance Communications has the highest EBITDA margin expands from 39.5% to 43.0% reported for the year ended March 31, 2008. The total income reported were Rs. 19,068 crores while the industry total was Rs. 123436.52 crores, with a change of 25%. Therefore Reliance has considerable catching up to do. In FY08, Reliance’s sales jumped by 49% compared with FY07 and are expected to grow strongly in the coming years. Same trend can be witnessed in PAT, with a rise of 30% in FY08 compared with FY07. Sales in AMJ08 are expected to jump by 13% to Rs36, 453.94m from Rs32, 289.30m in AMJ07. In the coming quarters, Reliance is expected to add subscribers at the rate of more than 4m customers every quarter. Since Reliance is present in both CDMA and GSM technology, it is fast catching up with the leading company and is second largest company after the market leader in terms of subscriber base. Only company to have nationwide GSM & CDMA service in India
26
7.8. Ethics & Culture Reliance defines what is right and what is wrong, and then proposes doing the right thing. Reliance Infocomm believes that any business conduct can be ethical only when it rests on the nine core values of honesty, integrity, respect, fairness, purposefulness, trust, responsibility, citizenship and caring (Communications, Code Of Conduct 2006).
27
8. Telecom Sector-An Outlook
8.1. Industry Analysis Indian Telecom industry is one of the fastest growing telecom markets in the world. In telecom industry, service providers are the main drivers; whereas equipment manufacturers are witnessing growth and decline in successive quarters as sales is dependent on order undertaken by the companies. Airtel, Reliance, Tata and Vodafone are some of the companies that are expected to spur the growth in AMJ08, as compared to AMJ07. According to Cygnus estimates, telecom industry is expected to grow by 25% in AMJ08 as compared to AMJ07, in terms of sales. EBDITA and PAT are expected to grow by 32% and 34% respectively in AMJ08 as cost expenses are being control by major companies like Airtel and Reliance. The major booster is the wireless mobile subscriber base; crossing over 261m in March 2008. Other services like Internet subscriber base has also provided significant impetus with its subscriber base reaching over 11m in March 2008
8.1.1. Bharti Airtel Bharti Airtel is India’s leading provider of telecommunication service. Airtel Data Card is the superior PC Data Card solution which delivers wireless internet 28
capabilities to laptops and notebooks, by providing EDGE and GPRS technologies in a single PC Card package. On an EDGE network, Airtel Data Card enables connection to the Internet using EGPRS. In areas where EDGE services are not available, the Airtel Data Card still enables reliable and secure data connections over GPRS. The tariff charges of Airtel’s data card are shown below: Airtel Data Card Name of Bill Plan Monthly Charges
Datacard Datacard49 Datacard350 599 New Monthly Fixed Chaeges
49 350 599 Data Charges (Rs/Pulse) (All India) Rate Per Pulse 0.1 5 3 Pulse 10 KB 1MB 1MB Data Usage Discount Nil 500 Mb 1 GB Default Voice Charge
Datacard 999 New
999 0 1MB Unlimitted Free
Local Outgoing (Rs/Min) (Kolkata,West Bengal,Sikkim and A &M Airtel to All 1.99 1.99 1.99 1.99 STD Outgoing (Rs/Min) Airtel to All 2.99 2.99 2.99 2.99 ISD Outgoing # Slab 1 6.4 6.4 6.4 6.4 # # Row 1 9.2 9.2 9.2 9.2 # # # Row 2 40 40 40 40 SMS (Rs/SMS) Local 1 1 1 1 National 2 2 2 2 International 5 5 5 5 100 Free Local 100 Local SMS/Month Nil Nil SMS SMS
29
8.1.2. Tata- Indicom Tata-Indicom currently at leading position in wireless data card market in India. Tata Teleservices' Tata-Indicom data card sales have exceeded the 100,000 subscribers’ milestone. Using CDMA 1x technology, Tata-Indicom data cards offer wireless internet access. The recently launched Plug 2 Surf Whiz fits into a standard USB port available in most desktops and laptops. TTML's Plug 2 Surf Whiz offer is being promoted with outdoor campaigns across Mumbai and Maharashtra. The tariff charges of Tata-Indicom’s data card are shown below:
Plan Name
Highlight
Budget 150
Lowest rental
Value 325
Free 1hr/day
ME Unlimitted ME Economy ME Jumbo ME Max
Unlimitted usage Alweys On For Heavy Users
ME 6
Advanced
ME 12
Rental
Rs. /min Local STD
To TATA 50 Paise Rs. 1.69
TATA USB Modem Fixed Charge Free Usage Time Based Rs.150/month 300min
Additional Usage
1800 Min (30 Hrs)
50p/min 8AM 12AM:50p/min 12AM -8AM :25p/min
Rs.1099/month
Unlimitted
N/A
Rs. 500/month Rs. 650/month Rs. 900/month Rs. 3600/6month Rs. 6700/annum Voice Tariff To Other Rs. 1 Rs. 2.65
512MB 1GB 2GB
Rs. 2/MB Rs. 2/MB Rs. 2/MB
1GB
Rs. 2/MB
1GB
Rs. 2/MB
Rs 325/month Data Based
30
8.1.3. Bharat Sanchar Nigam Limited (BSNL) Bharat Sanchar Nigam Ltd (BSNL) is a public sector undertaking, wholly owned by the Government of India. BSNL has decided to launch its Data Services on CDMA 2000 IX by using BSNL Internet Connect Card (ICC) based on broadband connection for laptop users in India. The CDMA IX ICC will provide Internet Service @144kbps to computer users on their laptops as well as on desktops. This service will be available in all those locations wherever CDMA IX MSC based coverage is there. However, during roaming the said Internet connectivity will not work at present. The following two types of data Cards will be available for BSNL customers:
(A) Network Interface Card (NIC): For internet speed up to 144 Kbps.
(B) EVDO Card: Internet speed up to 2.4 Mbps. The Tariff of this service is around 550Rs/month for speeds upto 2.4Mbps in most cities in India. Though there are reports that the pricing differs based on cities and starts at 400Rs/month to 550Rs/month.
City Wire tariff plans charges data card are shown below: Pricing in UP Plan 1 - 1650 Down Payment + 400Rs/monthly Rent Plan 2 - 3600 Down Payment + 250Rs/monthly Rent Pricing in Jamshedpur (Jharkhand) Plan 1 - 2460 Down Payment + 750Rs/monthly Rent Plan 2 - 3600 Down Payment + 250Rs/monthly Rent Pricing in Chennai Plan 1 - 3500 Down Payment + 250Rs/monthly Rent 31
8.1.4. Vodafone -Essar (Erstwhile Hutchison Group) The Hutchison Group provided GSM mobile services in 13 circles across the country. Its main equity partner is the Essar Group. Vodafone recently launched its its wireless internet device like
Vodafone Mobile Connect Globe Trotter EDGE data card Vodafone Mobile Connect USB Modem Vodafone Mobile Connect USB Stick
Globe Trotter EDGE is the superior PC Data Card solution delivering near broadband wireless capability to laptops and notebooks by providing EDGE and GPRS technologies in a single PC Card package The tariff charges of Vodafone’s data card are shown below: Monthly rental (Rs)
499
699
Free data
500MB
1GB
Usage charges
5P/10KB
5P/10KB
32
9. Reliance Netconnect 9.1. Introduction Reliance Communication erstwhile Reliance Infocomm always remained technological, market leader in CDMA mobile business. Its high brand awareness, market acceptance as a technological, economical leader in various segment of mobile business and high brand equity were compelling reason to penetrate and develop entire value chain of the both mobile and broadband based business.
9.2. Reliance Communication’ products in Reliance Netconnect Department Reliance has range of products for both office and individual internet usage. Reliance Data card is the superior Data card solution delivering near Broadband wireless capability to laptop & desktop .Reliance Data card enables connection to the internet at data speed up to a maximum of 144 kbps. Reliance is currently the best wireless connection in India which can be used for both laptops and desktops. There are two types of Data card are presented by Reliance.
33
1) PCMCIA Card (Personal Computer Memory Card International Association) Mainly for Laptop. Which Laptop is supporting PCMCIA Slot. Data Card company is ZTE.
2) USB Data Card (Universal Serial Bus) Supporting USB Slot. For Laptop & Desktop both. Direct USB connector – no need for adaptor or cable. (ZTE) Slim, sleek and stylish Plug and Play – No need to install drivers – just connect and surf using the Windows dialer. Retraceable antenna – better signal strength in low RF areas.
