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INTRODUCTION Brand loyalty is a highly sought after goal in the market place and building loyalty is seen by some

as the central task for the marketing manager. The importance given to brand loyalty is not surprising considering the many advantages that accrue on account of it. The presence of Brand loyalty customers has a beneficial impact on sales, costs and profit. Brand loyal customers even represent a barrier to entry for competitors because enticing such customers is very expensive. Marketing managers should therefore know which of the strategic alternatives at their disposal give the best results vis--vis brand loyalty. Branding and brand preference have gained importance only in the recent past. Earlier consumers were not able to differentiate / compare the features of the goods / services due to the lack of brand names available in the market. Many of the companies have started highlighting the product features with specific brand names in the goods / services market helping the consumers differentiate and choose the products / services which best suited their requirements. Consumers are now able to compare many features in the goods / services like quality, price and value for money, service, durability and brand image, etc., to decide which goods / services they want to buy for their need satisfaction. Once customers are satisfied with a particular product / brand, they purchase the product repeatedly. When a customer repeatedly purchases a product / service, showing favorable attitude towards the brand, he will be a loyal customer to the brand. Meaning / Definition of Brand loyalty:Loyalty: - A combination of Attitudinal and Behavioural factor. Brand loyalty has been defined in many terms by many eminent personalities. Jacoby and Chestnut defined it as, the biased, behavioural response, expressed over time, by some decision making unit, with respect to one or more alternative brands out of a set of such brand and is a function of psychological (decision making evaluative ) process. (Jacoby and Chestnut, 1978)

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2. Tellis defined it as, repeat purchasing frequency or relative volume of samebrand purchasing. ( Tellis, 1988) 3. Newman and Werbel, defined loyal customers are those who are bought a brand, considered only that brand and did no brand related information seeking. ( Newman and Werbel 1973) 4. Oliver defined loyalty as a deeply held commitment to re buy or repatronize a preferred product / service consistently in the future, thereby causing repetitive same brand or same brand set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour. (Oliver,1997) Need for Brand loyalty Many marketers have started highlighting the product features with specific brand names in the market helping the consumers differentiate and choose the products which best suited their requirement. Consumers are now able to compare many features in the products / services like quality, price, and value for money, durability and brand image, etc., to decide which product they want to buy for their need satisfaction. A customer would be loyal to a commodity brand, if the person repetitiously chooses one brand over the sheer infinite choice of others over a period of time. Understanding and building this kind of loyalty is an important task for the marketer, especially at the times of fierce competition. A loyal customer base helps the brands withstand the pressure from competitors in the market. MODELS OF BRAND LOYALTY A model is a theoretical representation of reality, which one uses as a thinking aid in the study of some system too complex to be understood by direct references from observed data. 1. Brand infused casual loyalty model. Moving from left to right in the figure given below, the model hypothesizes the

customer experiences with our touch point shape brand essence: the salient images, personality and feelings-associations that customers have for the brand. Those brand associations, in turn, activate both rational and emotional motivation and these two combine to influence customer loyalty.

2. Conceptual model of Brand Loyalty with respect to Brand Personality.

Sincerity

Excitement
Experien ces Competence points Brand Essence
Rational motivation Emotional

Loyalt y

Business results

motivation

Brand loyalty

Ruggedness

Relationship length

Operationalizing the findings

+
3

+ + + +
The figure presents the conceptual model of determinants of brand loyalty. The brand personality traits sincerity, excitement, competence, and ruggedness with which the customer relates himself impact brand loyalty. The relationship characteristics such as length of relationship ( period for which customer has been associated with the brand) enhance brand loyalty. 2. A model of Brand Loyalty and Brand Performance.

Product-level controls Utilitarian value Hedonic value H1a H1b H2a H2b H3

Brand Trust Brand Affect Brand level controls Differentiation Share of voice

Purchase Loyalty Attitudinal Loyalty

Market Share H3 Relative Price

H4

The model includes certain product-level category related control variables (hedonic and utilitarian value) and certain brand level control variables. According to categorization theory (sujan 1985), people form categories of the stimuli around them, and new stimuli (e.g. brands) are understood according to how they fit into these categories. Thus, prior knowledge of the product category determines the type of evaluation that a brand stimulus will make. Brand loyalty includes both purchase loyalty and attitudinal loyalty.

Purchase loyalty is defined as the willingness of the average consumer to repurchase the brand. Attitudinal loyalty is the level of commitment of the average consumer towards the brand. Brand trust and brand affect are each related to both purchase and attitudinal loyalty. They appear to serve as key determinants of brand loyalty, consistent with the concept of one-to-one marketing relationships. H1: Brand trust is positively related to both a) Purchase loyalty b) Attitudinal loyalty

Berschird (1983) isolates two critical aspects of a close emotional relationship namely, the magnitude of the affect (intensity) and its hedonic sign (+ve / -ve) The close relationship of a brand with its consumers (i.e. commitment) tends to reflect the level of positive affect generated by that brand. Therefore H2: Brand affect is positively related to both a) Purchase loyalty b) Attitudinal loyalty The given figure further suggests that the variables of purchase loyalty and attitudinal loyalty contribute to brand outcomes such as market share and relative price. (Because of higher levels of repeat purchases by the brand users) H3: Market share increases as purchase loyalty increases. Consumer with a strong, favourable brand attitude shall be more willing to pay premium prices for the brand. Therefore H4: Relative price increases as attitudinal loyalty increases. Smith and park (1992) found that the degree of brand differentiation is significantly related to market share with some exceptions, the brands share of voice had also tended to account for market share. (Jones 1990) Furthermore brand differentiation may justify higher relative price. Also, share of voice may reflect differences in advertising expenditures and therefore may also lead to affect relative price. 3. A model of trust worthy behaviour and practices, trust, value and loyalty.

Operational competence Dimensions of FLE & Benevolence Trustworthiness Problem solving orientation

Trust in FLE Behaviours

Value

Loyalty

Operational competence Dimensions of FLE & Benevolence Trustworthiness Problem solving orientation

Trust in MPP

The model is based on the works of Michele paulin et al. (1998), Craig C. Julian and B.Ramaseshan (1994), Deepak sirdeshmukh, Jagdip singh and Barry Sabol (2002) which focused on dimension on MPP (Management Policies and Practices) and FLE ( Front Line Employees) ; trust in MPP and FLE that linked with satisfaction. Consumers trust in the service provider focused on to develop around two distinct facets, FLEs and MPPs. In most service contexts, these facets are structurally distinct nodes around which the consumer is likely to make independent judgements during the course of a service exchange. DIMENSIONS: Operational Competence: - The expectation of competent performance from an exchange partner has been noted as a precursor to the development of trust in a variety of business relationship contents. Competence is defined as an ability of a marketer to meet his promise to the best satisfaction of his customers. Operational benevolence: Defined as behaviour that reflect an underlying

motivation to place the consumers interest ahead of self interest. Problem solving orientation: - Defined as the consumers evaluation of FLE and management motivations to anticipate and satisfactorily resolve problems that may arise during and after a service exchange.

Value and Loyalty: - Zeithams (1998) defines value as the consumers perception of the benefits minus the costs of maintaining an ongoing relationship with the service provider. Kolter (2000) says as value maximizes consumers are thought to consume exchanges with providers that provide max. value. Holbrook (1994) goes as far as to note that customer value and loyalty are the fundamental basis for all marketing activity. FACTORS INFLUENCING BRAND LOYALTY INTERNAL FACTORS (Mental constructs) --Internal to the consumer * Pre-dispositions * Opinions * Images * Attitudes * Motivations * Personality traits * Alternatives * Perception * Learning Internal factor refers to all those factors within a consumer or inner or intrinsic qualities of the individual consumer. The buying choices of the consumers are influenced by four major factors such as motivation, perception, learning and beliefs and attitudes. Each factor influences the buyer to purchase and repurchase or to become brand loyals. MOTIVATION There is general agreement that consumer is goal oriented. Consumers are motivated to seek ways to satisfy specific goals. Motivation is the driving force within individuals that impels them to action. This driving force is produced by a state of tension, which exists as a result of and unfulfilled need. The forces that impel such action are called motives. A person has many needs at any given time. A motive is a need that is EXTERNAL FACTORS (Outside consumers skin) -- external to the consumer. * Prices * Income * Assets

sufficiently pressing to direct that person to seek satisfaction of the need. Motivation is a driving force or a necessity to reduce a state of tension. A person acts because he is motivated i.e. set into motion to take action to fulfill the need or want. Thus motivation will also have its influence on consumer behaviour. Therefore understanding of motivation help marketers to develop insight into the needs motivates and tension of consumers to know its influence on consumer purchase and repurchase decision making. PERCEPTION: How a motivated person acts is influenced by his perception of the situation. Perception is the process by which individuals select, organize and interpret stimuli into a meaningful and coherent picture of the world. Perception has strategy implications for marketers, because consumers make decisions based on what they perceive rather than on the basis of objective reality. Consumers selections of stimuli from the environment are based on the interaction of their expectation and motives with stimulus itself. The perceived image of the product or service i.e. its symbolic meaning is probably more important to its success than are its physical characteristics. Products and services that are perceived favorably have a much better chance of being purchased than products or services with unfavorable or neutral images. Two persons in the same motivated state and objective situation may act quite differently because they perceive the situation differently. Thus perception of a consumer influences his buying behaviour. LEARNING: Consumer learning is a process by which individuals acquire the purchase and consumer knowledge and experience they apply to future related behavior. Although some learning is intentional, much learning is incidental. A persons learning is the result of interplay of drives, stimuli, cues, responses and reinforcement. Learning enables a person to recognize differences in sets of similar stimuli and to adjust his responses accordingly. Thus, learning experiences of consumers affect their buying behavior. For marketers, the purposes of understanding how consumers learn are to teach them that their brand is best, and to develop brand loyalty. ATTITUDES AND BELIEFS: -

Attitudes play a major role in both consumer research and marketing attempts to affect consumer behavior. An attitude describes an individuals enduring favorable or unfavorable cognitive evaluation, emotional feelings and action tendencies towards some object or idea. Attitudes put the individual into a frame of mind of liking or disliking an object, moving towards or away from it. The importance of attitudes in the study of marketing and consumer behaviour is due largely to the fact that they are learned tendencies to both perceived and act a linkage of perceptions ( beliefs, opinions, images, etc.,) and actual consumer behavior. A belief is a descriptive thought that a person holds about something. The beliefs make up product and brand images, and people act on their beliefs. The beliefs refer to the accumulated feelings and priorities that individuals have about things. More precisely, belief consists of very large no. of mental or verbal statements, which reflect a persons particular knowledge, and assessment of something that is another person, a store, perhaps a product, a brand. Attitudes and beliefs are strong and direct forces affecting consumers perceptions and buying behavior. EXTERNAL FACTORS:All those factors outside the consumer constitute external factors influencing brand loyalty. A consumers economic circumstance will greatly affect his product choice. Economic circumstances of the consumer consist of their disposable income, assets borrowing power, and attitude towards spending versus saving and price. Income available for spending is the amount available for personal consumption, expenditures and assets. Disposable personal income represents the amount of income that a consumer possesses to be used for spending or saving after having paid the taxes, debt installments etc. The changes in disposable personal income are relevant to consumer buying decisions. The consumer is not only influenced by his current income, but also by the future income. The expectations of future income will determine the level of future expenditure. If expectations of future income are strong, there will be a tendency to spend more and save less, whereas if expectations are weak, then there will be a tendency to spend less and save more in the present. Since, most of the consumers are

not having sufficient disposable income; they are not in a position to fulfill all their wants. Consequently, they give priority to certain wants and satisfy them by purchasing the suitable products. Thus the consumers loyalty towards the brand will be influenced by the economic circumstances i.e. external factors of the consumers. LOYALTY PHASES:Oliver (1997) has given cognition-affect-conation pattern. Consumers are theorized to become loyal in a cognitive sense first, then later in an affective sense, still later in a Conative manner and finally in a behavioral manner, which is described as action inertia. Cognitive loyalty:- In the first loyalty phase, the brand attribute information available to the consumer indicates that one brand is preferable to its alternatives. Cognition can be based on prior or vicarious knowledge or on recent experience-based information. Loyalty at this phase is directed toward the brand because of this information. This consumer state, however, is of a shallow nature. So the transaction is routine so that satisfaction is not processed, the depth of loyalty is no deeper than mere performance. If satisfaction is processed, it becomes part of the consumers experience and begins to take on affective overtones. 2. Affective loyalty: - At the second phase of loyalty development, a liking or attitude toward the brand develops on the basis of cumulative satisfying usage occasions. This reflects the pleasure dimension of the satisfaction definitionpleasurable fulfillment. Commitment at this phase is referred to as affective loyalty and is encoded in the consumers mind as cognition and affect. 3. Conative loyalty: - The next phase of loyalty development is the conative (behavioral intention) stage, as influenced by repeated episodes of positive affect toward the brand. Conation, by definition, implies a brand-specific commitment to repurchase. Conative loyalty, then, is a loyalty state that contains what at first, appears to be the deeply held commitment to buy. However, this commitment is to the intention to rebuy the brand and is more akin to motivation. In effect, the consumer desires to repurchase, but similar to any good intention, this desire may be an anticipated but unrealized action. 4. Action loyalty: - Study of the mechanism by which intentions are converted to actions is referred to as action control (Kuhe and Beckmann 1985). In the action control sequence, the motivated intention in the previous loyalty state is transformed into readiness to act. The action control paradigm proposes that this

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is accompanied by an additional desire to overcome obstacles that might prevent the act. Action is perceived as a necessary result of engaging both these states. If this engagement is repeated, an action inertia develops, thereby facilitating repurchase. Loyalty phases with corresponding vulnerabilities

Stage Cognitive

Identifying Marker Loyalty to information such as price, features, so forth.

