INDIAN INSTITUTE OF MANAGEMENT ROHTAK

Marketing Project Primary Research on Vodafone M-Health Initiative

Submitted to: Mr. Preshth Bhardawaj

Submitted By: Section C, Group No. 1 Aashita Kukreja (PGP04099) Anjali Burad(PGP04103) Balaji (PGP04107) Chetan Bhawsar(PGP04109) Sushma Pawar(PGP04147)

Acknowledgement

The success and final outcome of this project required a lot of guidance and assistance. We owe our profound gratitude to our professor, Mr. Preshth Bhardawaj for giving us the opportunity to do this project and providing us with his valuable insights and support. He took a keen interest in our project and guided us all along. We are extremely grateful to you for your guidance. We would also like to thank our institute, Indian Institute of Management, Rohtak, for giving us the opportunity and being a constant source for encouragement. Lastly we would like to thanks all those involved in this project, who have helped us in completing the project.

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Table of contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Executive Summary Situational Analysis Competition Assessment Marketing Mix Strategies Marketing Research Overall Evaluation Recommendations Appendices References

Chapter 1
Executive summary
History and Current Status:
"Telecommunications is the backbone of our future economy. International competitiveness increasingly depends on the development of a telecommunications infrastructure that is compatible with international standards" The technology that gives a person the power to communicate anytime anywhere has spawned an entire industry in mobile telecommunication. Mobile telephones have become an integral part of the growth, success and efficiency of any business / economy. The most prevalent wireless standard in the world today, is GSM. The GSM Association (Global System for Mobile Communications) was instituted in 1987 to promote and expedite the adoption, development and deployment and evolution of the GSM standard for digital wireless communications. The GSM Association was formed as a result of a European Community agreement on the need to adopt common standards suitable for cross border European mobile communications. Starting off primarily as a European standard, the Group Special Mobile as it was then called, soon came to represent the Global System for Mobile Communications as it achieved the status of a world-wide standard. GSM is today, the world's leading digital standard accounting for 68.5% of the global digital wireless market. The Indian Government when considering the introduction of cellular services into the country, made a landmark decision to introduce the GSM standard, leap frogging obsolescent technologies / standards. Although cellular licenses were made technology neutral in September 1999, all the private operators are presently offering only GSM based mobile services. The new licensees for the 4th cellular licenses that were awarded in July 2001 too, have opted for GSM technology to offer their mobile services. The Government of India recognizes that the provision of a world-class telecommunications infrastructure and information is the key to rapid economic and social development of the country. It is critical not only for the development of the Information Technology industry, but also has widespread ramifications on the entire economy of the country. It is also anticipated that going forward, a major part of the GDP of the country would be contributed by this sector. Accordingly, it is of vital importance to the country that there be a comprehensive and forward looking telecommunications policy which creates an enabling framework for development of this industry. Progress to Date The Telecom Sector witnessed a marginal decline in the number of subscribers during the year 2012-13. At the end of the financial year, the subscriber base was 898.02 million, out of which 867.80 million were wireless subscribers. During the year, wireless subscriber base recorded a

decline of 51.37 million, while the overall tele-density declined marginally to 73.32 from 78.66. But the situation is improving now. As the in the last one year there has been a growth in this sector. Also the predictions say that India will soon be the largest user of telecom networks in the world. Poised for rapid economic growth, India still lags behind on key development indicators such as basic health and education facilities. In order to promote and expedite inclusive growth, India can use mobile technology, Mobile Value Added Services (MVAS) in particular, to deliver these services. There is a need and the rationale for doing so. Also there are some challenges that MVAS industry facing, and steps are needed to be taken by the regulatory authorities and the industry players to fulfill the potential of MVAS to reach the Indian citizenry with basic services in an effective and efficient manner.

