Developing Sustainable &

Marketing Director
Strategies
Market Oriented Marketing

2010

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To: The Board of Directors

From: Marketing Director

Subject: Developing Sustainable and Market Oriented Marketing Strategies

Date: Sunday, 28 November 2010

1. Introduction

Mobilink GSM (registered name with PTA is Pakistan Mobile Company Limited) was the
first GSM mobile company in Pakistan to start its operations across the country in 1994.
Soon it became the market leader in the country in terms of growth and by having the
largest customer base in Pakistan. The market share of the company in 2008 – 09 was
30.88% amongst 94.34 million subscribers in the country.

Mobilink is offering exclusively designed sim-only pre-paid and post-paid tariffs to its
customers catering to their communication needs of a diverse group of people, from
individual to businessman to corporations and multinationals. To achieve this, Mobilink is
offering both pay-as-you-go (Jazz) & post-paid (Indigo), both are the largest and oldest
brands in the industry. One of the smart moves of Mobilink was the introduction of RIM’s
(Research in Motion Ltd.) Blackberry handsets in the country to its customers especially
those who are working in corporate sector in 2005.

2. Current Marketing Strategy of Mobilink

The mobile communications sector in Pakistan has brought significant fiscal, social and
economic benefits to the country. Population coverage has increased rapidly to the
current 70% level in just five years while the mobile penetration rate has grown
dramatically, with geographic coverage now exceeding that of the fixed line operator.
Mobilink GSM (PMCL) has done exceptionally well in this regard. Some of the key
features of its successful marketing strategies are as follows:

• To increase and stabilize market share, Mobilink GSM (PMCL) is striving its best to
not only stabilize its market share but also to increase its market size. It has also
adopted a corporate level strategy by entering into partnerships with various
organizations
• To have the largest subscriber base in Pakistan – Mobilink has a market share of
over 32 million subscribers across Pakistan which is still increasing even in this tough
 competition with its competitors (Telenor, Ufone & Warid etc.). Mobilink has also
expanded its international roaming services to more than 140 countries.
• Research and Development is the core competence of Mobilink GSM with innovative
ideas, new features and products i.e. GPRS, C-track for vehicle tracking etc. It was
the first company to start its GSM operations in Pakistan.
• Focused on differentiation strategy for both prepaid and post-paid customers ever
since it started. They make their products unique through massive advertising,
distinctive product features and exceptional services for its customers.
• To work directly with its stakeholders (Franchises / dealers) – Mobilink was the first
cellular operator in the country to introduce “franchise” concept and currently
operates the largest franchise network in Pakistan with over 250 franchises. The
organization also have more than 500 sub-dealers normally operates as point of sale
(POS) branded as “Mobilink Connect”.
• Mobilink’s commitment to total customer satisfaction by gaining customers trust and
confidence to anticipate their needs and deliver service, quality and value beyond
their expectation.

3. Evaluation of Current Marketing strategy

Mobilink had the edge over its competitors of being first mover in the country. Since 1994
when they started their operations in Pakistan, they did very good until the competitors
i.e. Telenor, Warid and Ufone came in the market and invested heavily. Mobilink was
once the market leader with slightly over than 60% market share. But according to
Pakistan Telecommunication Authority (PTA), their current market share in 2008–09 was
30.88 % as they witnessed a decrease of 5.51% from 2007–08 (lost 290,000 customers),
whereas the competitors have shown a positive growth by gaining their market. Though
Mobilink is still the largest share holder within the country and has the highest revenue
share of 39.2 % compared to its competitors. Some of the significant achievements of
the organization are as follows:

• Awarded as the ‘SuperBrands’ accolade of Pakistan because of their reliability,

innovation, growth and performance.
• Implementation of a full Intelligent Network (IN) platform from Siemens for the
Prepaid platform
• Largest Call Center in Pakistan, which is there to assist the customers 24 hours
• Only cellular service in Pakistan to provide coverage on the M2 motorway
• Bilateral roaming in over 140 countries around the world with true international
roaming with over 300 operators across the globe
• First mobile operator in Pakistan to offer extensive GPRS Roaming and BlackBerry
Roaming services

All the above achievements of Mobilink show the strength of the brand and their
innovative strategies.

a. Competition

With the new entrants in the market, competition is tense and prices have drastically
gone down. The Average revenue per user recorded in 2008-09 was 2.5 Pakistani
rupees as compared to 9.0 Pakistani rupees in 2003-04. The new entrants like Telenor,
Warid and Ufone have captured 22.15%, 18.96% and 21.20 % market share in the year
2008-09 and they are still a threat to Mobilink as it has lost its market share by 5.5 % in
the past one year. Mobilink will have to refocus on their strategies.

b. Stage in the Industry Life cycle

The industry is at its maturity stage with a cellular density of 58.2% in year 2008-09 with
almost around 100 million customers across the country as compared to 8.3 % in 2004-
05.

