Dear Student,

Your proposal has been evaluated again and still NEEDS a lot of
IMPROVEMENT. You are instructed to follow all the instructions
very carefully and resend the amended proposal in assignment # 3
as soon as the announcement is made. Instructions are provided in
the evaluated proposal in detail under the respective heads.
Remove all the red highlighted portions that are unnecessary or
incorrect
You were strongly advised to follow the format in the first
evaluation and were provided with the format too. But have not
followed it in chapter # 3 which is one of the most important
chapters of the proposal.
You are once again advised to follow the format and improve
accordingly

“Comparison of Pricing Strategies of Warid

Postpaid with that of Ufone Postpaid”
 Nisar Ahmed Khan
mc090200744

11th April 2010

1.1 INTRODUCTION

Cellular Industry in Pakistan has achieved enormous growth in the past years and has become one of the important
contributors in our GDP. Moreover, it was the only industry to be forecasted by economic analysts of Pakistan in
2010 to achieve good growth. As a result of more cellular companies entering Pakistan, economic situation of our
country and the Global economic crisis, the cellular companies have seen decrease in their revenues and are always
altering their marketing strategies to compete and survive in this environment.
Pakistan had a total of 98 million mobile subscribers at end-May 2010, according to the Pakistan
Telecommunication Authority (PTA). Mobilink had the highest number of subscribers with 31.98 million
subscribers, followed by Telenor with 23.65 million subscribers, Ufone with 19.16 million subscribers, Warid with
16.64 million subscribers, and Zong with 6.55 million subscribers. (PTA Website:2010)

Following Number of Subscribers at May-end 2010:

The consumer market is not only large its dynamic. To develop an appreciation of this dynamic consumer market,
we will examine consumer behavior and response on certain variables that affect both consumer and the cellular
connections. The five major areas include:

• Pricing
• Advertising
• Customer Services
• Product Line

Based on the above variables the consumer will give preference to the cellular operator packages that which to
choose and which seems more attractive and reasonable. Also on these variables the cellular companies are
marketing their products and make decisions. So its all of Preference for consumer keeping in mind the
attractiveness towards any network (result of marketing strategy of cellular companies). Preference (or “taste”) is a
concept, used in the social sciences, particularly economics. It assumes a real or imagined "choice" between
alternatives and the possibility of rank ordering of these alternatives, based on happiness, satisfaction, gratification,
enjoyment, utility they provide. More generally, it can be seen as a source of motivation. In cognitive sciences,
individual preferences enable choice of objectives/goals.
As according to a research on Consumer Buying-Decision Process quoted by Philip Kotler (Marketing Edition-
2005), the same consists of five steps:
Consumer Buying-Decision Process

-Need recognition
-Identification of alternatives
-Evaluation of alternatives
-Decisions
-Post purchase behavior

As per the mentioned steps Consumer Buying Behavior consists of a number of steps. Further the choices differ
because of difference in age segment, Peer reinforcement, status, parents and emancipation. Each segment needs to
be approached separately.

In the second step the consumer makes a decision about the different alternatives, hence is the area which we are
supposed to inquire further.

The purpose of this research study is to determine the performance of cellular companies in Pakistan as a result of
their marketing and promotional strategies. The research has a profound background containing the performance
levels in the companies. An efficient exploitation of promotional campaigns and creating value for new products has
become decisive in improving inclusive sales.
This research study is based upon the concept of a service-product bundle consisted of these elements: pricing,
advertising, value added services, customer services and product line.

In past researches have been carried out in services industries i.e. telecom sector but no research data could be
acquired from either of the mobile operators operating in Pakistan. Hence this study is made to probe further
research into marketing strategies as well as its effect on consumer preference.
1. 1.2 BACKGROUND

Telecommunication sector has massively expanded during 2004-2008 in Pakistan. The government has grant new
licenses to companies to operate in cellular Industry. "Therefore, it is massive expansion particularly in the cellular
sector and the growth in this sector has been more than 800 per cent"

During 2002-2009, the total numbers of cellular phone subscribers in the country were 1,698,536 but now their
number have crossed the figure of 98 million (PTA Statistics 2010). Mobile phone subscribers grew from 2.4M in
12/2003 to 5M in 12/2004 and from 5M to 18M subscribers in the first 10 months of 2005. Telephone rates have
massively decreased too.