Chapter 2
Situational Analysis
Industry profile: Current and Future Scenario
Telephony was introduced in India in 1882. The Indian Telecom sector has proved to be an international success story. With over 900 million telephone connections, India is now the world's second-largest telecommunications market as in 2013 and is meeting up to the global standards. The number of telephone subscribers in India increased from 895.51 million at the end of Dec12 to 898.02 million at the end of Mar-13, registering a growth of 0.28% over the previous quarter Dec-12. It reflected year-on-year (Y-O-Y) negative growth of 5.61% over the same quarter of the previous year. The overall Tele-density in India slightly declined from 73.34 as on 31st December, 2012 to 73.32 as on 31st March, 2013 (Exhibit 2). It had seen a bumpy ride in the past few years but now it has recovered and is starting to make little progress to jump to the next generation of services. Telecom infrastructure in India is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2008-15. With a growth rate of 43.23% every year the Indian Telecom network is expected to be the largest telecommunication market in the coming years. India is a country of a billion plus people with needs spanning across basic hygiene and sanitation, clean drinking water, basic healthcare, primary education to adequate housing, roads, higher education, banking facilities, disease control, and disease management. Each problem is exacerbated by its sheer magnitude. Today, we still struggle to disseminate basic banking, health, and education services to large segments of the population. (Exhibit 3) The reach and penetration of mobile phones can ensure the delivery of a large number of services in a cost effective, fast and seamless manner even without physical access, as is seen from such initiatives around the world. With the advancement in technology, even mobile phones at the lowest price points today can support powerful applications which empower the user in a variety of ways, from exchanging information via SMS, accessing entertainment based services to checking bank account details, crop prices, receiving personalized health alerts and obtaining vocational training. This makes mobiles phones the perfect medium to deliver a variety of content and services, or as referred to in popular parlance Mobile Value Added Services (MVAS) - to the Indian population. As the telecom industry sees a rapid decline in voice tariffs, it is looking at services beyond standard voice calls, or Mobile Value Added Services (MVAS) to propel it to the next level of growth. With mobile penetration expected to go up to nearly 100% by 2015, and the advent of 3G, MVAS revenues are expected to grow to approximately Rs. 48,000 Cr. The industry is looking at various means to use MVAS as a growth driver and simultaneously as a key differentiator. While today, non-voice revenues in India only account for about 10% of an

operators revenues, the global average for leading MVAS countries is far higher, pegged at approximately 23%3 (Exhibit 4). The focus of the industry, so far, has been infotainment MVAS, but there is much discussion around other services which have a greater growth potential, and currently may not even exist. Some of these services are those in the Utility MVAS category: Mobile Value Added Services (MVAS) which seek to digitally empower citizens by providing efficient access to essential information and services and foster inclusive growth.

Environmental Influences
The Indian telecommunications sector has undergone a major process of transformation because of significant Government policy reforms during the recent years. The New Telecom Policy, 1999 focused on creating an ideal environment for investment, establishing communication infrastructure by leveraging on technological development and providing affordable telecom services to all. These objectives of the policies have resulted in rapid growth of subscribers and lower tariffs. We believe that with these major initiatives of the Government, the mobile market in India will have a promising future In the National Telecom Policy 2012 the government had taken some significant initiatives - like the much-awaited policy on mergers and acquisitions and permitted 100 per cent foreign investment in the sector - which will drive Indian telecom in the years to come, analysts feel. The key drivers for Utility MVAS include: (1) Government mandate for inclusive growth Inclusion of aggressive targets on key development parameters such as poverty, health, literacy, population control, etc. in Millennium Development Goals Use of technology to overcome the lack of infrastructure which has been impeding access to a plethora of basic services including government services (2) Increasing mobile phone, and network penetration Increasing mobile phone penetration, especially in the non-urban areas Higher penetration of smart phones as well due to falling prices Increase in network infrastructure, including impending deployment of 3G enabling richer VAS (3) Need for differentiation among telecom operators and device manufacturers Handset manufacturers: Falling prices of handsets, increasing competition are forcing the shift to a focus on services Network operators: Falling voice revenues, increasing competition, heavy investments in 3G, and increasing consumer attrition have made them turn to VAS to secure their businesses (4) Increasing consumer demand and awareness, even in non-urban areas Increasing disposable incomes have resulted in increased willingness to spend on services that bring value Increasing familiarity with technology has resulted in greater awareness of VAS Access to business-critical information in rural areas directly results in supporting the livelihood of the farmers (5) Business need of service providers such as hospitals and banks

