2012 UNDERSTANDING THE CUSTOMER VALUE DELIVERY SYSTEM THROUGH VARIOUS MARKETING CHANNELS IN BHARTI AIRTEL, Hyderabad

[CHANNEL MANAGEMENT]

RAKESH SAI RAYAPUDI (11BSPHH010647) PROJECT in BHARTI AIRTEL,HYD 6/1/2012

A PROJECT REPORT by RAKESH SAI RAYAPUDI 11BSPHH010647

This report is submitted in a requirement of partial fulfillment of MBA program at IBS, Hyderabad Faculty Guide Dr.Ammani.P Company Guide Mr.A.S.Giridhar

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Authorization Letter

I hereby declare that all works shown in this project is true to my knowledge, and has been completed in and around Hyderabad. This study was conducted over a span of 3 months from March 2012 to June 2012. This project is meant for partial fulfillment of the MBA program at IBS Business School, Hyderabad.

Yours Faithfully Rakesh Sai Rayapudi 11BSPHH010647

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i. Internship Certificate

This is to certify that Mr. Rakesh Sai Rayapudi

Enroll no. 11BSPHH010647, student of IBS

Hyderabad, has undergone 12 weeks of Summer Internship in Bharti Airtel Ltd, HYD from March 13 th 2012 to June 2nd 2012 under the guidance of Mr.A.S.Giridhar (B2B Enterprise head for Bharti Airtel,Hyd) During the period of internship with us he was ..

Date : 2/6/2012

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ii. ACKNOWLEDGEMENT
I would like to express my profound gratitude to all those who have been instrumental in the completion of my project. Firstly, I would like to thank the organization Bharti Airtel Ltd for providing me a fruitful association by way of summer internship. This opportunity has provided me with a comprehensive insight into Channel management and specially Telecom Industry, its

operations, challenges and opportunities. I hereby regard my sincere thanks to my company guide Mr.A.S Giridhar and Mrs. Sai Bhargavi Naidu for giving us their guidance and support throughout my tenure in the company. I would also like to thank them for their constant insights and encouragement. I am deeply grateful to my faculty guide Dr.Ammani.P for her invaluable support and guidance throughout the internship. I also thank the staff of Bharti Airtel Ltd, and lastly I wish to thank my Family and Friends for the valuable support and advice.

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iii. Executive Summary:

The process of understanding the customer value delivery system through various marketing channels in Bharti Airtel is the sole reason for the consistent progress in sales and revenue by which the company as well as the channel members would reap the benefits. Doing more business with the channel by reaching periodical targets can pave the way in reaching long term goals and objectives of the company eventually. The channel basically works in an organized manner having a channel partner under which few sales executives work in carrying forward the products and services to the B2B market that include enterprise systems along with small and medium business. Every field sales executive interact and bring out the scope of new accounts and extension of service to the existing customers in the market. The variables involved were setting the distribution objectives, channel design, logistics, image building, inventory management, channel management, payment & credit, promotional assistance, setting targets, coverage frequency and motivating channel members to perform. The focus on effective channel management relies on key decisions such as: Designing of the marketing channels, selecting of channel members, identifying the target set of customers by locating the area that has the room for improvement and capturing the sale. To lead the channel productively, the communication and knowledge of the products is however essential to all the sales executives. Driving the appropriate and eligible sales force is again a challenging aspect for any channel to perform as per the required standards. The study of channel and its performance is the vital part for a multi-national company like Airtel. This project consists of responses and feedback collected after interaction with various channel partners and sales executives among few channels situated within the Hyderabad city. All this information is used in preparing a questionnaire essential for the channel development. Based on the qualitative data obtained, the eventual performance and skills of various channels are interpreted by which we can infer the valuable output or desired results required for the company growth and development

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TABLE OF CONTENTS
i. Internship Certificate..iv ii. Acknowledgement.v iii.Executive Summary...vi 1. Introduction.9 1.1 Background...9 1.2 Objectives..9 1.3 Methodology.....10 1.4 Limitations10 2. Economy Industry Analysis..11 2.1 Introduction...10 2.2 Liberalization & Privitisation13 2.3 Regulatory Framework..15 2.4 Revenue & Growth16 2.5 Domestice Economic Conditions...17 2.6 Foreign Direct Investment Policy..18 2.7 Opportunity & Success factors..19 2.8 Major Players.20 3. Company Analysis.21 3.1 About Airtel21 3.2 Products & Services21 3.3 Business Life Cycle.23 3.4 Business Segmentation24 3.5 Competitor Analysis25 3.6 Promotional Practices..26 3.7 Branding Practice.27

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4. Project Specific Analysis..28 4.1 Background28 4.2 Literature Review..30 4.2.1 Channel Relations.30 4.2.2 Role of Channel Management...31 4.3 Distribution Channel in Airtel31 4.4 Physical Structure of Channels in Bharti Airtel.32 4.5 Conceptualisation33 5. Conclusion & Recommendations50 6. Contribution.51 7. Learnings..52 8. Reference..53 9. Annexure53

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1. Introduction 1.1 Background

The project is an extensive report on how Bharti Airtel company strategies itself to increase the market share through the growth and development of channels. It also helps us to understand the customer delivery value system through various marketing channels within the company across Hyderabad. The line of products from Airtel offered is done through a method of channelizing that includes partners and sales executives. It is ensured that there is a proper flow of channel from the company to the end user in B2B market. The project also mainly deals with the analysis between management, channel partners and field sales executives in developing a good working relationship at various levels. This can be acquired by setting distribution objectives with a better channel design and factors like promotional assistance and motivating channel members by building an adequate efficient workforce for the organization. All channels under the company should be working with the same objective making it beneficial to the company as well as the customers. In case of new account penetration, I was given the list of B2B companies in and around Hyderabad and gathered information through tele-calling about the existence and scope of acquiring the new accounts.

1.2 Objectives
To ensure in providing an accurate role for the company executives in developing channel relations with the knowledge of channel design decisions by the Organization. To understand channel behavior and nature of existing marketing channels in Bharti Airtel. Analyzing the channel management decision to increase its sales in B2B market of small and medium enterprises. Identifying non-penetrated account in Hyderabad Study about different channel partners and channel management in Airtel Channel development for new account penetration.

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1.3 Methodology
The methodology followed for the channel management is a culmination of research, best practices implemented and experience. An effective channel management begins with ensuring that all the companys processes & procedures are aligned with the goal of working with channel partners. It also includes executive management support and operational issues like the pricing, order processing, technical support, database management, end-user information capture etc along with the sales compensation schemes. The method includes reviewing the skills and knowledge of vendor or channel staff, and examining the potential of conflict between internal systems and a sound channel philosophy. Outlining the processes to monitor and enhance by measuring the channel performance and predicting the trends. The feedback or the inputs from this project retrieved from the gathered information of all channels by interaction with channel members can also act as the source for reviewing channel efficiencies and assisting in the ongoing channel optimization process.