In the telecommunication sector, government has adopted the strategy that prices should be reduced and market base
expanded. As a result, the rates of nationwide dialing calls have decreased by 40 to 45 per cent.
Mobile phone service was introduced in 1990, with two operators but heavily regulated and taxed. An activation fee
of Rs. 20,000 was charged as late as 1996. Service was blocked completely in some cities at some times to prevent
terrorists from using cell phones. Things gradually began to change after a new telecom act in late 1996. As a result,
in 1998, service was back on everywhere.
By 2001 there were four operators in the market (with the PTT entering the mobile market at the beginning of the
year under the brand name UFONE) and the activation tax was down to Rs. 5000. Things started to accelerate. By
the end of 2002 there were 1.2M mobile subscribers.
The real changes happened in 2004. First, in April the government granted two more licenses. Telenor won one of
those licenses, built a network and launched services in March 2005. Warid won the other, launching services in
May 2005.
Second, in June 2004 the government of Pakistan abolished the remaining restrictions on foreign direct investment
permitting foreign investors to retain 100% equity in their investments. And third, they dropped the activation tax to
Rs. 500. Clearly, the two new operators coming on line in early 2005 have caused a lot of market activity, but their
network build out was helped by the largest annual foreign direct investment that Pakistan has ever seen.
Finally, the cost of acquiring service has fallen below a critical breakpoint, in part by the reduction in activation fees
and in part by the ever declining costs for mobile phones and mobile phone infrastructure.
Critical factor in the rise of the mobile subscriber base in Pakistan has been the reduction in activation fees and costs
of used handsets which is around Rs 1000/-.
Thus a subscriber only needs to spend a very nominal sum on a mobile connection these days, and pretty much
everyone can afford to have a mobile connection.
Another factor for the growth of the mobile subscriber base is the rise of prepaid mobile access. There are no
monthly connection charges in this system.

The factors also contributing to the growth (that the report will cover) were also pricing as pricing has reduced to
300% in five years as a result of intense competition. The companies are fighting on paisa nowadays. Also other
variable, the new product line with great value added services at reasonable prices like night packages, discounted
rates on friends and family numbers, ladies first, happy hour etc. These were new packages at attractive prices
backed by heavy promotional campaigns resulted in consumer attention and gave growth to industry. Moreover, the
cellular operators increased performance of their customer services departments and reengineered them.

Now the marketing strategy of these cellular companies and it was the low call rates, VAS (Value Added Services),
Customer Services, Product line which is important for them to retain or get new customers.

Here’s a brief description of the top Cellular companies in Pakistan:

https://telecompk.wordpress.com/wp-admin/www.ufone.comUfone, a wholly
owned subsidiary of Pakistan Telecommunication Co. Ltd (PTCL), is now under the control
of Etisalat group of UAE. It has 21% of subscriber share and added the most lines (2.4
million) from 2006-07. For those in Pakistan it is the one company where they can easily
invest locally.
http://www.waridtel.com/Warid, owned by the Abu Dhabi group of the United Arab
Emirates and sister of Wateen group is number 4 with 18% market of subscribers. Recently it sold 30% share to
SingTel.

1.3 Objectives of the study

The objectives of the research study are:
• To determine the consumer perception about the pricing of
Warid postpaid
• To determine the consumer perception about the pricing of
Ufone postpaid
• To compare the consumer perception about the pricing of both
the companies

Replace the above mentioned objectives with the ones highlighted red
1. To compare the variables for effecting and preferring one cellular operator over the other e.g.
Pricing
VAS (Value Added Service)
Advertising
Customer Services
Product Line

2. To know about the marketing strategies of Warid and Ufone in postpaid segment in the current economic
and future situation for telecom Industry in Pakistan

3. To analyze and compare which operator (out of Warid and Ufone) has a better marketing strategy in
postpaid segment in terms its advertisement, product line, and pricing etc.

1.4 Significance

This research is intended to compare the marketing strategies of Warid and Ufone in postpaid segment because these
are big cellular operators and part of telecommunication industry which is vital for economic growth of Pakistan. It
begins with analyzing and comparing their marketing environments. Then it analyzes the marketing strategies two
ways: basic strategy and corporate strategy of the telecommunication industry. On the basis of Porter’s Five Force
Theory, the thesis analyzes corporate marketing strategy in the following ways: bargaining power of consumer,
threats of new entrants, bargaining power of supplier, threats of substitute products and internal rivalry of
telecommunication companies. It shows that Cellular Companies are different in marketing strategies.

Furthermore, As the research is about marketing strategies of cellular companies in Pakistan and their impact to the
consumers.. It is known that these cellular operators are going through a maturity stage and having an aggressive
marketing and promotional campaigns. Based on a study of preferences of 100 subscribers, the researcher has been
able to identify as to which extent the consumers enjoy utility and how the marketing strategies of cellular
companies has also affected their budget as to get attracted from new packages.

This Research study is based on the data obtained regarding the Cellular Companies in Pakistan. They are namely
Ufone and Warid are under cut-throat competition in the market and as a result of their marketing strategies, price
reduction is going on between the cellular companies, which have been beneficial way to the consumers at large and
they are enjoying utility and economy but also the fact that they spent heavily to avail different offers from
companies like night packages, family and friends and their use of cell phone has increased.
Keywords: Telecommunication, Ufone, Warid, Marketing Strategy.