 Increasing disposable incomes have resulted in increased willingness to spend on services that bring value Increasing familiarity with technology has resulted in greater awareness of VAS Access to business-critical information in rural areas directly results in supporting the livelihood of the farmers (6) Automation due to Information and Communications Technology Advances in ICT has made large databases of information available and enable automation of services (e.g. IVR which access customer information to provide required information to customer) E-services such as e-commerce, e-governance etc. have shown the way for further mobile platform to be leveraged in a similar manner.

Existing Customers
In a country like India which is not yet telephone-saturated and the ongoing changes in related areas are resulting in a rapidly changing profile of users, providers and their respective needs, continuous revision of the telecom policy is imperative. Given the emerging new technologies and the integrating economies there must be fairness among competitors. The tele-density in India is about four per hundred people in respect of the fixed telephones and a little less than one in respect of the mobile telephony. The low densities are not because there is no need for a telephone but because of its high cost that many cannot afford that one. However the trend is changing among the consumers. The year 2013 saw an increase in rural tele-density to 41.02from 39.22 in the previous year but the urban tele-density decreased to 146.96 from 169.55. In 2011-2013, 47.82 million subscribers submitted their porting requests to different service providers for availing Mobile Number Portability (MNP) facility. While this predicted growth is mainly expected to be in high speed data services such as mobile TV, video calls, the MVAS market can be expanded further by looking at providing services to the emerging subscriber base. The next wave of growth in subscriptions will come from semiurban and rural areas. Today the penetration of mobile phones in urban areas is already ~ 100% while in rural areas it is only ~ 23%.8. This emerging subscriber base has many unmet needs, and some of the services could include providing real time agriculture information, banking services, and delivery of educational content. In India, and across the world, services in these areas have seen success such as Nokias Life Tools for agricultural information and Safaricoms remittance service called M-PESA in Kenya. Thus, here is economic and social benefit in looking at some of the emerging MVAS services which can optimally use mobile technology as a great socio-economic leveller, and driver of growth for India, as also rejuvenates the highly competitive and pressurized telecommunications market. As per the industry trends, growth is maximum in the bottom of the pyramid. The growth in urban areas and metros has been the same as always but there is new growth in the rural and semi urban areas, which is the area that should be tapped upon now.

Product and Service Description

What is Utility MVAS? Mobile Value Added Services (MVAS) which seek to digitally empower citizens by providing efficient access to essential information and services, and foster inclusive growth can be classified as Utility MVAS. Digital empowerment Digital divide is a term commonly used to refer to the gap between people with effective access to digital and information technology and those with very limited or no access at all. It includes the imbalance both in physical access to technology and the resources and skills needed to effectively participate as a digital citizen. The real divide today is in terms of amenities, services and infrastructure. Inclusive Growth This means a sustainable development including every section of the society. e. From the governments perspective the use of MVAS for the efficient and effective delivery of necessary services such as health, education, governance and banking to all sections of society will help accelerate the pace of economic development. From the perspective of the private sector, looking at MVAS services to foster inclusive growth not only presents new growth avenues for the industry, but also, shows a longer term vision of enabling more sections of society to participate in broad-based economic growth. VAS contribute to around 7% of total wireless telecom revenues for Indian operators. These Value Added Services are provided via SMS, IVR, and WAP of which SMS generates a total of 55% revenue to the total revenue generated by VAS. Bollywood and Cricket are the most popular be it through SMS, ringtone, games or wallpapers. Rural applications are also getting more and more popular and they are showing an increasing growth trend in les developed areas because of the willingness of people to spend on services which enhance livelihood.

