Beruflich Dokumente
Kultur Dokumente
ePGP-03
Submitted to
Dr. Atanu Adhikari, IIMK
Prepared by:
Sharon Selvaraj (Roll No : ePGP-03-167)
Nitin Jaiswal (Roll No : ePGP-03-139)
Nitesh Kumar (Roll No : ePGP-03-138)
Alok Sinha (Roll No : ePGP-03-095)
Sreeramana Gadhamsetty (Roll No : eMEP-10-064)
Yeshaswini GR (Roll No : ePGP-03-193)
Marketing Management Project
ePGP-03
Table of Contents
EXECUTIVE SUMMARY................................................................................................4
MARKET AND PRODUCT OVERVIEW.............................................................................5
India's Mobile Market.................................................................................................................5
Mobile VAS Services..................................................................................................................6
MVAS Value Chain.....................................................................................................................7
MVAS Content Aggregator – Categories & Offering....................................................................7
MVAS Content Aggregator – Key Competitors............................................................................9
SITUATION ANALYSIS...............................................................................................10
MARKETING OBJECTIVES...........................................................................................11
MARKETING STRATEGIES..........................................................................................12
MARKET SEGMENTATION.........................................................................................................................12
MARKET TARGETING:............................................................................................................................14
POSITIONING:.....................................................................................................................................14
MARKETING ACTION PROGRAMS...............................................................................17
PRODUCT: .......................................................................................................................................17
ACCESSIBILITY OF SERVICES:....................................................................................................................18
PRICING...........................................................................................................................................18
BREAK EVEN ANALYSIS:........................................................................................................................20
PROMOTION:.....................................................................................................................................21
IMPLEMENTATION....................................................................................................21
FINANCIAL PROJECTIONS..........................................................................................22
MONITORING AND CONTROL.....................................................................................26
MARKETING ORGANIZATION......................................................................................27
CONTINGENCY PLANNING.........................................................................................27
ANNEXURE...............................................................................................................27
SOURCES OF INFORMATION......................................................................................................................27
Marketing Management Project
ePGP-03
Marketing Management Project
ePGP-03
Executive Summary
In the last decade the Indian telecom industry has changed dramatically – some of its idiosyncrasies
like
- usage of ultra low cost handsets by 50% of Indians
- 85% of customer are prepaid customers
- declining ARPU and increased competition among operators
- rural India is still mostly untapped
sets it apart from any other telecom industry in the world.
This marketing project originally started with an aim of providing social networking features at low cost,
however soon realized after doing a market survey that providing social networking VAS is not going
to be profitable and sustainable in long term and social networking is particularly not palatable to rural
population.
We have diverse set of users –urban vs rural, sophisticated vs basic- the need is to identify niche
offerings that satisfy these diverse tastes by identifying innovative, user-centric, localized content
through specific delivery mechanism. This is where mobile value added services (MVAS) come into
play.
The MVAS market is fragmented, high infrastructure setup cost being one of the reasons, there is no
leadership in the market and there is a definite entry opportunity in the market. We plan to enter the
MVAS market by providing six distinct and interesting offerings, catering to different niches of the
market and yet keep the prices low. This being a network based market and winner takes them all, it’s
important hence that we make a speedy entry with a good footprint with an aim to gain as much
market share and as early as possible.
Marketing Management Project
ePGP-03
While the urban top-tier markets are near saturation with the number of subscribers, the growth
has mainly been triggered by subscription in rural areas. The inequality suggests a large
untapped market to reach the users at the bottom-of-the pyramid.