CHAPTER# 2: PROJECT PROCEEDINGS

In project proceedings as per the format provided to you ion your
LMS you were supposed to mention the expected project sections,
parts, main headings or outline of the final project.
Remove all the text highlighted in red and add the following as your
project proceedings (i.e. the outline of your final project highlighted
yellow)
Executive Summary
Chapter 1: Introduction
1.1 Introduction of the project
1.2 Background of the project
1.3 Company’s introduction
1.4 List of competitors
1.5 Objectives of the project
1.6 Significance of the project
Chapter 2: Pricing Strategies of Ufone
2.1 Marketing mix
2.2 Market segmentation strategies
2.3 Target marketing strategies
2.4 Pricing objectives of the Company
2.5 Product mix pricing strategies (You have to specify and justify whether
the company is following product line pricing, optional product pricing,
captive product pricing, by-product pricing or product bundle pricing)
2.6 Price adjustment strategies (You have to specify and justify whether the
company is following discount and allowance pricing, segmented pricing,
psychological pricing, promotional pricing or geographical pricing)
2.7 Price changes
2.8 Initiating price changes
2.9 Competitors’ reactions to price changes
2.10 Company's responses to price changes

Chapter 3: Competitor Analysis (Warid)

3.1 Introduction of the competitor firm(s)
3.2 Marketing mix
3.3 Market segmentation strategies
3.4 Target marketing strategies
3.5 Pricing objectives of the Competitor
3.6 Product mix pricing strategies (You have to specify and justify whether
the competitor is following product line pricing, optional product pricing,
captive product pricing, by-product pricing or product bundle pricing)
3.7 Price adjustment strategies (You have to specify and justify whether the
competitor is following discount and allowance pricing, segmented pricing,
psychological pricing, promotional pricing or geographical pricing)
3.8 Price changes
3.9 Initiating price changes
3.10 Company's responses to price changes

Chapter 4: Methodology
4.1 Data collection sources
4.1.1 Primary sources
4.1.2 Secondary sources
4.2 Data collection tools
4.3 Sampling
4.3.1 Sample size
4.3.2 Sampling technique

Chapter 5: Data processing, analysis & interpretation

Summary
Chapter 6: Conclusion, recommendations and limitations:

The telecom industry has a poor track record of predicting what the customer wants. Think back five or six years to
the hype surrounding GSM. There were countless PowerPoint presentations by vendors and operators all going on
about video telephony and assorted multimedia services. Not one, had a slide about lower costs to deliver market
needs, which now turns out to be one of the main benefits to GSM operators in Asia.

Then there's videoconferencing. For over a decade, the industry has been banging on about the supposed benefits
that this brings to the busy executive: less travel, less cost and more productivity. Yet videoconferencing, despite all
the technological upgrades, still remains — at best — a niche industry.
It's easy to use hindsight as a stick to beat the telecom industry with. Predicting what the customer wants is an
extremely tricky business, particularly if the views of one senior executive from a major European mobile operator
are correct. According to him, focus groups and marketing surveys will only give a partial insight as to which types
of services customers will be attracted to. Customers, it would seem, don't know what they want themselves and
their responses on that subject are anyhow limited to the questions asked. The challenge of the service provider —
apparently — is to know customers' latent desires.

Bright Kpodoh (2010) from Blekinge Institute of Technology While communicating on bankruptcy and financial
distress in mobile telecom industry stated that marketing strategies for emerging markets at the base of the economic
pyramid as also alongside the relationship between corporate governance and corporate failure. Finally, companies
operating in BOP markets ought to adopt and adapt the myriads of marketing strategies available, especially for
mobile telecommunication operators, in order to be able to compete effectively and earn positive average margin per
user (AMPU) in the midst of declining average revenue per user (ARPU) in the region.
Muhammad Umar; Muhammad Tahir; (2007) in his research on Boom of Telecom Sector in Pakistan and its
Impacts on Pakistani Culture.from Blekinge Tekniska Högskola/Sektionen för Management (MAM) has provided
extensive information about how this boom occurred gradually in Pakistan, present circumstances and situations of
the sector and future prospects of this segment in Pakistan. It has also provided information about how Government
institutes and policies are playing their role for the growth of the telecom sector in Pakistan? We have revealed the
new businesses that are now running in Pakistan due to the rapid growth of Telecom sector. We have also presented
the impacts of telecom boom on the existing businesses and how these businesses are being benefited due to easy
access of telecom services to a common person. Then we presented the analysis of our questionnaire that how this
boom of telecom sector has changed and affected the Pakistani culture. We have analyzed that it is of worth
importance to understand these cultural values and social set ups before entering to a new market.
There are potentially problems with the niche approach. Small, specialist niches could disappear in the long term.
Cost focus is unachievable with an industry depending upon economies of scale e.g. telecommunication

