GROUP NAME: GRAMEENPHONE

TERM PAPER
Non-Price Competition
MD. Habibur Rahman

24/07/2012

Group Members and Their Activities

Group Members Md. Nazmul Hasan Md. Khayrul Islam Didar Mahmud Tamanna Farhan Samara Salsabeel Khan Muhammad Aminur Rahman Sayeda Munzareen Rahman Md. Habibur Rahman

Members ID
41221062 41222017 41221069 41222026 41222027 41222018

Members Activities
Information Collector Communicator & Advisor Data Collector Financial Data Analyzer Anchor of Presentation Power Point

Power Point Slide Designer & Report Presenter Absent Overall Data Organizer & Report Writer

41222005 41222009

July 24, 2012

Dr. Samir Kumar Sheel Associate Professor Course Name: Economics

Dear Sir, It gives immense pleasure to submit a report on Grameenphones Non-price competition tools. This report is submitted as a partial fulfillment as a part of our course. The preparation of the report has given ours and insightful experience and in-depth knowledge on Grameenphone Company in Bangladesh. We have given our best effort to make it a worthy one and each aspect of the problem is considered and studied as required. If any confusion arises or further explanation is needed, we shall be available to explain the matter to you as and when required despite having limitations. Your benign and authoritative advice will encourage us to conduct further flawless research in future.

Sincerely, Md. Habibur Rahman

TABLE OF CONTENT

Executive Summary

An overview of Telecommunication service provider companies in Bangladesh Competition of Telecommunication service provider companies in Bangladesh And their Market Share

A Glance Over Grameenphone Why there is an emphasis on non-price competition in Telecommunication service providers market rather than on lowering prices to gain market share?

What is Non-price commpetition? Non-Price commpetition Tools used by Grameenphone Advantages and disadvantages of Non-Price competition Conclusion

Bibliography

EXECUTIVE SUMMARY

In 1,47,570 square kilometer there are 16.40 corer people and more than 90.5 million mobile phone subscribers in Bangladesh, where the telecommunication service providers are very few as like oligopoly market. As the number of telecommunication service providers is very few and the market (potential & actual buyer) is big a common thing happen among these companies which is called competition related to the price of the product or service. To divert this price competition they use Non-price competition tools which are the main discussion of this article. More over this article will focus on the market leader Grameenphone among all other telecommunication service providers.

An overview of Telecommunication service provider companies in Bangladesh

Grameenphone had37.7 million subscribers (as of April 2012). March 26, 1997: Grameenphone launched its service on the Independence Day of Bangladesh.

Airtel Bangladesh had 6.538 million subscribers as of April 2012. Airtel is the sixth mobile phone carrier to enter the Bangladesh market, and originally launched commercial operations under the brand name "Warid Telecom" on May 10, 2007.

Banglalink (Bengali: ), is the second largest cellular service provider in Bangladesh after Grameenphone. As of April 2012, Banglalink has a subscriber base of 25 million.

Citycell (Pacific Bangladesh Telecom Limited) is the first mobile communications company of Bangladesh. As of April 2012, Citycell has 1.801 million subscribers.

Robi Axiata Limited(formerly known as Aktel), is a joint venture between Axiata Group Berhad, Malaysia (70%) and NTT DoCoMo Inc., Japan (30%).Robi is the third largest mobile phone operator in Bangladesh with more than 18.2 million subscribers as of April 2012.

Teletalk is the 6th mobile phone operator in Bangladesh with more than 1.295 million subscribers as of April 2012.

Competition
As at 31 March 2012, Grameenphone had a market share of 42.2%. In addition to Grameenphone, there are five other mobile operators in Bangladesh. These operators and their market shares as at 31 March 2012 are: Banglalink (27.5%), Robi (19.8%), Airtel Bangladesh (7.1%), Citycell (2.0%) and Teletalk (1.4%). Competition among operators is intense and tariff levels are among the lowest in the world. AndGrameenphone ( ) widely known as GP, is the leading telecommunications service provider in Bangladesh.