1.4 Limitations Possible to reach only two channels in a day. Availability of FSEs only in particular time in most of the channels Chance of biased information from FSEs or Partners. Unavailability of few channels or its partners. Partial information from channels that are newly started in the market. Reaching system integrators as and when required

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2. ECONOMY INDUSTRY ANALYSIS

2.1 Introduction
Indian telecom sector is more than 165 years old. Telecommunications was first introduced in India in 1851 when the first operational land lines were laid by the government near Kolkata (then Calcutta), although telephone services were formally introduced in India much later in 1881. Further, in 1883, telephone services were merged with the postal system. In 1947, after India attained independence, all foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a body that was governed by the Ministry of Communication. The Indian telecom sector was entirely under government ownership until 1984, when the private sector was allowed in telecommunication equipment manufacturing only. In 1975, the Department of Telecom (DoT) was separated from Indian Post & Telecommunication Department. DoT was responsible for telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for private investment as a part of Liberalization-Privatization-Globalization policy. Therefore, it became necessary to separate the Government's policy wing from its operations wing. The Government of India corporatized the operations wing of D.O.T on 1 October 2000 and named it as Bharat Sanchar Nigam Limited (BSNL). Many private operators, such as Reliance

Communications, Tata Indicom, Vodafone, Loop Mobile, Airtel, Idea etc., successfully entered the high potential Indian telecom market. The government concretised its earlier efforts towards developing R&D in the sector by setting up an autonomous body Centre for Development of Tele-matics (C-DOT) in 1984 to develop state-of-the-art telecommunication technology to meet the growing needs of the Indian telecommunication network. The actual evolution of the industry started after the Government separated the Department of Post and Telegraph in 1985 by setting up the Department of Posts and the Department of Telecommunications (DOT). Role in Indias development India's telecommunication system is highly developed. Indian telecom industry underwent a high pace of market liberalization and growth since 1998. India is served by an extensive system of automatic telephone exchanges connected by modern networks of fiber-optic cable, coaxial cable, microwave radio relay and is being served by one of the largest domestic satellite systems ( INSAT ) of the world. Page 11

India possesses a diversified communications systems that link all parts of the country by telephone, Internet, radio, television and telegraph. The primary regulatory body of telecommunications in India is the Telecom Regulatory Authority of India ( TRAI ). India has the world's second-largest mobile phone user base with over 919 million users as of March 2012. It has the world's third-largest Internet users with over 121 million as of December 2011. In recent times India has become the world's most competitive and one of the fastest growing telecom markets .

The industry is expected to reach a size of 344,921 crore (US$68.81 billion) by 2012 at a growth rate of over 26 per cent, and generate employment opportunities for about 10 million people during the same period. According to analysts, the sector would create direct employment for 2.8 million people and for 7 million indirectly. The total revenue of the Indian telecom sector grew by 7% to

283,207 crore (US$56.5 billion) for 201011 financial year, while revenues from telecom equipment segment stood at 117,039 crore (US$23.35 billion). The telecommunications industry in India is dominated by private-sector and two state-run businesses. Most companies were formed by a recent revolution and restructuring launched within a decade, directed by Ministry of Communications and IT, Department of Telecommunications and Minister of Finance. Since then, most companies gained 2G,3G and 4G licenses and engaged fixed-line, mobile and internet business in India. On landlines, intra-circle calls are considered local calls while inter-circle are considered long distance calls. Foreign Direct Investment policy which increased the foreign ownership cap from 49% to 74%. Currently Government is working to integrate the whole country in one telecom circle. Some major telecom operators in India include Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance Communications, TATA Teleservices, Infotel, MTS, Uninor, TATA DoCoMo, Videocon, Augere, Tikona Digital. Telephone Subscribers (Wireless and Landline): 951.34 million (March 2012) Land Lines: 32.17 million (March 2012) Cell phones: 919.17 million (March 2012) Monthly Net phone Addition: 7.85 million (Oct 2011 - Mar 2012) Teledensity: 78.66 % (March 2012) Projected Teledensity: 1 billion, 84% of population by 2012.

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2.2 Liberalization and privatization of the market

The Indian government was composed of many factions (parties) which had different ideologies. Some of them were willing to throw open the market to foreign players (the centrists) and others wanted the government to regulate infrastructure and restrict the involvement of foreign players. Due to this political background it was very difficult to bring about liberalisation in telecommunications. When a bill was in parliament a majority vote had to be passed, and such a majority was difficult to obtain, given to the number of parties having different ideologies. Liberalization started in 1981 when Prime Minister Indira Gandhi signed contracts with Alcatel CIT of France to merge with the state owned Telecom Company (ITI), in an effort to set up 5,000,000 lines per year. But soon the policy was let down because of political opposition. She invited Sam Pitroda a US based Non-resident Indian NRI to set up a Center for Development of Telematics(C-DOT), however the plan failed due to political reasons. During this period, after the assassination of Indira Gandhi, under the leadership of Rajiv Gandhi, many public sector organisations were set up like the Department of Telecommunications (DoT), VSNL and MTNL. Many technological developments took place in this regime but still foreign players were not allowed to participate in the telecommunications business. The demand for telephones was ever increasing. It was during this period that the Narsimha Rao-led government introduced the national telecommunications policy [NTP] in 1994 which brought changes in the following areas: ownership, service and regulation of telecommunications infrastructure. They were also successful in establishing joint ventures between state owned telecom companies and international players. But still complete ownership of facilities was restricted only to the government owned organisations. Foreign firms were eligible to 49% of the total stake. The multi-nationals were just involved in technology transfer, and not policy making. During this period, the World Bank and ITU had advised the Indian Government to liberalise long distance services to release the monopoly of the state owned DoT and VSNL; and to enable competition in the long distance carrier business which would help reduce tariff's and better the economy of the country. The Rao run government instead liberalised the local services, taking the opposite political parties into confidence and assuring foreign involvement in the long distance business after 5 years. The country was divided into 20 telecommunication circles for basic telephony and 18 circles for mobile services. These circles were divided into category A, B and C depending on the value of the revenue in each circle. The government threw open the bids to one private company per circle along with government owned DoT per circle.

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For cellular service two service providers were allowed per circle and a 15 years license was given to each provider. During all these improvements, the government did face oppositions from ITI, DoT, MTNL, VSNL and other labour unions, but they managed to keep away from all the hurdles. After 1995 the government set up TRAI (Telecom Regulatory Authority of India) which reduced the interference of Government in deciding tariffs and policy making. The DoT opposed this. The political powers changed in 1999 and the new government under the leadership of Atal Bihari Vajpayee was more pro-reforms and introduced better liberalisation policies. They split DoT in two- one policy maker and the other service provider (DTS) which was later renamed as BSNL. The proposal of raising the stake of foreign investors from 49% to 74% was rejected by the opposite political party and leftist thinkers. Domestic business groups wanted the government to privatise VSNL. Finally in April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw it open for sale to private enterprises. TATA finally took 25% stake in VSNL. This was a gateway to many foreign investors to get entry into the Indian Telecom Markets. After March 2000, the government became more liberal in making policies and issuing licenses to private operators. The government further reduced license fees for cellular service providers and increased the allowable stake to 74% for foreign companies. Because of all these factors, the service fees finally reduced and the call costs were cut greatly enabling every common middle class family in India to afford a cell phone. Nearly 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market. In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year. As the unbranded Chinese cell phones which do not have International Mobile Equipment Identity (IMEI) numbers pose a serious security risk to the country, Mobile network operators therefore planned to suspend the usage of around 30 million mobile phones (about 8 % of all mobiles in the country) by 30 April. 56 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 millions. However, after a number of proactive initiatives taken by regulators and licensors, the total number of mobile subscribers has increased rapidly to 991 million subscribers as of March 2012. India has opted for the use of both the GSM (global system for mobile communications) and CDMA (code-division multiple access) technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only. In 2005 alone additions increased to around 2 million per month in 200304 and 200405. Page 14

In June 2009, the Government of India banned the import of several mobile phones manufactured in China citing concerns over quality and the lack of IMEI's which make it difficult for authorities in India to track the sale and use of such phones. In April 2010, the Government was also reported to be blocking Indian service providers from purchasing Chinese mobile technology citing concerns that Chinese hackers could compromise the Indian telecommunications network during times of national emergency. A series of attacks on Indian government websites and computer networks by suspected Chinese hackers has also made Indian regulators suspicious with regards to the import of potentially sensitive equipment from China. The companies reported to be affected by this are Huawei Technologies and ZTE.