9.2.1. Value Based Plan Plan
Freedom
Freedom Plus
Monthly Rental (Rs)
650
900
Monthly Rental for Voice Service
NIL for NJ 149 Data, for other plans as applicable
Platinum 1500
NIL for NJ 149 Data, NIL for NJ 149 Data, for other plans as for other plans as applicable applicable
Total Free Data Usage Hrs
N.A
N.A
N.A
Free Usage Peak Hrs
N.A
N.A
N.A
Free Usage Off Peak Hrs
N.A
N.A
N.A
Free Data Usage in GB
1 GB
1.5 GB
Unlitted
Additional Data Usage Rate
Rs.2/Mb
Rs.2/Mb
N.A
34
Free SMS Per Month
100Local & National
100Local & National
100Local & National
9.2.2. Advance Rental Plan Plan Monthly Rental (Rs)
12 Months ARP 0*
24 Months ARP 0*
Zero Rental Plans 0
NIL for NJ 149 NIL for NJ 149 Data, Rs. 174 for NJ 149 Data, for other for other plans as Data, for other plans Monthly Rental for Voice Service plans as applicable applicable as applicable Total Free Data Usage Hrs
N.A
60 Hrs.
N.A
Free Usage Peak Hrs
N.A
20 Hrs
N.A
Free Usage Off Peak Hrs
N.A
40 Hrs
N.A
Free Data Usage in GB
1 GB
N.A
N.A
Rs.0.5/min
Peak Hrs Rs.0.60/min off Peak Rs. O.30/min
400 Local
N.A
Additional Data Usage Rate Free SMS Per Month
Rs.2/Mb 100Local & National
9.2.3. Time based plan Plan Monthly Rental (Rs)
Swift 40
Freedom @ Night
400 NIL for NJ 149 Data, for other plans as applicable
400 NIL for NJ 149 Data, for other plans as applicable
45 Hrs.
60 Hrs
N.A
15 Hrs
20 Hrs
N.A
30 Hrs
40 Hrs
Unlimited
N.A
N.A
N.A
Swift 03
300 NIL for NJ 149 Data, for other Monthly Rental for plans as Voice Service applicable Total Free Data Usage Hrs Free Usage Peak Hrs Free Usage Off Peak Hrs Free Data Usage in GB
35
Additional Data Usage Rate Free SMS Per Month
Rs.0.5/min Rs.0.5/min 300 Local
Rs.0.5/min
400 Local
N.A
9.2.4. Prepaid Options
Product Name
5 hours Internet 10 hours pack Internet pack
25 hours Internet pack
Unlimited Internet pack
Prepaid Data RCV including Taxes
111
202
404
1501
Core Validity Days
0
0
30
30
Netconnect Validity Days
30
30
30
30
Free Local SMS
50
100
300
300
Netconnect minutes if entire usage is in Peak hours
300
600
1500
Unlimited
Netconnect minutes if entire usage is in off Peak hours
600
1200
3000
Unlimited
9.3. Evaluation Criteria & Parameter of Competitors Used for
Reliance
Airtel
TATA Indicom
Vodafone Laptop & Laptop & Desktop Desktop
Laptop & Desktop
Laptop & Desktop
Technologies
CDMA
EDGE
Interface
USB/PCMCIA
USB/PCMCIA
USB/PCMCIA
USB/PCMCIA
Price
2820
3350
2999
Speed
Up to 144KBps
100-115KBps
Up to 153.6 KBps
5999 Up to 144 KBps
Voice Call
Yes
yes
Yes
N/A
SMS
Yes
yes
Yes
yes
National Data Roaming
Yes
yes
N/A
N/A
No of Tariff
9
4
8
2
500 MB Free
N/A
Rs, 350
N/A
Rs. 499
EDGE
Tariff
512 MB Free
N/A
N/A
Rs.500
N/A
1 GB Free
Rs.650
Rs. 599
Rs.650
Rs. 699
1.5 GB Free
Rs. 900
N/A
N/A
N/A
2 GB
N/A
N/A
Rs. 900
N/A
36
Unlimited
Rs. 1500
Rs. 999
Rs. 1099
N/A
5 Hrs Free
N/A
N/A
Rs. 150
N/A
30 Hrs Free
Rs. 300
N/A
Rs. 325
N/A
40 Hrs Free
Rs. 400
N/A
N/A
N/A
Unlimited (night)
Rs. 400
N/A
N/A
N/A
Minimum Rate
Rs. 300
Rs. 49
Rs. 150
Rs. 499
Maximum Rate
Rs. 1500
Rs. 999
Rs.1099
Rs. 699
Additional Data Usage (size)
Rs. 2/MB
For Rs. 49 - .10/10 KB For Rs. 350 - Rs.5/MB For Rs.599 - 3/MB
Rs. 2/MB
Additional Data Usage (Time)
Rs. 0.5/min
N/A
8AM - 12AM:50p/min 12AM -8AM :25p/min
Free SMS per Month
For Rs. 300 - 300 For Rs. 400 - 400 For Size - 100 Local & For Rs. 599 - 100 Local For 999 - 100 local National
N/A
Voice Call for company to company (local)
Rs. 1.79
Rs. 1.99/min
Rs. .50
Voice Call for company to Other (Local)
Rs. 1.79
Rs. 1.99/min
Rs. 1
Voice Call for company to company (STD)
Rs. 2
Rs. 2.99/min
Rs.1.69/min
Voice Call for company to Other (STD)
Rs. 2
Rs. 2.99/min
Rs. 2.65/min
9.4. Reliance Data Card - an insight Reliance data card has been developed as technologically superior. Reliance's cutting edge CDMA2000 1X technology offers pan-India coverage. Internet can be assessed in 2200 towns across in India soon to be increased to 5700 towns. These can be used to connect to the Internet from laptops as well as Desk top PCs.
37
Features:
Uninterrupted high-speed wireless Internet connectivity Better surfing speeds, with download speeds up to 144 kbps High download speed of heavy email attachments One-time installation of the dial-up software without the need to change the dial-up configuration Hassle-free connection o Connect instantly (No line busy / waiting tone) o Easy to remember username / password (your phone / card number).
38
High
Category Development Index
Low Low
Low
Brand Development Index
High
9.5. Packaging
With data card as a utility product in India, the packaging, Point of purchase plat a minor role in consumers’ mind while deciding which product to buy.
The Reliance PCMCIA card has been designed and packaged with a old Reliance Infocomm’s green and blue theme in mind .The USB modem comparatively looks much futuristic. It comes in
39
black in colour, overall new look of the new USB modem is attractive enough to grab the attention of customer at Point of Purchase.
9.6. Price
Reliance Netconnect has dropped their prices on new data cards purchased because their competitor [Tata] has offered free 2 months internet services. According to the new pricing Reliance USB Modems would now be available from 2299 Rs. rather than the old pricing of 2850Rs. This price drop is for a limited time also comes with a 2 months unlimited internet usage for free. The best part of Reliance Netconnect is that they don’t charge which on roaming and also have an excellent network services
Pricing of USB Modems: USB Modem for Laptops & Desktops: 2299 Rs. PCMCIA Card for Laptops: 2620 Rs.
9.7. Promotion Data card is a specialty product .That is why promotional activities are mainly focused around in store promotional activity as well as other 40
medium like print media, hoarding and posters. Reliance data card doesn’t have any brand ambassador as of yet. But, for the data card not been much of advertisements.
9.8. Bundling Bundling has always been the norm for reliance data card. This is mostly due to the fact that consumers have to purchase tariff plan with all data cards. There is always at least one trade promotion across both data cards throughout the year. Currently it’s giving free data card for HDFC bank card holder.
41
10. Market Research 10.1. OVERVIEW OF RESEARCH
10.1.1. Problem or opportunity?
Study and analyses of pre, during and post sales perception of consumer towards Internet Data cards especially Reliance Internet Data cards.
To understand the market segmentation in the light of Indian Data card market Gauge brand recall for various data brands, specifically Reliance Internet Data cards. Map the Data card market and competitive positioning within it. To understand the buying intention of and analyze the effect of non-attribute factors. To understand the brand loyalty of customers towards Data cards. Identify the parameters that play the most important role in a consumer’s choice of buying Data cards using Factor and Cluster analysis.
42
10.1.2. Background of the study
The Internet has grown tremendously during the past years. It radically changes the way people live, work and consume. It represents a tremendous opportunity as well as threats. Internet usage in India continues to grow at a slow but steady pace, both in breadth and depth, with the overall internet-using population in urban India reaching 30.32 million - a growth of 28% from April 2006 to April 2007. The penetration of the internet among urban Indians stands at 9% now, assuming the total urban population at 336 million (Juxt Consultant 2006) Unlike the '70s and '80s when business-related travel was not seen much, the '90s, particularly the dawn of the twenty-first century, has witnessed intensive business travels, and this is gaining momentum with time. India too is on the move and wants to stay connected anytime, anywhere-whether on a train or bus, in a hotel or conference hall, within India or abroad. Meeting this need of business travelers are data cards and USB modems that have become the preferred solution, even before wireless mobile broadband is introduced in the country. At present, there are 10 mn data cards, USB modems, and Internetenabled mobile phones in the Indian market. 43
With India on the move, the data card market is flourishing even as low, inconsistent speed remains an issue. In this already competitive market, it becomes essential for Internet data card players to understand the different factors that affect people using the Internet data card as a new wireless device for internet connection There are many benefits that attract people to choose internet data card for access to the internet
as convenience, time saving, wireless
connectivity and possibly affordable , however, many people are often hold back as fear of low speed, high usage charges and using issues in relation to internet data card usage.