A study form quickmba.com

Research Title: Effective Marketing Base: The Case of Virgin Mobile Company
Company Background
Virgin Mobile is UK's largest mobile virtual network operator and uses T-Mobile's network. Virgin Mobile is part
of the international Telewest group. The group is the first to be able to offer 'quadruple play' to customers: mobile
and fixed line telephony, broadband internet and television. Virgin Mobile was voted 22nd in the Best Workplaces
in the UK Financial Times survey last 2006. For instance last 2006, fixed line and cable television company NTL
acquired the largest mobile virtual network operator Virgin Mobile. When Virgin Mobile, faced the welcome
challenge of skyrocketing growth, it quickly learned the hard way that server based architecture that relied on tight
coupling of services could not help them meet it. There prove costly and potentially tarnish the company’s great
reputation for customer service. As part of marketing base strategy to grow its online capability, the company sought
innovative solution that would provide scalability to accommodate rapid, unpredictable changes in demand and
tolerance required to maintain continuous availability, as the UK mobile market was worth £13.6bn end of March
2006, having increased in value by 7.7 percent on previous year. Although there remains dynamic mobile market in
the UK, marketing sales have slow down as compared to few years back, reflecting greater market maturity and
price restrictions on rates.
Findings
The study integrated market based research report on Virgin Mobile Company, located in London UK. It recognized
and craft in discussion and analysis of the company’s marketing strategies. The Virgin Mobile’s ideal marketing
activities of market mix, segmentation was effective as it brings in Porter’s five forces model, SWOT and PEST
analysis as well as presence of some marketing based matrix.
Virgin Mobile Company business is all about looking what the company composes and how it works in terms of
their marketing services and products that place weight in their situational analysis in order to lead an effective
marketing base.
Overview of Service Sector
The service sector plays an increasingly important role in modern economies
With the service sector contributing 80 percent of the 2006 Gross National Product attention is being focused more
and more on this sector. Consequently, service managers and academic researchers are now directing their efforts to
understanding how customers perceive the quality of services, as well as how these perceptions translate into
customer satisfaction and behavioral intentions. Consistent with this direction, there is increased interest in
understanding such important constructs as service quality, customer satisfaction and behavioral intentions (e.g.
repeat business, recommending the service, loyalty).
Mittal, Vikas and Wagner A. Kamakura (2001) from their Journal of “Marketing research” have pointed out that
behavioral intentions may or may not be accurate predictors of behavior. However, if they are, then the construct of
behavioral intentions is of importance to a service provider. Specifically, would a customer maintain a repeat
business relationship, staying with the company for a long time? Satisfied customers who stay with a company for a
long period tend to impact the profitability of the company in several ways. First, their repeat business generates
income for the company. Second, because of the expenditure involved in advertising, promotion, and start-up
activities, acquiring new customers can cost much more than retaining existing ones.

Third, as according to Eugene W. Anderson and Mary W Sullivan (1993) in their article “The Antecedents and
Consequences of Customer Satisfaction for Firms” wrote that loyal (and satisfied) customers often “spread the good
news” and recommend the services to several others. The resolution and the understanding of the different issues
involved in the constructs of service quality, satisfaction and behavioral intentions, and the interaction of these
issues, have sparked keen academic interest.

Overview of Telecom Industry

Telecommunications is a growing industry that has been globally available for some time. Growth of subscribers,
traffic, and most importantly revenues, is by no means automatic. Entry costs for new users and tariffs must be
continuously reduced to increase subscriber numbers and minutes of use. Infrastructure solutions that deliver lower
cost coverage and more efficient capacity are critical to drive up service volumes and revenues. Competition is often
already intense amongst the established players. Additionally, there is a steady stream of new operators and service
providers who build up their service capabilities with the latest technology, hoping to create a major competitive
advantage. Key needs for telecom operators are higher volumes and new services to sustain revenue growth and
improved cost efficiency to protect margins. A prudent yet aggressive adoption of business enhancing technology is
also needed to ensure current and future competitiveness: especially as future IP based communications creates the
opportunity for much wider competition. Business Growth, Cost Efficiency and Evolution are therefore regarded as
key drivers which can be addressed with wireless technology.
The remarkable diffusion of mobile services has outperformed experts’ expectations. From a marginal industry in
the shadow of other telecommunications providers (e.g. fixed line and the Internet), it has become a leading sector
providing commoditized services. As such, the penetration of mobile phones is almost twice as high as that of
personal computers. While only 9.9% of the world’s population owned PCs in 2002, 19% of the population
possessed cell-phones.

