Airtel and Vodafone in India

International Marketing








Name: Dumindu Katuwala
Student ID: 2948
Lecturer: Mr. Bruno Silva

Airtel and Vodafone in India International Marketing

Duidu Katuwala


Table of Contents


Executive Summary ........................................................................................... 2

Company Introductions ..................................................................................... 3
Airtel ............................................................................................................... 3
Vodafone ..................................................................................................... 4

Marketing Strategies ......................................................................................... 5
Airtel ............................................................................................................... 5
Vodafone ..................................................................................................... 6

How big a threat is Vodafone to Airtel? ............................................................ 8

How big a threat is Airtel to Vodafone? ............................................................ 9

Work Cited ...................................................................................................... 10


Airtel and Vodafone in India International Marketing

Duidu Katuwala
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Executive Summary
This paper focuses on Indias telecommunications sector taking two of the top three
telecommunication service providers in India. The two companies are Airtel and Vodafone.
Airtel and Vodafone hold the first and the second position in the Indian market in terms of
subscriber base. Airtel is originally an Indian company which was incorporated on the 7
th
of
July, 1995. Vodafone is a British multinational company which entered into the Indian
market in February 2007 by acquiring Hutch-Essar. Vodafone has been massively successful
since its inception in India which is reflected by the position Vodafone holds today in the
Indian market.
Vodafones entrance into the Indian market would be discussed further by relating to
the strategic decisions taken by Vodafone to compete with strong domestic companies like
Airtel and Reliance.
The different marketing strategies used by the two companies (Airtel and Vodafone)
will be discussed highlighting a successful marketing strategy used by each company. This
would enable us to understand the different strategically important methods used by the two
companies to reach a larger market share in India.
The strengths of each company would be discussed and also how one companys
strengths would affect another would be analyzed. The strength of one company is always a
weakness of the other and recommendations to overcome these weaknesses will be explained.







Airtel and Vodafone in India International Marketing

Duidu Katuwala
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Company introductions
Airtel
Bharti Tele-Ventures was incorporated on July 7, 1995 as a company with limited
liability under the Companies Act, for promoting telecommunications services. Bharti Tele-
Ventures received certificate for commencement of business on January 18, 1996. The
Company was initially formed as a wholly-owned subsidiary of Bharti Telecom Limited.
Today Airtel is a multinational telecommunications Services Company headquartered in New
Delhi, India. It is the largest cellular service provider in India, with 192.22 million
subscribers as of August 2013. Airtel is the largest provider of mobile telephony and second
largest provider of fixed telephony in India, and is also a provider of broadband and
subscription television services.
Its services sector businesses include mobile operations in Andhra Pradesh, Chennai,
Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Kolkata, Madhya Pradesh
circle, Maharashtra circle, Mumbai, Punjab, Tamil Nadu and Uttar Pradesh (West) circle. In
addition, it also has fixed-line operations in the states of Madhya Pradesh and Chhattisgarh,
Haryana, Delhi, Karnataka and Tamil Nadu and nationwide broadband and long distance
networks.










Airtel and Vodafone in India International Marketing

Duidu Katuwala


Vodafone
Vodafone Group PLC is a British multinational telecommunications company
headquartered in London and with its registered office in Newbury, Berkshire. It is the
world's second-largest mobile telecommunications company measured by both subscribers
and 2011 revenues (in each case behind China Mobile), and had 439 million subscribers as of
December 2011.
On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held
by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion. The whole company was
valued at USD 18.8 billion. The transaction closed on 8 May 2007.
Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers
16 telecom circles in India. Despite the official name being Vodafone Essar, its products are
simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage
throughout India and is especially strong in the major metros.











Airtel and Vodafone in India International Marketing

Duidu Katuwala


Marketing Strategies
One of the main purposes of this report is to compare the marketing strategies adopted by
Airtel and its rival international counterpart Vodafone. The comparison would help us
understand how both the companies have been challenging each other to gain a large sector
of the market share.
Airtel
Segmentation
Airtel has done their segmentation in terms of geographic and demographic
Geographic: Urban/City areas
Demographic: Middle Income earners in the age group of 20 to 28 years
Targeting
According to Airtels chief executive officer, Airtels main target market is the middle income level
youth who are living in the city areas. (Beckett)
Successful Marketing Strategy followed
In late-2002, Bharti Cellular Ltd. (Bharti), India's largest cellular telephone company released
a television commercial (TVC), which despite using the 'oft-repeated' celebrity endorsement
route was unusual in terms of its celebrity selection. Instead of using the usual movie
stars/sports celebrities, it chose one of the country's most successful music composers, A.R
Rahman (Rahman) to promote its brand.
The campaign attracted considerable media attention because this was the first time Rahman
had agreed to do a television commercial and also because, Rahman had been paid Rs. 10
million for the campaign, a sum usually unheard of, for celebrity endorsers in India. The
campaign received brickbats as well as bouquets in the media, both for the selection of
Rahman and the TVC's execution. However, Bharti claimed to have scored an ace in terms of
getting Rahman to compose five exclusive symphonies downloadable as ring tones for Airtel
users.
Airtel and Vodafone in India International Marketing

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The TVC was a part of the brand repositioning and restructuring efforts for Airtel, as part of
which, Bharti changed the brand's tagline in early-2002 from 'Touch Tomorrow' to 'Live
Every Moment.' The company also decided to undertake a comprehensive brand building
program for the company and chose the slogan 'Unlimited Freedom' for the same.
Commenting on these changes, company sources said, "Airtel's brand identity and campaign
will now have a new younger and international look and feel that builds on the earlier
positioning."