Vulnerabilities Actual or imagined better competitive features or price through communication and Vicarious or Personal experience. Deterioration in brand features or price variety seeking and voluntary trial. Cognitively induced dissatisfaction. Enhanced imagery seeking liking and and for competitive Variety trial. brands. Perhaps conveyed through association. voluntary

Affective

Loyalty to a liking I buy it because I like it.

Conative

Loyalty

to

an

intention

am

Deteriorating performance. Persuasive counter argumentative competitive messages. Induced trial (eg. Coupons, sampling, point of purchase promotions.) Deteriorating

committed to buying it.

Action

Loyalty to action inertia coupled with the overcoming of obstacles.

performance Induced unavailability

(eg.

Stock

lifts-purchasing the entire inventory of a competitors product from a merchant). Increased obstacles generally deteriorating performance.

OBSTACLES TO LOYALTY:Consumer idiosyncrasies: - Some aspects of consumer consumption are antithetical to loyalty. For example, variety seeking frequently has been cited as a trait that will not permit loyalty to develop until there is no variety. This will be particularly true at the cognitive and even at Conative level. Until the variety seeking consumer reaches action inertia, the lure of new experience will be too tempting to ignore. Many product and service provider fall into this pattern and find that even their regular clientele will try new and different alternatives.

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Other reasons for apparent consumer disloyalty include multibrand loyalty, withdrawal from the product category and changes in need. Switching incentives: - Competitors can (and do) take advantage of irrational behavior of consumers, engaging them through persuasive messages and incentives with the purpose of attempting to lure them away from their preferred offering. Measurement of Brand Loyalty:Brand Management, the value and loyalty of the brand, is largely determined by four key elements. Brand Awareness Brand Attributes and Associations Perceived quality and Brand loyalty.

Brand Awareness:- According to David Aaker, brand awareness involves a continuum ranging form a hazy, uncertain feeling that the brand is recognized to a belief that it is the only one in its product class. Most brands, when they make an entry into the market are not known to consumers. Planned marketing communications like ads, promos, publicity and personnel selling take the brand up the awareness ladder. Further advertising / promotional efforts help to move the brand up to the higher awareness level termed as the Brand Recall level (the unaided recall level, a level superior to brand recognition). More persuasive, frequent advertising / promotions can take the brand higher up the awareness ladder to the top of the mind. Aaker introduces a further level in the continuum, which goes beyond the Top of the Mind level Dominant. This is a stage where the brand name itself stands for that product category. Efforts in developing brand awareness can lead to trial or first time buying and even repeat purchase which in turn make some consumers loyal to their brands.

Brand Awareness
David Aaskers Awareness Pyramid Dominant Top Of the Mind High

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Promotion

Brand Recall

Awareness

Brand Recognition

Hazy Low

Brand awareness research is the key to creating brand equity / loyalty. Awareness equates to traffic and prospective buyers showing up at the store without awareness, little happens. It can be measured using both aided and unaided recall items such as the following Which single company comes to mind first in the cellular services market? Which company do you view as the leader in cellular service provider? Which other companies come to mind? Which factors led you to mention your preferred brand as the leader? Are you aware of offers in cellular services market? If so to what extent? Please list the types of services that you know that your brand offer in the market? Based on your understanding of schemes, strategy and execution, provided by your service provider, how do you view its market position a year from now? BRAND ATTITUDES AND ASSOCIATIONS:Advertising guru, David Ogilvy, defined brand as the intangible sum of a products attributes. Its name, packaging, price, history, reputation, and the way its advertised (1987). When marketers create a brand, they emboss a set of positive values on the product. Branding is probably more important for service providers than for consumer product business because a strong company brand helps to retain customer loyalty, even when a company keeps introducing new generations of products. Each product becomes a reflection of the company, its values and then keep introducing new

The following questions measure different aspects of aided awareness and perceptions:-

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products that reinforce the brand. As customers begin to associate a company with the quality products it makes, brandings true power becomes evident. Brand attributes and associations provides the fabric of loyalty and equity research. Loyalty and equity are largely the result of the associations and attributes of the brand. These brand evaluation attributes may be functional, physical, financial, social or psychological in nature. Its measures include product features and attribute measures, as well as more advanced attribute. Personal image congruence measures: Their services are reliable and trouble free. Their services has features Im looking for in cellular services market. Their services are less expensive than most of the cellular service providers. Their schemes are attractive. They provide a good value for the money. Their services are of high quality. Associations include such areas as how the customer thinks and feels about the product / service and personal view points about the product / service class. Safety and security. Trust and confidence. Dependability and freedom. Peace of mind and calm. Self esteem and success. Congruence and compatibility. Power and control Psychological and psychographic associations with the product / service.

PERCEIVED QUALITY:Quality is king and such is a key component of all loyalty and equity measures. Quality is not, as many researchers perceive, a uni-dimensional construct. Quality effects are the consequences of attribute performance. The key areas of quality, such as quality and craftsmanship are the focal point of in depth elaboration techniques to find out what makes quality and what quality improvements can be made

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to enhance brand loyalty and brand equity. Customer care service. Honesty. Innovativeness.

CUSTOMER BRAND LOYALTY MEASURES:Brand loyalty has been examined at great length by academicians and practitioners alike as one of the most important factor influencing a brands success or failure in the market place. From the reevaluation of a fledging product(s) to the extension of a mature brand, effective marketing strategies depend on a thorough understanding of the core brand loyalty. The brand loyalty programs can have a dynamic impact on the success of a brand. Trust, quality, pride of association and identification with the brands concept and image influence loyalty and what customers buy. The loyalty tracking program provides an ongoing measures of loyalty of products / services to guide any business. SAMPLE MEASURES FOR BRAND LOYALTY:1. CUSTOMER LOYALTY Overall, how satisfied you are with your service provider? How likely are you to continue to choose or repurchase your service provider? How likely are you to recommend your satisfied service provider to a friend / associate? 2. TRUST IN THE BRAND I always trust my service provider. They always deliver what they promise.

3. QUALITY OF BRAND RELATIONSHIP They always treat me fairly. If a problem arises, I can always count on my service provider to reach a fair and satisfactory resolution.

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4. PRIDE OF ASSOCIATION I feel proud to be my service provider customer. They always treat the customer with respect.

5. IDENTIFICATION WITH THE BRAND My service providers company is the perfect company for people like me . I cant imagine a world without my d service provider.

CLASSIFICATION OF BRAND LOYALTY. Dick and Basu (1994), (Bilal 2004) classified brand loyalty into four groups termed as Spurious loyalty, Circumstantial loyalty, Latent loyalty and Sustainable loyalty. SPURIOUS LOYALTY :observed when despite (Low relative attitude and high relative patronage) can be consumer perception that the choices available are

undifferentiated, behavioral data suggests loyalty. The consumer in such cases shows only temporary display of loyalty as he is open to competing offers and will shift the moment he gets a better deal. CIRCUMSTANTIAL LOYALTY: - It includes cases where temporary monopoly is achieved due to patents, copyrights, and trademarks. LATENT LOYALTY: - It is displayed when consumers have high regard for a company or brand, but they dont necessarily buy it. This can be due to inconvenient store locations out-of-stock situations, etc. SUSTAINABLE LOYALTY: - It exists when a customer repeatedly buys only one particular brand or when he recommends it to friends, family, colleagues, etc. Thus sustainable (true loyalty) loyalty occurs when there is repeat patronage, which is the result of a conscious decision by the consumer. Review of literature:- Prior research on the relationship of brand loyalty with various elements of marketing strategy was examined. Brand loyalty & Market:

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Raj believes that his is the first empirical investigation into the relationship between brand user share and brand loyalty. Since then a number of researchers have examined this relationship. Most of them have found that high market share brands get more brand loyalty than the other brands. Ehrenberg it all finds that simple parameters such as penetration, purchase frequency and market share are consumer behaviour, including brand loyalty. Ehrenbergs views as paraphrased by Baldinger and Rubinson are that Marketing efforts in general and advertising in particular, have relatively limited effectiveness since nothing truly important, like market share, or penetration, is likely to be effected by the marketers efforts is a predictable way. The various reasons advanced for this phenomenon of high brand loyalty for high market share brands include better distribution, bigger advertising budget, more in store promotion, letter advertising budget, more in store promotion, letter social acceptability, better social acceptability, better suitability as the raw material for social interaction etc. While the majority view is that high market share brands reap higher brand loyalty than do the other brands there does exist research that gives the exception to this Barnard et al use empirical date to demonstrate, that loyalty. Bhattacharya finds that low market share brands following the niche strategy and brands bought in large quantities also enjoy high brand loyalty, and that excess loyalty for high share brands is more occasional than general. Brand loyalty and Price: Previous research shows that those whose are brand loyal differ from those who are not brand loyal with respect to their response to various aspects of pricing. Krishna murthy and Raj found that those who are brand loyal are less price sensitive than those who are not brand loyal. They also found that these two categories of buyers respond differently to a price reduction. While a price reduction can induce those who are not brand loyal to switch brands, it induces those who are brand loyal to buy more whereas the brand loyal customers respond to price increase or to price decrease with the same sensitivity, the consumers who are not loyal to any brand respond more strongly to price decrease than to price increase. Krishna Murthy et al, and Upshaw felt that the advent of value pricing was making Switehers out of many local customers as they went looking for the right deal. What sort of pricing strategy gets higher brand loyalty? Some answers are provided by Bhattacharya it al who found that higher price brands seem to have lower loyalty levels compared to other brands. This happens because high price brands have higher penetration. Consumers who normally purchase low priced brands switch to high price brands but the reverse of this will not happens. While such behaviour of the

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consumer increases penetrations of the brand this increase in penetration is not accompanied by a commensurate increase in respect buying. In addition to authors found that brands that go in for price promotions have less loyalty than the either brands. The authors see a different between buying loyalty and earning it. BRAND LOYALTY AND SALES PROMOTION: Does sales promotion increases brand loyalty or reduce it? While reviewing previous research, Papatte and Krishna murty found that there was evidence for both positive and negative effects of promotional activity (mainly coupons) on repeat purchase probability. However, their own empirical research as well as that conducted by mela et al shows that affect of promotions on brand loyalty is bad and tends to increase price sensitivity of consumers. Agarwal sought to understand the role of brand loyalty in the optional promotional mix for manufacturers. He explains that advertising is a defensive strategy used to build brand loyal as it helps in retaining the loyal customers. On the other hand, price promotions are an offensive strategy used to attract customers away from the rival brand. The stronger brand plays offensive by using more trade promotions and the weaker plays defensive by emphasizing advertising. Singh found that a majority of the people would continue to stick to their favorite brand. Only about 12% of the households would switch over to the brand offering the deal or adopt it for trial. It is significant that many of these households were from the lower income group. BRAND LOYALTY AND ADVERTISING: Bhattacharya reports contradictory research findings on the

relationship between advertising and brand loyalty, based on reviews of earlier literature. There are researchers who propose that advertisings main role is to sustain repeat buying among existing customers. On the other hand, there are those who find that advertising largely induces brand switching and not repeat purchase. Bhattacharya own findings are that the effects of advertising are in contrast to the effects of the promotional variables and price cuts. Perhaps advertising induces brand switching that is not purely price related. The Indian study on the subject does not support the hypothesis that advertising influences brand loyalty.