At the beginning of 2004, there were over 1.3 billion cell-phone users. Over the next three years, a demand for
mobile services is predicted to grow at an average annual rate of 9.1%. However, this growth mainly stems from the
deployment of new networks in developing countries rather than from an inclining penetration in developed states.
In the latter group of countries, the market has almost saturated and the install base has reached over 80%
penetration. For instance, at the end of 2003, 88.3% of the UK’s population had cell phones. According to the
Yankee Group (2004), the install base in Canada is expected to grow from 45.6% by the end of 2003 to 53.7% in
2007 with a declining annual growth – from 10.8% in 2004 to 5.1% in 2007.

The saturated markets in developed countries, combined with the de-regulation of the telecommunication industry
and the increasing number of wireless service providers, drives competition. For instance, an average number of
wireless operators in most OECD (Organization of Economic Co-operation and Development) countries doubled
from 1998 to 2000 and in 2001, new subscriber acquisition costs of Vodafone, UK were over $180.

Thus, in order to be competitive and cost efficient, mobile operators need to adjust their marketing strategies and
focus on retaining existing customers rather on acquiring new subscribers and increasing market shares. This
retention battle is further fueled by the removal of switching barriers. Partial regional standardization (i.e., CDMA in
the Far-East and GSM in Europe) allows individuals to switch from one provider to another while keeping a
previous handset. In addition, due to Number Portability regulations that emerged in some countries, a person may
even keep the same phone number when switching to another provider. The recently mandated Wireless Local
Number Portability (WLNP) regulation in the US is an example of a legislation that is predicted to dramatically
increase the competition on wireless markets (FCC 2003).

Pakistan Telecom Industry

Telecom sector is the most prominent and dominant sector in Pakistan since past 5 years. Although the
sector had suffered a lot in the current recession but still it had gained to a huge extent as compare to the other
emerging sector in Pakistan like Textile sector.

When Paktel lauched its services in 1990 there was a monopoly of Pakistan Telecom Company Limited PTCL, the
land line phone, prevail in the country. In initial stages the users were too less that the cost of the firm could hardly
be fulfilled. But as the time passed by Mobilink and then Ufone joined the race. They educate the public about the
telecom sector and tried to grab more and more users in their network. After the millennium the then government
attract more foreign firm to invest in Pakistan and they succeeded in their act and the telecom sector became highest
contributor in the GDP.

Source: Pakistan Investment Brueau Journal

Despite the difficult time in Pakistan economy, generally the telecom sector had exhibit a positive and emerging
growth in term of revenue and subscribers. From the above analysis we see that in start of the millennium the
teledensity in year 2003-04 was 6.25% and it jumps to 58.8% in 2007-08. The major portion that makes this sector
to 58.8% is of Foreign Direct Investment in Pakistan these days. In other words Pakistan kept on relaxing
investment-related policies for its telecom industry, FDI in the sector boosted up. The difference between nature of
policies in early 90s and in 2000 onwards is reflected in the difference in the level of foreign direct investment in
telecom, especially cellular phone, sector of Pakistan.

Facts on policy reforms provided evidences that government of Pakistan is taking serious steps for the
growth of Foreign Direct Investment in the country. It also witnessed that investors are given proper incentives and
protection. They are considered back bone of growing economy of the country. Steps for the liberalization,
privatization and deregulation of the telecom sector were specially appreciated by investors and considered as
rational thinking of the current government. The liberal FDI policy by the Government of Pakistan and deregulation
and privatization of the sector has triggered a wave of international acquisitions in the sector. During the last year
about US $ 2 billion worth of acquisitions were made in the telecom sector. After liberation of the sector a large
number of firms are found working in Pakistan’s telecom sector.
Information on the environmental factors also observed same kind of trends which are targeted toward
increase in FDI in the country. Moreover, our government is very much keen to provide investment friendly
environment for the investors. Solid steps of PTA as regulatory body of telecom sector and support from the
government enhanced the level of confidence of foreign investors and stimulate the investment environment of the
country. Due to satisfaction of the investor Pakistan enable to have 19th position out of 175 countries in securing
investors. PTA has proved a conducive and investor friendly environment in the telecom sector by awarding licenses
in a fair and transparent manner. All operators mostly foreign are rolling out their networks rapidly all over the
country, which requires huge investments. The foreign investment has created an environment of competition in the
mobile sector and the tariffs have reduced substantially with improved telecom services.

Since international investors learnt it worthwhile opportunity to invest in Pakistan and especially in the
telecom sector, telecom companies have invested over US $ 8 billion during the last four years in Pakistan. In 2006-
07 Cellular Mobile sector has invested over US $ 2.7 billion. This sector of economy is in its boom in these days and
it is generating chunk of profits for the investors and revenues for the government in the form of taxes. Pakistan
Mobile industry is witnessing increasing net addition to total subscriber base for last five years. In 2006 the net
addition was more than 21 million in one year showing 1.75 million average addition per month whereas in 2007 the
net addition was more than 27 million increasing average addition to 2.3 million per month.