GSM Sector
In terms of the Global System for Mobile Communication (GSM) subscriber base, it places India third after China and Russia. China had 401.7 million GSM subscribers.

2.3 Regulatory Framework

The Telecom Regulatory Authority of India (TRAI) was set up in March 1997 as a regulator for Telecom sector. The TRAIs functions are recommendatory, regulatory and tariff setting in telecom sector. Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in May, 2000. TDSAT has been empowered to adjudicate any dispute between a licensor and a licensee between two or more service providers between a service provider and a group of consumers hear and dispose of appeal against any direction, decision or order of TRAI.

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Tariffs for telecommunication services have evolved from a regime where tariffs were determined by Telecom Regulatory Authority of India to a regime where tariffs are largely under forbearance. TRAI intervenes by regulating the tariffs for only those services, the markets of which are not competitive.Universal Service Obligation Fund (USOF) exclusively for meeting the Universal Service. Obligation was established in April, 2002. The Universal Service Levy is presently 5 per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers except the pure value added service providers like Internet, Voice Mail, E-Mail service providers etc. Indian Telegraph Act has been amended in October2006 to provide support for all telegraph services including mobile and broadband to bridge the digital divide. With the introduction of the Unified Access Licensing Regime, operators can offer telecom access services to consumers in a technology neutral manner, subject to fulfilling certain conditions. Introduction of this regime has also broken the legal/regulatory impasse between the cellular and basic service providers. Issuance of Intra-Circle Merger and Acquisition Guidelines provide investors an opportunity to take stakes in existing telecom operations.

2.4 Revenue and growth

The total revenue in the telecom service sector was 86,720 crore (US$17.3 billion) in 200506 as against 71,674 crore (US$14.3 billion) in 20042005, registering a growth of 21%.estimted revenue of FY'2011 is Rs.835 crore (US$ 19 Bn Approx).The total investment in the telecom services sector reached 200,660 crore (US$40 billion) in 200506, up from 178,831 crore (US$35.7 billion) in the previous fiscal. Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internet subscriber base has risen to more than a 121 million in 2011. Out of this 11.47 million were broadband connections. More than a billion people use the Internet globally. Under the Bharat Nirman Programme, the Government of India will ensure that 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), will be connected. However doubts have been raised about what it would mean for the poor in the country. It is difficult to ascertain fully the employment potential of the telecom sector but the enormity of the opportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December 2005 up from 2.3 million in December 2004.

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The Total Revenue of Indian Telecom Services company is likely to exceed Rs 200000 Cr ( US$ 44 Bn approx) for FY 1112 based on FY 1011 nos and latest quarterly results. These are consolidated nos including foreign operation of Bharti Airtel. The major contributions to this revenue are as follows: Bharti Airtel 65,060 Reliance Comm 31,468 Idea Cellular 16,936 Tata Comm 11,931 MTNL 4,380 TTML 2,248 BSNL 32,045 Voda 18,376 TataTeleservice 9,200 Aircel 7,968 SSTL 600 Uninor 660 Loop 560 Stel 60 HFCL 204 Videocon Telecom 254 DB Etisalat/ Allianz 47 Grand Total Rs 201,997 Crs contributed by Sanjay Banka, FCA.

2.5 Domestic Economic conditions :

The Government has taken the following main initiatives for the growth of the Telecom Sector :

All telecom services have been opened up for free competition for unprecedented growth. Availability of low cost mobile handsets. The International Long Distance Services (ILDS) opened with effect from April 2002. Calling party pays (CPP) regime was implemented with effect from 1st May .

In April 2004, license fee for Unified Access Service Providers (UAS) was reduced by 2 percent. Entry fee for NLD licenses was reduced to 2.5Crore from 100Crores nad Entry fee for ILD also reduced from 25Crore to 2.5Crore.

Lease line charges have been reduced to make the bandwidth available at competitive prices to facilitate growth in IT enabled services.

One India plan i.e single tariff of Re.1/- per minute to anywhere in India was introduced from 1st March 2006 by the public sector undertakings.

The Governments policy is neutral on use of technology by telecom service providers subject to availability of scarce resources such as spectrum etc.

License fee 6-10per cent of Adjusted Gross revenue(AGR).

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2.6 Foreign Direct Investment Policy

Foreign direct investment (FDI) was permitted in the telecom sector beginning with the telecom manufacturing segment in 1991-when Indian embarked on economic liberalization .FDI is defined as investment made by Non-resident Indians (NRLs),Overseas corporate bodies (OCB),foreign entities, Foreign institutional investors (FIIs),American Depository Reciepts (ADR) / Global Depository receipts (GDRs) etc Present FDI policy for the Telecom Sector : In Basic, Cellular Mobile, National Long Distance, International Long Distance, value added Services and Global Mobile Personal Communications by satellite. FDI is limited to 49 percent (under automatic route) subject to grant of license from the Department of Telecommunications and adherence by the companies(who are investing and the companies in which investment is being made) to the license conditions for foreign equity cap and lock-in period for transfer and addition of equity and other license provisions. Foreign Direct Investment upto 74 percent permitted, subject to licensing and security requirements for the following : Internet Service (with gateways) Infrastructure Providers Radio Paging Service FDI upto 100 percent permitted in respect to the following telecom services ISPs not providing gateways (Both for satellite ans submarine cables) Infrastructure providers providing dark fibre Electronic mail Voice mail.

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2.7 Opportunities & Success factors

India offers an unprecedented opportunity for telecom service operators, infrastructure vendors, manufacturers and associated services companies. A host of factors are contributing to enlarged opportunities for growth and investment in telecom sector: An expanding Indian economy with increased focus on the services sector. Population mix moving favorably towards a younger age profile. Urbanization with increasing incomes.

Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates.

Telecommunication Sector Opportunities in India have grown phenomenally in the past 3 years as has been surveyed by Indian Ministry of Communications and Information Technology in New Delhi very recently. The telecom sector is one of the leading contributors to India's flourishing economy. According to the statement of Indian Ministry of Communications and Information Technology, the telecom opportunities in India has been growing by 20 to 40 percent every year since past 3 years. The telecom services in India have been recognized as a world-class tool for the socio-economic development in India. India is known to rank fourth in the telecom industry in Asia after China, Japan, and South Korea and the telecom network in India is known to stand in the eighth position across the globe .

The tele-density has grown leaps and bounds in the past few years from 2.3 percent in 1999 to 4.8 percent in 2002. The world average percentage for the telecom industry as against the Indian average is 7.5 times while the Asian average against the same was 4.5 times. The current market range of the telecommunication industry in India has been estimated to USD 8 billion and this is expected to undergo an accretion by the end of 2012.