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Mela et al assess the medium and long term impact of promotion and advertising on two types of customers. The loyal (or relatively less price sensitive consumers ) and the non-loyal ( or price sensitive consumers ). They found that advertising had a powerful role in reinforcing consumer preferences for brands. A reduction in advertising makes consumers more price sensitive and affects the non-loyal customers more, increasing the size of the non-loyal segment. BRAND LOYALTY AND DISTRIBUTION: That brand loyalty is related to store loyalty is borne out by research. Earlier research has examined the linkages between trust in a salesperson, trust in the store, and repeat purchase intension. The findings reveal that those having an interpersonal relationship with the salesperson are directly linked with purchase intention as well as indirectly linked through store attitude. For customers not having relations with a salesperson, trust in the store leads to loyalty only indirectly through store attitude, but it does not have a direct impact on purchase intention. Other studies: To explain the satisfaction loyalty conundrum, Richard Oliver investigated what aspect of the consumer satisfaction response had implications for loyalty and what portion of the loyalty response is due to satisfaction component. He (concluded) that satisfaction is a necessary step in loyalty formation but becomes less significant as loyalty begins to set through other mechanisms. These mechanisms include the roles of personal determinism (fortitude) and social bonding at the institutional and personal level. When these additional factors are brought into account ultimate loyalty emerges as a combination of perceived product synergistic effects. As each fails to be attained or is attainable by individual firms that serve consumer markets the potential for loyalty erodes. A disgusting conclusion had gave is that loyalty cannot be achieved or pursued as a reasonable goal by many provides because of the nature of the product category or consumer disinterest for some firms satisfaction is the only feasible goal for which they should strive ; thus satisfaction remains a community. The disparity between the pursuit of satisfaction versus loyalty as well as the fundamental content of the loyalty response, poses several investigate directions for the next wave of post consumptions research Arjun Chaudhuri and Morris B. Holbreok examined two aspects of brand loyalty purchase loyalty and attitudinal loyalty as linking variables in the chain of effects from brand trust & brand affect to brand performance (market share & relative price ) . The study includes product level, category- related controls & brand level controls. The Researchers compiled an aggregate date set for 107 brands from three separate surveys of consumers and brand managers. The results indicated that when the product and

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brand-level variables are controlled for brand trust and brand affect combine to determine purchase loyalty and attitudinal loyalty. Purchase loyalty in turn leads to greater market share, and attitudinal loyalty leads to a higher relative price for the brand. K. Abdul Waheed and Neeti Yadav examine the relationships between brand personality dimensions and brand loyalty. The examinations of brand personality will advance the research in marketing especially the growing area of the brand-consumer relationships. It was found that the company having a brand image of sincerity and ruggedness wins customers loyalty. It was also found that relationship length of does not have any impact on consumer loyalty a customer buys a companys doesnt have any other options. C. Anandan, K. Ravichandran, M. Prasanna, Mohan Raj and N.K. shetty studied Brand Awareness and Brand Loyalty in branded commodity product. The researchers found that Brandingh the commodities is not the end of the road, but it is upto the commodity marketer to adapt to the customer requirememts over time and deliver value in a consistent manner. The marketer with the help of proper application of marketing mix can convert a basic commodity into brands which are perceived by customers as offering total satisfaction in fulfilling the customers needs. The marketers must build their brands based on key factors like quality of product and favorable brand image so that a strong long-term loyal customer base can be created. Subhasis Ray and Avishek Sarkar analyzed the influence of brand vis--vis price in Indian mobile industry and concluded that though the schemes and offers help to attract customers, it is the brand that ultimately reigns in decision-making. Therefore activities like sales promotion and economizing the product should be backed up with efficient brand building activities. Brand is an element of any firm that helps it to build intangible and emotional association with its customers. A company can leverage this association when a customer makes a choice or helps others to make a choice i.e. recommendations and word of mouth. product for many years it doesnt means that he/she is loyal to the company it may also be because he/she

NEED OF THE STUDY:

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OBJECTIVES OF THE STUDY: The basic objective of the study is to assess brand loyalty is cellular services in Andhra Pradesh. Further the sub objectives are as follows:1. To make an analysis of consumer profile in relation to demographic variables to identify the broad features of the cellular service providers. 2. to know about cellular service providers operating in Andhra Pradesh in general and AIRTEL, BSNL, IDEA, RELIANCE, TATA INDICOM INDICOM AND VODAFONE in particular. 3. To make an analysis of various influencing factors of brand loyalty for cellular service providers to highlight the relative importance and influence of those factors. 4. To make an analysis of four key elements of brand loyalty:

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Brand Awareness. Brand Attributes and Association.

Perceived quality and Brand loyalty for cellular service providers.

5. To draw conclusions based on the analysis made in the study on different aspects. SCOPE OF THE STUDY The scope of the study is related to the services rendered by different service providers in the state namely AIRTEL, BSNL, IDEA, RELIANCE, TATA INDICOM INDICOM AND VODAFONE. This study is conducted to know brand loyalty of selected cellular companies in selected districts of Andhra Pradesh. PERIOD OF STUDY The primary data for the study was collected between the years 2006 and 2008 DATA SOURCES AND METHODOLOGY For the purpose of the research study, both the primary and secondary data is collected. Primary data is collected through comprehensive questionnaire administered to the customers of selected enterprises namely AIRTEL, BSNL, IDEA, RELIANCE, TATA INDICOM INDICOM AND VODAFONE. Secondary data is collected from the various research publications, journals, magazines, daily newspapers, pamphlets, published reports and published and unpublished literature related to the above mentioned service providers. PRE TESTING OF QUESTIONNAIRE The questionnaire was pre-tested on a sample of 30 customers of cellular service providers in A.P. The pre-testing of questionnaire has helped the researchers to modify some questions and alternative answers. Some of the respondents were happy to reveal their experiences and asked the researcher to make provision for other alternative answers which were duly done. The final (modified) questionnaires

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after pre-testing were used for collecting the data. SAMPLE OF THE STUDY The customer sample size is taken as three hundred. The customer sample is based on randomized cluster sampling technique. The area of the study is restricted to mobile service providers operating in A.P. All 300 respondents have been interviewed with a structured

questionnaire for the purpose of the study. The selection of the respondents was randomly made from the districts like Vijaywada, Adilabad, Hyderabad and Secunderabad, Karimnagar, Warangal, Tirupathi, etc. EDITING, CLASSIFICATION, TABULATION AND ANALYSIS The filled in questionnaires were checked to see that the respondents answered all the questions. In addition to this, while editing the data the following points were kept in mind as suggested by paten to see that the data were As accurate as possible Consistent with other facts secured Uniformly entered As complete as possible Acceptable for tabulation & Arranged to facilitate tabulation The classification of raw data was essential for analysis & interpretation. The computer system was used for classification of data. As most of the questions, included in the questionnaire were close-ended, classification was not complex. The classified raw data had to be displayed in compact form for analysis. This was done through tabulation. The tabulation has been done by hand using excel sheet in the computer. All the tables were prepared from the questionnaire using SPSS package specially designed software cross-tabulation has also been doe for the sake of analysis. For the data analysis various statistical techniques such as average, percentage, graphs, diagrams, standard deviation and other appropriate test i.e chi-square test has been employed depending upon the requirements. LIMITATIONS OF THE STUDY:-

23

Every care is taken to study the foregone objectives in detail, however the study is subjected to the following limitations. A deep study was not undertaken due to time constraint. The areas selected were few & as such the scope of the study is limited. Since the sample is represented by various strata of the universe, they may be biased in certain responses. The conclusion may or may not be generalized since the study is confined to Andhra Pradesh only The numbers which are approximated may or may not convey the exact results. In spite of the above limitations, the study should throw some light on the understanding of brand loyalty in cellular services. Since this is an exploratory study, it is hope to have the way for further research in the area. CHAPTER LAYOUT: The study is presented in chapters, which are as follows:1. CHAPTER I : INTRODUCTION, this chapter will comprise of conceptual overview of Brand loyalty, Meaning & Definitions, Need for Brand loyalty, Models of Brand loyalty, Factors influencing brand loyalty, Loyalty phases, Obstacles to loyalty, Measurement of Brand loyalty, Classification of Brand loyalty, Review of literature, Need for the study, Objectives of the study, Scope of the study, Period of the study, Data sources & methodology pre-testing of Questionnaire, Sample of the study, editing, Classification, Tabulation & analysis, Limitations of the study & chapter layout.

2. CHAPTER II:

1.1 INTRODUCTION: In the present day world, the information technologies have been successful in building a super highway for communication knowledge is supposed to be the power generating force. Communication Technologies is found to be contributing substantially to the development process. The process of Socio-Economic emancipation is now considerably governed by the quality of information technologies. Information management is an integral part of the decision making process. The information technologies will continue to play an important role in the decision making process, it is 24

found sophistication in the process of communication technologies getting an important place on the development agenda of almost all the countries. The death of distance as a determinant of the cost of communicating will probably be the single most important force shaping society in the century. Technological change has the power to revolutionize the way people live, and this one will be no exception. In ways that are only dimly imaginable, decisions about where people work and what kind of work they do, concepts of national borders and sovereignty, are the patterns of international trade. But the death of distance is only one of the astonishing changes taking place as communication and computers are combined in new ways. Fiber - optic networks and digital compression will allow many families, to receive a personalized communication channels. Networks are being developed that are (a) like the telephone, "switched" so that they can used by many subscribers, (b) like television, high capacity or "broad band" so that they can carry moving pictures and (c) Interactive, so that, unlike with television, every user of the network can communicate with every other part. mails. The world will change as a result of the communication revolution. locate a service where it can best be produce, rather than near its market. 1.2 THE ROOTS OF REVOLUTION: It is easy to forget how recently the communications revolution began. All three of i.e. Telephone, TV & Interactive today's fast changing communication technologies have existed for more than half a century. The telephone was invented in 1876; the first television transmission was in 1926; and the electronic computer was invented in the mid 1940's. For much of that time, change has been slow, but in each case, a revolution has taken place since the late 1980's. the Telephone Since the 1980's, the oldest of the three technologies has undergone two big transformations - an astonishing increase in the carrying capacity of much of the long distance network and the development of mobility. They result, in the first case, from the use of glass fibers to carry digital signals, and the second from the steep fall in the cost of computing power. The telephone network has had the least capacity for its most useful service long distance communication. Once a connection was made people in the branch will stay on the phone reading books and news papers all day just to keep the line open until it was needed. The telephone lines at the heart of the communication revolution. In its existence of a century and a bit, the telephone has already transformed social and economic The death of distance loosens the grip of geography companies will have more freedom to Mobile telephones now account for almost half of all new telephone connections world wide and few millions of people are just using electronic

25

life beyond anything that Alexander Graham Bell dream of back 1876. It has brought companionship, employment and information to millions. This familiar instrument has become the gate way to new world. The revolution now taking place has three aspects, the collapse in the cost of providing a long distance calls; the increase in the number of things a phone can do, and the wiring of the world. Because the telephone is so versatile and so widely used, there changes will have profound effects. The forces for changes are not just technological. In addition, privatization and deregulation are bringing competition into the telephone industry in many countries, for the first time. The richer countries of the European Union have pledged to open their market to competition at the start of 1998 and world trade organizations (WTO) agreement reached in early 1997, have number of other countries. Competition will be good for customers new services emerge more often where competition is lively. Business customers will benefit first and most, but individuals, too; will eventually enjoy most of the concession that companies receive. These changes will reshape the telephone business from being dominated by monopolies a single state owned giant or a few big regional monopolies. Telecommunication is becoming more like other fast-changing industries full of new comers, including new comers from other countries and from other industries. It will retain its tendency to concentration, but today's big telephone companies will find them selves facing unprecedented commercial pressures. Wireless Telecommunication Most striking change in telecommunications since the early 1980's has been the development of wireless services. It has brought innovations of three kinds. The mobile telephone, the wireless link to a fixed point, known as "wireless local loop", and the tracking of moving objects. Mobile telephones More than one in seven of the world's telephone subscriptions are for mobile telephones. As the use of mobile telephones continues to grow, there will be three key trends. Mobile telephones will capture a growing share of voice traffic, the line between a mobile and a fixed telephone will blur; and mobile telephones will acquire many of the attributes of portable computers. The mobile telephone is now the competitor for the telephone companies core business of voice conversations. Most voice conversations will be received on and sent from wireless telephone. The shift from fixed to mobile telephony will be hastened by the falling price of actually making calls over mobile telephones. In 1992, mobile service tariffs were, on average, three and a half times higher than fixed - link tariffs. That rate has now fallen