10.2. An overview of internet and wireless connectivity 10.2.1. Definition of internet
The Internet is a worldwide, publicly accessible series of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP). It is a "network of networks" that consists of millions of smaller domestic, academic, business, and government networks, which together carry various information and services, such as electronic mail, online chat, file transfer, and the interlinked web pages and other resources of the World Wide Web (WWW). 44
60000000
5.00%
50000000
4.00%
40000000
3.00%
30000000
2.00%
20000000 10000000
1.00%
0
0.00% 1
2
3
4
5
6
7
8
9
% Penetration
Users
Penetration of Internet in India
10
Years Year
Users
% Pen
Source: India Online 2007, Juxt Consultant report
10.2.2. Common uses of the Internet
E-mail World Wide Web Remote Access Collaboration Streaming Media File Sharing Voice Telephony
45
10.3. Driving growth of internet data card Growing businesses in all segments, necessity to access emails and corporate applications during urgent business trips and the urge for some entertainment while on the move are some drivers increasing the demand for data card usage. Apart from these factors, as the name of Tata Indicom's data card, 'Plug 2 Surf', suggests, ease of use with plug and play factor is also a driver for growth. SP Shukla, president, Personal Business, Reliance Communications, says that faster surfing and higher download speeds, convenience of surfing the Internet while on the move, simple to use, and affordable tariffs are among the key reasons for the data card growth, in both the laptop and desktop segments. Wireline broadband connections are yet to penetrate the vast semi-urban and rural parts of the country where entrepreneurs, officials, students, etc have the need to surf the Internet for various purposes. Though the laptop penetration in these areas has not made a significant mark, desktop penetration is comparatively more. With data cards offering convenient access to the Internet, a number of companies have started to tie up with service providers to avail bulk network connections for their employees on the go and allow them to utilize their time during business travels. Since data cards can be used with desktop also, it cuts down the office infrastructure costs as well. With the data card segment witnessing steady growth, affordability will go up, which, in turn, will drive 46
growth. “As the data card growth increases, speed evolves and prices come down, affordability will go up and more users can begin to think of data card as an affordable solution,” says an Airtel spokesperson. And growth of mobile telephony in India has created users with specific needs like m-commerce that require wireless Internet, driving the wireless data card growth. Once the concept of mobile wallet and its applications hit the market in India in the near future, the wireless data card segment is also expected to witness an exponential growth. Apart from this, Internet charges in costly hotels are very high. With the availability of data cards and USB modems, frequent business travelers who stay in costly star hotels can access the Internet and corporate applications on their laptops and avoid using the Internet facility at hotels, saving on high Internet charges.
10.4. The Deterrents
All players are competing with each other to give affordable tariff rates for their data cards. But still the rates are very high when compared to countries like the UK. In the UK, wireless broadband connection through 3G technology costs about £10 per month and that too with a data download speed faster than 256 Kbps. International travelers who have used data cards with faster speed are not satisfied with data cards and USB modems services offered in India. So, in India, 47
data cards mean accessing a bare minimum net connectivity only for a sizable population. That is why it is said that data cards have not exactly taken off in India.
11. Consumer behaviour theories
11.1. Consumer perception and consumer behaviour
According to Rice (1993), perception is the initiator of behaviour. It can also be seen as a process of information extraction. Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture (Kotler, 2000). Different people tend to perceive quite differently even when they are exposed to the same reality. A set of factors, e.g. individual responses, determine an individual’s perception process and lead to individual differences. The most important is that people’s perceptions are often more important than the reality in marketing (Kotler, 2000).
The study of customer behaviour provides a sound basis for identifying and understanding the factors that influence consumers purchase on line. Schiffman and Kanuk (2000) state that the behaviour that consumers display in searching,
48
purchasing, and evaluating products/services is those that they expect to fulfil their needs. Although perception and behaviour are typically treated as two completely separate phenomena, i.e. the input and output respectively, it has been suggested that perception and behaviour are in fact two sides of the same phenomenon and are closely related to each other (Rice, 1993). In order to understand what customer perceive and how they act to affect their perceptions, study of perception and behaviour should be treated as one integral part.
11.2. Consumer decision process
At present, the consumer decision process model has been well accepted. This model of purchase as decision process is explained in more detail by Thorelli et al. (1975). Thorelli’s
decision model illustrates the type and shows there are a
series of semi-discrete steps which take place over time for the buyers and purchasers.
11.2. 1Predispositions (Before Purchase): According to Thorelli et al (1975), the prospective buyer possesses a certain stock of cognitive content, including his own personality or self-concept, attitudes and 49
opinions both in general and on specific products, and stored information and past experience. This stock has been formed as a result of his interaction with his environment over time, and it will help determine the environment in which he places himself in the future as well as influence his perceptions of that environment.
11.2.2. Product Need: As a result of either cognitive activity or some environmental stimulus, the buyer recognizes a need which is capable of being satisfied by a product or service. In other words, the need is often triggered by internal or external stimuli. Some authors also take this need recognition stage as the entry point. Chaston (2001) argues that the potential consumer will not implement any of the other steps in the buying process until need recognition has happened.
11.2.3. External Search: Thorelli et al (1975) describe that this stage represents all search of the external environment for alternative solutions as well as for information helpful in evaluating these alternatives. The search for information occurs on an internal and external basis (Gilbert, 1999). The internal search for information from previous experience might be relevant to the present purchase situation. The extent and nature of external search for information likely in any given purchase 50
has been the subject of a great deal of research. When searching for information in the external environment (e.g., friends and family), consumers focus on those relevant attributes that are available and are diagnostic (Dick et al., 1990).
11.2.4. Evaluation of Alternatives: This stage consists of the physical and cognitive activities involved in comparing alternatives on the basis of information gathered from external search above. According to Kotler (2000), the consumer arrives at attitudes toward the various brands through an attribute evaluation procedure and most buyers consider several attributes in their purchase decision. These attributes used by consumers for evaluation are also called choice criteria. Jobber (2001) has made a good summary of these choice criteria. In fact, consumers attempt to optimize the trade-off between product benefits, product costs, the desired personal utilities and other variables. 11.2.5. Purchase Activity: Purchase activity involves the actual final decision and physical activities involved in making (or not making) the purchase. This stage includes the actual transaction. However, as suggested by Kotler (2000), perceived risks of a consumer can heavily influence his decision to modify, postpone, or avoid a purchase decision. Therefore it is necessary for marketers to understand factors
51
that might provoke perceived risk in consumers and work out solutions to reduce that. 11.2.6. Post Purchase Behaviour: This step is concerned primarily with the buyer’s use of the product purchased. After purchasing the product, the consumer will experience some level of satisfaction or dissatisfaction which will influence a consumers’ subsequent behaviour. Dissatisfied consumers may abandon or return the product, they may even complain to the other group (Kotler, 2000). It is clear that satisfactions and dissatisfactions created by product performance will be important determinants of attitudes and information stored as inputs to future purchase decisions.
11.2.7. Predispositions (After Purchase and Use): This stage suggests that following the purchase process, the buyer (or non-buyer) is left with cognitive content which may be quite different from that which was present at the beginning of the process. Buyers may change their attitudes, information and experience due to reasons of time and events. All of these may serve to change substantially the nature of the decision process for future purchases of the same type.
52
11.3. Consumer perception
11.3.1. Introduction Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. This works well, for example, when we “see” a friend three hundred feet away at his or her correct height; however, our perception is sometimes “off”—for example, certain shapes of ice cream containers look like they contain more than rectangular ones with the same volume.
11.3.2. Factors in perception Several sequential factors influence our perception. Exposure involves the extent to which we encounter a stimulus. For example, we are exposed to numerous commercial messages while driving on the freeway:
bill boards, radio
advertisements, bumper-stickers on cars, and signs and banners placed at shopping malls that we pass. Most of this exposure is random—we don’t plan to seek it out. However, if we are shopping for a car, we may deliberately seek out advertisements and “tune in” when dealer advertisements come on the TV
Exposure is not enough to significantly impact the individual—at least not based on a single trial (certain advertisements, or commercial exposures such as the “Reliance communication” logo, are based on extensive repetition rather than 53
much conscious attention). In order for stimuli to be consciously processed, attention is needed. Attention is actually a matter of degree—our attention may be quite high when we read directions for getting an income tax refund, but low when commercials come on during a television program. Note, however, that even when attention is low, it may be instantly escalated—for example, if an advertisement for a product in which we are interested comes on.
Weber’s Law suggests that consumers’ ability to detect changes in stimulus intensity appear to be strongly related to the intensity of that stimulus to begin with. Several factors influence the extent to which stimuli will be noticed. One obvious issue is relevance. Consumers, when they have a choice, are also more likely to attend to pleasant stimuli (but when the consumer can’t escape, very unpleasant stimuli are also likely to get attention—thus, many very irritating advertisements are remarkably effective). One of the most important factors, however, is repetition. Consumers often do not give much attention to a stimuli—particularly a low priority one such as an advertisement—at any one time, but if it is seen over and over again, the cumulative impact will be greater.
Surprising stimuli are likely to get more attention—survival instinct requires us to give more attention to something unknown that may require action. A greater contrast (difference between the stimulus and its surroundings) as well as
54
greater prominence (e.g., greater size, center placement) also tend to increase likelihood of processing.