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The growth witnessed by the telecom market in India has increased the number of opportunities for the industry and this has been fueled by the growing mobile sector, which has attained the consumer level of 10 million by the end of December 2002 that was almost 100 percent in the year. This outstanding growth in the mobile sector explains the advent of digital cellular technology and reduced tariffs as a consequence of competitive pressures. The growth in the cellular subscribers has surpassed the benchmark of subscriber base. The telecom market has increased dramatically with the advent of Wireless in Local Loop Technology .

Telecommunication Sector Opportunities in India assures a transparent, safe, and secured ambiance for the telecom market. Around 300 million population of highly consumable middle-class status that is advantageous for the industry surrounds the telecom sector in India. This is because, in some of the Indian that possess land line telephones can be substituted by mobile phones that is very unlike the developed countries. Therefore, it adds up to the growth in mobile sector in Indian telecom industry. Few more Telecommunication Sector Opportunities in India include introduction of Internet telephony services, privatization of VSNL, and introduction of a number of international long distance services sector. The opportunities in the Indian telecom sector is increasing at a massive pace with the introduction of newer and innovative schemes in various sectors and at present the telecom sector in India is claimed to be one of the major contributors in India's flourishing economy.

2.8 Major Players

There are three types of players in telecom services:

State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications).

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3. COMPANY ANALYSIS

3.1 About Airtel

Sunil Bharti Mittal founded the Bharti Group. Bharti Airtel Limited is a leading telecommunications company with operations in 20 countries across Asia and Africa. Headquartered in New Delhi, the company ranks amongst the top 5 mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G services, fixed line, high speed broadband through DSL, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G mobile services. Bharti Airtel had over 246 million customers across its operations at the end of February 2012. It is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the airtel brand, and is the first Indian telecom service provider to achieve Cisco Gold Certification. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

3.2 Products & Services

The basic business divisions of Bharti Airtel as classified as: Mobile Services Data & IP solutions Tele-media Services Enterprise Services and Airtel Money

Mobile Services:
Bharti airtel offers GSM mobile services in all the 22-telecom circles of India and is the largest mobile service provider in the country, based on the number of customers.It consists of Pre-paid, Post-paid and Blackberry services. Voice connections are the pre-paid & post-paid sim cards used in mobile phones to make voice and video calls. It also includes mobile number portability (MNP).

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Data & IP solutions:

Data and IP services helps in doing business at ease. From keeping our mission critical applications running to managing the flow of information across the globe, our comprehensive suite of data technologies and infrastructure support. Data services include mobile internet and 3G dongles (data card). It also includes special internet wi-fi devices that connect to 5 systems simultaneously but these are catered only to corporate clients who request such services.

Tele-media Services:
The group offers high-speed broadband with the best in class network with fixed line services in 87 cities. The broadband, fixed lines, internet lease port and DTH services are covered under these tele-media services. Airtel has made strong entry into tele services with Airtel TV. It offers best quality DTH services and is emerging as a tough competitor to dish TV.

Enterprise Services:
Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers. This division comprises of the Carrier and Corporate business unit. Enterprise Services is regarded as the trusted communications partner to India's leading organizations, helping them to meet the challenges of growth. This business unit delivers end to end telecom solutions to Indias large corporates. It serves as the single point of contact for all telecommunication needs for corporate customers in India by providing full suite of communication services across data, voice and managed services.

Airtel Money:
This is Airtels new product where in people can send money, pay utility bills, shopping bills etc through phone. One needs to activate Airtel money by paying Rs.100, 50 of which will be credited back to the customers account. Airtel is tying up with shopping malls, hospitals etc to make Airtel money easy for its customers.

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3.3 Business Life Cycle:

In 1983, Mittal was in an agreement with Germany's Siemens to manufacture push-button telephone models for the Indian market. In 1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. In 2002 Bharti Enterprises went public, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice services all across India. In 2009, Airtel launched its first international mobile network in Sri Lanka. Today, Airtel is the largest cellular service provider in India and the fourth largest in the world. August 7, 2008: Bharti Airtel adjudged the 'Best Cellular Service Provider' and 'Best Broadband Service Provider' at the 2008 V&D 100 Awards. May 26, 2008: Airtel was honoured with the prestigious 'Wireless Service Provider of the Year' award at the 2008 Frost & Sullivan Asia Pacific ICT Awards. Since then it has won many awards and honours for its unmatched network and services and formed a strong brand image in the minds of Indian customers. 3G: On May 18, 2010, 3G spectrum auction was completed and Airtel paid the Indian government 122.95 billion (US$2.45 billion) for spectrum in 13 circles, the most amount spent by an operator in this auction. Airtel won 3G licences in 13 telecom circles of India: Delhi, Mumbai, Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (east), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Page 23

Assam, North East, and Jammu & Kashmir.

Airtel also operates 3G services in Maharashtra,

Goa, Kanpur and Kolkata through an agreement with Vodafone and in Gujarat through an agreement with Idea. This gives Airtel a 3G presence in 15 out of 22 circles in India. 4G: On 19 May 2010, the broadband wireless access (BWA) or 4G spectrum auction in India ended. Airtel paid 33.1436 billion for spectrum in 4 circles. On 10 April 2012, Airtel launched 4G services using TD-LTE technology in Kolkata, becoming the first company in India to offer 4G services. Airtel launched 4G in Bangalore on 7 May 2012. It will launch services next in Pune and Chandigarh. This way Airtel has become the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services.

3.4 Business Segmentation:

Airtel has segmented its customers mainly into two segments:

1. Business to Customers B2C ( retail ):

Retail segment targets all the common people who use prepaid services of Airtel. Their distributors are the common retail stores where recharge coupons are sold and easy recharges are done. These are not the main source of revenue for Airtel. Voice connections, data services (internet), Airtel money and tele services (Airtel TV DTH) are sold under retail segment.

2. Business to business B2B (AES & SME) :

This is the main source of revenue for Airtel as it is confined only to post paid and catered to business enterprises. Here the business enterprises are divided into two sub segments. AES and SME. Voice connections, data services, Airtel money, tele services and business applications are sold under AES. AES: Airtel enterprise services. All business enterprises having annual turnover of more than 1000 Crore are included in AES. There is an AES team in every circle that covers all AES corporate accounts. There are channels who act as distributors for Airtel. A voice accounts manager is liaised to each channel to coordinate the sales process. Every channel partner has Field Sales Executives who work on field for corporate sales.

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SME: Small and Medium enterprises. All business enterprises that have an employee base of at least 5 persons are taken under SME. There is an SME team in every circle with territory managers liaised to each channel. Special schemes and offers are put up exclusively for B2B customers to avail bulk sales and capture good accounts.