26

to a point where the overall cost of using some mobile services is becoming competitive with that of fixed services. General, a mass market will reached, and voice calls from mobile services will start to overtake those from fixed services. The fusion of fixed and mobile telephone will take place on many fronts. Mobile telephones will become available that are not tied to one service (and tariff). "Personal Communication Services", a new generation of wireless telephone, will be combined in all sorts of flexible ways with cord less and fixed-wire telephones. Wireless Local Loop A local telephone network is expensive, "wireless local loop" offers a cheap alternative. A mobile telephone uses a great deal of spectrum to switch from one base station to another, a fixed antenna can be permanently tuned precisely to the correct base station. The main cost is that of transmission spectrum must be allocated. But maintenance costs are low. Most faults arise at one end or the other of the network, making them easier to repair than those in the part between exchange and customer. Tracking moving objects Mobile communications have another set of applications just as radical as the mobile telephone. Locating moving objects, with the help of global positioning satellites, a position on the globe can be pin pointed with extra-ordinary precision and with land based wireless, moving objects can be tracked. From such technologies, a huge range of uses is developed. Including the following. Inventory control system: shelves. Navigation System: Electronic maps that pin point the location of an automobile, truck, or military targets or that help a hiker find atrack or a farmer to work out which parts of a field to spray. Altering System: impending attack. Toll Payment System: Systems for automatically assessing tolls against automobiles passing through an electronic check point. Table No.1.1: Representative costs of local loop technologies. Electronic tags that track stolen automobiles or roaming Systems used to monitor the position of

electronically agged containers, for instance or to check stock on super market

elephants or probes that monitor that state of a patients heart to warm of an

Competent Copper

Cost per connection ($) 200 - 2000

27

Fixed wireless Coaxial cable * Fiber to Curb Fiber to Home

500 500 1050 upward 2000 upward

* Does not include additional cost to upgrade for interactive capability. Source: 1997. In building telecommunications network, poor countries have two advantages; many new technologies reduce the cost of installing new networks and newly installed networks will be state-of-the art, unlike those in the rich countries which now require upgrading. Cost saving technologies can reduce the cost and increase the reliability of services. .Developing countries can also move to mobile telephones more rapidly that can rich countries. Mobile operators do not need to compete against a massive installed based of fixed wire telephone which has long been amortized, and their spectrum is frequently less heavily used than in the rich world. Privatisation, competition and open markets assure more important in developing countries than in rich ones. In Chile the first Latin American company to privatize there proportion of people with access to a telephone doubled within three years and waiting time fell from nearly ten years to just one. Peru sold a 35% stake in its telephone system to telefonica de Espana in 1994, a rare instance of a country ceding effective control of its system in exchange for a large investment in it. Several developing countries have accepted bids from foreign firms to build parts of their network, thus US west is building a network in Southern India, AT & T is building a mobile network in Argentina, Deutsche Telecom is building a fixed link system in Indonesia, and Australia Telstra is installing pay phones in Phnom Penh. Such policies make sense not only because they will allow users access to in expensive telephone services, but for an even more important reason. Good telephone services are especially important for poor countries because they bind the poorest, most distant regions into the rest of the country and they allow developing countries to compete on the same footing as richer rivals. 1.3 BENEFITS OF TELEPHONE SERVICE TO RURAL AREAS: People who live in the country are less than half as likely to have access to a telephone as people who have live in cities, a perennial problem in poor countries. Some times the discrepancy in much worse. In India 74% of the population lives in villages, but they have only 10% of the lines. This is partly because city dwellers have more political clout than rural dwellers and partly be cause it cost up to five times Information Infrastructure: Regulatory requirements OECD

28

as much to install a fixed line in a rural area as in a town and obviously to install wireless links -"mobile or even less expensive, fixed. In rural areas, good communication can bring news, education, medical and agricultural advice. They also provide a disincentive to move to the city. Some of the advantages of urban life are available to those who stay, the benefits of persuading people to stay in the country are immense. Moreover rural telephone services frequently, each much larger revenue than those in cities. Country dwellers make and attract many more long distance calls than do city people. It is important to connect cities to the rural areas and as it is to connect cities to the rest of the world. Benefits of telephone services to competitiveness one of the powerful effects of the enormous investment in telecommunications now under way will be to reduce some of the gaps between developed and developing countries. Since around 1990, international call charges in the two have been converging as developing countries cut tariffs at a faster rate than rich countries (by roughly 3% year, to the rich countries 2%). The fast growing developing countries, especially in Asia, are now on track to become the telecommunications power houses of the next century. Today emerging economics account for more than 25% of global telephone traffic in the year 2005, the ITU predicts that will rise to more than 50%, by then China will be one of the top three sources of international traffic and India will be close behind. The benefits from plugging developing countries into the vast global telephone network will be enormous. Developing countries may be a low-cost location for telecommunications services, as they now provide a low cost, rich country may find it less expensive to reverse the direction of a call to exploit low telecommunications costs in the developing world. The telephone brings access to information from other parts of the world, technological information, which can allow developing countries to catch "up with the rest of the world in industry, health care, education and a host of other services, commercial information, raising aspirations and transforming patterns of consumption; and political information which will faster the spread of democracy and open to public affairs. In expensive telecommunications services will narrow the advantage of the first world over the developing countries; Indeed, countries with good communication will be indistinguishable. 1.4 They will have access to services of first -

world quality; health care, education and technical information. SIGNIFICANCE OF THE TELEPHONE SERVICE: The way demand for a technology will evolve is a game with a high failure rate. Even those close to an innovation may fail to spot its significance. In few years it is likely to see the increasing integration of the internet with both the telephone and the

29

television. The most immediate effect of the communications revolution will be to allow familiar objects and be used in new unfamiliar ways. The most powerful corporate role will be played by the telephone companies, largely free from debt, with powerful national brands; the telephone companies have the muscle and ubiquity to exert enormous influence over the future of communication, at least in the short run. business models to emerge. It takes time for a new technology to find its true market. It takes time too for new People are paying directly for telephone services although, with toll-free calls, a growing share of the cost is carried by companies. In the short and medium term, the way people adopt new technologies will be influenced by culture, convenience and cost. It will also vary enormously from one country to the other. The following factors will be among those that determine how each technology is used in the future. Culture: People are doing things one way, they may be slow to change, especially, like one-fifth of the rich world's population they are over 65. Some of the developing countries with their young population and fewer pre conceptions, may thus be quicker than older west to spot and take advantage of new possibilities. Convenience: Some technologies can be readily used in one situation but not in another. Cost: Demand will be boosted when new technologies cut costs. The services whose costs will be mostly affected can be electronically distributed from computer software and video's to financial services and information. The broadest impacts of new communication have been the effect will be felt in four main areas. Commerce and the shape of the company, the economy, society, culture, the government and the political process. Commerce, including many kinds of retailing, will become increasingly international. The barriers, such as customs formalities, delivery costs and different rules of consumer protection, will gradually decline. Such global retailing will allow many niche markets to emerge. Companies: Companies will be able to build new links not just with customers but with employees in different parts of the country or around the world. Employees in different countries or regions will be able to work in teams on the same project. All kinds of services will be brought in communication improve it will become easier for companies to hunt for spare capacity and low prices. A knowledge based company can buy in much more of what it needs, design or marketing or packaging than a traditional company. There will be new opportunities to integrate customers and suppliers using the corporate communications network. Suppliers will tap into their customer electronic data base to work out what the customer need and to supply it. Technologies such as

30

electronic mail and computerized billing will reduce the costs of dealing with suppliers at arm's length. The result of intensified competition will be greater emphasis a performance, productivity and waste reduction. Economic will benefit from the vast increase in the diffusion of knowledge and information, the basic building block of economic growth. This revolution is especially important because of innovation. The introduction of new production methods, new products and new kinds of industrial organization is the main force driving growth and living standard. The communication revolution speeds up the diffusion of innovation. It will thus allow new competitors to spring up companies to react quickly, and individuals to spot opportunities. Information is also essential to make markets to work well. Society: Society too will change with the disappearance of the old demarcation between work and home. More people will work from their homes or from purpose built small offices. The office may become the place for the social aspects of work such as networking, lunch, and catching up on gossip, thus inverting the familiar roles of home and office. Political and government will be transformed by free communication, changing the balance of power between governments and their citizens. People will be able to communicate their views to their government leaders and representatives more easily. People who live under dictorial regimes will find it easier to communicative with the rest of the world.

Growth of Indias Telecom Services(1991-2007)


The phenomenal growth of the information technology (IT) industry in India has brought to the fore the growing importance of the country as a knowledge powerhouse. But this competitiveness is restricted to the services sector. In fact, it is the sector that is increasingly contributing to the high growth rate recorded in the country. Despite showing a goad growth performance over the last three years or four years, the manufacturing sector is still a relative non-performer although three industries, namely, auto parts, cotton textiles and Pharmaceuticals are showing much dynamism in terms of exports. However India's exports have now diversified to encompass services. The service sector in general has come to occupy preeminent position in India's economy in terms of its contribution to overall
GDP ,

exports and as a destination for foreign direct

31

investments (Table 1). Manufactured exports are still dominated by low and medium technology products although, earlier some hi-tech products such as; pharmaceutical and certain types of machine tools have crept into Indias export basket. But the growth of
IT

exports and the evidence of moving up the value chain in

IT ,

the

emergence of other high technology industries such as biotechnology, aerospace, etc, is enabling India to be in the' league of high technology producers from the developing world. The recent growth of research and development (R&D) outsourcing is yet/another illustration of the country's prowess in high technology activities. An interesting dimension, of high technology production in India is that this capability is largely in the realm of services. However, there are indications that this capability is slowly percolating into hi-tech manufacturing. And an industry where it is very clearly visible is telecommunication where a revolution of sorts is taking place [Mani 2007]. In the context, the purpose of the present paper is understand the technological implications of the phenomenal growth of this industry. 1. Introduction 2. Telecoms and India's Growth Communications is the fastest growing sector in India's economy. The average compound rate of growth of the economy works out to 24.02 per cent per annum since the turn of this millennium (Table 2). No other sector of the economy has clocked such a rate of growth. The sector accounts for about 4 per cent of overall
GDP

and

the recent high rate of growth has contributed to about 11 per cent of the growth in
GDP

of the country. In information and communications technology (ICT), it is


ICT

again communications that is more important. This is evident from a dataset on the total spending on by India, about 63 per cent was in communications.

spending developed by World Information Technology and Services Alliance (2006), of


ICT

The communication sector comprises both services and equipment manufacturing, although in the above characterisation the data refers only to the services segment. The domestic production of telecom equipments has shown some impressive increases during the period since 2001, but it accounts for only about 15 per cent of the total telecoms industry. With some fluctuations, the equipment sector is slowly seeing a decrease in its share in the total revenues of the telecommunications industry (Figure 1). Table 1: Relative share of the service sector in Indias Economy (1990-91-2006-07, in %)

32

Real GDP 1990-91 2006-07 40.6 61.8

Exports 20 39

FDI Not available 81

Table 2: Contribution of communication sector to Indias Growth Performance (1990-91-2006-07, in %)


Share of communications in GDP 19992000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 1.6 1.9 2.2 2.6 3.1 3.5 4 26.9 19.5 25.6 25.4 22.8 23.9 4.1 5.6 3.4 8.6 7.5 9.1 12.47 7.66 19.58 9.16 10.64 10.51 Growth sector GDP Growth

Contribution (%)

2.1 Dimensions of Growth In 1991, India had just five million telephone subscribers. As at the end of July 2007, there were 233 million subscribers, an average annual growth rate of over 27 per cent per annum. No other country in the world, other than China, has shown such high rates of growth (see Table 3). Tele density too which was below one telephone per 100 population has now risen sharply to about 20. Among the infrastructure industries, telecommunications is the only one that has shown significant improvements over the reform period. Consequently, it is generally opined that a revolution of sorts is taking place in the Indian telecoms industry. There are at least seven dimensions of this growth performance that merit our attention.