Market Share
45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Market Share

Market Share

Mobile Phone Companies in Bangladesh

A Glance Over Grameenphone

Starting its operations on March 26, 1997, the Independence Day of Bangladesh, Grameenphone has come a long way. Grameenphone pioneered the then breakthrough initiative of mobile to mobile telephony and became the first and only operator to cover 98% of the countrys people with network. Coverage: Since its inception Grameenphone has built the largest cellular network in the country with over 13,000 base stations in more than 7000 locations. Presently, nearly 99 percent of the country's population is within the coverage area of the Grameenphone network. Grameenphone has so far invested more than BDT 17,093 corer to build the network infrastructure

Largest Taxpayer: Grameenphone is one of the largest taxpayers in the country, having contributed more than BDT 24,517 corer in direct and indirect taxes to the Government Exchequer over the years. Product and Services of Grameenphone:

Employees: Grameenphone has more than 5000 full and temporary employees. Ownership Structure: It is a joint venture enterprise between Telenor (55.8%), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2% ), a non-profit sister concern of the internationally acclaimed micro-credit pioneer Grameen Bank. The other 10% shares belong to general retail and institutional investors.

Organizational Structure:

Companys Mission: Leading the industry and exceed customer expectations by providing the best wireless services, making life and business easier Companys Vision: We exist to help our customers get the full benefit of communications services in their daily lives. We want to make it easy for customers to get what they want, when they want it. We're here to help Grameenphones Values:

Make It Easy Keep Promises Be Inspiring Be Respectful

Brand Promise: Stay Close

Financial Position:

Why there is an emphasis on non-price competition in Telecommunication service providers market rather than on lowering prices to gain market share?
The distinctive feature of an oligopoly is interdependence. Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore the competing firms will be aware of a firm's market actions and will respond appropriately. This means that in contemplating a market action, a firm must take into consideration the possible reactions of all competing firms and the firm's countermoves. It is very much like a game of chess or pool in which a player must anticipate a whole sequence of moves and countermoves in determining how to achieve his objectives. For example, an oligopoly considering a price reduction may wish to estimate the likelihood that competing firms would also lower their prices and possibly trigger a ruinous price war. Or if the firm is considering a price increase, it may want to know whether other firms will also increase prices or hold existing prices constant. This high degree of interdependence and need to be aware of what the other guy is doing or might do is to be contrasted with lack of interdependence in other market structures. In Telecommunication service providers market there is zero interdependence because no firm is large enough to affect market price. All firms in this market are price takers, information which they robotically follow in maximizing profits.

What is Non-price commpetition?

Non-price competition is a marketing strategy "in which one firm tries to distinguish its product or service from competing products on the basis of attributes like design and workmanship". The firm can also distinguish its product offering through quality of service, extensive distribution, customer focus, or any other sustainable competitive advantage other than price. It can be contrasted with price competition, which is where a company tries to distinguish its product or service from competing products on the basis of low price. Nonprice competition typically involves promotional expenditures (such as advertising, selling staff, the locations convenience, sales promotions, coupons, special orders, or free gifts), marketing research, new product development, and brand management costs. Firms will engage in non-price competition, in spite of the additional costs involved, because it is usually more profitable than selling for a lower price, and avoids the risk of a price war. Although any company can use a non-price competition strategy, it is most common among oligopolies and monopolistic competition, because firms can be extremely competitive

Non-Price commpetition Tools used by Grameenphone

Grameenphone Non-price Competition Tools

Advertising

Unique Brand

Unique sales promotional tools

Corporate Social Responsibility

News papers TV Radio Magazines Newsletters Internet

Brand Name Brand Slogan Brand LoGo Brand Character Jingle

Cash Refund Offer Bonus Offer GP Offer Premium Package Star Program My zone Offer Micro SIM Offer

Health Education Environment

Convenient Location

Product Variation

Grameenphone Advertising tools: Grameenphone uses different types of media to acquire different types of objectives. To select media depend on the target audience, product characteristics, message characteristics and cost. The advertising tools that Grameenphone uses as a media to communicate with the existing and potential customers are: 1. Newspapers: Newspaper covers all sorts of information about Grameenphone product. It mainly covers the informative and reminder advertising. 2. Television:

The countrys six telecom operators have spent around Tk 103 corer in the first three months of this calendar year on television commercials. All of them give a lot of television commercials in different media including television, newspaper and popular websites. Television commercial (TVC) is the most expensive medium of giving advertisement. There are almost 10-12 television channels in Bangladesh. They are almost getting dependent of advertisements of Mobile operators. Grameenphone led the market share of advertisement for long time. But Robi (Aktel) has crossed the amount of money expense on television advertisement. Grameenphone has several times of subscribers than Robi.

3. Radio: Within a lower cost, Grameenphone broadcast their massage through radio. It is a better way for persuasive advertisement. 4. Magazines: An effective media that Grameenphone uses as a promotional tool to achieve the customers awareness about Grameenphone and its product. It is an effective media for informative and persuasive advertisement. 5. Newsletters: Grameenphone publishes newsletter regularly to inform existing customer as well as Potential customer about companys recent activities and offer. 6. Internet: Internet performs effective promotional tools Grameenphone advertising. It gathers all sort of information about Grameenphone.