3.5 Competitor Analysis:

Airtel is the market leader in terms of subscriptions. It is followed closely by Vodafone which is a big international player. Coming to voice connections Airtel is almost unbeatable due to its unmatched network and connectivity. Airtel also has the advantage of being an early mover into the market. Though Airtel charges a little more than its competitors, customers find it justified due to the better network and connectivity provided by Airtel compared to other networks. Brand image of Airtel also plays a very important role in Airtels success story.
Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 Name of Total SubAdditions Company Figures in Dec Bharti Airtel 171,846,824 1,150,298 Vodafone 144,144,031 1,133,024 Essar IDEA 98,441,714 2,330,239 BSNL 90,622,219 388,057 Aircel 59,191,661 602,312 Uninor 27,738,154 349,488 Videocon 6,382,493 -652,383 MTNL 5,298,081 32,932 Loop Mobile 3,181,967 19,035 Stel 3,433,988 -67,259 Etisalat 1,477,495 52,941 All India 611,758,627 5,338,684 % Market Share 28.09% 23.56% 16.09% 14.81% 9.68% 4.53% 1.04% 0.87% 0.52% 0.56% 0.24% 100.00%

The only threat to Airtel in terms of voice connections could be Vodafone as its subscribers are increasing at a faster rate due to cheap tariff plans and schemes. Idea recently started emerging as a strong brand with 3G speeds and strong marketing strategies involving bollywood stars like Abhishek bachchan. But is yet to reach the position from where it can threaten Airtel. Coming to data services (internet) Airtel was a late entrant into the market due to which it is facing real tough competition from Tata, Vodafone, idea and local players like Beam. Yet Airtel has been successful enough in doing good number of sales despite a late start, as statistics report that the highest number of dongles (data cards) are being sold by Airtel. Mobile internet market is almost the same for Airtel, Vodafone and Idea with three of them sharing the top spot.

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Airtel takes a sharp edge over all its competitors with the launch of Airtel money which is an exclusive product of Airtel and is the first product of its kind in India. Airtel is doing fairly well in tele service market with Airtel TV DTH doing decent number of sales in Indian market.

3.6 Promotional Practices:

There was an intense competition in Telecom arena, so Bharti Airtel took few initiatives to woo customers.Prominent among these were celebrity endorsements , loyalty rewards, discount coupons, business solutions and talk time schemes. Airtel has used most number of celebrities for its advertisements. The list includes Sachin tendulkar, Shahrukh, A.r.Rahman, Saif ali khan, Kareena kapoor, Zaheer khan etc. The most important consumer segments in the cellular industry were the youth segment and business class segment. The youth segment was the largest and fastest growing segment and therefore targeted most heavily by cellular service provider.

Bharti tele ventures adopted celebrity endorsement as its chief promotional strategy. By 2004 it emerged unprecedented leader commanding the largest market share in the cellular service market. Airtel hardly does any promotional activities in retail (B2C) segment as it has a very strong brand image in Indian market. But in B2B segment Airtel keeps bringing in new offers, plans and discounts to beat competition and capture as many customers as possible. They have special CUG (closed user group) plans exclusively for corporates working in particular organisations or firms. These plans and schemes vary from one client to another based on their usage and employee base.

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3.7 Branding Practice:

To promote, Airtel has been dependent on tactical advertising However, it has restrained from using comparative advertising Hoardings has been a very popular medium for carrying the advertisements Airtel has also been advertising on television using the Bharti Telecom name. Starting from the name, logo, slogan the Airtel has created intense brand image by adopting various marketing acting activities. It truly captured the market and maintaining its brand as a best brand in the market. Though there are spaces for improvement, by developing effective marketing program those gaps can be filled up. Airtel has always branded itself as the best telecom provider of the country. It comes up with catchy taglines, tunes and advertisement concepts. Its signature tune composed by Mr.A.R. Rahman has added a lot to its brand image. Sponsorships in sports events, award functions and tie ups strengthened Airtels brand image. Airtel had an Attractive logo which recently underwent a makeover symbolising a hug, to go little casual, was much appreciated by the Indian audiences. Airtel doesnt work very hard on its branding but works quite smartly at the right time in the right fashion to move parallel and hand in hand with the generation.

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4. PROJECT SPECIFIC ANALYSIS

( CHANNEL MANAGEMENT )
4.1 Background
Channel members maximize short-term profit by allocating the resources so that marginal contribution by each of the suppliers is equal to the channel members marginal cost. Higher commission rates have diminishing returns in terms of motivating agents to devote more time to a principal. Agencies appear to spend more time than economically optimal (in short term) on principals with whom they have a trusting relationship and good communication .Personal contacts in the form of visits by the principal have a significant positive effect on time allocation . Resellers often complain that their suppliers dont provide enough training and support. Resellers often complain that their suppliers dont provide enough training and support . Delegation has no impact on channel profit. Selection criteria and recruitment tools such as thoroughness and performance may be improved by according greater importance to managing distribution activities. Manufacturer support programs are related positively, though weakly to distribution intensity. When a manufacturer provides many support programs, retailers may have some incentive to join and remain in the channel system. Manufacturer co-ordination efforts are related inversely through weakly to distribution intensity, when close co-ordination is needed manufacturers are likely to limit distribution to reduce potential difficulties in channel operations and foster a supportive atmosphere in their exchange relationships. Retailer investment significantly weakens the inverse relationship between manufacturer co-ordination efforts and distribution intensity. Retailers making heavy investments are signaling to the manufacturers their willingness to sell and service it effectively.

Manufacturers in heterogeneous market must ensure that retailer interests are properly aligned. In markets with price and service competition there can be channel conflict over the nature of retail competition itself. Quantity discounts provide an improvement over simple contracts which include fixed conditions. By linking the contract to performance such as quantity ordered for promotional spending the incentive to achieve coordination can be created without the rigidity of fixed requirements. Manufacturer profits are constant and total profit variations are equal to retailer profit variations. Relationship between asset specificity and channel mode is significant. The probability of using an integrated channel or an intermediate mode increases relative to the independent channel.

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Marketing channels are frequently organized on the basis of negotiated transaction. Marketers must carefully characteristics of middlemans marketing behavior in order to avoid the risk of linking up incapable distributors.

Usually the first transaction between the supplier and retailer encompasses only small quantities of goods, if these first exchanges are performed to mutual satisfaction, the number of decision variables in the internal role relations increase. The room for bargaining about the suppliers sales price will increase when the retailers and suppliers transaction cost is reduced. Sales personnel most frequently named the manufacturer, owner/manager, chain management, and sales promotion as channel influencers. Sales managers are entrenched in managing their firms distribution channels. Sales managers are more likely than their industrial counterparts to perform the following channel management tasks : formulating channel strategies, designing marketing channels, motivating channel members and managing conflict . However the type of project manufactured does not appear to influence the extent to which sales managers are involved in selecting channel members, co-ordinating channel strategy or evaluating channel member performance. In examining the importance of firm size, sales managers in large firms report a higher level of involvement in co-ordinating channel strategy and evaluating channel member performance than their counterparts in small firms .

Strategic alliances are co-operative arrangement than transcend organizational boundaries to achieve channel goals. Central to such alliances is an understanding by all channel members of channel goals , roles of particular players, sharing of information, cross-organization functional shifting and a long term commitment to the alliance. Managers at all levels in the channel have a wealth of information. This diffusion of information technology into channels is having a profound effect on how managers look at the problem of managing the channels and the resultant channel relations. The following constructs were then deduced as :

Role of company executive in developing channel relations The variables were setting distribution objectives, channel design, logistics, image building, inventory management, channel management, payment & credit, promotional assistance, setting targets, coverage frequency and motivating channel members to perform.

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Strategies for sustainable channel relations In consultation with various companies the dimensions considered in the study were motivating channel members, positive attitude towards channel, providing the channel members with market knowledge, conductive credit facility, constant and effective communication and also being aggressive.