Pakistan Mobile Industry Life Cycle

Industry
Output

Introduction Growth Maturity Decline

Time

Figure 1.1: Pakistan Mobile Network Industry Life Cycle

 Pakistan cellular network market is consistently growing every day. The price which they
are charging to its customers is slightly higher than its competitors. If we talk about 98%
prepaid customers in the industry, every prepaid customer would like to have cheaper
call rates and messaging across any network.

Mobilink also needs to improve the quality of its services across the country. Though
they have more cites than any other network but the quality of their service and reception
is dropped. That is why they have seen an abrupt decline in their market share.

c) Macro Environmental Factors

Some factors have affected the industry growth in the past few years. The cellular density
has only increased to 3.5% between the year 2007-8 and 2008-09 (figure 4.4). These factors
are; the current economic downturn across the world and less investment by these networks
parent companies, political instability in the country for the past few years, raise in taxes,
unemployment & inflation and recent floods in the country. In these circumstances, Mobilink
GSM (PMCL) will have to review its strategies and think out of the box to improve their
market share.

The key findings of the evaluation can be summarized as follows:

• Due to high level of competition, Mobilink GSM needs to review its strategies in order
to compete with its competitors with the support of its parent company, Orascom.

• The company is growing quite fast across the country. Therefore Mobilink needs to
focus on new customer segments specially youth.

• Mobilink needs to consider Macro environmental factors and respond to its changes
by restructuring its strategies to ensure its long term stability.

• Mobilink will have to focus on upcoming technologies and improve the quality of its
services for its customers.

• The country is yet to witness the power of 3G mobile technology. Mobilink will have
to be prepared in advance before its being launched in the country to keep up with
the competition.
Task 2

Recommend changes to the existing marketing strategy

Taking the findings of the evaluation into consideration market development strategy is
recommended to Mobilink GSM (PMCL). Considering the past five years, the market growth
is quite significant since Mobilink GSM is operating in a matured market. Therefore, the
company needs to consider other options.

With reference to the Ansoff matrix, the following opportunities are available to Mobilink
GSM (PMCL).

• Target corporate organizations for post-paid packages (mobile phones and SIM only
deals)

• Drive operational performance through customer value enhancement, improve

efficiency and cost efficiency – hence resulting in exceeding customer expectations

• Introduction of new technologies like Mobile broadband and home broadband to

prepaid customers, post-paid customers and SMEs

This new market sectors increase competitiveness of Mobilink GSM (PMCL) over its
competitors which further ensures sustainability of the company. Although Mobilink GSM has
vision & mission statements are in line with these strategies to be a leading
telecommunication service provider in Pakistan through innovation and best value to its
customers, employees, business partners and shareholders. Entering into post-paid market
and mobile broadband packages for its customers also support to the overall corporate
strategy of cost leadership.

Task 3

1. Situation Analysis

• Strengths

o Strong international brand name (Mobilink GSM)

o First mover advantage in Pakistan

o Modern Network with core network GPRS and EDGE ready

 o Number of customers is more as compare to any other mobile service provider in
Pakistan.

o Highest market share not only in terms of number of subscribers but also in terms
of revenue.

o Mobilink's short message service center allows Vehicle Tracking and Fleet (VTF)
Management services.

o Large number of corporate customers.

o Economy of scale.

o Mobilink and MCB Bank Limited have made a combined effort in order to
maximize the ease and the satisfaction of their respective customers by offering
them all banking services from their very own mobile handset.