Vodafone
Vodafone India Limited, formerly Vodafone Essar Limited, is the second largest mobile network operator in India after Airtel by subscriber base. It is based in Mumbai, Maharashtra. It has approximately 160 million customers as of December 2013. In July 2011, Vodafone Group agreed terms for the buy-out of its partner Essar from its Indian mobile phone business. The UK firm paid $5.46 billion to its Indian counterpart to take Essar out of its 33% stake in the Indian subsidiary. It will leave Vodafone owning 74% of the Indian business, while the other 26% will be owned by Indian investors, in compliance with Indian law. On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was

valued at USD 18.8 billion. The transaction closed on 8 May 2007. It offers both prepaid and post paid GSM cellular phone coverage throughout India with good presence in the metros. Vodafone India provides 2.75G services based on 900 MHz and 1800 MHz digital GSM technology. Vodafone India launched 3G services in the country in the JanuaryMarch quarter of 2011 and plans to spend up to $500 million within two years on its 3G networks. There various products and services offered by Vodafone are: Voice Data Fixed and other services Devices

In this project, we will analyze the value added service in health sector, what are the problems faced by the consumer, what are the opportunities available, what customer demands and how it can be achieved.

Chapter 3
Competition Assessment
Competitive Analysis
The major operators in India include Airtel, Vodafone, Idea, Reliance, Tata Docomo, BSNL, Aircel and MTNL of which Airtel was the first service provider, with Bharti Airtel, Tata and Vodafone being the major market shareholders. (Exhibit 1) Competitive analysis can be determined using STP (Segmentation, Targetting & Positioning)

SWOT Analysis
SWOT Analysis is a strategic planning method used to evaluate the strengths, weaknesses, opportunities & threats involved in a business project. It involves specifying an objective of the company and accordingly identifying the internal as well as external factors that are favorable or unfavorable to the company.

STRENGTHS
Leadership position Global brand strength High reach Strong international presence & brand recognition Excellent network coverage Strong advertising strategies Well defined cost reduction initiatives 2nd highest market share in India Expanding marketing boundaries Strategic alliances. Innovation VAS as a means to increase ARPU Products & service expansion

WEAKNESSES
Low flexibility High consumer churn rates Brand recognition low in rural India. Uncertainty in revenue growth Low R&D.

Internal

OPPORTUNITIES

THREATS
Intense competition Emergencies of low cost brands. Extremely high penetration rates in key European markets Still lags behind major competitors in USA

External

Chapter 4
Marketing Mix Strategies
Putting the right product in the right place, at the right price, at right time. The Marketing Mix is a business tool used in marketing & by marketers. The marketing mix is very essential in determining a product or brands offer & is associated with 4P s: price, product, promotion & place. Product: features and benefit of a service. Place: where the good or service can be bought. Price: the cost of a good or service. Promotion: awareness of a product or service.

Vodafone seems to have a good marketing mix. Vodafone marketing mix are as follows:

Product:
Vodafones product has many different features that enables consumers to chat, play games, send and receive pictures, change ring tones, receive information about travel, sporting events and restaurants, see video clips and send video and audio messages etc. Vodafone live! provide on-the-move information services. Vodafones M-Health is an additional facility in their VAS product that will aim to provide people with information regarding health, medicines, available doctors etc. so as they can get health related services anywhere they go.

Place:
Vodafone UK operates 300 of its own stores. It also sells through independent retailers. Customers are able to see and handle products they are considered buying. People ensure that their needs are matched with the right product. Different Value added services like entertainment and lifestyle, games, social networking, news and finance etc. can be subscribed from any location.

Price:
Vodafone wants to make its services accessible to as many people as possible from the young to the more mature users. It offers various pricing structures according to the different age groups and at very affordable cost. Monthly as well as prepaid options are available everywhere so as people can pay according to their convenience.