Vodafone
Segmentation
Demographic: Vodafone uses the occupation aspect in the demographic category of
segmentation. They divide their users as consumer and business. On their website
these two segments are catered to by two completely different web pages. The
business users are offered company solutions, machine to machine solutions and all
other end to end business connectivity solutions. The consumers on the other hand are
again segmented as follows
Geographic: The company provides different plans, tariffs and offers to different
customers depending on the state that they come from.
Behavioral (User Status): The users are further segmented depending upon
whether they are postpaid users or prepaid users. Separate plans are then provided
to each user depending upon their category.

Targeting
Vodafone is adopting a multi segment targeting. They are targeting the high end user, low
end user, the business professional as well as the common man.




Airtel and Vodafone in India International Marketing

Duidu Katuwala
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Successful Marketing strategy followed
Vodafone in order plan for the future and in wake of mobile number portability
decided to distinctly identify its value added services by launching the Zoozoos campaign
during the Indian Premier League 2 (IPL-2). Cricket is considered to be a religion in India,
and Zoozooz captured attention of nearly two billion people during the IPL. People eagerly
waited for breaks between matches to see more stories about Zoozoo. Zoozoos have been
successful in giving Vodafone a makeover and establishing maximum brand presence. It is an
excellent example of a well-laid out marketing strategy. It was a fresh and innovative concept
and Vodafone wonderfully promoted their services by creating different stories featuring
Zoozoos. There were no celebrity endorsements. The charm of the Zoozoo was itself a great
self-marketing strategy and they were instant success among masses. Within few days,
Zoozooz created a huge audience for them, giving a boost to the Vodafone brand.
People were already in awe of those cute and lovable characters, but the curiosity heightened
when Vodafone disclosed that Zoozooz were not animated, rather humans were playing those
characters. People were hungrier to know about their favorite Zoozooz.
In the second phase, after the release of these ads, Vodafone promoted these characters on
social media sites, which was another wise decision. Zoozoo fan clubs are there on social
networking sites like Facebook, YouTube, Orkut, Twitter, and many more, where they have a
huge followings. Now Vodafone has announced to launch the Zoozoo goodies like zoozoo
toys, zoozoo mugs, zoozoo keychains, zoozoo t-shirts, etc.






Airtel and Vodafone in India International Marketing

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How big a threat is Vodafone to Airtel?
This question was raised in 2007 to Sunil Mittal and he responded very confidently
about Airtel. He said that they dont expect Vodafone to be no different from Hutch. He also
mentioned Vodafone had in 2005 picked up around 10% stake in the Bharti group and that
they were released within minutes when requested by Vodafone. (Mookerji)
However Mittal forgot to realize that by Vodafone selling the 10% stake of Airtel
back to Airtel, Vodafone got the opportunity to re-invest at Hutch where knowledge and
technology previously available to Airtel moved into the hands of one of its competitors.
Also it is understandable that Mittal took Vodafone lightly and actually is starting to
pay the price. It was reported this year that Vodafone has overtaken Bharti Airtel in the rural
areas of India. Vodafones total of 82.24 million rural customers now just outstrips Bharti
Airtels 82.16 million. However Vodafone has a long way to go to catch up to Indias market
leader; as of March 2013 Vodafone and Bharti have 152.3 million and 188.2 million
respectively. That said, Vodafones growth is encouraging, with 2.47 million additions across
the same month. Bharti meanwhile gained 1.57 million customers in this period. (Barton)

People have started switching from Airtel to Vodafone
Vodafone has been able to provide faster internet at a much cheaper rate which has basically
caused a large portion of Airtel users to shift to Vodafone. Also even though the calling rates
are fairly similar in both Vodafone and Airtel, Vodafone has been able to provide a much
larger range of plans that customers can select from which has again negatively affected
Airtel.
Recommendation for Airtel
It is understandable that Airtel did not take Vodafone as a serious threat to their business
when Vodafone initially launched. However Vodafone has been able to seriously affect Airtel
in the past few years. One recommendation would be to analyze Vodafones strategies and
work out new strategies to keep Airtels current customers with Airtel. Airtel definitely has
the resources to work out new strategies as they are still standing at the top of the market; but
they need to work up soon before Vodafone reaches Airtels position in the market.
Airtel and Vodafone in India International Marketing

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How big a threat is Airtel to Vodafone?
Airtel however is one of the most trusted telecommunication companies in India simply due
to the fact that it is one of the oldest companies in India. Also the fact that Airtel is solely an Indian
company serves well for Airtel as people would prefer what is theirs over a foreign company.
The brand image created by Airtel still keeps them in the forefront of the market which
Vodafone has not been able to reach until today. Analyzing Airtels strategy deeply we need to
understand that the strategic decisions taken by Airtel in 2002 have really pushed them forward. The
music composed by A. R. Rahmen in 2002 for Airtels television commercial has been so catchy that
it is even heard today in Airtels new television commercials. This again is due to the fact that Airtel
has focused on the cultural aspect of India in their marketing.
Recommendation for Vodafone
Vodafone should try and adopt the Indian culture more into their marketing. Plus they should
try and gain the trust of its customers if they need to reach the top level of the market in
India.












Airtel and Vodafone in India International Marketing

Duidu Katuwala
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Work Cited

Beckett, Paul. "An Ideal Bharti Airtel Audience: Youth." India Real Time RSS. N.p., 01 July 2010.
Web. 03 Dec. 2013.
Mookerji, Nivedita. "Vodafone Is Not a Bigger Threat than Hutch, Says Sunil Mittal." Money. N.p.,
28 Apr. 2007. Web. 04 Dec. 2013.
Barton, James. "Developing Telecoms in Emerging Markets Worldwide." Vodafone Overtakes Bharti
Airtel in Rural India. N.p., 08 May 2013. Web. 04 Dec. 2013.