Table 3: Trends in Number of Telecom Subscribers and Tele density (1991-2007)


Number of Telecom Subscribers Fixed Mobile (inmillion) Total Growth (%) Teledensity 0.6 14.60 17.04 18.09 22.04 0.67 0.77 0.89 1.07 Ratio of mobile to fixed

1991 1992 1993 1994 1995

5.07 5.81 6.8 8.03 9.8

5.07 5.81 6.8 8.03 9.8

33

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007(as on October 31,2007)

11.98 14.54 17.8 21.59 26.51 32.44 41.48 42.58 45 49 40.43 39.41 0.34 0.88 1.2 1.88 3.58 13 33.58 50 76 149.5 217.14

11.98 14.88 18.68 22.79 28.39 36.02 54.48 76.16 95 125 189.9 3 256.5 5

22.24 24.21 25.54 22.00 24.57 26.88 51.25 39.79 24.74 31.58 51.94

1.26 1.56 1.94 2.33 2.86 3.58 4.3 5.1 7.04 10.66 17.16 22.52 0.02 0.05 0.06 0.07 0.11 0.31 0.79 1.11 1.55 3.70 5.28

Dominated by wireless technologies, which include cellular mobile and fixed wireless technologies. In fact, almost the entire increase in the availability of telephones has been contributed by wireless technologies. India has one of the highest ratios of wireless to wireline services, which is now almost five (Table 3). In fact what is interesting is that since 2005, the wireline services have started falling. A number of factors explain this decrease in the popularity of fixed telephones, which has now become a worldwide trend. This heavy reliance of wireless technologies, while extremely positive from the availability point of view, has some implications for the diffusion of the internet in the country. This will be analysed in some detail in one of the subsequent sections. (ii) Growing Market for Telecom Handsets: As a corollary of the above, it is seen that there has been a steady increase in the average number of mobile subscribers per month since 2003 (Table 4). In 2003, on an average 1.5 million new subscribers were added to the existing stock. This increased to 6.4 million until September 2007. These large increases in the number of mobile handsets have strong positive implications for the telecom equipment industry and specifically the mobile handsets industry, which means that close to six million handsets are being sold every month. Consequently, a huge domestic market for telecom equipment has suddenly emerged in the country spawning the creation of a significant manufacturing base. Chennai has become a thriving cluster for mobile handsets manufacturing and this has important implications for the downstream industries such as the semiconductor industry. This point will be discussed at some depth in the fourth section. Table 4: Monthly Additions to Mobile Subscribers (2002-07, in million)

2002 January February

2003 0.64 0.6

2004 1.58 1.6

2005 1.76 1.67

2006 4.69 4.27

2007 6.81 6.22

34

March April May June July August September October November December Average

0.28 0.29 0.35 0.36 0.49 0.37 0.53 0.72 0.8 0.46

0.96 0.64 2.26 1.42 2.32 1.79 1.61 1.67 1.9 1.69 1.46

1.93 1.37 1.33 1.43 1.74 1.67 1.84 1.51 1.56 1.95 1.63

0.78 1.46 1.72 1.97 2.46 2.74 2.48 2.9 3.51 4.46 2.33

5.03 3.88 4.25 4.78 5.39 5.9 6.07 6.71 6.8 6.4 5.35

3.53 6.11 6.57 7.34 8.06 8.31 7.8 8.05

6.88

(iii) Increasing Privatisation: The share of the private sector in the overall telecoms industry has been rising (Figure 2) and the ratio of private to public actually crossed unity in 2006. This again is due to the fact that the public sector is more dominant in wireline (or fixed) and the private sector is dominant in the wireless (mobile) segment (Table 5). This sort of a structure is largely the product of historical reasons. The two public sector service providers (BSNL and
MTNL)

dominated the wireline sector, while

the private sector was able to dominate the new wireless technology. In fact it was only in the late 1990s, early 2000s that the government allowed the public sector entities to provide wireless communication services.

Table 5: Telecommunications Services according to ownership (Percentage shares as on May 31, 2007)

Public Private Total

Wireline 91 9 100

Wireless 19 81 100

(iv) Competition - Fixed vs Mobile and GSM vs CDMA: An interesting feature of the industry is that after a very long time, it has suddenly become very competitive. There are three dimensions to this competition. First, it is competition between two standards or technologies, namely, the Global System for Mobile Communications (GSM)
VS

Code Division Multiple Access ( CDMA ) standards. Second, it is competition

between various service providers, although this competition was restricted to public policy designed spaces or markets known as telecom circles. A yet another dimension is the type of market. There are essentially three types of markets based on the geographic coverage of the service. They are: (i) the local telephone market; (2) long distance or national telecom services; and (3) foreign or the overseas market. We

35

focus here on all the three dimensions of competition between the service providers. Competition in Fixed and Mobile Technologies: The markets for mobile services are much more competitive than the one for fixed line services. In the latter, the incumbent service provider,
BSNL

continues to have the lion's share of the market.

However, the existence of mobile communication services has made the market for fixed line services contestable and as a result despite high concentration, the prices of fixed telecom services kept falling or kept under check over the last five years or so. (a) Competition in Fixed Telephone Services: If one goes by overall summary measures of domestic competition, the market for fixed telephone services is much more concentrated than the one for mobile services. For instance (as on May 31, 2007), the Herfindhal Index (H-Index) for fixed services for the nation as a whole works out to 0.6899 while the one for mobile services work out to 0.1592. This national level picture hides the level of competition that exists at the sub-national level. The market for fixed telecom services is highly concentrated in all the telecom circles, although in seven of them, namely, Delhi-NCR, Chennai, Madhya Pradesh, Mumbai, Punjab and Karnataka, the H-Index has a value less than 0.8. Of course, this does not mean that the market for fixed telecom services is not competitive. There are two dimensions to this level of competition for fixed services. First, the consumers are increasingly substituting mobile for fixed services, so the fixed service providers face intense competition from mobile services. Second, the existence of the telecom regulator too has acted as a check on the dominant service provider, Bharat Sanchar Nigam (BSNL), from charging high prices. Instead what one sees is a significant improvement in the performance of
BSNL

during this period.1 First of all,

BSNL

is one of the

leading profit-making central public sector enterprises in the country: in 2005-06 it made a net profit of Rs 8,940 crore - one of the few non-oil public sector enterprises (PSES) in the top 10 profit-making
PSES

in the country. Three areas where the firm has

made performance improvements are: (i) considerable reductions in the number of consumers on the waiting list for a connection; (ii) reductions in the number of faults per subscriber; and (iii) number of personnel per 1,000 subscribers. On all the three indicators
BSNL

has made substantial progress [Department of Telecommunications

2007] and I argue that this is entirely due to the force of competition leading to efficiency gains for this rather monopolistic firm which has had a previous history of being completely impervious to the demands of consumers. (b) Competition in Mobile Services Industry: Compared to the fixed services,

36

the mobile services industry has a number of distinguishing features. First, the industry started as one dominated by private sector enterprises and the government religiously followed a policy of "managed competition" by licensing more than one service provider in a telecom circle. In fact majority of the 28 circles have at least four services providers and in a number of cases there are six service providers well. In short, right through inception the government envisaged an oligopolistic form of competition. Second, most of these private sector enterprises had some of foreign equity holding of sorts. Third all of them are based on new technologies that were state-of-the art. Fourth, the conduct of the industry was, relatively speaking, more regulated by the newly created independent regulatory agency, the Telecom Regulatory Authority of India (TRAI). Fifth, it is the rapid growth of this industry that has catapulted the communications sector into one of the major growth-contributing sector of India's economy. Sixth, the mobile communications industry, especially the equipment part of the industry is the second largest in the world (next to China) and therefore has attracted considerable
FDI

in the manufacture of handsets leading to

the employment of skilled manpower. Seventh, India is supposed to be having the cheapest mobile telecom tariffs in the world. The early part of the industry was of course riddled with much controversy pertaining to the terms and conditions under which the licenses were issued and the spectrum allocated between various kinds of service providers [Desai 2006]. Since all the services providers were new and had the same vintage of technology, their competition was more in terms of price and conditions of sale and of late these two aspects are much in public scrutiny thanks to the timely intervention, on various occasions, by the regulator. If one computes the H-Index for the industry, at the national level (which is not exactly a meaningful as some of the providers are only at specific telecom circles), it shows a mild increase: the H-Index for the industry increases from 0.1370 in 2002 to 0.1593 in 2007. However, this increase hides considerable variations at the circle level (Table 6). Most of the service providers have focused on specific regional markets, with the exception of Bharti (the largest mobile service provider). In fact, there are only four service providers who have a presence in at least 20 of the 29 circles. It is also interesting to see that the circles where
BSNL

has a monopoly position are also those

with very low revenue potential. In other words, the private sector providers have positioned themselves in the most revenue earning circles. Also it is seen that it is the circles with high revenue earning potential where there has been an increase in the intensity of competition - in the metros of Delhi, Mumbai and Chennai for instance.

37

Telecom circle 1 Andaman and Nicobar 2 Andhra Pradesh 3 Assam 4 Bihar 5 Chennai 6 Chhattisgarh 7 Delhi-NCR 8 Gujarat 9 Haryana 10 Himachal Pradesh 11 JandK 12Jharkhand 13Karnataka 14 Kerala 15 Kolkata 16M P 17 Maharashtra 18M um bai 19 North-east-1 20 North-east-ll 21 Orissa 22 Punjab 23 Rajasthan 24Tamil Nadu 25 UP (east) 26 UP (west) 27 Uttaranchal 28 West Bengal India as a whole

Number of 3 service 4 4 5 6 1 6 6 6 6 4 1 6 6 5 5 6 6 4 1 5 7 7 6 6 6 1 6 12

Herfindha l index 0.49 0.29 0.28 0.30 0.19 1 0.19 0.22 0.23 0.24 0.45 1 0.23 0.20 0.21 .0.24 0.18 0.18 0.28 1 0.25 0.20 0.20 0.20 0.22 0.18 1 0.21 0.16

Dominent Bharti (42) Reliance (59) Aircel(31) Bharti (38) Aircel (26) BSNL(IOO)

Suplier

(with

Market) share in % )

Hutchison Essar (21) Hutchison Essar (38) Reliance (27) B5NL(30) BSNL(55) BSNL(IOO) Bharti 329) B5NL(29) Hutchison Essar (25) Reliance (32) Idea (23) Hutchison Essar (25) BSNL(35) BSNL(IOO) Bharti (31) Bharti (30) BSNLC7) Aircel (28) Hutchison Essar (22) 'Hutchison Essar (22) BSNL(IOO) Hutchison Essar (29) Bharti (23)

Competition between Mobile Standards: It was seen above that mobile phones were introduced in the country towards the latter half of the 1990s and specifically in 1997. Ever since that year and until the end of 2002, the market was dominated by just one technology, namely,
CDMA GSM.

But in December 2002, a Reliance Info-comm launched


CDMA

services across 17 circles on a countrywide basis,


GSM ,

has since been growing

faster than

although there are some year-to-year variations (see Figure 3).

Most Indian consumers are unaware of the nitty-gritty of the two technologies. So the deciding factor between the two technologies is often based on price and other conditions of offer such as the coverage of the service, ease of obtaining a new connection and whether a handset is available at a reduced price as part of the deal.

38

Given this sort of a possibility of perfect substitution between the two types of technologies, the existence of the two standards has made both the markets for and
CDMA GSM CDMA

services very competitive. This is especially so when the market for

services is highly concentrated with just two service providers accounting for almost the entire output. This is further indicated by the higher Herfindhal Index for services. What is being argued here is that despite being highly concentrated, service providers have to compete with the
CDMA GSM CDMA CDMA

service providers and this has prevented

service providers from wielding any excessive market power.

One of the most important institutional requirements for competition to emerge and sustain is the introduction of number portability. Number portability allows a customer to move from one mobile service to another within
GSM GSM,

and also between

and

CDMA,

while retaining the same number,

TRAI

had recommended in March 2006

to the Department of Telecommunications (DOT) that mobile number portability be introduced by April 2007. But it was only in October 2007 that the
DOT

finally announced the introduction of


GSM

number portability from April 2008, but this was strongly opposed by the

players.

(v) Price of Telecom Services: One of the more direct effects of this competition is lower prices. Before the deregulation of the telecom services industry and indeed the entry of mobile service providers, telecom consumers were periodically subjected to increases in the tariff. This has now been effectively checked. The price of telecom services basically follows a two-part tariff, both in the case of fixed and mobile services: first an activation charge followed by a charge for each type of calls. For mobile communication consumers then there is the additional cost of calls according to whether it is post or prepaid. Based on estimates made by
TRAI

(2006), I

have obtained the minimum effective charge derived out of an outgoing usage of 250 minutes per month per quarter during 2003 through 2005. This is plotted for both fixed and mobile services as well. Although charges for both the calls have come down, a higher reduction is noticed in the case of mobile services. In fact, India now has one of the cheapest mobile tariffs in the world (Table 7) and this can give an additional fillip to the growth of
ICT

industry in the country. If one were to plot the

price of telecom services and the number of subscribers, one can see an inverse relationship in the case of mobile services although in the case of fixed services such an inverse relationship is not visible. This is because of the relative advantages which mobile technology can bestow on its user. Table 7: Cost of mobile calls in India compared to other countries (As of June 2004)

39

Country

Callcharges per minute

Minutes usage

of per

Average revenue per user($) 43 11 10 59 63 11

Termination ($) 0.152(.O16)" 0.080(0.020) 0.025(0.010) 0.163(0.017) 0.130(0.022) 0.007(0.007)

rates

per minute mobile

subscriber Australia Brazil China Switzerland Japan India 0.24 0.11 0.04 0.45 0.33 0.03* 159 per month 92 261 119 156 309

(vi)

Institutional

Support:

An

interesting

feature

of

the

growth

of

telecommunications industry in the 1990s and beyond, compared to the earlier period is the strong public policy support that the industry has received. It was manifested in the form of the following policies: (i) National Telecom Policy of 1994, (ii) Telecom Regulatory Authority Act of 1997, (iii) New Telecom Policy of 1999, and (iv) Broadband Policy of 2004. Of these four main policies, in my view, the most important piece of legislation that is determining the growth performance of the industry is the establishment of the regulatory agency
TRAI.