Subliminal stimuli back in the 1960s, it was reported that on selected evenings, movie goers in a theater had been exposed to isolated frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie. These frames went by so fast that people did not consciously notice them, but it was reported that on nights with frames present, Coke and popcorn sales were significantly higher than on days they were left off. This led Congress to ban the use of subliminal advertising. First of all, there is a question as to whether this experiment ever took place or whether this information was simply made up. Secondly, no one has been able to replicate these findings. There is research to show that people will start to giggle with embarrassment when they are briefly exposed to “dirty” words in an experimental machine. Here, again, the exposure is so brief that the subjects are not aware of the actual words they saw, but it is evident that something has been recognized by the embarrassment displayed.
11.4. Consumer behaviour towards Internet data card When consumer purchase internet data card they still perform a similar sequence of tasks: searching for information about different products, evaluating these 55
alternatives, and transacting the chosen alternative. However, the family and friends has great impact on these activities.
11.4.1. Problem recognition: The starting point is feeling the need or recognition of a problem. The need for accessing internet at anywhere can trigger the recognition of a need or problem and can have significant impact by encouraging customers to begin the information search process (Breitenbach and van Doren, 1998).
11.5. Information Search: Once customers identify the need they may seek information about retailers or products to help them satisfy. Customer search regarding internet data card could be limited because it’s a specialty product. Our analysis has shown that in terms of internet data card customer mostly refer to family and friend as reference group. These reference groups affect buying decision offering information like price, tariff plan availability and so forth. Providing rewards for specific purchasing behaviors for instance friends could appreciate that you could access internet at anywhere if you are carrying a laptop. By identifying and affiliating with reference groups, consumers create, enhance, and maintain their self-image. Customers who want to create an image of mobile, technologically 56
updated person as well as want to be seen as members of a higher social class might buy internet data card from Reliance or other competitor’s products.
11.6. Product Evaluation: During this stage, consumers process different product information and make a final value judgment. The multiattribute model provides a useful way for summarizing how customers use the information they have about alternative brands of internet data card. From our consumer behaviour analysis we have found out that
on this stage customer evaluate data card on its several
attributes like price, net speed, tariff plan which come along with, looks etc and they also decide which attributes are most important for them. The multiattribute model shows that how a consumer gives weights of importance to the various attributes of a data card. A sample multiattribute model which is actually has been taken from one of our questionnaire shown that how a consumer gives importance to different product attributes of data card. No.
Attributes/Benefits
Rating
1.
Price
4
2.
Easy handling
3
3.
Net Speed
5
4.
Signal Strength
5
5.
Availability in store
3 57
6.
Tariff plan
4
Total evaluation score for each attributes is 5.From the above sample table we can see that consumer is giving more importance to net speed and signal strength. So marketer should put more focus of highlighting these two attributes
11.7. Purchase Activity: Its not necessary that customer will always purchase a brand or data card with evaluation. The data card offering benefits (having the highest evaluation) may not be available in the store, or the customer may feel that the risks outweigh the potential. During purchasing customer also may feel that their data card might not be able to meet their expectations. Therefore retailer should ensure that their sales persons are knowledgeable enough and they are also skilled presenter of their product, otherwise it could raise confusion in customers’ mind during purchasing of data card. Reducing the actual and perceived time of purchasing.
11.8. Post Purchase Activities: As we know buying process doesn’t end when a customer purchase a product. From focus group interviews we have come to know that after making a purchase of data card, customer evaluate their experience on the basis of net 58
speed, signal strength amount of money they have spent. Customers often feel that service providers do not deliver what they promise. They feel players should present the terms and conditions and tariff plans/schemes in clear terms. Mentioning every small detail regarding the tariff plans must be included in the bill. For example, if a company intends to collect an advanced monthly rental from customers, then it has to mention that in its tariff plan, so that customers are not shocked when they see a bill that includes monthly advance rentals as well. This kind of practice might keep customers away from going for a particular brand.
11.9. Perceived benefits of Internet data card
Among the process there are various factors that might influence consumers¡¯ purchase during their purchasing process. Many of these factors also reflect the advantages and disadvantages of Internet as a shopping medium. The advantages or benefits currently conceived by people are described as the followings.
59
11.9.1. Convenience: From our questionnaire survey and focus group discussion we have come to know that when a customer thinks to purchase a data card for accessing internet they mostly its convenient to access internet at any where at any time. Especially those who have to extensively traveling its quite convenient for them to get connected with World Wide Web!
11.9.2. Time saving: Some time data card also proves time saving from the customers especially for business executives who have to travel extensively due to their job purpose. If they are using a data card for accessing internet they don’t have to find out a cyber café at an unknown place.
11.9.3. Economical: From our secondary research we have found that for younger group of consumers (age group of 18-28) who generally spend a lot of time for downloading different kind of materials like music, picture, data, due to availability of some attractive tariff plans offered by the different players (Reliance’s Freedom plus) along with their respective data cards, its seems a must have utility device for all young laptop users. 60
11.10. Perceived risk of Internet data card Perceived risk can be defined as the uncertainty that consumers face when they cannot foresee the consequences of their purchase decision.
Customer
perception of risk varies depending on individuals, situation and product. The degree of risk that consumers perceive and their own tolerance for risk taking, are factors that influence their purchase strategy (Schiffman and Kanuk, 2000). Individuals tend to reduce perceived risk to some acceptable level in any given purchase situation.
11.10.1. Risks of internet connection speed: Internet connection speed refers to the data transfer rate from the Internet to your computer. Basically that means the amount of time it takes your computer to download a given amount of data. Internet connection speeds are usually measured in Kbps (kilobits per second, or thousands of bits per second) or KBps (kilobytes per second). According to our study, consumers already have a predisposition that data card do not provide good internet connection speed, so during products evaluations and purchasing activities they mostly think about product attributes e.g. internet connection speed, signal strength. Therefore here implication for management is during product evaluation; purchase activities, retailers must take some 61
necessary measures to reduce the uncertainty in the customer mind by aggressive promotional strategies, especially focusing on innovating below the line (BTL) marketing activities, giving excellent product demonstrations during purchase and most importantly reducing the cognitive dissonance during post purchase behaviour by giving enough assurance about product qualities, warranty as well as excellent after sale service.
11.11. Research Objective 11.12. Research Question What is the inter-brand recall of Internet data card and their existing image in the consumer’s mind? What is the effect of non-attribute factors on the purchasing decision of Internet data card? How strong is the brand loyalty of customers towards Internet data card? What are the factors that play the most important role in a consumer’s choice of buying Internet data card?
11.13. Research Boundaries
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The research was conducted in Howrah and the respondents were chosen on the basis of their usage of Internet data card.
11.14. Research Design
Problem
Causes of the problem
Exploratory research
Descriptive research
Causes of the problem
Phase One -> Secondary Data In the initial phase of the project we focused on secondary data collection. The data collection primarily focused on
History of Reliance Communication The financial results of Reliance Communication Products of Reliance Communication 63
Organizational structure The competitors in the market The strategy adopted by Reliance Communication and its competitors in the market. The secondary data collected in the first phase of the project helped the group in getting better understanding of the Internet business and the various brands competing in this market.
Phase Two -> FGD After the secondary data collection was complete, two focused group discussions were done. A group of 3 people and a group of 5 people were used for the two FGDs. Through these FGDs, the various attributes that a person looks for in the data card were listed down. FGDs also helped the group in understanding the buying behavior, the consumption pattern, the influencers etc which further helped in preparation of the questionnaire.
Phase Three -> Questionnaire From the results of FGDs, a pilot questionnaire was formed. The purpose here was to get an accurate snapshot of particular aspect of the market environment hence the pilot study was a descriptive research that identified all possible problems and factors influencing buyer behavior. An analysis of the pilot questionnaire was done.
11.14.1. Validity and Reliability test of the questionnaire
11.14.2. Validity Test Validity tests how well an instrument that is developed measures the particular concept it is supposed to measure. According to Sekaran (1992), validity tests can 64
be grouped under three broad headings: content validity, criterion-related validity, and construct validity. Face validity is a basic, and a very minimum, index of content validity. After consulting with people that are acquainted with the topic, it proves that the dimensions and elements of the concept have been well delineated. This is further confirmed by the results from pilot study.