Foreign Direct Investment (FDI) in Pakistan Telecom Industry (Source: State Bank)
 Foreign Direct Investment is considered an important source of economic growth in this globalized world. PTA has
created a conducive and investor friendly environment in the telecom sector by awarding licenses in a fair and
transparent manner. In the last 2-3 years the telecom sector has attracted record inflows of FDI. During 2005-06,
telecom sector received over US$ 1.8 billion FDI and emerged as the only sector of the economy to attract such
huge investment where its share in total FDI crossed 54%. During 2006-07, telecom sector has received above US$
1,824 million FDI, which was about 35% of total FDI in the country.

Overall net International Investment in Pakistan shows that its worth has decreased from US$ -50,754 million in
2007 to US$ -52,298 million during 2008. External financial assets decreased by 21 percent in 2008. Direct and
portfolio investment abroad which is 12 percent of the total assets has increased by US$ 523 million or 33 percent
during 2008. This happened mainly due to increase in capital of Pakistanis companies in its overseas branches/
subsidiaries. Reserve assets of Pakistan dominating the assets side with 54 percent share have decreased by 38
percent or US$ 5,903 million during 2008. Direct and portfolio investment in Pakistan which accounts for 30
percent of the total liabilities of Pakistan have decreased from US$ 32,388 in 2007 million to US$ 21,196 million
during 2008. The reason of decrease in direct and portfolio investment in Pakistan is price changes which
contributed US$ 10, 286 million in overall decrease. External loans which account for 66 percent of the total
liabilities have increased from US$ 39,038 million to US$ 46,602 million by US$ 7,564 million or 19 percent from
the previous year.

Source (PTA)
CELLULAR SUBSCRIBERS
Growth
Mobilink Ufone Zong Instaphone Telenor Warid Total
Rate %
2000 114,272 80,221 112,000 306,493 15.39
2001 309,272 116,711 96,623 220,000 742,606 142.29
2002 800,000 350,000 218,536 330,000 1,698,536 128.73
2003 1,115,000 550,000 319,400 420,000 2,404,400 41.56
2004 3,215,989 801,160 470,021 535,738 5,022,908 108.90
2005 7,469,085 2,579,103 924,486 454,147 835,727 508,655 12,771,203 154.26
2006 17,205,555 7,487,005 1,040,503 336,696 3,573,660 4,863,138 34,506,557 170.2
2007 26,466,451 14,014,044 1,024,563 333,081 10,701,332 10,620,386 63,159,857 80.70

2008 32,032,363 18,100,440 3,950,758 351,135 18,125,189 15,489,858 88,019,812 39.4

2009 29,136,839 20,004,707 6,386,571 34,048 20,893,129 17,886,736 94,342,030 1.30

CELLULAR MOBILE DENSITY

Year Mobile Density
2000 0.22
2001 0.52
2002 1.16
2003 1.61
2004 3.29
2005 8.30
2006 22.21
2007 39.94
 2008 54.60
2009 57.40

INDUSTRY ANALYSIS REPORT

INTRODUCTION
Since the inception of Pakistan, basic telecom services were being provided by a monopolist, previously called as
Telephone and Telegraph department (T&T). The department was being run by the government and played multiple
roles as regulator, policy maker, operator and service provider in the country. The T& T department was later
converted into a corporation. Although the corporation was
earning huge profits from the services, it was re-investing the same profits into the sector for the provision of more
telecom service but the investment was not enough. Further, with the technological advancement, more and more
telecom services were becoming available but there was not enough money available with the corporation to install
new telecom systems for the provision of modern services. Resultantly, a digital divide prevailed in Pakistan
keeping it behind its neighbors and other comparable countries in terms of telecom access.
Cellular mobile services in Pakistan commenced in 90s when two cellular mobile telephone licenses were awarded
to Paktel and Pak Com (Instaphone) for provision of cellular mobile telephony in Pakistan. Currently there are six
cellular players in the market. There has been a tremendous growth in Cellular market. By the end of 2007 cellular
mobile services were available in 7011 cities/towns and villages.

LDI segment witnessed blooming health during 2007 wherein telecom consumers enjoyed cheap international
dialing. Deregulation process of the telecommunication sector of AJK and NAs that was finalized in 2006-07
resulted in the award of licenses to five existing cellular operators. In 2007, PTA established ITU Asia Pacific
Center of
Excellence (CoE) PTA node for Policy and Regulations and conducted two training workshops for ITU members. In
2007 total teledensity in Pakistan has reached 52% which stands well above other regional economies, of which the
fixed line teledensity

GROWTH OF TELECOM SECTOR IN PAKISTAN

Although tremendous growth has taken place in the Pakistan telecom sector but most of it can be attributed to the
cellular growth. Fixed line is still awaiting a take off. Similarly Value Added Services have grown but are still a
drop in the bucket. Now that the competition has been introduced in the telecom sector some very positive impact
have been observed on the growth of the sector in a short span of time which is expected to continue to grow for at
least next five years if the daring investors influx continue as in the last 3 years. A brief account of the growth in
telecom sector is given below.