The 10-year history of telecommunications regulation in India can be divided into two phases: the first covering the period 1997-2000, when were made to the original Act. On the whole,
DO'T TRAI

had just been established

and the second covering the period 2000 onward, when considerable amendments
TRAI TRAI'S

functioning has been marred

by a number of bitter disputes between it, the

and the service providers, although

in more recent times (especially since 2001) it has been rather effective in shaping the conduct of the industry in terms of pricing behaviour and indeed in quality of service. (In late 2007,
TRAI

found itself once more in controversy over spectrum allocation and


TRAI'S

pricing.) I do not attempt here to provide a detailed review of

operations since its

inception, but a quick survey of its place in telecom regulation in India. The purpose is essentially to illustrate the need for a more independent regulator that can effectively oversee the functioning of an almost completely deregulated industry. The actual benefits that the consumers have received from this regulation have been discussed in detail elsewhere in the paper in terms of increased easy access to telecom services, considerable improvements in both the price and quality of services and the existence of a watchdog of the industry.
TRAI'S

functions can be broadly categorised into two: recommendatory

40

and mandatory. It is seen that in most of the important conduct variables such as the promotion of competition, pricing, technology and quality of service and in the efficient use of spectrum, etc, the pronouncements of
TRAI

are

merely

recommendatory and the final decision is to be taken by the government. The mandatory powers of
TRAI

are restricted to a number of technical issues such as

fixing the terms and conditions of inter-connectivity between the service providers, laying down the standards of quality of service and to ensuring that these conditions are actually met by the service providers and ensuring the effective compliance of the Universal Service Obligation. This shows that the effective space that is available for the
TRAI

in terms of asserting its real power is very limited. This

fact has to be borne in mind while one assess the contribution of this regulatory agency towards improving the conduct of the industry even post 2000 than that actually prevailed in the previous period. After a detailed review of its functioning during the earlier period (1997-2000), Mani (2002) referred to the because during this phase, phone service operators,
TRAI' S TRAI

as a "muddled regulator". This is

functions were poorly articulated, and it was and

generally viewed as driven by the well-organised and vociferous lobby of private


TRAI

did little to hide its pronounced contempt for the


BSNL

DOT

the state-owned providers,

and

MTNL.

At the same time, it failed to ensure that

private operators adhered to their license conditions. Its authority and credibility were undermined by court rulings that clearly exposed its lack of power. Its reputation suffered even more when it allowed the private operators to fight its court battles. In short, it would not be incorrect to state that there was "regulatory capture" during this first and initial phase of its operations. The governmental admission of the ineffectiveness of in
TRAI'S TRAI

resulted in the reinvention

of the regulator and a redefinition of its functions. This takes us to the second phase history and this thinking manifested itself in the form of the issuance of an
TRAI

ordinance to replace

with an appellate tribunal with judicial powers and a

reconstituted regulator that lacked one of the most important functions of any telecom regulator, namely the power to settle disputes between the various stakeholders. This function was vested in a newly created Telecom Dispute Settlement and Appellate Tribunal (TDSAT). However, this was followed up with a strengthening of
TRAI'S

role in a

number of other areas. But it can be shown that although the amendment clarified the precise role of the regulator by considerably reducing the grey areas, it effectively reduced the power of the regulator.
TRAI'S

recommendations to the government are binding only with respect to the non-

compliance and efficient use of the spectrum. On the crucial issues of timing and licensing

41

of new service providers,

TRAI'S

recommendations are not binding. In sum, the

TRAI

has

been reduced to a tariff-setting body empowered only to fix tariffs and inter-connection charges and to set norms on quality of service. And on these two and especially on the tariff issue,
TRAI'S

role is generally considered to be very satisfactory

Table 8: patents issued to Indian inventors in the US (2001-05, number of patients)

Multiplexing 2001 2002 2003 2004 2005 0 2 3 6 7

Pulse or Digital 1 1 1 2 2

Telephonic 0 0 0 1 1

Telecommunications 0 1 1 0 3

Total 1 4 5 9 13

(vii) Growing R&D Outsourcing: It is generally held that India has emerged as a major R&D hub. The Technology Information and Forecasting Assessment Council (TIFAC) (2007) study confirmed this commonly held proposition:
R&D

investment worth of $

1.13 billion has flowed into India during the five-year period 1998-2003. The total receipts of R&D services have doubled from $ 221 million in 2004-05 to $ 519 million in 2005-06 [Reserve Bank of India 2006, p 1355]. Telecom along with the pharmaceutical industry is a major recipient of these investments. The innovative performance of this segment can be gauged from the fact the number of the us patents issued to Inventors from India (including
MNCS

having operations in India) in the

area of telecom technologies has increased from just one in 2001 to 13 in 2005 (Table 8).

3 Three Disquieting Features In the previous section I have outlined several dimensions of the growth of the industry. All these were positive features -the phenomenal growth of the industry, significant reductions in the waiting time to get a telephone connection and indeed in the price of telecom services. However, this growth has also been with some disquieting features. Three such disquieting features of the growth of the industry

42

have been identified. They are: (1) the growing digital divide; (2) increased dependence on imports as far as the equipment are considered; and (3) the relatively low penetration of the internet in India. (i) The Growing Digital Divide: Several commentators, notably Desai (2006), had referred to the growing inequalities in the availability of telephones especially between states and indeed between the rural and urban areas within a state. This is so severe that the national picture that I presented above is only representative of the urban areas of some of the states. This growing digital divide, as it is usually referred to, is of course a reflection of the growing divides within the country as far as income and wealth is considered. The ratio of urban to rural tele-density, which was falling until 2002 has started rising again since 2003 and in 2005 was much higher than what was in 1996, when the mobile revolution was just about to begin. To illustrate, the ratio of urban to rural tele density increased from 14 in 1996 to nearly 20 by the end of 2005 [Department of Telecommunications 2006]. A yet another dimension of the digital divide is the variation in tele density across the various telecom circles (Table 9). Tele density (in 2005) ranged from as high as 60 per 100 people in the national capital region to just two in the backward state of Chhattisgarh. The urban divide within each of the telecom circles is presented in Table 9. It shows that Kerala, Tamil Nadu (excluding Chennai) and Punjab have one of the lowest urban-rural divides, while Uttar Pradesh, Bihar and Assam have the highest digital divides. The table also shows that rural tele density is significantly below the urban one across all the circles and even for the nation as whole it has remained at a very low level. This confirms the oft-expressed view that the telecom revolution spearheaded by the mobile phones has remained largely an urban phenomenon. The government has put in place an institutional arrangement for bridging the digital divide. Specifically, the National Telecom Policy of 1999 envisaged implementation of the Universal Service Obligation (USO) Fund to provide telecom services in rural, remote areas and non-remunerative areas. This fund is raised through an "universal access levy", which is 5 per cent of the adjusted gross revenue earned by the service providers under various licenses. The Universal Service Support Policy for Implementation of USO took effect from April 1, 2002. It is administered by the
DOT

and it has three major components: (1) providing public

shared access; (2) providing individual access; and (3) infrastructure support for mobile service providers. The latter policy is on the anvil and is yet to take shape. The overall performance of the uso fund is far from satisfactory, as cumulatively speaking only about a third of the funds accumulated have actually been disbursed (DOT, http://www.dot.gov.in/uso/implementationstatus.htm).

43

The service providers, excepting for the state-owned

BSNL,

are rather reluctant to

provide shared access. However, the private providers are keen to participate in the provision of individual access in rural areas as it is more profitable than providing shared access [Department of Telecommunications 2007]. Hitherto, the uso funds have been utilised only for provision of fixed line connections. Given the fact that the future is in mobile communications, it is prudent to involve mobile service providers too. Some amendments made to the utilisation of uso funds have expanded the scope of the funds to include more items.3 The following additional four items were included: (i) Creation of infrastructure for provision of mobile services in rural and remote areas; (ii) provision of broadband connectivity to villages in a phased manner; (iii) creation of general infrastructure in rural and remote areas for development of telecommunication facilities; and (iv) induction of new technological developments in the telecom sector in rural and remote areas. Only the first of four are in the form of some implementation. However, it makes a lot of sense to extend the uso funds to provide mobile services in rural areas as increasingly much of the growth in mobile communications have emerged from 'B' and 'c' circles. In fact, the four metros have ceased to be the major force behind the growth of the mobile connections in the country. Encouraging the growth of mobile communications in the other circles and the rural areas within the circles can increase tele-density in the country. Such increases in tele-density through mobile phones also have some negative consequences, which is discussed below. Table 9: Digital Divide within Telecom Circle (as on March 31, 2006)

Urban Andaman and Nicobar Kerala Tamil Nadu (-) Chennai Punjab Haryana Uttaranchal Maharashtra (-)Mumbai Gujarat Himachal Pradesh North-East-ll Karnataka Andhra Pradesh North-East-I Chhattisgarh Rajasthan Kolkata Mumbai Chennai 22.49 47.61 23.1 51.57 29.21 17.05 27.71 30.12 78.11 14.21 31.26 30.19 15.93 7.18 22.94 25.09 45.81 48,03

R u ra l 9.15 9.74 2.86 5.34 2.9 1.68 2.59 2.63 6.82 1.21 2.49 2.37 1.24 0.46 1.45

Ratio of LJ to R 2.46 4.89 8.08 9.66 10.07 10.15 10.70 11.45 11.45 11.74 12.55 12.74 12.85 15.61 15.82

44

Delhi National Average West Bengal (-) Kolkata Jharkhand Orisa Jammu and Kashmir Madhya Pradesh Assam Bihar Uttar Pradesh

52.09 28.25 17.14 8.56 21.35 19.87 17.15 18.22 19.71 18.89

1.74 1.05 0.51 1.05 0.78 0.67 0.67 0.57 0.52

16.24 16.32 16.78 20.33 25.47 25.60 27.19 34.58 36.33

(ii) Import Dependence for Telecom Equipment: The country had earlier assiduously built up a domestic telecom equipment manufacturing industry in all the three segments of the industry, namely in switching, transmission and terminal equipment. Until 1985 or so, the manufacture of telecom equipment was exclusively reserved for the public sector, when in that year certain customer premises equipments like the Electronic Private Automatic Branch Exchanges (EPABX) were thrown open to the private sector. In fact, the very first public sector enterprise established in independent India, Indian Telephone Industries (ITI) was devoted to the manufacture of telephone switching and terminal equipment. In 1985, the government established the standalone laboratory, Centre for Development of Telematics (c-DOT) to develop a family of digital switching technologies, which it licensed to both government and private sector enterprises. In fact, Mani (2005) had argued that the
C - DOT

is credited with the


DOT,

establishment of a modern telecom equipment industry in the country. The government's policy of public technology procurement practiced through its contributed to the emergence and sustenance of a domestic manufacturing industry in telecom equipment which fitted very well with the overall policy of import substitution that was being followed. The deregulation of both the equipment and services industries, the liberalisation of the economy, the virtual abandoning of the public technology procurement policy and above all the growth of the mobile communications industry put a leash on the growth of a domestic manufacturing industry. This is because both the research and production components of the industry focused only on fixed telephone technologies and with the mobile communications becoming very important, the demand for such equipment had to be increasingly met through imports. A self-sufficiency rate (SSR) is defined as the ratio of domestic production to total availability, where total availability is the sum of domestic production and net imports. Two variants of the rate,
SSRI

which was

the only telecom service provider for a very long time until the late 1980s also

and

SSR2

have been computed (Figure 4):

SSRI

is based on

net availability data from the World Telecom Indicators 2006 of the International

45

Telecommunications Union and

SSR2

is based on data on net availability of telecom Commodity Trade Statistics

equipment developed by us on the basis of data on exports and imports of telecom equipment from India contained in the online database, (UN Comtrade, http://comtrade.un.org/db/ ). Although the level of as indicated by the two series is slightly at variance with
SSRI UN

SSR

each other, the direction of movement is roughly the same although

shows a

much steeper fall in the self-sufficiency rate. Suffice to say that the industry, which was more or less self-sufficient, is now increasingly dependent on equipment imports. In other words, the phenomenal increase in the growth of services has not really benefited the local Indian manufacturers as most of them do not have the technological capability to service the new technology based equipment demanded by the service industry. The new telecom policy of 1999 had envisaged making the country a leading centre for the manufacture of telecom equipment. But as to be discussed below, this is being achieved by opening up the market to domestic investments by
MNCS.