11.14.3. Reliability Test It is necessary that scales are reliable when they are included in the study. One of the most important aspects of reliability concerns the scale’s internal consistency which actually indicates how the items measuring a concept hang well together (Pallant, 2002). Cronbach’s alpha coefficient is a commonly used indicator of internal consistency. It reflects how well the items in a set are positively correlated to one another. The closer Cronbach’s alpha is to 1, the higher the internal consistency reliability (Sekaran, 1992). According to Pallant (2002), the ideal Cronbach’s alpha coefficient of a scale should be above 0.70. Internal consistency is firstly checked for the questionnaire scale of Section A. The Cronbach’s alpha coefficient for it is 0.8257, which means that scales are reliable. Questionnaire scales of Section B are also checked for the internal consistency. The result shows that Cronbach’s alpha coefficient is 0.7871; the value is also higher than 0.70, which indicates that reliability is good (See Table ). Table : Cronbach’s Alpha for Each Group of Questions 65
Number of questions- 17
11.14.3.1. Cronbach’s Reliability Test Perception towards Reliance data card
0.8257 Good
Perception towards Other brands
0.7871 Good
From the analysis, the redundant variables, hard to analyze variables etc were removed so that people could easily fill in the questionnaire. After the pilot test, the final questionnaire was formed. The questionnaire was designed to capture both quantitative and qualitative information. The overall design of questionnaire has tried to capture data in the following areas: To answer the question of what are the predominant elements of internet data card consumers in terms of: Profile and age Buying Behavior and Decision-making process and to answer how Reliance data card compares with competition and what should it be targeting to be able to grow Relative importance of different attributes Brand awareness and preference Brand switching behavior/ Brand Loyalty
11.15. Research Tactics Questionnaire (Refer section ) Sampling Plan 11.15.1. The theoretical population: All people aged 16-80 in Kolkata who have purchased internet data card. 66
11.15.2. Sampling Frame: Company own operated outlets, cyber café, institutions are places where the respondents where drew our respondents were interviewed.
11.15.3. SAMPLING PROCEDURE:
Calculation of the sample size by the help of the pilot survey. Sample size of the pilot survey: 30 Formula use
Mean (μ): X bar ± 1.96 σ/√n
1.96 For 95% confidence level X bar σ = Standard Deviation of the population μ = Mean of the population Length of the Confidence Interval = 2×1.96×σ ≈ 4σ/ 2 Here √n ≈ 4σ =2σ n = 4σ² (from the scale of five σ ≈4) n= 64 Therefore, the sample size for the final survey is 64
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11.15.4. Implementation Data Collection - Phase 1: FGDs
The FGDs were aimed at helping us to
Define the target segments better
Identify the important attributes that add in the target customer’s internet data card usage experience
The FGD questionnaire is given in section 14.5 A preliminary definition of main two segments is:
Experimenters and Adopters (EA): This category of consumer comprises of both males and females from the age group 18-24 years. These are the people who are willing to try new brands. These people are internet users and willing to pay for anything if net speed is concern.
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These people generally spend a lot of time to access internet. They tend to prefer surf any time of the day.
Suspicious Traditionalists (ST): These are men who are more traditional and not very much willing to try new brands. They are a slightly older age group (33-55 years) whose main concern is the ease of use, speed, affordability, availability of proffered product. They also show a preference for broadband connection which they are using.
11.15.6. Final Survey The Final Survey helped us to collect data on Main influencers towards the purchase data cards, Benefits that are most important for each segment of customers, Comparative brand and benefit perceptions, Trade-offs between price and quality, Preferred point of purchase, Consumer’s position within the Needs Hierarchy Model (Awareness, Knowledge, Liking, Preference, Commitment and Conviction) with respect to own and competitive brands and consumer satisfaction.
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11.15.7. Data Processing Age profile, product preference and place of purchase of the surveyed sample are mentioned in section 11.15.1 and 11.15.3 respectively.
Data Analysis
11.6.7.1. Brand Recall A sample of customers, which is representative of the Kolkata population, was surveyed and the first unaided recall of the brands by these customers was recorded. (Refer section 14.5) It was observed that Reliance data cards had the highest brand recall amongst all the competing brand of Internet data card. This can be attributed to various reasons like brand perception, usage pattern, advertisement expenditure etc. some of which would be analyzed in the subsequent sections. Buying Intention The survey administered had questions which measured the importance of various attributes like price, net speed, signal strength, offers & discounts of various data cards and specifically for Reliance data card.
11.6.7.2. Fishbein Analysis: The survey also measured the attribute scores for other competing brands like, Tata-Indicom, Vodafone, BSNL and Airtel. Along with the data card for Reliance, 70
an average attribute score was computed across the 64 samples for each attribute for each of the data cards brand. Fishbein analysis was performed by converting the Likert scale from 1 to 3 to -3 to -1. Consumer’s attitude about each brand was calculated and plotted as shown on below. (Section 14.15)
Average Perception Score of Each Brand 35 30 25 20 Series1 15 10 5 0 Series1
Tata-Indicom
BSNL
Airtel
Reliance
Vodafone
30.348
22.938
25.733
28.235
22.334
Chart: Consumer attitude about each brand
Tata-Indicom had the highest consumer perception score of 30.348 followed by Reliance and Airtel with a score of 28.235 and 25.733 consequently. But taking a look at individual consumer attitude score, we found that Reliance was preferred by almost 42% of the people surveyed and Tata-Indicom by 28%.
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11.6.7.3. Factor Analysis A factor analysis was carried out to obtain the group of attributes which can be grouped together. Hence 3 factors were obtained as follows – Factor 1 Product attributes (Net speed, Signal strength and Ease of Use)
Factor 2 Price Sensitivity (Tariff plan And Offers/Discounts)
Factor 3 Point of Purchase (Availability in Stores )
11.6.7.4. Perceptual Maps Attribute scores were averaged under each factor for each of the internet data card. Then graphs were plotted (Refer section 14.15) for the perceptual map along the dimensions as shown
Observations:
In Kolkata surveyed samples perceive that Reliance primarily targets consumers which are more focused on the product attributes like net speed, signal strength, ease of use etc whereas the perception of price sensitive consumer towards was found to be of an over priced brand.
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For price sensitive customer’s products like Airtel, Vodafone’s data card is less satisfying than Reliance.
The surveyed sample considered Reliance to have the best tariff plans among all the brands. This feature highlights the fact that offer and promotion is an important factor for the internet data card
market and
Reliance has been outperforming other competitors on this particular factor.
High satisfaction in the availability in stores further shows the robust distribution system that has put into place to cater to diversified markets.
Although not much differentiation can be introduced in the product per se (low satisfaction scores for all brands), still Reliance is found to be seen as a brand which brings out products with new features like free data card for HDFC credit card holder, bundling with other products like laptop etc.
11.7.5. Brand Loyalty The questionnaire had specific questions to measure the brand loyalty for the brand that the consumer was using at that point of time. From the graphs shown, 73
it can be concluded that the Brand loyalty in the internet data card segment is only 75% where customers would stick to it irrespective of the availability other data card with high speed with reasonable price. This figure says that 75% of the customers would rather go to some other retailer in search for their preferred internet data card than to buy some other brand from the other company’s outlet. Price sensitivity measured along the lines of a hypothetical price and change in tariff plans increase in their preferred brand was around 25%. This figure indicates that 75% of the customers do not shift from their preferred brand to some other brand because of a price hike in their preferred brand, provided it’s a reasonable price hike whereas 25% would move to some other brand. (Refer section 14.12)
11.7.6. Cluster Analysis and Segmentation K-means segmentation was performed based upon the factors thus obtained from factor analysis. The cluster analysis showed 3 clear segments. Description of the segments is as below Cluster 1 46% percent of respondents formed a part of this segment. With age group of 2328 years, this cluster formed the young age group segment. The majority of
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people in this segment (66%) use internet data card. In this segment 27.42% were Reliance customers and the rest 72.58% used competitor brands. With an average usage time of 240 minutes per day, this segment clearly forms a part of high usage cluster. They were passive information seekers yet skimmed through a lot of sources for seeking information about their purchase decision. Word of mouth formed the best source of information for this segment.
Cluster 2 29% percent of respondents formed a part of this segment. An average age of 30 years means this segment formed the middle age group cluster. 76% of the customers in this segment were business customers, i.e. use data card for business purposes. The business customers surveyed were primarily in Reliance R World; hence this segment may be interpreted appropriately. With 32% Reliance customers, among the rest, Tata-Indicom and Airtel were the competitor brands preferred among users in this segment (52% users). The level of information search was extremely low and thus can be said to be low involvement segment of the market. They did not refer to many sources and also had low importance ratings to the sources being referred to for seeking information about the product to aid their purchase decision.
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Cluster 3 25% percent of respondents were a part of this segment. The lowest average age of 38 years means this segment formed the aged Customers. Almost 96% of the customers in this segment used data card for personal purposes. This segment had 64% Reliance users and the competitor brands seem least preferred to this segment and can be said to form a big part of the reliance customer base. The customers used data card to access information and other personal purposes, and with a heavy usage rate is the opportunity segment for Reliance. The level of information search was extremely high among this group and thus can be said to be Intensive information seekers in the market. Among the sources they referred to, TV advertisements seem to be the most important source for this segment besides word of mouth. This was the only segment that gave credibility to ads on internet as a source of information. Relailer’s recommendation too formed a part of their purchase decision.