Unique Brand: 1. Brand Name: Grameenphone. 2. Brand Slogan: Stay Close. 3. Brand Logo:

4. Brand Character: Dont have any. 5. Jingels: Sole Background Music.

Convenient Location: The company has nearly 600 customer touch points, including 82 Grameenphone Centers (GPC), across the country. GPCs are Grameenphone's flagship sales and service points. It is a one-stop shop, manned by professional sales and service people, to help customers pay their mobile bills, change a subscription, buy a new connection or replace a mobile phone, and more, all under one roof.

Unique sales promotional tools: Many tools can used to accomplish sales promotion objectives. Describes of the main consumer, trade and business tools that Grameenphone uses as short-term incentives to encourage the purchase the product follow:

1. Ramadan Special Offer: In the upcoming holy month of Ramadan, Grameenphone has designed a whole range of offers to satisfy the need of the pious Muslims. By dialing 2200, customers will have the access to special religious contents specially designed

to perform religious acts in a better way. Under this campaign subscribers can listen to different Islamic Contents only at BDT 2 per day and can browse maximum 30 minutes per day. If a subscriber accesses this 2200 IVR for 20 minutes, he/she will be able to listen to the contents for another 10 minutes for that particular day.

2. Grameenphone Start-up Offer: Grameenphone prepaid SIM for only BDT 149 and enjoy BDT 150 worth of bonus talk-time, 150 SMS and 150 MB Internet absolutely free! Your new prepaid SIM will also come with BDT 10 worth of pre-loaded talktime. And that's not all! If you buy your GP prepaid connection on or after July 05, 2012, you can also enjoy BDT 1 Instant Cash Back upon BDT 1 usage!

3. Whole day internet offer: Ccustomers will be able to enjoy whole day internet at BDT 7.

4. HSC Result on Your Mobile: Subscribers will be able know HSC results as soon as it is declared/published by the Education Board of Bangladesh.

5. GP Offer: Grameenphone has always strived for bringing the very best offers for its subscribers that will suit their telecommunication needs. Based on individual subscribers interests and mobile behavior we are now designing attractive and customized offers as well. As it is obvious that people will have different preferences, likings and disliking, a generalized offer cannot fulfill individual needs completely. These offers are sent to subscribers mobile phone through a specific SMS, which is called GP Offer. We have been sending the GP offer SMS to our valued subscribers for quite some time with attractive offers. Subscribers need to follow the instructions of the GP offer SMS to avail the offer. The offers can be of different types; Voice, VAS or Data.

6. Premium Package: Grameenphone Ltd. (GP) introduces its Xplore Postpaid product in a brand and exciting new way. With an aim of delighting all existing Xplore subscribers and the upcoming generation of postpaid users, GP has not only made a change in the tariff plan of this product but has also introduced other new unique offers for it (such as: Auto debit option with Standard Chartered Bank, Lanka Bangla Finance, The City Bank Ltd. & United Commercial Bank and Extended Credit Limit Option with Bank Guarantee from United Commercial Bank).

7. Star Program: This program is a small effort to show gratitude to Their best customers for being with Grameenphone for a reasonably long time. They strive to give the best possible offers and experience to the Grameenphone STARs, with the honor of privileged treatment, through invitation to special engagement programs and through pleasant surprises!

8. My Zone: Grameenphone Ltd. Introduces an innovative service called MY ZONE. Under this service, now any prepaid subscriber of GP can enjoy upto 83% discount in their call rate.

9. Micro SIM Card for iPhone & iPad: Grameenphone brings Micro SIM cards for iPhone 4 & iPad users to provide the best experience as well as to make life easy. Micro SIM card is a mini-version of traditional SIM Cards, exclusively designed for iPhone4 and iPads. Because of its unique (smaller) size, micro SIMs usually cannot be used in any other regular handsets. However, Grameenphone's Micro SIM cards are designed in such a way that the users can use it for iPhone 4, iPad and/or any other regular handset.

10. Muktijudhdho Portal: Bangladesh, a land which we call our home, is celebrating its 40 years of independence on December 16, 2011. 1971 a year which marked itself in the history of war, from which the memories still haunts many, a year when a new nation was born, Bangladesh. Now we celebrate the Independence Day turning the unhappy past into happy memories. Believing that what we are today is only because of the liberation; making everyone realize that '71 will never be the past, it is the eternal notion of the nation that will keep on existing even within those who were not a part of the war, the youth & the next generation. Grameenphone not only wants to preserve the past for the future, but also wants the youth to realize and live with the fact that '71 still subsist within us.7171 a voice portal service launched by Grameenphone, only for its subscribers where one can listen to incidents that took place on that very day of 1971 Muktijudhdher Ei Dine. Apart from that, subscribers would also be able to know more about the Independence Day by dialing different menus.