Even for

IT

solutions such as for software requirement, the domestic mobile service providers are depending on foreign vendors. Although India is a leading exporter of computer software and indeed telecom software, its own telecom service providers are depending on foreign sources. (iii) Low Penetration of the Internet: Internet services in India were launched in 1995 by Videsh Sanchar Nigam (VSNL). By the end of March 1998, the number of subscribers had barely reached 1,40,000. In November 1998, the government recognised the need for encouraging the spread of the internet in the country and opened the sector for provisioning of services by private operators. To date there are 389
ISP

licensees, but only 135 are operational. Public sector providers dominate with
ISPS

56 per cent of the market (2006). Five

account for 83 per cent of the market with

the leading provider alone accounting for 42 per cent. Approximately 60 per cent of the users still use dial-up internet access. Broadband access was introduced in October 2004, but its diffusion remains low. According to million broadband subscribers. Only about a quarter of the internet subscribers have changed over to broadband access technologies. Majority of the subscribers use the older dial-up technologies for accessing the internet. According to a recent study on internet in the country by the internet and Mobile Association of India (2006), almost 76 per cent of
PC TRAI

estimates (Table 10, P

43), there were 9.27 million internet subscribers as of end March 2007 and 2.34

users have and 46

taken internet connections. This means that the two technical reasons militating against the higher internet diffusion in the country is the lack of ownership of
PCS

not having a fixed telephone for accessing the internet. Although it is possible to access internet over a mobile phone, the current generation of mobile technology that is common in the country is 2
G

and 2.5 G. Of course, it is generally held that whenever

the country moves over to 3G phones, accessing the internet over mobile phones is easier. But given the much higher prices of 3G handsets, it is not very likely that its diffusion will be high in the initial years. So the low internet diffusion in the country is a direct consequence of the country becoming too reliant on mobile phones. Table 10: Diffusion of Internet in India (1995-2007, numbers in millions)

Number August 1995 March 1996 March 1997 March 1998 March 1999 March 2000 March 2001 March 2002 March 2003 March 2004 March 2005 March 2006 March 2007 subscribers 0.01 0.05 0.09 0.14 0.28 0.95 3.04 3.42 3.64 4.55 5.55 6.95 9.27

of

internet

Numbers of Broadband subscribers

0.04 0.18 1.35 2.34

4 The Silver Lining The silver lining is that India is becoming a major manufacturing hub especially for mobile handsets. This has the potential of increased demand for semiconductor devices, like for instance Digital Signal Processors (DSP), and this increased demand can catalyse the domestic manufacturing of semiconductor devices. However, all the players are expected to be policy in 2007. (i) India emerging as a Manufacturing Hub: The New Telecom Policy of 1999 had envisaged the country becoming a major manufacturing and export hub for telecom equipment.5 But for a long time this
MNCS

as no local companies are available

as of now. The government responded to this prospect by announcing a semiconductor

47

sounded more like an empty statement not backed by reality where, as noted above, the country was depending heavily on imports. This was reflected in the rates of selfsufficiency presented earlier showing a declining trend. However, this situation has been changing very rapidly, specifically since 2006. The more proximate cause of this change is the large size of the domestic market for mobile communication. With a monthly sale of over five million pieces since July 2006, India has now become the second largest market for mobile handsets in the world, which all the major mobile handsets and other equipment manufacturers have begun manufacturing locally since 2006 (Table 13). Domestic output of telecom equipment, although fluctuating, has shown some significant increases over the last two years (Figure 5). Also, although the numbers of data points are few, one can see an almost perfect positive correlation between the growth of the services sector and the equipment sector (Table 11,). My argument is that this correlation is bound to become more significant in the future, given the present trends. However, the industry is going to be dominated by affiliates of fact, the telecom industry has been one of the major recipients of
FDI MNCS.

In

in the country

since 1991 (Table 12). Although much of these investments (over 50 per cent) are in the services segment, increasingly (since 2001), the equipment sector has ' received about a quarter of the total investment. In short the domestic manufacturing industry will be dominated by foreign enterprises (Table 13). Further, the import dependence of the industry will in all probability continue to be high for a few more years as the local manufacturing of mobile equipment is at present based largely on fully knocked down (FKD) and semi-knocked down (SKD) kits. But as the domestic manufacturing of electronic components and semiconductor devices increase, the import dependence is sure to come down. In this way the experience on this count will be similar to the Indian automotive industry. This growth of the manufacturing sector has several spillover effects besides direct employment. One of the more important of these is the demand for electronic components and specifically semiconductor devices, which are used in the manufacture of these equipment. According to estimates by the Indian Semiconductor Association (formed in 2004), the total available market (after taking into account imports) is bound to increase from $ 0.91 billion to over $ 16 billion by 2015. Mobile handsets and equipment will be one of the larger markets. Consequent to this thinking, a number of proposals and projects for the semiconductor manufacturing industry have been announced.6 If all the projects announced materialize, India will soon be safely in

48

the "bus" that it had missed several years ago as far as electronic hardware is concerned. The government has responded to these private initiatives by announcing on March 21, 2007 a special financial incentive package to attract investments for setting up semiconductor fabrication and other micro and nanotechnology manufacturing industries in the country. The incentives are in the form of capital subsidies to the tune of 20 per cent of the total investment expenditure incurred by a fab or eco-systems units during the first 10 years, provided that these units are located within a special economic zone (SEZ) and 25 per cent if they are located outside a established before March 31, 2010. In response to this incentive package, the government is expecting $ 10 billion worth of investment. It remains to be seen whether or not such an investment will fructify. Such an incentive-induced investment strategy is sometimes criticised as the government is essentially taxing the citizens of a country and passing on the benefits to a few private sector individuals. Overall, the growth of the telecom services industry seems to be leading to the emergence of not just the telecom equipment industry, but also the electronic components and semiconductor devices that are required for the manufacture of these equipments. Thus, the Indian telecom industry is an excellent example of the growth of the services leading to the emergence of an attendant manufacturing industry as well. Table 11: Growth of services and Equipment Segments (2002-03 to 2005-06, in Rs billion) Telecom Equipment 2002-03 2003-04 2004-05 2005-06 144 140 160.9 178.33 Telecom services 480 610 800 1,000
SEZ.

In addition the

units are also exempted from countervailing duties. Further they will have to be

Table 12: FDI Inflows into Indias Telecom Industry (1991-2007, in Rs million) Total FDI Inflow FDI Inflow in Telecom Industry 20031,21,170 5,320 Share of FDI in Total FDI 4.39 11,96,600 Cumulative FDI Cumulative FDI Telecom Industry 107,250 for Share FDI of in

Telecom Total FDI 8.96

49

04 200405 200506 200607

1,71,380 2,46,130 7,06,300

5,880 30,230 23,550

3.43 12.28 3033

13,67,980 16,14,110 23,20,410

1,13,130 1,43,360 16,6,910

8.27 8.88 7.19

Table 13: India as a Manufacturing Hub for Mobile Telecom Equipment (2007) Name of manufacturer 1 Ericsson 2 Elcoteq 3 Nokia 4 LG Electronics 5 Flextronics 6 Foxconn 7 Motorola 8 Sony Ericsson Facility and location GSM Radio base station facility-Jaipur R&D centre in Chennai Contract manufacturer-Bangalore Mobile handsets-Chennai Mobile handsets-Pune Contract manufacturer-Chennai Contract manufacturer-Chennai Mobile handsets R&D centres Mobile handsets through Flextronics and Foxconn GSM facility with Alcatel at Nainital and Manakapuri UP CDMA with ZTE, China at Bangalore NOTES BSNL's sales revenue emanate from two major segments: basic services and cellular services. Of the two, although the share of basic services has gone down even in 2005-06, its share was over 80 per cent of the total. So the performance of BSNL depends to a large extent the way it manages fixed telephone services although with the growth of mobile services the relative importance of fixed telephone services is likely to come down over time. See the Annual Report 2005-06 of BSNL at http://www.bsnl.co.in/company/results2oo5-o6/resultcomplete_o6.pdf In working out the ideas contained in this subsection, I have relied on my own writings on the topic in Mani (2002) and also Desai (2006) and TRAI (2007c). An Ordinance was promulgated on October 30, 2006 as the Indian Telegraph (Amendment) Ordinance 2006 to amend the Indian Telegraph Act, 1885 in order to enable support for mobile services and broadband connectivity in rural and remote areas of the country. Subsequently, an Act has been passed on December 29, 2006 as the Indian Telegraph (Amendment) Act 2006 to amend the Indian Telegraph Act, 1885. It may be pointed out that there is no consensus on the number of internet and indeed broadband subscribers in the country. There are a plethora of estimates widely diverging from each other. For a detailed account of these various estimates, see Chandrasekhar (2006). (accessed on August 25 2007)

9 ITI

50

The policy had stated, "With a view to promoting indigenous telecom equipment manufacture for both domestic use and export, the government would provide the necessary support and encouragement to the sector, including suitable incentives to the service providers utilising indigenous equipment". See the New Telecom Policy of 1999 at the DoT web site: http://www.dot.gov.in/ntp/ ntp1999.htm (accessed on August 27, 2007) These proposals are: Semlndia promoted by Vinod Agarwal - $ 3 billion (12" fab) at Hyderabad; (ii) NANO-TECH Silicon India (NSTI) promoted by Jun Min - $ 0.6 billion (8 fab) at Hyderabad; (iii) Hindustan Semiconductor Manufacturing Co. (HSMC) promoted by Deven Mehta - $ 4.5 billion (8 fab) - location to be confirmed; (iv) India Electronics Manufacturing Corp IEMC promoted by Rajendra Agarwal - $ 3.0 billion (12 fab) - location to be confirmed; (v) A number of chip companies from around the world have established research centres in India. Qualcomm Inc, the largest chip design house by revenue and a major US mobile chip company, has also opened a software and chip development lab in India. The company uses it as a base for research and development as well as a place from which to promote its CDMA according to its web site; (vi) The state-owned semiconductor complex at Chandigarh (which has been taken over by the the department of space), is drawing up a road map for a new project. It expects to rejuvenate SCL and put India on the 0.35-micron map in the foreseeable future; (vii) The Indian Semiconductor Association has close to 100 members (2007). REFERENCES: Central Statistical Organisation (2007): National Accounts Statistics 2007, Ministry of Statistics and Programme Implementation, New Delhi. Chandrasekhar, C P (2006): 'India Is Online but Most Indians Are Not', Macroscan, September 25, http://www.macroscan.com/cur/sepo6/cur 26o9o6India_Online.htm. Department of Telecommunications (2006): Annual Report 2005-06, Government of India, New Delhi. Delhi. Desai, Ashok (2006): India's Telecommunications Industry, History, Analysis, Diagnosis, Sage Publications, New Delhi. Indian Semiconductor Association (2006): Summary of the Frost and Sullivan Report on Indian Semiconductor Industry and Its Eco System, Indian Semiconductor Association, Bangalore. Internet and Mobile Association of India (2006): Internet in India 2006, Mapping the Indian Internet Space, IMRB International and IAMAI, New Delhi. International Telecommunications Union (2006): World Telecom Indicators 2006 on CD-ROM, International Telecommunications Union, Geneva. Mani, Sunil (2002): 'Private Financing Initiatives in India's Telecom Sector' in Sanford V Berg, M G Pollitt and Masatsugu Tsuji (eds), Private Initiatives in Infrastructure, Edward Elgar, (2007): Annual Report 2006-07, Government of India, New

51

Cheltenham, UK, Northampton, US, pp 118-39. (2005): Innovation Capability in India's Telecommunications Equipment Industry' in A Saith and M Vijayabaskar (eds), ICT's and Indian Economic Development, Sage Publications, New Delhi, pp 265-322. (2007): 'Revolution in India's Telecommunications Industry, Economic & Political Weekly, VolXLII, No 7, pp 578-80. Reserve Bank of India (2006): 'Invisibles in India's Balance of Payments, Reserve Bank of India Bulletin, November, pp 1339-74. (2007): Annual Report 2006-07, Reserve Bank of India, Mumbai. Technology Information and Forecasting Assessment Council (TIFAC 2007): FDI in the R&D Sector, Study of Its Pattern 1998-2003, TIFAC, New Delhi. Telecom Regulatory Authority of India (TRAI) (2005): 'Study Paper on Indicators for Telecom Growth', Study Paper No 2/2005, Telecom Regulatory Authority of India, New Delhi. (2006): New Delhi. (2007a): Annual Report 2005-06, Telecom Regulatory Authority of India, New Delhi. (2007b): 'Draft Recommendations on Growth of Broadband', Telecom Regulatory Authority of India, New Delhi. (2007c): A Journey towards Excellence in Telecommunications', Telecom Regulatory Authority of India, New Delhi. (Various issues): Press releases dealing with monthly additions to subscriber base, Telecom Regulatory Authority of India, New Delhi. World Information Technology and Services Alliance (2006): Digital Planet 2006, The Global Information Economy, Arlington, VA. World Markets Research Centre (2006): WMC Country Reports: India (Telecoms). 1.5 SERVICES MARKETING - AN OVER VIEW: Services dominate the development of any economy. The history of developed economies show that services played major role in their economic development. Approximately 70% of the GNP is from the services. Services act as catalyst in the generation of income and employment, thus in then leads to expansion of market for special products & services. Services are no longer an industrial by product. But has become a powerful economic engine where the jobs are created and the energy for gaining acceleration for economic growth is provided. Marketing orientation for services is a need of present day business, service marketing plays a critical role in the creation and delivery of customer focused services. Organizations which are engaged in any line of business including specialized services have to lay major emphasizes on 'Consultation Paper Paper on the Review of Internet Services', Consultation No: 19/2006', Telecom Regulatory Authority of India,