12. Recommendation And Conclusion 12.1. PLAYING WITH THE PLC:
Reliance has the widest internet data cards range and the deepest product line in internet data card market, its also has broadband business as well as internet 76
connection GPRS .This is a double edged sword because of the variety Reliance offer and the cannibalization that can occur. The segments thus formed and the components extracted indicate that different buyer groups have different decision variables, use data card for accessing internet for different purposes and have varied perceptions about brands. All the segments require different pricing strategies and hence Reliance should come out with different plans specifically targeting different groups. Reliance having several types of tariff plan but it would have improved network connectivity along with aggressive promotional strategies’ be an unbeatable advantage in upgrading the consumer throughout his lifetime and also making him brand loyal in the process. From the perception maps, we see that Reliance has an image of having high choice of tariff plans rates and usage costs. Further, it comes out that Reliance is not a user friendly service provider. Users have taken to Reliance essentially because of high recommendation from friends and family. According to our research weak signal strength and slow net connection speed could be a deterrent for Reliance data cards.
Hence, Reliance should aim to providing
higher network coverage, good signal strength, and more efficient response requests. This could be done by setting up more network towers and having a more customer friendly focus in store as well out store activities.
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Our analysis indicates clearly reliance is popular among the youth because of low usage rate. These users use data card mostly for entertainments. This target segment can be attracted by advertising in Television and internet. Also, word of mouth publicity clearly scores above all forms of information search, primarily because of its convenience and source credibility. Everybody whom we surveyed believed in consulting their “circle” for opinions while buying connections
12.2. Recommendations 4 P’s 12.2.1. Product: The products launched should focus on improving service response i.e. better customer service and greater network connectivity.
12.2.2. Price: It should keep focus on reducing usage rates and be a price leader for price sensitive heavy usage segments.
12.2.3. Promotions: One important finding of our FGDs and Consumer Survey was that not a single consumer was aware of the fact that Reliance has different tariff plans. This can be attributed to one or more of the following reasons:
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The brand equity of Reliance data card is very high (42% TOMR in our study). But the brand development is pretty low. The consumers have low involvement and do not search for information. This implies that wireless data card is becoming a commodity. Reliance has spent on advertisements mostly for the mobile business, not on internet data cards. Hence the information available to public is limited.
To discommodities the category, to increase customer loyalty and repeat purchase, promotions have to be done on a bigger scale than what is currently been done. The promotions should have more of a pull effect in the advertisements that communicate not just the price and offers/discounts but also the values, attributes which the consumer can relate to. In short, more information has to be communicated to the consumer through ads, To left the sales of internet data card Reliance can think to adopt of innovative give away strategy, for instance design laptops with manufactures in such a way that there will be a built in Reliance internet data card. It should focus on Television advertising and Internet ads primarily. Print ads do not seem to have that effective influence in purchase decisions of the sample. Our analysis has shown that word of mouth (WOM) marketing has a excellent effect on the consumer purchasing decision of internet data card. So 79
promotional strategies could be given focus on viral marketing campaign like on SMS, e-letters or blogs and so forth.
12.2.4. Place: Reliance should strengthen its distribution network and also focus on creating more web worlds with easy accessibility outside cities as they are perceived to be authentic by consumers.
Note: The recommendations have limitations of a small sample size and a simple sampling.
12.3. CONTINUE WITH UPGRADATION Reliance has been very successful in its strategy of upgrading the consumer in the mobile business segment. Reliance has made sure that it makes its consumers move up the product chain by introducing new, technologically superior products and phasing their PLC very well. But sadly, this approach is missing in the wireless data card segment. Though there are 3 variants, there has been no effort made to communicate to the consumer of the superior quality and attributes.
Hence, we suggest that Reliance adopt its “upgrading the consumer” strategy for the internet data card segment also. This up gradation has 2 main advantages 80
We can fully leverage the Product life cycle and the individual phases of the products in different markets
We can make the consumer loyal to the brand over his lifetime.
12.4. Future challenges
Introduce a product which would be designed specifically for Indian consumer and satisfy aspiration of youths.
To match the increased demand patterns in the country.
Launching of innovative products in regular and short intervals
Reliance products are descending the customer value hierarchy from that of a potential product towards an expected product. Competitors like Tata-Indicom, Vodafone, are moving up the hierarchy. So, Reliance will find it tough to charge the moderately high price it has tilled now charge.
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It is also highly likely that Reliance may not fully absorb the consumers who upgrade from slow speed internet connection device USB modem to broadband. Hence, Reliance’s market share might not grow as good as their competitor Tata-Indicom or BSNL.
Reliance’s major challenge lies in entering the premium market through an upgraded version of wireless data card the way it did in mobile business.
12.5. Store Centric Recommendations In order to increase the Reliance wireless data card sales in exclusive R worlds and other franchisees across the country management has to take some aggressive steps to ensure that customers who are evaluating alternatives are coming in store for purchasing a Reliance data card. According to our research outcomes some following measures can be taken Management has to ensure that C3 executives especially those who are dealing with internet connections and data cards and also other telecom products, have exhaustive knowledge about their own products. C3 executives should be given special behavioral training to recognize the customers’ expectations and convey the all benefits of the product accordingly. 82
Management has to ensure that their sales persons are updated with new schemes regarding product. Product knowledge as well as sales techniques of the sales personnel should be reviewed frequently by the senior management. C3 executives should be remained motivated through various incentives which are only proportionate to their target achievements.
13. Marketing Strategy
13.1. Segmentation
In the wireless data card market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of upgraded version of wireless data card for instance Vodafone recently launched wireless data card (Globe totter) specially meant for those who frequently travel abroad would help Reliance identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point
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of purchase decision makers and customers influenced by additional features are the factors on which we will segment the upgraded internet data card market.
Segment one-> is most prices sensitive and values additional feature the least. This segment has one third of our sample size. As Reliance is an economic brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will be a strategically appropriate decision.
Segment two-> is more influenced by attributes of the products and is not a price sensitive segment. Reliance through its wireless data card is currently catering to this segment. This segment has more than one fourth of the survey sample.
Segment three-> is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample.
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13.2. Positioning Market research
Market research results have been analyzed in section 12 of the report. The following conclusions from the survey help us in identifying the positioning of the Upgraded version of wireless data card:
Target market: - The target market has been identified as the customers who are concerned about the attributes of the internet data card but are not willing to shift from the current price band to a higher price band.
Competitor Brands: - The competitor brands have been discussed in Section 8 The upgraded data card will be competing with brands like Tata-Indicom and Vodafone. Choice Criteria: - As per our findings (Section 11.15.7.3.) the 3 factors on grouping attributes post factor analysis that contribute to the data card Purchase decisions are:
Factor 1 Product attributes (Net speed, Signal strength, Ease of Use)
Factor 2 Price Sensitivity (Price, Tariff plans And Offers/Discounts) 85
Factor 3 Point of Purchase (Availability in Stores and Package Design)
Customer Evaluation: - Perceptual maps in the section show how the customers evaluate Reliance with respect to competitive brands.
Perceptual map 4
, TataIndicom, 3.6
Price Sensitivity
3.5
, Reliance, 3.4 , Vodafone, 2.9 , BSNL, 2.5
3 2.5
, Airtel, 2.8
2 1.5 1 0.5 0 0
1
2
3
4
5
6
Attributes
Reliance data card needs to position itself above Tata-Indicom in order to attract the target segment.
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Perceptual Map 4.5
Tata-Indicom, Vodafone, 4.2 4 Reliance, 3.8 Airtel, 3.6
Product attributes
4 3.5 3
BSNL, 2.9
2.5
Series2
2
Series1
1.5 1 0.5 0 0
1
2
3
4
5
6
Attributes
13.4. Real Positioning In the survey conducted, Reliance had the top of the mind recall of 42%. This shows that Reliance has an excellent real positioning in the wireless data card market and Reliance data card leverage this positioning in the target market.
13.5. Psychological Positioning Reliance data card will primarily alter the attributes importance in the target segment by increasing the importance of attributes internet speed, signal strength etc and decreasing the importance of price. This will be consistent with its strategy of moving the customers up the value chain.
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14. Appendix
14.1. Reliance communication- Timeline
1999- Reliance Infocomm started its Project Planning. Mr. Dhirubhai Ambani understood it very well that information technology had the capacity to accelerate the growth of Indian economy leaving behind its backwardness and underdevelopment.
2000- Mr. Dhirubhai Ambani’s dream started to take in a shape. Optic fiber laying process commences in Gujarat, Andhra Pradesh & Maharashtra
2001- First Media Convergence Node made "Ready for Electronics" at Jaipur
2002-It’s a true gala time for Reliance Infocomm. First Base Transceiver Station (BTS) made "Ready for Electronics". Its obtained Obtains International Long Distance License from Govt. of India. Commissioned 1st 60,000 route kilometers Optic Fiber Backbone ring. Its established 1st Point of Interconnect (POI) in New Delhi. Hon'ble Prime Minister of India, Atal Behari Vajpayee e-inaugurates 88
Reliance Infocomm Hon'ble Union Minister for Parliamentary Affairs, Information Technology and Communications, Pramod Mahajan, inaugurates NNOC
2003- Reliance Infocomm Introduced Dhirubhai Ambani Pioneer Offer for Reliance India Mobile service. Launched Reliance Web World in top 16 cities as well as International Long Distance Services. Launched Reliance India Mobile Service commercially in top 92 cities with one million customers and India's first wireless Point of Sale (POS). Introduced "Monsoon Hungama" Offer: Instant multimedia mobile phone and connection for just Rs 501.Sets world record acquires one million customers in 10 days. Launched R Connect Internet connection cable. Reliance became India's largest mobile service provider within 7 months of commercial launches.