Corporate Social Responsibility: Grameenphones CSRinitiativesisbasedon3mainfocusareas: Health Education Environment Some of Grameenphones Key CSR initiatives: Safe Motherhood & Infant Care Project - More than 1.7 million free primary healthcare services to underprivileged pregnant mothers & their infants Free eye care support for around 28,780 people - 3,458 eye sights restored so far Awareness building on varied national issues- AIDS, National Immunization Day

Information boats with digitized livelihood contents and internal access for remote reverie communities Economic freedom for more than 400,000 Village Phone Operators More than 500 Community Information Centers- connecting life and learning Proud sponsor of Bangladesh Special Olympics team Employment opportunity to acid survivors Scholarship for underprivileged meritorious students Blood donation camps for underprivileged Thalassemia patients Establishment of Blood Bank at Bogra for underprivileged patients Emergency relief effort in natural calamities

Product Variation: 1. Product modification: Grameenphone attempt to bring in new variations on their products like call block, MCA, Smart Load, Buddy Tracker, Pay for Me, Facebook SMS, Mini pack internet. 2. Vartical Product Variation: Shohoj: Grameenphone prepaid connection comes with this pre-activated package where you will be able to talk to any operator number at a low, flat rate of Tk0.79

Bondhu: This package with the highest number of F&Fs allows you to talk to your near and dear ones at the lowest rate.

Apon: You can talk to over 37 million Grameenphone numbers at a very low rate of 49 Paisa per minute.

Baadhon: "Baadhon" is a special package which is very suitable for the rural population of Bangladesh.

Spondon: Spondon is the new attractive price plan from Grameenphone which gives you the opportunity to Pay only as much as you will talk

Amontron: "Amontron" is the new attractive price plan from Grameenphone which gives you the opportunity to talk to any other operator at a call rate of 65 paisa per minute (24 hours).

Smile: The Grameenphone SMILE prepaid connection now gives you more freedom, more opportunities and more reasons to smile! Talk to all your Grameenphone friends at on 50 paisa and 80 paisa per minute in the special hour and only at Tk. 1.60/minute at other hours. You can also call other operator numbers at only Tk. 2.00/minute. There is also the super off-peak hour which allows you to make GP-GP calls at only 50 paisa/minute.

Djuice: New djuice price plan from Grameenphone Ltd. is designed with the Youth in mind. It addresses the most relevant elements of atypical Youth lifestyle: Community, F&F and Night-time!

Internet packages: Grameenphone offers the most affordable internet packages for handset browsing. You can easily connect to internet by availing any of the internet packages offered by Grameenphone. Minipack Pay per Use (Max BDT 20/day) Pay as you go package at BDT 0.02/KB Minipack1MB at BDT 2.50 with 2 MMS and 3 Days validity Minipack3MB at BDT 9 with 3MMS and 7 Days validity Minipack15MB at BDT 29 with 15 Days validity Minipack99MB at BDT 99 with 15 Days Validity 1GB Package at BDT 300 with 30 Days Validity Subscribers are free to choose any of the other Grameenphone internet packages (i.e. P2, P3, P4, P5) for browsing internet over handsets. No SMS charge is applicable for activation, deactivation and usage query of internet services through 5000.

Advantages and disadvantages of Non-Price competition

Grameenphone

Advantages

Disadvantages

Increased demand Leads to more sold and profit

Avoids price wars

Increased cost may Decrease the profit

Summery after Discussion

These Non-price competition tools enables Grameenphone to be unique and different from other competitors. The design and distinguishing features of services offered in the market matches the demand and needs of the people. Above all is the quality of the product and grameenphone is the best among all other competitors.

The greater the difficulty, the more glory in surmounting it. Epicurus

Greek Philosopher

BIBLOGRAPHY

1. http://www.grameenphone.com/ 2. http://en.wikipedia.org/wiki/Grameenphone 3. http://www.djuice.grameenphone.com/ 4. http://www.cellular-news.com/tags/grameenphone/ 5. http://www.scribd.com 6. http://www.docstoc.com 7. http://www.slideshare.net 8. http://telenor.com/global-presence/bangladesh/ 9. Grameenphone Annual Report 2011. 10. http://www.telecomsmarketresearch.com 11. http://www.thedailystar.net/