• Weaknesses

o High call rates.

o Large organizational structure

o Low Revenue per user (ARPU)

o Currently providing not good quality service because of changing their network
from 900 MHz to 1800 MHz

o Lack of proactive churn management and stimulation program to address inactive

subscribers

• Opportunities

o Huge Market size

o Can lower prices to make business difficult for new companies.

o Mobilink is completing field-testing and certification of its General Packet Radio

Service (GPRS) products; targeted to a market that delivers Internet Protocol
packet services to over 650 million GSM subscribers.

o Network all around Pakistan (with over 7500 sites)

o Adaptation of newest technology (3G)

 o Removal of international trade barriers

• Threats

o High Competition with the competitors

o High tax rates

o Increase in imported equipment costs

o Current Economic downturn

o Terrorist attacks and political instability in the country

o Strong competition and marketing is reaching to its maturity stage

o New companies can offer packages for corporate customers in better way.

o Wireless local loop service providers too targeting areas which are less
developed.

o Current price war may reach at a position where only brand names survive.

o Due to expensive quality of service now a day’s customers can shift to other
companies.

2. Marketing Objectives

• To start post-paid services for corporate organizations by the start of 2011 and
Mobile broadband packages for the prepaid customers, post-paid and SMEs by mid
of 2011

• To strongly position the new service among the potential customer groups

• Increase the market share by 10% within next five years (2011-2015)

• As telecommunication is a very competitive and dynamic industry, five years period is

taken as longer term.

3. Strategy
 a. Segmentation , Targeting and Positioning

The strategy includes new post-paid connections for corporate organizations

which not only include mobile sim deals but Mobile phones as well. The firm will
also introduce broadband packages for prepaid, post-paid customers and SMEs.

b. Competitive Strategy

With reference to Porter’s three generic strategies, Mobilink GSM needs to

operate within the low cost framework in order to ensure its corporate objectives,
to earn a profit higher and remain competitive against its rivals. Mobilink is
capable of being the cost leader in the market as it has the capital to invest via its
parent company; Orascom, skilled staff / employees, expert engineers &
technicians and has efficient distribution channels in the form of Franchises
across the country.

c. Product Market Strategy

According to Ansoff framework, Mobilink GSM (PMCL) will focus on product

development strategy as it can leverage its strengths by developing a new
product targeted to its existing customers.

Existing Products New Products

Product Development
Existing Markets
Market Penetration
(Mobilink GSM’s post-paid
packages for corporate
organizations)

New Markets Market Development Diversification

4. Implementation

a. Marketing Mix

i. Product – Post-paid packages and Broadband packages

ii. Price – Mobilink needs to make its service accessible to as many

customers as possible. It needs to offer a lower price for these packages
than its competitors.

iii. Place – Across Pakistan

iv. Promotion – Mobilink works with its icons as Brand Ambassadors like the
legend cricketer Wasim Akram, Mass media, new interactive media and
social marketing are used to strongly position the new packages.

v. Process – Franchises and the local branches of Mobilink GSM along with
the online registration for these packages are used to improve
effectiveness, reduce operational cost and to improve convenience.

vi. People – Staff needs to focus on providing superior customer service and
engineers & technicians are to focus on providing best quality network
across the country.

vii. Physical Evidence – The existing customers by providing the best value of
their communication services

5. Budget

6. Controls

Appendix

Orascom Telecom Holding S.A.E. ("Orascom Telecom") or ("OTH") was established in 1998
and has grown to become a major player in the telecommunication market in the world. OTH
is considered among the largest and most diversified network operator in the Middle East,
Africa and Pakistan.

Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, was awarded a license in July,
1992 and started its operations in 1994, and has become the market leader both in terms of
growth as well as having the largest customer subscriber base in, Pakistan - a base of
approximately 32 million (May 2010) and growing.

Mobilink provides the most extensive network coverage footprint across Pakistan through an
integrated technology infrastructure in more than 10,000 cities, towns, villages, and
countless remote destinations, including International Roaming in 110 countries through 300
partner operators.

In April 2001, when the OTH (Orascom Telecom Holding) took over management control of
the company, the market share was only 40% but as of March, 2006; Mobilink served over
14 million subscribers, representing a market share of approximately 56.2% of total mobile
subscribers in Pakistan. However, during the past three years the market share of Mobilink
has gone down to 32.8% (As of May, 2010).

Principal area in which Mobilink Telecommunication is working is that it provides its

customers, a wide range of post-paid (Indigo) and prepaid (Jazz) solutions. Keeping in the
mind their customer convenience they have also bundled mobile handsets, sold either
independently or bundled in Set so Go Get Pack.

MOBILINK’S VISION

“To be the leading Telecommunication Services Provider in Pakistan by offering innovative

Communication solutions for my Customers while exceeding Shareholder value & Employee
Expectations“

MOBILINK’S MISSION

“To be a superior communication service company in Pakistan providing the best value to its
customers, employees, business partners and shareholders”