2004-International wholesale telecommunications service provider, FLAG Telecom amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocomm. Reliance Infocomm receives the Most Promising Service Provider of the Year 2003 (Asia Pacific) award at the Asia Pacific Technology Awards instituted by Frost & Sullivan. Introduced Railway Ticket booking from R World data applications suite of Reliance India Mobile. Reliance Infocomm
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bagged the CDMA Development Group's 3G CDMA Industry Achievement Award for International Leadership. 2005- Reliance introduced first e-recharge facility in CDMA in India. Reliance India Mobile announced mega rural plan to cover 4 lakh villages and 65 crore Indians by December 2005. XLRI’s Post-Graduate Certificate program in Logistics Supply Chain Management (PGCLSCM) launched on Reliance Web World's virtual classroom platform. First of its kind e-learning program in India. Reliance Communications, UK launched Reliance India Call service in England and Wales enabling callers to make high-quality calls to India from any landline or mobile phone at economical rates. Apollo Hospital and Reliance Infocomm join hands to provide top class healthcare service to millions of Indians in over a hundred Indian cities. Reliance Infocomm and China Telecom sign agreement for telecom services to provide direct telecommunication service, including a global hubbing service, to subscribers in the two countries.
2006-Reliance Infocomm launched "One Nation, One Tariff" to enable Reliance India Mobile prepaid users to call anywhere in India at Re one per minute. Reliance Infocomm introduced R World in Hindi to become the world's first operator to offer mobile data services in more than one language on the same handset. This will make it possible for millions of Indians to access the popular R World with hundreds of every-day-use applications in the national language. 90
Reliance Communications launched India’s first Talking Message Service (TMS) enabling its mobile users to send voice messages to not only other mobiles but also fixed wireless phones (FWP) and landlines. Reliance Communications launches Free Group Term Life Cover for its CDMA subscribers.
2007-Reliance Communications added a record 1.4 million subscribers in December ’06. Search Jobs & Classified Ads from Reliance Mobile World Reliance Communications ties up with Naukri.com. Reliance Classic' Makes Music - FM Radio Phones Launched at just Rs.1888. RCOM and QUALCOMM Collaborated on CDMA2000 Expansion. Reliance Communications adjudged World’s Top CDMA Operator at the Global CDMA Industry Achievements Awards Fete.
2008- Reliance Communications received Started-up GSM Spectrum. HDFC Bank tied up with RCOM, turns every Reliance Mobile into a credit card. One of the main strategic dimension of RCOM is extensive focus on all type segment of customers, in order to do that its recently started a religious portfolio by tying up with Sadhana TV. Keeping eye on Internet data card market scenario its also drop the data card price.
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14.2. SWOT ANALYSIS
Strengths Reliance has fully integrated IP-enabled infrastructure platform thus implying application convergence, service convergence and network convergence.
It has been successful in building right alliances in the form of network alliances with Ericsson and Cisco Systems, IT alliances with HP Compaq, interconnecting alliances. Thus it can focus on its main business of marketing its service.
Reliance has been able to maintain a strong distribution capability. It has a selling capacity of 25 million per annum as compared to Nokia’s 20 million per annum. It has 90000 handset outlets as compared to Nokia’s 42000. It has presence in 5000 towns serviced by 1500 distributors as compared to Nokia’s presence in 4600 towns serviced by 250 distributors/micro-distributors.
It can leverage its strength in wireless connectivity in the future to offer mobile telecom services. It has wireless connectivity available in 4500 towns with a speed of 144kbps.
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Backing by a healthy balance sheet of the parent company helps in investing in assets for long term growth. Also the Reliance culture focuses on financial conservatism, thus providing it with good human skills at managing capital.
Weaknesses The Reliance network does not deliver on the Quality of Service parameters as decided by Telecom Regulatory authority of India (TRAI). Due to this it suffers from high call dropping rates and a reduction in brand equity.
Reliance has a major presence only in C’ Circle. It needs to establish itself also in other circles so that it can compete with player like Bharti on a national scale.
Opportunities A strong economy and a growing market: The Indian telecommunication industry is amongst the fastest growing telecom markets in the world and is poised to deliver solid growth as a result of several economic reforms that have lead to strong GDP growth pegged at approximately 9.1% for FY 2007-08. Increasing per capita income supported by increased consumption is resulting in a greater-than-proportionate impetus for telecom growth. As India still remains
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one of the lowest penetrated markets, it is one of the most attractive telecom markets in the world today.
New technologies and paradigms: The trend towards adoption of Next Generation Networks (NGN) is global and the discussions in India are still at a preliminary stage. Technologies like Triple Play, wherein a single cable can deliver voice, data, video on demand and IPTV provide us with a unique opportunity to an integrated player who is well positioned to deliver this service.
Strong strategic partnerships: Strong strategic alliances with network companies may help Reliance Communication to focus on marketing its services. Alliances provide the service provider the access to technological know-how as well as best practices to enhance customer experience. It is important to leverage the strengths of our partners and benefit from their experience and know-how.
Introduction of number portability: Number portability would allow customers to retain their telephone numbers even after switching service providers or networks. Companies with better service delivery and customer care platforms stand to gain over their competitors. Extensive network coverage, coupled with aggressive pricing and innovative products and services would help in gaining a larger share of the market. Given a competitive position and focus on customer 94
delight, Reliance may be positioned to attract subscribers presently on other networks, as and when number portability gets introduced in the market.
Threats Regulatory decisions and changes: On the regulatory front, reduction in the entry fee and the annual license fee for National Long Distance and International Long Distance (ILD), combined with the impending implementation of Carrier Access Code (CAC) would lead to greater competition in the Long Distance segment. The implementation of Carrier Access Code would make it easier for customers to choose their long distance carrier, regardless of the access provider. A focus on offering value-for-money services to consumers would stand to gain from the introduction of CAC.
14.3. Product portfolio Reliance communication has the following consumer product lines ü ü ü ü ü ü ü ü ü ü ü
Mobile Wireless Phone Wireless Terminal Blackberry Broadnet Roaming Reliance Landline Reliance Netconnect Reliance Mobile Reliance India Call Reliance Passport
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Reliance communication has the following enterprise product lines ü ü ü ü ü ü ü ü ü ü ü ü
BlackBerry Office Centrex One Office Due Audio conference Reliance PCO Toll-Free ITFS Broadband Business Broadband Internet Leased Line>Virtual private network>IPLC Video Conferencing Internet Data Centre[IDC]
14.4. Retail Revolution:-Reliance World What a wonderful world -- Reliance World Reliance World (formerly Reliance Web World) first of its kind a retail store with telecom products and services in India, is a world-class nationwide chain of retail outlets for products and services of the Reliance – Anil Dhirubhai Ambani Group. It is designed to give the customer a delightful experience of the digital world of information, communication, entertainment and utility services. All Reliance World outlets are connected to Reliance’s countrywide optic fibre network. The Broadband Centre at Reliance World leverages this broadband network to bring you innovative digital services. With 242 Reliance World outlets across 105 cities in the country 96
14.5. Customer Survey Questionnaire
Customer Survey: Questionnaire Name: Date: Name of interviewer:
1. What is your age? Less Than 18 18-23 years
23-28 years
28-45 years
Greater Than 45
2. What is your occupation? Government Service
Private Service
Business Self-Employed
Student
Homemaker
Others (please specify) __________
3. How often do you get connected to Internet? At irregular intervals
Once a day
Twice a day
97
4. What type of data card you preferred to buy? USB Modem
PCMCIA Card
5. From where did you buy your data card? Company own outlets
Other place
6. Which brands of data card you are aware of? (TOM)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
7. Which brands of data card you are aware of (Aided recall)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
98
8. Which brands of data card you are aware of (Unaided recall) Reliance Tata-Indicom
Vodafone
Airtel
BSNL
9. Which of the following brands do you use personally? (Tick only one)
Reliance
Tata-Indicom
Vodafone
Airtel
BSNL
10. Please rate the following sources of information according to the level of importance of each source (1 – Least Important; 5 – Most Important) Friends ___
Family ___
Retailer ___
Advertisements___
Packaging ___
Magazines or newspapers ___
Cyber café ___
Any Other ___
99
11. How satisfied are you with Reliance Data card? (If used) Highly Satisfied
Moderately Satisfied
Neither satisfied nor dissatisfied
Moderately Dissatisfied
Highly dissatisfied
13. If your FIRST preference is not available then what do you do? Purchase some other brand from the same shop/ store.
Purchase the same brand from some other store.
14. If the price of your most preferred data card as well as tariff charges increases what would you do? Shift to another options or different brands of data card
Will be using the same brand
15. If you choose to shift then which Brand will you prefer? Tata-Indicom
Vodafone
Reliance
Airtel
100
BSNL
16. Please rate the factors given below on scale of 1 – 5 based on the s importance they hold for you in purchase decision of Data card. (1 least important to 5 most important)
No. Attributes/Benefits 1.
Price
2.
Easy handling
3.
Net Speed
4.