4.2 Literature Review

Distribution channels have become the most important component of marketing today and are receiving increased attention. Channels not only add value to project and services, but also create customer and shareholder value, brand equity and market presence for a company. For most service organizations, consumer marketing and industrial marketing firms, the distribution channel, or inter organizational network of institutions, comprising of agents, wholesalers, distributors and retailers play a significant role in the flow of goods from producers to consumers. The channel member also called as an intermediary is a member of the distribution channel excluding the manufacturer and the consumer. Intermediaries come between these two and perform one or more of the above functions.The shifting of channel power from manufacturer to retailers, wholesalers and distributors has had a great impact on distribution. When competition increases , a few leading companies remain, who then become very competitive and offer high quality products. This actually increases the distributors power because sales are then determined by what is in stock and most often what is recommended by the distributor and not by what particular brand offers.

4.2.1 Channel Relations

Channel relations look into developing long term positive interactions between the company and the channel members. It involves more than just getting products or services from company to customer. Like all elements of marketing and operations, it offers numerous chances to improve revenue and profitability. Effective channels serve targeted customer , maximize sales, minimize cost and provide companies a sustainable competitive advantage. Customers are in the drivers seats as they should be, when it comes to the buying relationship. Powerful products and great brands no longer provide sustainable in delivering superior value to customers. This focuses on the need for effective channel management. Channel management includes key decisions such as (1) Designing marketing channels, (2) Selecting channel members, (3) Motivating and communicating with channel members, (4) Evaluating channel performance. Page 30

4.2.2 Role of Channel Mangers in Channel Management

Channel management research and practice have now recognized the importance of managing relationships between the channel managers and firms performing distribution functions, which makes products and services available to customers at the right time and place at the right price. Channel managers are company executives who are the conduits between the company and the distribution channel. They are anyone in the firm or organization who is involved in distribution channel decision making, though in practice few firms or organizations actually have a single designated executive position called the channel manager, depending on the type of firm or organization, a variety of different executives are involved in making channel decisions. Often, they are the sales managers who are in constant touch with the channel partners.

Channel managers play a crucial role in improving relationship with channel partners for effective functioning. They assess the channel partners need and align goals and objectives, they motivate these resellers to attain the agreed-upon goals and provide appropriate support. Channel managers also evaluate goal alignment and reseller performance so that corrective action can be taken if necessary.

4.3 Distribution Channel in Airtel

Airtel company

Direct selling Associates (DSA)

Franchisee selling Associates (FSA)/ Airtel relationship centre (ARC)

Corporate selling Associates (CSA)

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4.4 Physical Structure of the Channel in Bharti Airtel :

Below is the channel structure followed by the company as

Channel Management

Channel partners

Channel FSEs

Product Information + Training

Customer Information

Market Information

Mobile Dongle (3G) Toll free Voice (analog) Broadband (DSL) Landlines (digital) Video conferencing (BRI) Internet lease port (ILP) Local loop (ILL)

- B2B - (SME/Commercial/Corporates)

- Competitors - Bsnl/Tata/Ril/Voda/Idea

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4.5 Conceptualisation :
The main part of the project is all about the analysis between management, channel partners and field sales executives in developing a good working relationship at various levels. This can be acquired by setting distribution objectives with a better channel design and factors like promotional assistance and motivating channel members by building an adequate efficient workforce for the organization. Airtel,Hyderabad consists of channels that include Direct selling associates, corporate selling associates and franchisee selling associates or also Airtel relationship center and they are around 45 channels in number located at various parts across the city.As per the requirement and suggestion from the company I have visited 19 channels and collected all the basic information related to every channel and a proper response from partners and sales executives based on the questionnaire I prepared. It consists of some vital information about the channel performance, hygiene, growth and development in association with the company like Bharti Airtel. Visiting the channels atleast two everyday and interaction with all the 19 channels clearly gave an outlook regarding the scope of its development in the market through which both the company as well as the intermediaries would get benifitted by earning good profits and creating a better customer value with the products and services offered to the consumers. Here the consumer is mainly referred to the B2B market that again includes Airtel enterprises and all those small and medium enterprises, system integrators and relationship centre as mentioned above.

Hierarchy of the Channel

CEO

COO

Zonal Business Manager (ZBM)

Zonal Manager

Territorial or Channel Manager

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As mentioned in the early structure, every channel manager is related to one or more channels and its partners. These channel partners have few sales executives under them depending on the size and requirement the channel demands to reach the targets and goals on time. The following is the list of 19 channels I visited that includes Airtel enterprises along with system integrators and small & medium business where I have gathered some valuable information helps to understand ,analyze and scope of improvement required in areas to be focused on channel growth with respect sales and creating a long-term value to the consumers. 1. M/s Eco additive (SMB) 2. Efforts (SMB) 3. Genesa Enterprises(CBA)- (AES) 4. Shree Lalitha Enterprises (SMB) 5. Leo Marketing (SMB) 6. Net Ventures (SMB) 7. Rising Sun Solutions (SMB) 8. Sri Sai Solutions (SMB) 9. Startel-CBA (SMB) 10. Svap links (SMB) 11. Apex Corp (AES) 12. Tsr Netowrks (SMB) 13. Renascent Management services (SMB) 14. Elite Solutions (SMB) 15. JVR Infotech pvt ltd 16. Proventures (SI) 17. Compware Technologies (SI) 18. Gopal communications (SI) 19. Radiant Sales & service (SMB)

The questionnaire that consists of 15 questions all related to the channel is attached in the annexure at the end but the presentation of all those channels mentioned above can be interpreted as follows : Page 34

Number of years the Channels been associated with Airtel

YEARS

Less than 1yr

1 to 5yrs

5 to 10yrs

More than 10yrs

Number of channels

Years

5
4 3

Years

1 0 <1 1 to 5 5 to 10 >10

Six channels are been associated with Airtel which are not more than 1year and also six of the channels falling within a period of 5-10yrs association with the company that indicates a good number of channels are consistently growing with the company for a considerable period. Two channels that are the Enterprise systems were attached to the brand with almost a decade carrying a good relationship and growth.

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Opinion on Airtel, its Products and Services

Opinion
Number of channels

Bad

Good

Satisifed

Very Good

Excellent

10

Opinion on Airtel Pdts

0%

26%

Bad Good Very Good

5%

53%

Excellent Satisfied

16%

More than half of the channels among 19 say that the products of Airtel are really good and have a great demand in the market with the service and and the value they carry with the satisfaction of customers. Few channels feel that the products are considerably doing good in the market but are left with minute issues like the billing and installation delays which can be noticed and taken a further care to improve the levels of customer satisfaction in the areas required. A tiny bottle neck issues claimed could also be rectified soon. ON a positive side none of the channels had a negative response about the brand. All stood better and also best in working inline with the market needs.

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Number of Field Sales Executives (FSEs) and their Performance

Channels
M/s Eco additive Efforts Genesa Enterprises (CBA) Shree lalitha Enterprises Leo Marketing Net Ventures Rising sun solutions Sri Sai Solutions Startel-CBA Svap links Apex Corp Tsr networks Renascent Management services Elite solutions JVR infotech pvt ltd Proventures Compware technologies Gopal communications Radiant sales & service

Number of FSEs 4 15 22

Active FSEs 3 15 18

8 14 12 5 3 10 11 22 3 3

3 14 8 3 2 4 8 18 2 2

7 15 5 2 3 8

5 14 3 0 3 5

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Number of FSEs Number of channels

Less than 5

5 to 10

10 to 15

Above 15

No of FSE's
11% 21% 26% 42% <5 5 to 10 10 to 15 > 15

FSEs achieving targets :

Targets Number of channels More than 70% achieved 13 Do not achieve 6

FSE Targets
32% 68% >70% Achieve targets Do not achieve

Reasons for FSEs lacking in achieving targets :

Reasons Number of channels

Freshers & lack of experience 6

Incentives 2

Other factors 3

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Where are the FSE's lacking in achieiving targets?