Mobile Sector

Driven by lowest tariffs, maximum coverage, and relatively better quality the Pakistan mobile market maintained
rapid growth during 2007. The newly deregulated mobile market is now working on sustaining the mobile boom that
hit Pakistan 2 years back and on the brink of adding Value Added Services to increase ARPU along with customer
satisfactions. Steady growth saw addition of more than two million mobile subscribers every month throughout the
last year. Network coverage of almost 90% of the total population of Pakistan has made mobile industry even more
attractive for foreign investment. Pakistan has emerged as one of the fastest growing mobile markets among the
developing nations. This year the sector grew by 80% whereas average growth rate in last 4 years has been more
than 100%. Today total subscribers have reached 76.9 million (Dec 2007) whereas it was 34.5million in 2006 and
12.7million in 2005. Figure-1 shows the subscribers growth of different Cellular Mobile Operators.Ths year This
year the sector grew by 80% whereas average growth rate in last 4 years has been more than 100%. Today total
subscribers have reached 76.9 million (Dec 2007) whereas it was 34.5million in 2006 and 12.7million in 2005.
Figure-1 shows the subscribers growth of different Cellular Mobile Operators.

Market Share

In 2007 the share of each company in mobile market exhibited a change, except for Ufone whose
subscriber share remained more or less the same. Mobilink kept on loosing its share for another year in
favour of Telenor and Warid despite its secure subscriber base.
Marketing strategy: is a process that can allow an organization to concentrate its limited resources on the greatest
opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be
centered on the key concept that customer satisfaction is the main goal.
Philip Kotler (2005): Book: Competitive Advantage

There are two major components to your marketing strategy:

• how your enterprise will address the competitive marketplace
• how you will implement and support your day to day operations.
In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or
service in a way that will outsell the competition is critical. However, in concert with defining the marketing
strategy you must also have a well defined methodology for the day to day process of implementing it. It is of little
value to have a strategy if you lack either the resources or the expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of those many factors, some are
more important than others. Because each strategy must address some unique considerations, it is not reasonable to
identify 'every' important factor at a generic level. However, many are common to all marketing strategies.

You begin the creation of your strategy by deciding what the overall objective of your enterprise should be. In
general this falls into one of four categories:
• If the market is very attractive and your enterprise is one of the strongest in the industry you will want to
invest your best resources in support of your offering.
• If the market is very attractive but your enterprise is one of the weaker ones in the industry you must
concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective.
• If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an
effective marketing and sales effort for your offering will be good for generating near term profits.
• If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you
should promote this offering only if it supports a more profitable part of your business (for instance, if this
segment completes a product line range) or if it absorbs some of the overhead costs of a more profitable
segment. Otherwise, you should determine the most cost effective way to divest your enterprise of this
offering.
Having selected the direction most beneficial for the overall interests of the enterprise, the next step is to choose a
strategy for the offering that will be most effective in the market. This means choosing one of the following 'generic'
strategies (first described by Michael Porter in his work, Competitive Advantage).
• A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good
quality product or service at a lower cost than your competitors. These low costs should translate to profit
margins that are higher than the industry average. Some of the conditions that should exist to support a cost
leadership strategy include an on-going availability of operating capital, good process engineering skills,
and close management of labor, products designed for ease of manufacturing and low cost distribution.
• A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being
unique "throughout the industry". The emphasis can be on brand image, proprietary technology, special
features, superior service, a strong distributor network or other aspects that might be specific to your
industry. This uniqueness should also translate to profit margins that are higher than the industry average.
In addition, some of the conditions that should exist to support a differentiation strategy include strong
marketing abilities, effective product engineering, creative personnel, the ability to perform basic research
and a good reputation.
• A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more
'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused"
segment of the marketplace, product form or cost management process and is usually employed when it
isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based
on the concept of serving a particular target in such an exceptional manner, that others cannot compete.
 Usually this means addressing a substantially smaller market segment than others in the industry, but
because of minimal competition, profit margins can be very high.
Operational Strategies:
Pricing
• Skimming Strategy
• Market Penetration Strategy
• A comparable Pricing Strategy
Promotion

• The PUSH STRATEGY

• The PULL STRATEGY

There are many strategies for advertising an offering. Some of these include:
• Product Comparison advertising
• Product Benefits advertising
• Product Family advertising
• Corporate advertising

Distribution
• On-premise Sales
• Direct Sales
• Wholesale Sales
• Self-service Retail Sales
• Full-service Retail Sales
The Environment
• Government actions
• Demographic changes
• Emerging technology
• Cultural trends

The Prospect

The Product/Service

The Competition

Your Enterprise

Development

Production

Marketing/Sales

Customer

Malcolm McDonald (2004)

Marketing continually has to adopt new approaches and techniques to respond to a changing business environment
that is characterized by increasing consumer sophistication, deregulation, time-based competition, and lack of
market growth. Such adaptive techniques have led to marked change in marketing practices over the years.