Marketing Management Project
ePGP-03
India is a low ARPU (Average Revenue per User) country and the share of data is small though
the MoU (Minutes of Usage) has been increasing. Hence, Mobile service providers/operators
need to look at alternate streams of revenue. With cell phone operators and mobile phone
manufacturers seeing an immense growth potential in the rural sector, they are now devising
new ways and trying to grab a larger share of the rural pie.
iPhone caused a paradigm shift by unleashing the VAS market. Even though VAS market
existed before, Apple made it disruptive by partially open sourcing the iTunes App Store and
allowing collaborations from independent third party developers. In spite of using a 30-70%
revenue sharing in the favor of developers, it helps Apple rake in close to $75 million in
revenues every month. This is the kind of revenue that can come in from MVAS. As per
Gartner's prediction, “Through 2012, over 70 percent of IT-dominated social media initiatives will
fail. Only those that focus on a customer need will survive”.
For a firm to be successful in the Mobile VAS Services market, the following factors play a key
role:
1. Relevant content
2. Technology support for delivering VAS
3. Access-support from handset
Hence, we need to use Focused differentiation strategy with Market-development strategy
for rural markets.
Marketing Management Project
ePGP-03
MVAS in India is still in the nascent stages and multiple players overlap in each of the areas in
Value chain. Operators still dominate the revenue sharing arrangement in MVAS retaining 60-
70% of revenue. This is one of the reasons why there is a dearth of innovative mobile content.
However, as per TRAI, this is likely to change in the future wherein operators get only 30%
approximately and the rest 70% will be shared by Content providers and aggregators.
• Entertainment
• Information
• M-commerce
• Social VAS
• Enterprise VAS
Content provided by the content aggregators can be accessed using SMS, Voice (IVR), GPRS,
USSD, MMS.
However considering cost to end consumer, cost to provider, availability in handsets, ease of
usage (limited by literacy and language factor), consumer awareness and growth potential, SMS
(Short Message Service) and USSD(Unstructured Supplementary Service Data) access
modes are more suitable for the rural market in the current situation as per TRAI report.
A market research was conducted with 15 rural users using low cost handsets to identify their
content needs. The research was done using descriptive research process (see annex for
questionnaire). The data collection was done using survey. The sample was based on
'Convenience sampling’. The following features are identified to be incorporated in the 'content
aggregator' offering that will be accessible via SMS and USSD.
Indiatimes is both a content provider and a content aggregator. Indiatimes provides the following
services as a content aggregator:
Hungama Mobile
Hungama Mobile, a division of Virtual Marketing India Pvt Ltd (VMIL) was launched in 2001 and
in this short span of time is now the largest aggregator, developer and publisher of Bollywood
and South Asian mobile and digital entertainment content in the world.
Hungama Mobile runs a comprehensive network across 50+ carriers in over 30 countries and is
the worldwide exclusive rights holders to over 70% of all Bollywood content for mobile and
online publishing.
The range of services provided by Hungama Mobile includes:
• Mobile TV
• Ring Tones – Mono, Poly, True Tones and Ring Back Tones
• Full track downloads – First company in India to launch the service with Hutch
• Video download and streaming services
• Games – Based on movies, developed in Java, Symbian & Flash
• Themes & Interactive Applications
• Graphics – Wallpapers, Animated Screensavers, Operator Logos etc
Marketing Management Project
ePGP-03
Situation Analysis
This section analyzes the market in which the company operates and its competitive position.
The SWOT Analysis for the Mobile VAS Content Aggregator offering is given below. Based on
the analysis, it can be concluded that the weaknesses and threats can be mitigated by the
opportunities and strengths with a well planned marketing effort to build awareness of the
offering and localization of content.
Strengths Weaknesses
Marketing Objectives
The goal is to see that the MVAS content aggregation offering becomes the product of choice
for low cost mobile users. The decision to use the offering is likely to be exercised by:
4. Users who have not yet installed any MVAS offering and realize they have a need for
one
5. Users who have installed MVAS offering that caters to a single need i.e Entertainment,
but are looking for additional functionality i.e social networking
In order to reach the usage goals, the following marketing objectives must be achieved:
• Raising awareness of the relevance of MVAS offering in the day to day life
• Performing market research to identify the key features that need to be a part of MVAS
offering for rural needs
Marketing Strategies
This is a network based business and network based businesses have the following
peculiarities-
Hence its utmost important for us that we realize the situation and segment, target and position
ourselves in market so that we get a bigger share of the pie at the earliest, the benefits of which
we will reap in time to come.