27% 55% 18% Freshers & lack Exp.

Incentives

Basic Qualification of FSEs in all Channels

Qualification Number of channels

Intermediate

Degree

Degree with work-ex

Mba

Qual. of FSE's
16% 16% Inter Degree 21% 47% Degree with work Ex. MBA

Most of the channels prefer selecting people with basic experience in field that can be an advantage so that less training is required further to enter into field and communicate with the customer.Every channel prefers minimum qualification as inter or graduation who can find themselves potential in interacting and reaching targets on time. This can inturn help the channel to progress and achieve their objectives in a better way with additional profits from the market as well as the company.

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Number of FSEs who are active and good at communication

25 20 15 10 5 0 43 15 10

22 22

22 15 12 8 4 55 10 11 10 11

No of Active FSE's
15 12 7 32 33 8 5 55 22 33 5

14 14 8

No of FSE's No. Active

The FSEs play the vital role in increasing the channel sales and earning some good profits to the channel and to the company. These FSEs are given weekly or monthly targets and are boosted to perform accordingly as per the channel objectives and process implemented as per the market demand and also to face the competition that is strongly existing in the market.Every channel has FSEs starting from three in number to more than twenty and they were being paid according to the experience and standard of performance. Hence communication to the final consumer and expressing his channel view is highly required. The role of the sales force is basically managing the major steps involved in it. Initially a proper sales force structure must lead to a planned selling process that involves : Prospecting, Pre-approach, Approach, Presentation, handling objectives, closing and finally following-up. All these steps are followed by the sales force in a most assertive manner and convincing the opposite consumer by making him/her know about the true value of the products and to what extent they would be benifitted in making the sale. Communication and interaction however above all can be an appropriate advantage for any sales person to get the everyday work done. These sales people must be offered with a fair incentive and bonuses when required that can boost up and be a major influencing factor through which he can be motivated and made to perform as per the targets. The performance at various channels varies from place to place and person to person considering various environmental factors.

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Fast moving & Slow moving Products through Channels

Products Number of channels opinion

Post-paid

Broadband

Data cards

Others

13

Fast Moving Products

11% Post paid 16% 5% 68% Broad Band Data Cards Others

Products Number of channels

Broadband

Data card

DTH

3G

Others

Slow Moving Products

16% 16% 11% 10% 47% Broad Band Data Cards DTH 3G Others

Majority of the products that are fast moving are the mobility products and other side most of the telemedia products are slow moving comparatively because of certain reasons like the plan cost, no feasibility, impact of competitors aggressive and cheaper plans. Some of the reasons for the lukeworm response of these tele-media products is also due to some connectivity issues and a fairly low customer service with respect to products like broadband. Products that come under mobility carry out the maximum revenue and profits for the company right from the time of inception. Few other products like Dish TV and Data cards somehow need better promotions to equally or more than the competitors do. The above mentioned slow going products are mostly unable to reach the customer point of satisfaction and the required point is already targeted by other players in the market. Page 41

Channels Opinion on Competitor Products in the Market

Competition Number of channels opinion

Competitors Better

We are at par

We are better

11

Competitors
21% 21% 58% Better At Par V r Better

Why are competitors Better ?

Reasons Number of channels opinion

Aggressive in market

Good plans

Pricing others

Others

Why are Competitor's Better ?

18% 37% 18% Aggressive Good Plans Pricing

27%

Others

Most of the channel partners have an opinion on competitors that they come up with aggressive plans and varied prices in market to attract the targetted customers on a large scale. In a way that some of the competitors have already captured the early demand in the market and also most of them instantly design special tariffs at the month end especially to capture the customer base offering with more cheaper plans and also there are few networks that issue voice services even without initial deposits. These reasons led to say that competitors are also better visible in the market.

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Areas in which Airtel Products can be Improved

Room for Tariffs improvement Number of channels opinion

Billing & Service issues

Dongles

Promotions

Product knowledge

Others

Room for Improvement

16% 32% 11% 5% 10% 26% Tariff Billing & Service Issues Dongles Promotion Product Knowledge Others

Looking at the pie chart above , we find that majority of channels consider Tariff plan as the essential factor that requires a greater scope of improvement and more focus in the current scenario existing in the market with few good competitors who are proving to be equally strong with the market leader of telecom service in the state. There are also some billing and service issues where the customer might lose the patience and interest to prefer the brand repeatedly. The ultimate effort is always for the customer satisfaction who shows a greater brand loyalty and also his influencial marketing caused by word of mouth . It further increases brand reputation with wide-spread awareness of the companys products and service.Products like dongles are expected to have more aggressive promotions to compete with already existing leaders who had initially earned the reputation and trust of the customers by serving them better and offering good plans depending on the usage and different customer requirements. All the channel members must have the basic knowledge and awareness of products launched by airtel and the way they are brought into light with other players in the market. The product knowledge to manager, partners and all FSEs is however necessary to pull out the sales and increase the number in cross product selling thereby paving a path to growth in channel sales and retaining the position of being a market leader for long term profits and comfortable existence in the field . Page 43

Expectations from Channel Managers

Factors Number of channels opinion

Timely commision

Customer data

Product knowledge

Better incentives

Satisfaction

Good support

11

What more do they expect from Channel Managers

6% 21% 5% 5% 5% Timely Commission Customer Data Better Product Knowledge Better Incentives 58% Satisfied Good Support

More than half percentage of channel partners convey that they are satisfied with the all channel managers that they are associated. They opine saying , managers are standing up for support whenever required and giving them a good scope of business maintained with a healthy relation acting as a bridge between the partners and the company as well. Most of the channel partners often communicate with their respective managers and sit in discussions and frequent meetings for all the analysis and strategies required to build upon the healthy growth of the channel putting up an appreciative performance that again carries interest to carry forward the business for long period reaping out some benefits on a whole. Few partners of the channel look for the readily available customer data in the market that are newly established or unnoticed enterprises in readily capturing their need and expected benefits. All channels partners are mainly satisfied with support and increment in incentives periodically along with the timely commission from the company and smooth payments ensuring the importance of channels progress.

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Satisfaction levels of Profits earned in Various Channels

Level of satisfaction Number of channels

Satisfied 10

Unsatisfied 6

Yet to reach BEP 3

Profits
16% Satisfied 53% 31% Unsatisfied Yet to reach BEP

Among those 19 channels visited, more than 10 channels feel that they just satisfied with constant benefits and are growing with Airtel maintaining good relationship with the company and customers as well. Of them , nearly 6 channels are not much satisfied with the way the business is going. They need to adopt certain factors and conditions to pull up the sales and achieving timely targets. Initially any channel doenst earn good profits as it is non-existent in this stage because of the heavy expenses involved for the sales force and building of channel. Once the channel efforts are recognized and accepted within the company and enterprise segment by meeting the targets effectively leads to further growth and maturity of the channel. Three of the channels are newly started and they are yet to reach the Break-even but are consistently performing upto the mark and have some managed to establish at the initial stages.