Al Ries & Jack Trout: Book: Marketing Warfare (2005)

MARKETING WARFARE STRATEGIES
It has given the four kind of marketing warfare strategies that are as follows:
1. The principle of defensive warfare
2. The principle of offensive warfare
3. The principle of flanking warfare
4. The principle of guerilla warfare.

Marketing Strategy of Nokia

As we move into the Mobile World, we remain committed to strong growth, profitability and responsible market
leadership.
　
Strategic Direction:-
The mobile phone is fast becoming the centerpiece of personal communication, allowing us access to an ever-
widening range of services. Today, we are moving from voice services to services driven by data and multimedia.
Business Environment:-
Nokia competes in the global telecommunications industry in general and in the mobile industry in particular, each
of which has exhibited rapid growth, change and convergence in recent years.

CHAPTER # 3: METHODOLOGY

You have not followed the format in Chapter # 3. You were strongly advised to stick
to the format for your convenience. You were instructed to add the following heads
in chapter 3.

Chapter No 3: Methodology
3.1 Data Collection Sources:
• Primary sources of data collection
• Secondary sources of data collection
3.2 Data Collection Tools/Instruments
3.3 Subjects/Participants:
• Target population
• Sample Size
 • Sampling technique
3.4 Fieldwork/Data Collection:
3.5 Data Processing & Analysis:
You are instructed to improve chapter # 3 as per the format
provided above in yellow highlighted portion

3.1 Data Collection Sources:

Research Methodology

Time Frame: 3 months.

Overall Population: Peshawar

The research was carried out during the April-June 2011 in the market. The researcher traveled to different Industry
analysts, Cellular Industry all stakeholders i.e. employees, vendors, retailers, and the end-user, The consumers. In-
depth interviews, interactive sessions and discussions were held with the concerned people. Also a comprehensive
questionnaire was made and the concerned parties were requested to fill in the questionnaire. I occasionally left
questionnaires with people who requested for more time because some of them were key position holders with busy
schedule.

On approaching criteria was setup by the researcher to determine who to give or not to give the survey. Moreover,
the internet, other secondary sources, Digital libraries, and references abroad in the industry was also the source to
obtain knowledge.

The researcher met with supervisor every week to report on his activities. When giving out the surveys the
researcher provided the respondents with all the adequate information that they needed to know; this included,
explaining why the research was being carried out and clarifying any questions that seemed hard to answer. The
survey was carried out in a time span of 100 days.

PROBLEM IDENTIFICATION

Warid and Ufone are cellular operators of Pak Telecom Industry and the study covers Peshawar (Pakistan). It is
claimed that these two Companies were earning huge revenues in postpaid segment because of their marketing
campaigns and now striving for their survival or will achieve sustained growth or decline. Based on study of
respondents it is going to find out that what are their marketing strategies in postpaid segment? And what their
marketing strategies in postpaid segment will result into while comparing with each other?

The variables considered were

• Pricing
• VAS (Value Added Service)
• Advertising
• Customer Services
• Product Line
Research Question
What are the marketing strategies of Warid and Ufone in its postpaid segment and how they have influence
the consumer and the Industry?
Limitations of the Study

• Time frame has been one of the limitations of my Study.

• The study covers only the Peshawar City.

• The study covers Preferences of the consumers, hence possibility of biased responses.

• Research was done on just the two cellular companies.

• The limited population was also the limitation

• One of the limitations was the coverage of Geographic location. My study covered only two cities i.e.
Peshawar. Hence it may not show the overall picture of marketing strategies and its effects.

• Moreover, non co-operation from many telecom Industry personnel in making this research a very accurate
one specially employees of Warid and Zong who do not share enough time and complete information about
their company marketing strategies.

Bibliography
Bibliography is missing. Please add in APA format
Bibliography is a list of source materials on a particular subject. In a formal
report, it includes books and other library materials which have been
consulted in the preparation of the project. As a part of the reference matter,
it follows the appendices.
Note: The APA format for the reference citation is given in the
lesson # 45 of the lecture hand outs of STA630. It is also advised to
consult the said course for a better understanding of the research
process.