Market segmentation
As Segment marketing offers key benefits over mass marketing, a combination of Demographic,
Geographic and Behavioral segmentation provides better mix for generating revenue.
Market
Segment Recommendation Support
Geographic
Marketing Management Project
ePGP-03
100 million subscribers expected out of 250
million people expected to go mobile. Rural
mobile penetration is highest in Punjab (20.69
Rural and percent), followed by Himachal Pradesh
semi-urban Highly (17.09 per cent), Kerala (10.63 per cent) and
areas recommended Haryana (10.20 per cent).
Psychographic
Culture-Oriented
Behavioral
Marketing Management Project
ePGP-03
Occasions Regular
Readiness
stage Interested
Market Targeting:
Pros:
• Content Aggregators has high demand with high volume of subscribers increasing along
with increase in their income, there is need for providers catering to different kinds of
VAS services.
• High demand for local language content in Rural areas
• High demand for entertainment-related VAS, also going forward there is a need to focus
on information VAS and transactional VAS (M-commerce), ensuring even growth among
all consumer segments.
• Facilitate of content accessible through simple access modes like SMS and USSD,
which are cheaper compared.
• Wider portfolios and integration along the value chain could improve MVAS revenues of
content aggregators/providers.
Cons:
Positioning:
Competitive frame of reference:
• Social Networking: we will have interfaces with Facebook, Twitter, popular web-mails,
chat, messenger, dating and blog sites.
• Shopping: we will enter into partnership with some of the ecommerce providers on
revenue sharing basis. We would get a share of the businesses we will bring into them.
• Job Opportunities: We will have interfaces with Naukari.com, Monster.com and some of
the job sites like babajob.com which caters to job opportunities for drivers and house
maids segment etc.
Marketing Management Project
ePGP-03
• News: We will aggregate news from all the popular news sites for example Aajtak etc.
• Local Best Deal: This is for the local advertiser to reach to a particular geographical
segment. We will also provide bulk sms facility for advertisement also.
• Entertainment: This will give the total experience: From Bollywood to Cricket ; from
online Games to Astrology . This will provide multimedia micro-sites, most-sought-after
downloads, jokes, latest stories and rare pictures.
Pod:
Customer
Positioning
Pros Cons
Marketing Management Project
ePGP-03
As per analysis Huge subscriptions, over Need for developing local language content,
100Million expected from Rural India. and they are highly price sensitive.
All the age groups are interested in VAS in Need to cater to all types of SMS services in
Urban India. Over 150 Million subscribers Information, Entertainment, commerce
expected in next year Youth segment VAS..etc where huge effort is needed in
comprises 30% of the total handsets collecting the data , thereby need of
collaboration with different content owners in
all the areas .
The Revenue generated is high in VAS. The share of content aggregators is low. Only
10-15% is their share.
The consumers are not fully aware of the The stakeholders/content aggregators need to
services offered ensure that the consumers are educated about
the value of the services in the MVAS market
Selling more to the existing customers is Need to maintain the competitive edge.
relatively easier
Marketing Management Project
ePGP-03
The possibilities are limitless for the offerings that can be provided to masses at low cost- any
content which is available on the web can be provided to the end customer at very little extra
cost to us given the content is accessible through the web-services and is free(on web).
To cater to be low cost segment we are going to support USSD and SMS protocols- they work
out to be cheapest for telecom operators. All the operators support these two protocols so we
are not locking into a particular service provider.
Marketing Management Project
ePGP-03
To start with and to gauze the market response we plan to launch the following services-
1. Social Networking: we will have interfaces with Facebook, Twitter, popular web-mails,
chat, messenger, dating and blog sites.
2. Shopping: we will enter into partnership with some of the ecommerce providers on
revenue sharing basis. We would get a share of the businesses we will bring into them.