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Awareness of Promotional Offers of all Airtel products

Response Number of channels

YES 12

NOT ALWAYS 7

Awareness of Promotional Offers

37% 63%

Yes Not Always

Few of the channels are facing the communication gap in knowing the plans and offers made by the company for the B2B segment. This information is actually passed to the partners through catalogs, brochures and pamphlets that are to be sufficiently to all channels as and when required. Interaction with managers regularly can avoid the gap.

Channel to FSE Communication

Period Number of channels
Daily 18 Not always 1

Frequency of communication with FSE's

5% Daily Not Always 95%

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Are Promotions made by Airtel Adequate?

Promotions Number of channels

Adequate
14

Need Improvement
5

Are the promotions Adequate ?

26% Adequate Need to improve 74%

74percent of channels felt that the promotions made by Airtel are very much adequate in the market. The other 25percent of channels opine saying that there must be improvement in promotions that should be catchy and creates a positive impact in consumers mind that other networks are aggressively promoting with more creative tools used for promotions. Also Airtel got a list of various mobile and media products and very few among them are not into the picture as other products, and are falling behind even after they are newly launched into the market.

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Channel Expectations from Airtel

Expectations

Satisfied

Number of channels

Better customer service 2

Payment & Commision issues 4

Others

What else do you expect from Airtel ?

Satisfied Better Cust. Service 47% 21% Payments & Commission Issues others 11%

21%

Nearly half of the channels are satisfied with the current scenarios prevailing in the company. They do not have many expectations and are happy with the goings in the company considering all aspects. The rest half of the channels express few of their expectations in common can be mentioned as follows: Smooth payments and maintaining good long-term relations with the company and customers Opening a bank account for FSEs, demanding pay cards, pay slips, and also insurances for FSES Small issues in the increased product line must be resolved as early as possible. Better incentives and a trained workforce provided from the company would add more value to the channel and can find a better way to the tasks. Improvement in channel margins, monetary benefits and more engagement Service should be better and keeping it the best All levels of members associated to channels should meet often and discuss about daily sales, happenings in the market and knowing the satisfaction levels of end consumers. Page 48

FSEs PAY SLAB

The salaries paid to FSEs in all channels range from 7,000 per month to 12,000. FSEs with work experience earn comparatively more to a range of 12,000per month or more, excluding the incentives given to them. The freshers to the field initially are paid from 6,500per month and incremented based on their impressive performance or targets being achieved weekly or monthly base.

Growing with Airtel in the Best Possible Way

This is basically an open-ended question put up in every channel and they came out with distinguished responses where every answer is considered to be highlighted. Each of those 19 channels have their own opinions in regard to the market conditions and existing scenarios in Telecom industry. Some of the important various opinions are mentioned as follows: With Experience being in market for more years. Doing more volumes More trained workforce and good incentives More marketing and reaching targets in time that keeps both the company and its channel happy Good relations and smooth payments By analyzing all positives & negatives in business and maintaining consistency in not only focussing the products alone but also providing workforce to the franchisee by the company and showing the employee growth More focus on postpaid and building on strengths For a good need of business ,a demand in the market to be existed Revenue to channel partners, payments on time and hike when required Market driven Being on par and updated with the competition More interaction with channels, more focus on partners and their motivation rather than exclusively concentrating on sales. Always keeping up with the good products & services.

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5. Conclusion & Recommendations

Airtel is the biggest cellular network in India and it enjoys a very strong brand image in the market. However it has to do more with building up of trade relations, regular and direct meetings with channel partners can bring out more effective and better results. There should be a balanced focus on revenues occurred by channel sales as well as the members of channels included. From the analysis based on the channels, some of the findings stand out clearly and would help in making appropriate recommendations to the company such as : All channel managers of the company should work towards similar goals and objectives. Furthermore investments need to be made in programs like channel members research and partner relationship management softwares. Building up the skill-sets required for the FESs in communication and customer approach. Reviewing the Channel growth and performance standards periodically Promoting the entire product line and having a thorough knowledge of every product is required to all the channel members and management being on par with the market demands. Rectifying and controlling the back-end issues of the customers and always maintaining a better service and delivering a customer value system. Motivating the channel members and guiding them to make a good business and maintain the trust with the customers in various B2B market segments. Equal treatment to all the employees working in the company and identifying the factors that make the channel members to get more associated with the company that creates a scope for growth and sustainability. Focussing on the reasons that make few products moving slow in the market comparatively. Being proactive and on par with the market needs, doing more volumes by analyzing all the positive and negative aspects. Maintaining the channel friendly approach that makes both the channel and company profitable.

Lastly, the efficacy of a distribution system can be altered and increased by monitoring pricing policies, margins, nature of product line, new products launch, servicing policies, territory of operation and sales force. An optimal combination of these should result in a satisfied customer response. Page 50

6. Contribution :
Initially the objective was to understand the working culture and process being followed in a major telecom company like Airtel. This project entirely deals with pulling out some crucial data based on internal and external factors for growth, hygiene and performance of channel. I have personally visited few channels as per requirement and gathered some valuable inputs to the company that are essential in providing some insights to a better customer response and to gain a good market share considerably provided an effective and productive task built on market needs. I have also put my efforts in finding out the scope for new accounts penetration by Airtel that include small, medium and large enterprises within the Hyderabad .

I could trace out the data and address of various companies existing in and around Hyderabad that can be captured based on their requirement of telecom service. By telecalling a list of few hundred companies, we could locate the new accounts where airtel can associate for the benefit of those customers and offering them with various plans depending on the requirement and interest of the service.

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7. Learnings :
I consider it as a great opportunity in working for the most reputed company across the nation, Bharti Airtel Ltd. There was definitely a great part of learning and knowing the work culture of Airtel such as : Understanding the responses and varied opinions from many channel members and other staff actually gives us a better motto to grow and work with the company and its process. The nature of the industry and its prevailing brand image also helped me to cope up and adopt with the ways several tasks are being handled. A proper understanding about how the channels work and distribution happens, interaction with FSEs, partners and sharing the knowledge with the management is clearly evident in my project as mentioned earlier. I could also know about the targets, sales and micro and macro environmental factors influencing and effecting the performance of channels and company as well. It is also my first experience on field and could know about the hardships and efforts put in by the FSEs in making sales. Identifying a systematic procedure in approaching a client. Learned how the channel network is built and how the strategies are planned and implemented

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8. References:
www.airtel.in http://www.trai.gov.in/ http://www.dnb.co.in/IndianTelecomIndustry/OverviewTI.asp http://en.wikipedia.org/wiki/Communications_in_India http://www.dot.gov.in/osp/Brochure/Brochure.htm

9. Annexure
The Questionnaire prepared for the Channels 1. How long are you dealing with Airtel ?

2. What is your opinion on Airtel & its products ?

3. How many FSE do you have ?

4. What is their general qualification and how do you recruit them ?

5. How many of them are Active at work and good at communication ?

6. Which are the fast moving products and which are the slow moving products? What is your opinion on this ?

7. What is your opinion on Competitors products ?

8. Where do you think Airtel products can be improved?

9. What more do you expect from channel managers ?

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10. How much profits do you earn every month?

11. Are you aware of the promotional offers of all Airtel products?

12. How often do you communicate and update your FSE ?

13. Does all FSE achieve their targets? If not where do you think they are lagging?

14. Are the promotions made by Airtel adequate ? Is there any need for improvement?

15. What else do you expect from Airtel ?

16. How do we grow with Airtel in the best way possible ?

17. Salary being paid to FSE (spay slab)

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