Promotion:

Vodafone works with icons such as Zoozoos & Pug to communicate its brand values. Above the line activities include advertising on TV, on billboards, in magazines and in other media outlets. Vodafone reaches large audiences through ATL activities and spreads its brand images and the message very effectively (Exhibit 6 ). Below the line activities include special offers, promotions and point of sales posters to attract those inside the stores to buy. Vodafone actively develops good relations by sending press releases to national newspapers and magazines to explain new products and ideas. Vodafone produces various publications for customers and staff, for eg: Vodafone essentials which outlines the product range, Vodafone Explore to help customers to maximize their use of purchase.

Chapter 5
Market Research
Marketing basically consist of identifying the need of customers and meeting them in the best possible manner. Marketing Research plays key role in identifying the needs of consumer. It helps the firm acquire a better understanding of the consumer, the competition & the marketing environment. It also aids the formulation of marketing mix.

Definition of Marketing Research:

Marketing Research means the systematic and objective identification, collection, analysis and use of information for the purpose of improved decision making related to the identification and solution of problems and opportunities. It is the process or set of processes that links the customers, consumers and end users to the marketer through various information-information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research identifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. It is an essential tool to tackle with the needs of marketing management which begins with gathering of information followed by analysis of the data gathered. Hence, the gathering of observation must be systematic. The systematic conduct of research requires: Orderliness, in which measurements are correct. Impartiality in analysis and interpretation. All of research can be categorized into Basic and Applied research: Basic Research: This research is carried out when there is need to expand the limits of knowledge for the use of others. Applied Research: This research is carried out to find the solution for a particular problem or for guiding a specific decision. It is usually private in nature. Research on Vodafone Value added services is carried out for specific decisions and results will indicate that whether Vodafone should go for value added services which in our case is specifically M-health services. Hence, the research is Applied Research.

Process of Marketing Research:

The marketing research is done in a systematic process. We followed the following process for marketing study of Vodafone VAS.

Problem Identification

Research Design

Data Collection

Data Analysis & Interpretation

Research Report

Fig : Marketing Research Stages Detailed diagram of marketing research has been demonstrated in Exhibit 5. 1.) Problem Identification: The first step of marketing research is to identify the problem. In this case, the problem is to identify whether the customers or end users want to avail M-health facility and what will be the response of end users once launched. 2.) Research Design: It indicates the methods and procedures of conducting research study. It can be done in 3 types : a.) Exploratory Research: focuses on discovery of new ideas and is generally based on secondary data. b.) Descriptive Research: focuses when the researcher wants to know in detail the characteristics of certain groups. c.) Causal or Experimental Research: is undertaken to determine the causes & effect relationship between two variables. In this case, descriptive research design is adopted in order to know the detail of certain groups whether they are willing to take this facility or not. 3.) Data Collection & Sampling: Data is collected once the objectives are clear. There are primarily two types of data: Primary & Secondary.

Primary Data can be collected through observation, personal interview, survey, etc. whereas Secondary data can be collected from internal as well as external sources. To conduct a survey, we designed a structured questionnaire in order to gather valuable information from the customers. 4.) Data Analysis and Interpretation: Once the data is collected and gathered, it is then analyzed and interpreted in order to arrive at a conclusion. Some of the commonly used tools used for data analysis are percentage, co-relation, coefficient, etc. 5.) Research Report is designed accordingly.

Appendices EXHIBIT 1

Market Share of all mobile operators

Exhibit 2

Exhibit 3

Exhibit 4

Exhibit 5

Exhibit 6

Questionnaire

References http://pib.nic.in/newsite/erelease.aspx?relid=79183 http://www.livemint.com/Opinion/X4NfbCFjSPNUIulSEQcIFM/Numbers-show-Top-3-dominateIndian-telecom-sector.html http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Indicator%20Reports%2001082013.pdf http://www.trai.gov.in/WriteReadData/UserFiles/Documents/AnuualReports/TRAI-EnglishAnnual-Report-10032014.pdf http://www.deloitte.com/assets/DcomIndia/Local%20Assets/Documents/Deloitte_ASSOCHAM_MVAS_Study.pdf