3. Job Opportunities: We will have interfaces with Naukari.com, Monster.com and some of
the job sites like babajob.com which caters to job opportunities for drivers and house
maids segment etc.
4. News: We will aggregate news from all the popular news sites for example Aajtak etc.
5. Local Best Deal: This is for the local advertiser to reach to a particular geographical
segment. We will also provide bulk sms facility for advertisement also.
6. Entertainment: This will give the total experience: From Bollywood to Cricket ; from
online Games to Astrology . This will provide multimedia microsites, most-sought-after
downloads, jokes, latest stories and rare pictures.
Accessibility of services:
All the cell phones, even some of the wired phones support these protocols - this makes our
product offering operator and handset agnostic. All the cell phone users – high end or low cost-
can access our services at a very nominal price.
To access our services end user will have to type one of the following-
a. SMS service1 to XXXX
b. * Service1XXXX#
Where, service1 is the code of the services offered; option a. is for SMS and option b. is for
USSD.
XXXX is the shortcode- this will get after applying to TRAI.
We will support pull mode in which the cell phone is initiating the interaction as well as push
mode in which the content will be pushed to cell phones. Generally the pull mode is one time
interaction of the customer with us where as in the push mode the customers are subscriber to
our services.
Pricing
Pricing is a function of demand of the product, our cost and what price competitors are offering.
Demand
There are close to 300M mobile users in India, majority of them, especially younger crowd, uses
SMS more than calling. Even professionals use it for myriad of reasons, including checking
bank balances, mobile bills, and status of train/flight etc.
Marketing Management Project
ePGP-03
Recent TRAI data shows that Indians are using SMS as an extension of their lives more and
more every year, an average Indian sends 29 SMS per month.
• SMS VAS is the highest revenue earning Value Added Service with almost 5%
revenue earned by service providers
• 1 in 5 urban Indians have used a SMS based VAS service either as a one-off or on
subscription basis.
• SMS is an effective marketing tool, showing conversion rates a lot higher than other
conventional mediums i.e. TV/Radio etc. 1 in 3 Urban Indian has acted in some
manner over the SMS i.e. forwarding to others or enquiring about it.
• SMS, an advertising medium, has an interaction rate of around 5%
• 25% users have participated in some sort of SMS contest
Taking a conservative figure of 30 lakhs customer subscription, which is just the 1% of the
whole mobile user base, even then, the number if pretty big, there is a huge demand.
Cost:
The major portion of the cost is fixed cost; the variable cost is negligible for a given capacity of
user base. The fixed cost consist of the following-
Total : 15 lakh
Competitor’s Price
The standard SMS rate in India is Rs 1 per sms, USSD is virtually free till now- its primarily used
in India for getting the balance of the amount (recharge coupon). The market norm till now- is
that almost 75% of Rs 1 goes to the telecom operator (the service provider)- we can expect to
get 20 paisa of this 1 Rs.
Promotion:
We will reply on three types of advertisements:
1. Advertisement though the social networking sites
2. SMS advertisement
3. News paper advertisement
The total budget should not exceed 4 lakhs, its included in cost above. Since we are offering the
product for the mobile devices- the emphasis of the promotion will also target the mobile
devices- through SMS. We will spend 75% of promotional budget in SMS advertisement. We
also plan to organize some promotional events – lucky draw of some of the early users of our
system and we will provide them with brand new cell phones.
We plan to engage in some charity event geared towards the under privileged class which may
get us some media coverage in return.
Implementation
The following activities need to be completed to successfully implement our plan-
1. Get the shortcode from TRAI- this would entail applying to TRAI citing our marketing
plan as to what all services we are going to provide, expect to get the code in a month’s
time.
2. Lease/Rent out the real estate for our operations- we would be requiring a 1000 sqft
area and getting this would not be a problem.
3. Hire key resources- we would need 2 engineers, 1 full time manager and one marketing
person.
4. Identify a software/hardware vendor- to get us the hardware and develop software
solution, expecting this would require around 3 months of time for the software to be
ready and fully functional.