Signal Strength
5.
Availability in store
6.
Tariff plan
Rating
7. Offer/Discounts 17.Please rate the following brands on the scale of 1-5 for the attributes mentioned below i.e. write 5 if you feel the attribute is good enough to fully satisfy you and mark 1 if you feel the attribute could not satisfy you. (1 fully dissatisfied to 5 fully satisfied – Show cards with the ratings on them)
No.
Attributes
1.
Price
2.
Easy handling
3.
Net Speed
4.
Signal Strength
5.
Availability in store
6.
Tariff plan
Brands 1
2
3
4
5
TataIndicom
Airtel
Vodafone
BSNL
Reliance
101
Focus Group Discussion Format Introduction Presentation of the Purpose Discussion of the procedure
Focus Group Discussion (FGD) We conducted two FGD for our product-Reliance Data card. We also conducted Telephonic interviews with existing customer from company’s data base Focus Group 1: PG students from NSHM, Kolkata (Age: 18-24) Focus Group 2: Faculty members NSHM, Kolkata (Full time) (Age: 38-55)
Following are the questions that helped us in moderating the entire discussion and the answers that majority in the group agreed to:
1) Type Net connection have been used FG 1: The PG students now use mostly USB modem and data card for surfing FG 2: The faculty members now use broadband for surfing 2) What product first comes to your mind when I say Internet connection? FG 1: The PG students said Airtel, Reliance data card and BSNL internet connection FG 2: The Faculty members mostly use BSNL broadband 3) Different type of net connections you are aware of? FG 1: Came up with Airtel GPRS connections and also Reliance Netconnect FG 2: Came up with mostly BSNL and Reliance Netconnect,
102
5) The reason for using data card? FG 1: Sometimes just for peer pressure and convenient for using anywhere FG 2: Extensive traveling and easy access to internet 6) Does the data card really matter for net surfing? FG 1: no. only it can be taken anywhere. FG 2: not really.
8) Have you switched data card’s brands? FG 1: yes, once FG 2: no. not very recently. 9) If so, why? FG 1: just for bad speed FG 2: only sometimes. Better connectivity and charges of usage 10) Where do you purchase? FG 1: Company’s own outlets. FG 2: Company’s own outlets 11) Currently which type of net connection do you use? Are you satisfied? FG 1: Airtel GPRS, Reliance data card, BSNL broadband connection FG 2: Reliance data card, BSNL broadband connection 12) Information search? FG 1: ads don’t influence. Decision is made at the point of purchase FG 2: ads don’t influence. Many times decision is made before coming to store.
103
14) Have you seen an ad for Data card? FG 1: No, not really. Charges are not important like net speed as well as download speed FG 2: Yes, did 15) What do you expect from your net connections? (Speed, free usage etc.) FG 1: Speed. Dialup connection FG 2: Good offers, easy to handle, good coverage 16) The attributes you look for in your data card? FG 1: Good net speed, affordable price, Wire less connectivity FG 2: Affordable price, Ease of use 17) What do you expect from net connections? FG 1: Speed FG 2: Strong network (if USB modem and data card) quick connectivity, affordability.
19) Do you know the difference in pricing of Reliance data card plans? FG 1: The group wasn’t surprised with the price catalogue we provided FG 2: The group was surprised 20) Would you like to buy Reliance data card even if the price and tariff was further raised? FG 1: Depends on the budget we have FG 2: Yes 21) What do you think of Reliance data card? FG 1: Not sure
104
FG 2: Better compared to others
22) Why Reliance data card? FG 1: Good speed, attractive tariff plans, recommended by family and friends FG 2: Worth of money, recommended by family and friends
The two groups together came up with 7 attributes of data card after a few minutes. They had 3 attributes that overlapped as shown.
FG 1: Price Net speed Availability in stores Offers/Tariff plans Wire less connectivity FG 2: Ease of Use Availability in stores Quick connectivity Offers/Tariff plans Lasting Net Speed
COMMON ATTRIBUTES: Speed, availability in stores, offers/tariff plans,
105
14.6. Age Profile of Sample Population
8%
9%
14%
<18 23%
18-23 23-28 28-45 45>
46%
14.7. Internet Data Card Preference
11%
5% 28%
TATA INDICOM RELIANCE
14%
AIRTEL VODAFONE BSNL 42%
14.8. Recall Pattern
Unaided Recall of Reliance Brand 67% Aided Recall of Reliance Brand
89%
Top of the Mind Recall of Reliance Brand 77% 106
14.9. User Preference
11%
5% 28%
TATA INDICOM RELIANCE
14%
AIRTEL VODAFONE BSNL 42%
14.10. Respondents’ preference of Internet Connection
Preferrence of Internet Connection
11% Broadband 23%
pcmcia card 53%
usb modam General net connection
13%
107
14.11. Brand Satisfaction of Reliance
Satisfaction Level-Reliance Highly satisfied 11%
6% Moderately Satisfied
14%
41%
Neither Satisfied nor Dissatisfiefd Moderately Dissatified
28% Highly Disstisfied
14.12. Brand Loyalty Brand Loyalty in Internet Data Market If your FIRST preference is not available then what do you do? Option 1 Purchase some other brand from the same shop/ store Option 2 Purchase the same brand from some other store
Brand Loyalty
25% Other Brand Same Brand 75%
Price Sensitivity in Internet data card Market If the price of your most preferred brand increases what would you do? (Q 14) 108
Option 1 Shift to another brand Option 2 Still buy the same brand
Price Sensitivity
13%
Stick to current brand Other brand 87%
14.13. Fishbein Analysis Fishbein Attitude Model
Where,
Ab = Attitude toward the object (brand)
Wi = belief about the brand’s possession of the attribute
Xib = evaluation of the attribute as being good or bad n = there are a limited number (n) of attributes which the person will consider
109
Preferred Brand on basis of individual Attitude Score
17%
23%
Tata-Indicom BSNL Airtel
22%
Reliance
18%
Vodafone
20%
14.14. Average attitude perception score of each brand
Initial Eigen values Total
% of Variance
Extraction Sums Loadings
Cumulative%
Total
% of Variance
Cumulative%
1
2.705
24.201
24.401
2.805
24.542
23.294
2
1.881
14.443
31..768
1.798
16.547
41.643
3
1.431
13.563
52.338
1.502
13.516
54.543
4
1.124
9.688
64.075
1.543
10.872
63.098
5
.827
8.032
70.221
6
.435
6.437
78.334
7
.768
6.407
82.451
110
Average Perception Score of Each Brand 35 30 25 20 Series1 15 10 5 0
Tata-Indicom
BSNL
Airtel
Reliance
Vodafone
30.348
22.938
25.733
28.235
22.334
Series1
14.15. Factor Analysis Component 1
2
3
Price
-.328
.634
-.067
Easy handling
-1.20
.028
-.076
Net speed
.458
.327
.326
Signal strength
.336
.122
.398
Availability in store
.776
-.096
-.064
Tariff plan
.451
-.078
-.043
Offers/Discount
.169
-.112
.418
111
Score plot 3
Eigenvalue
2.5 2 1.5
Series1
1 0.5 0 1
2
3
4
5
6
7
Component number
14.16. Cluster Analysis Two Cluster Analysis Cluster 1
2
Attributes
4.5
3.9
Price Sensitive
3.7
2.9
Point of Purchase Additional factors
2
1
3.1
1.2
112
Number of Cases in each Cluster Cluster
1
42.000
2
38.000
Valid
89.000
Missing
.000
Three Cluster Analysis Final Cluster Centers Cluster 1
2
3
Attributes
2.8
3.3
2.9
Price Sensitive
2.5
3.0
2.1
Point of Purchase
3.4
3
2.8
Additional Factors
3.1
3.4
2.9
Number of Cases in each Cluster
Cluster
1
38.000
2
23.000
3
19.000
113
Valid
Missing
89.000
.000
114
Reference • • •
Berman, B Evans, JR Retail Management, A Strategic Approach, McMillan Publication 2001. Levy & Weitz, Tata McGraw-Hill Publishing Company Limited, 2006. Philip Kotler, K. K. (2006) Marketing Management, New Jersey, Pearson Education Australia.
•
Daft, Richard L. Organization Theory & Design. Thomson/ SouthWestern, 2007.
•
Ambani, Dhirubhai. Reliance Communication. 1999. http://www.rcom.co.in/Communications/Aboutus/aboutus_home.html.
•
Reliance communication- Timeline http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus _milestones.jsp
•
Products http://www.rcom.co.in/webapp/Communications/rcom/index.jsp
•
ANI. Andhra News. July 16, 2007. http://www.andhranews.net/Business/2007/July/16-Reliance-Communicationbuys-8239.asp.
•
Communications, Reliance. "Code Of Conduct." Reliance Communications. 2006. http://www.rcom.co.in/Communications/Aboutus/pdf/Code_of_Conduct.pdf.
•
http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus _business.jsp
•
Miller, Chris. SAP NetWeaver Magazine. 2006. http://www.netweavermagazine.com/archive/Volume_02_(2006)/Issue_02_(Sprin g)/v2i2a09.cfm.
115
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