5. Enter into revenue sharing agreement with telecom operators- we will be starting on this
right away- given what we are offering- would not be too difficult to get operator partner
with us. We may have to give a bigger cut in the beginning.
6. Organize promotional events.
One of the founders will be closely associated with each step of the project and keep a close
eye on the every activity that needs to be executed. He will work directly with the marketing
person and the manager.
Overall we can go live in 4 to 6 months of timeframe and start getting revenues only after that.
Marketing Management Project
ePGP-03
Financial Projections
Indian Population spread
Total Indian population as per the 2010 is 1191000000. This population is divided in terms of
age group and geographic location is as given in below figure:
• Urban Population
1. Assumption is that 80% of the urban residents have used at least one time
the internet and are familiar to the inter use.
2. Distribution of the internet users based on the choice for using internet is as
given below:
Urban Market Segment Percentage Users
Percentag
Rural Market Segment e Users
Final Conclusion
• We also assume that the average revenue per use of the VAS service is 20
paisa. So the expected revenue in the first year = 1284481113 * 0.20 Rs. =
256896222.6 Rs.
• As per the expectation the Indian population is expected to grow at the rate
of 1.548%. We also assume that the percentage of VAS users will grow at the rate of
20%. Based on these assumptions, the expected number of revenue for next five
years is as follows :
After the six months we are expecting to launch the fully functional VAS facilities. As per the
calculated projections from the financial projections we are expected to get 1284481113 VAS
facilities usage for the first year of launch. This means if we divide these equally across the
twelve months period, we should get approximately 1284481113/12 = 107040093 VAS usage
for every month. Below graph shows the expected number of the monthly usage:
We should monitor these numbers carefully on monthly basis and see if the numbers are as per
the expected number. If the numbers are not as per the expected numbers, we should take one
of the following actions:
• Check if the required number from the rural and urban areas is as per the expected
numbers.
• Do a customer survey in the rural and urban areas separately to find out the reason
or need of the customers.
• Take corrective actions to support the need of the customers.
• Promote the product in the respective section of the target segment.
Marketing Management Project
ePGP-03
• Engage the mobile operators and service providers to release a concessional plan
for short period to attract more customers.
• Add on more VAS facilities, as per the customer need and requirement.
Marketing Organization
One of the founders will head the marketing organization and oversee and guide the marketing
manager.
Contingency planning
In the event of competitors’ offering or we not getting enough customers in time, we have
sufficient cash cushion to keep us going for another 3 years. Even with sufficient cushion at
present we will have tight controls consisting of a lean organization and efficient use of funds.
Annexure
Sources of Information
Primary
Questionnaire used for arriving at different types of services offered:
1. Do you use a mobile phone?
2. What do you use mobile phone mainly for?
3. Do you use sms for communication with friends/family?
4. Do you surf internet on the phone?
5. Do you use social networking site to keep in touch with friends/family?
6. Do you have online friends?
7. Which activity do you want to prefer among netsurfing, SMS and Social
networking?
8. Do you know English speaking?
9. Do you know English writing and reading?
10. Do you prefer the activity in your mother tongue language?
11. Are you ready to pay extra money for the local language support?
12. Do you want to go active on social networking site?
13. What are the main reasons for not using the social networking site?
14. What services you want in your mobile phone which can help you/your work?
15. If the cost is reduced and made easy to use do you want to use the same?
Secondary
http://www.trai.gov.in/
http://www.trai.gov.in/annualreport/AnnualReport_09_10English.pdf
http://www.trai.gov.in/WriteReadData/trai/upload/StudyPapers/16/studypaperword21jan.
pdf
http://www.trai.gov.in/WriteReadData/trai/upload/StudyPapers/17/ASSOCHAMMVAS_S
TUDY_%20paperfinal.pdf
http://www.slideshare.net/andre4e/sms-trends-august-2008-presentation
www.iamai.in/Upload/Research/mobile.pdf