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services marketing. In the present day context no organization can think of surviving without emphasizes on services. A major shift from product orientation to customer orientation compiled organization to set into customer relationship management (CRM), supply chain management (SCM), pre-sales services, post sales services and a set of interactive customer care services. Also a major shift in the life styles necessitated the business to offer specialized services. Such as financial services, money management services, Insurance product services, personal care services and a whole gamout of services which are not linked to the product but to the customer needs. As such marketing of services, play a strategic role in the survival and success of business entities. Concepts of Services: The American Marketing Association defines services as "activities, benefits or satisfaction which are offered for sale or provided in connection with the sales of goods. In 1963 proposed by Regan suggested that services represent either intangibles yielding satisfactions directly or intangibles yielding satisfactions jointly when purchased either with commodities or other services. Lehtinen in 1983 defined services as "an activity or a service of activities which takes place in interaction with a contact person or a physical machine and which provides consumer satisfaction". Kotler and bloom in 1984 defined services as "Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product". Gummension defined "services as something which can be bought and sold which you can't drop on your foot". In 1990 Gronross proposed working definitions: According to him " A service is an activity or services of activities of more or less intangible that normally, not necessarily, take place in the interactions between the customer and service employees and / or physical resources or goods and / or system of the service provider, which are provided as solution to customer problems". Customer Services: The modern marketing concept mainly emphasizes on customer services. According to this concept, all business decision in organizations are to be based on consumer orientation. It is only by satisfying the customer needs that an organization can survive and prosper in this competitive world, much more so, in the growing dominance of consumer movement. Customer services assume vital important in the marketing programs of all modern organization including service organizations. Service marketing requires that service organizations should devote much of their attention on offering efficient services to the customer. prompt customer services only. As the services are hidden and invisible, they can gain confidence and good will through economic, efficient and Customer is the most important person under modern

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marketing. He is the central figure and axis around which all business activities revolve. The main philosophy of any business organization is the treatment to be given to customer is rightly described by Mahatma Gandhi as " A customer is the most important visitor on our premises. He is not dependent on us, we are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so". Customer services means, satisfying the needs of a customer at the right time and in the right manner. The customer service broadly includes giving expeditions assistance, explaining various policies and systems answering each and every query with balancing judgments and opinions giving due importance and respect to him. The very objective of the service marketing requires that the service organization should devote more attention offering efficient service to the customer. As services are invisible they can gain confidence and goodwill through efficient and prompt customer service only. Among the services organizations, telecommunications services are largest with the widest network. Telecommunication services are more a public and private utility service and a commercial organization. Therefore service orientation is an imperative of its policies and operations. The general trends in business organization in India consider customer relation as an additional attempt to keep customer in good humour. And possibly this thinking comes in the way of development of true and professional relationship with customers. Customer relationship is necessity, not a luxury for business success. The Indian Telecommunication is under going significant transformation with regard to its network and technological up gradation. With the introduction of improved technologies and high degree of competitiveness, it has become more important for any organization customers. to take competitive advantage by providing better services to With proliferation of organization involved in the same line of business,

more and more customers are becoming alert about the competitive quality of the product and services marketed by organizations. In the west, particularly in United States of America, the management expects are constantly engaged in finding ways and means for maximizing customer satisfaction. Seminars research has been initiated to find how an organization can render. Telecom services taken an edge over its competitive organizations in achieving higher growth rates. Service Marketing: In modern times service marketing is gaining vital importance particularly in view of the role of tertiary sector in economic development of a country. Though same marketing principles and concepts are to be followed for marketing of tangible goods and services, the practices and strategies vary to a significant extent. This is mainly due to the unique nature and characteristics of services as compared to the products which are tangible and verifiable. 1.6 NATURE AND CHARACTERISTICS OF SERVICES:

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A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of any thing. Its production may or may not be tied to a physical product1. Attending a play, calling the police for assistance, traveling on public transportation, seeing a mental health counselor and attending any place for recreation - all of them involve receiving a service. Services have a number of unique characteristics that make them so different from products some of the most commonly accepted characteristics are2 (i) In tangibility: Services are intangible, unlike physical products they cannot be seen, tasted, felt, heard of smelled before they are brought. Thus, a patient getting plastic surgery cannot seen the result before the purchase and prosper cannot experience the service before he bought the life insurance under these circumstances, purchase requires having a confidence in the service provider. (ii) Inseparability: A service is inseparable from the source that provides it. Its very act of being created requires the source, whether a person or machine, to be present. In other words, production and consumption occur simultaneously with services. This is in contrast to a product which exists whether or not its source is present. (iii) Variability: A service can be highly variable, depending on who is providing it, and even when it is being provided. Purchasers of services are aware of their high variability and engage in normal risk reducing behaviour by talking to others and trying to learn who the best provider is. Service firms should make an effort to deliver high and consistent quality in their service offers. The major step is to develop a good personal selection and training program. Another step for the service providers is to develop adequate customer satisfaction monitoring system. The main tools for this are suggestion and complaint systems, customer surveys and comparison shopping. (iv) Perish ability: Services cannot be stored. While a car can be kept in inventory until it is sold the revenue on an un occupied theater seat is lost for ever. The perishability of services is not a problem when demand is steady, because it is easy to staff the services in advance. When demand fluctuates heavily, service firms have difficult problems. (v) Ownership: When one buy a product one becomes the owner be it a pencil, book, shirt, refrigerator or car. In case of service, one may pay for its use but one never own it. By buying a ticket, a customer can see the evening film show in the local cinema theatre; but paying wages one can hire the services of a chauffeur who will drive his car. In the care of a service, the payment is not for purchase, but only for the use or access to or for hire of items or facilities. Offer of Services: The service component can be minor or a major part of the total offer. In fact, the offer can range from a pure "good" on the one hand to a pure service on the other hand. Four categories of offer can be distinguished.

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i) A Pure tangible good: Here the offer consists primarily of a tangible good such as Soap, tooth paste or salt. No services accompany the product. ii) A tangible good with accompanying services: Here the offer consists of a tangible good accompanied by one or more services to enhance its consumer appeal. For example an automobile manufacturer sells an automobile with a warrant, services and maintenance instructions, and so on. Levitt observes that "the more technically sophisticated the generic product (Ex: Cars and computers), the more dependent are its sales on the quality and availability of its accompanying customer services (Ex. Display rooms, delivery, repairs and maintenance, application aids, operator training, installation advice, warrants fulfillment)4 iii) A major service with accompanying minor goods and services: Here the offer consists or a major service along with some additional services and / or supporting goods. For example, air line passengers are buying transportation services. They arrive at their destinations with out anything tangible to show for their expenditure, however the trip includes some tangibles such as food and drinks, a ticket stub, and an air line magazine. The service requires a capital intensive goods called an aero plane for its realization. But the primary item is a service. iv) A pure service: Here the offer consists primarily of a service examples include psychotherapy and messages. The psychoanalyst gives a pure service, with any tangible elements consisting of an office and couch. As a consequence of this varying goods to service mix, it is difficult, to generalize about services unless some further destinations are made. First, services vary as to whether they are people based or equipment - based. Equipment - based services vary in turn depending on whether they are automated or monitored by unskilled or skilled operators. People based services also vary by whether they are provided by unskilled, skilled or professional workers. Some of the services required the client's presence. Thus brain surgery involves the client's presence, but a car repair does not. If the client must be present, the service provider has to consider his or her needs. Thus beauty shop operators will invest in their shop's decor, play background music, and engage in light conversation with the client. Services differ as to whether they meet a personal need (Personal Services) or a Business need (Business Services). Physicians will price physical examination differently for private patients versus company employees on a retainer. Service providers typically develop different marketing programs for personal and business markets. Finally, service providers differ in their objectives (Profit or non-profit) and ownership (private or public) there two characteristics, when crossed, produced four quite different types as private profit, private non-profit, public profit and public non-

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profit organizations. 1.7 APPLICATION OF MARKETING FOR MANUFACTURING AND SERVICE FIRMS: Service based organizations typically lag behind manufacturing firms in their development and use of marketing. George and Barksdale surveyed four hundred service and manufacturing firms and arrived at following conclusions. In comparison to manufacturing firms, service firms appears to be a) Less likely to have marketing mix activities carried marketing department. b) Less likely to perform analysis in the offering area. c) More likely to handle their advertising internally rather than go to outside agencies. d) Less lively to have an overall sales plan. e) Less likely to develop sales training programs. f) Less likely to use marketing research firms and marketing consultants and g) Less likely to spend as much on marketing when expressed as a percentage of gross sales. There are several reasons for the negligence of marketing. Many service organizations are small and do not use management techniques such as marketing which they think would be expensive. Many professional and non-profit organizations are antagonistic to the idea of marketing believing that it is unprofessional to apply any marketing planning to their services and even prohibiting it in their codes of ethics. Some service organizations had so much demand for years that they had no need for marketing until recently. Today, as competition intensifier, costs rise, productivity stagnates, and service quality goes down, an increasing number of services organizations are taking an interest in marketing. unevenly. 1.8 TASK OF SERVICE ORGANIZATION: Service companies face three tasks, those of increasing their (i) Competitive differentiation (ii) Service Quality and (iii) productivity. Although there interact and to some extent compete, we will examine each separately. (i) Managing Differentiation: of several major service Services marketers frequently complain about the communication, transportation, energy, difficulty of differentiating their services from those of competitors. The deregulation industries banking precipitated intense price competition. To the extent that customers view a service as fairly homogeneous, they care less about the provider than the price. The In service industries such as stock brokerages, insurance, lodging, law, telecommunications and accounting, the marketing concept have come out in the

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solution to price competition is to develop a differentiated offer and image. The service company can add innovative features to distinguish its offer. What the customer expects is called the primary service package, and to this can be added secondary service features. The only problem is that most service innovations are easily copied. Few of them are pre-emptive in the long run. Still, the service company that regularly researches and develops service innovations will gain a succession of temporary advantages over its competitors and through earning an innovative reputation, may retain customers who want to go with the best. Service companies can also work on differentiating their image, specially through symbols and branding. (ii) Managing Service Quality: One of the major ways to differentiate a service firm is to deliver consistently higher quality service than competitors. The key is to meet or exceed the target customer's service quality expectations. Their expectations are formed by their past experiences, word of mouth, and service firm advertising. The customers choose providers on this basis. After receiving the service, they compare the perceived services with the expected service. If the perceived service falls below the expected service, customers lose interest in the provider. If the perceived service meets or exceeds their expectations, they are apt to use the provider again. Berry and Parasuraman suggested five general dimensions that influence customer's assessment of service quality. They are Reliability Tangibles : : The ability to perform the promised service dependably and accurately. The appearance of physical facilities equipment, personnel and Communication strategies. Responsiveness: Assurance Empathy : : The willingness to help customer and to provide prompt service. The knowledge and courtesy of employees and their ability to Convey trust and confidence. The provision for caring individual attention to customers. Therefore, the service provider needs to identify target customers, wants in the way of service quality unfortunately, service quality is harder to get agreement on the quality of a haircut than on the quality of a hair dryer yet, customers will make judgments about service quality, the service providers need to know customer expectations in order to design effective services. Clearly, customers will be satisfied if they get what they want, when they want it, where they want it, and how they want it. Still, it is necessary to research the specific customer criteria for any specific service. Thus, a bank customer / or a telecom customer may expect on a trip to a bank or to a customer service center that they will not wait in line more than five minutes, that the feller or the clerk will be courteous, knowledgeable and accurate,

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and that the computer will not break down, service providers must do their best to identify the expectations of their target customers with respect to each specific services. This does not mean that the service provider will be able to meet the customer's wishes. The service provider faces trade - off s between customer satisfaction and company profitability. What is important is that the service provider clearly defines and communicates the service level that will be provided, so that the employees know that they must deliver and the attracted customers know what they will get. (iii) Managing Productivity: Services firms are under great pressure to increase productivity. Since the service business is highly labour intensive, costs have been rising rapidly. There are six approaches to improve service productivity. The first is to have service provider work harder or more skillfully for the same pay. Working harder is not a likely solution, but working more skillfully can occur through better selection and training programs. The second is to increase the quantity of service by surrendering some quality. The third is to "Industrialize the service" by adding equipment and standardizing production. Levitt recommended that companies adopt a "manufacturing attitude" towards producing services as represented by Me Donald's assembly - line approach to fast food retailing culminating in the "Technological Hamburger 7" commercial dishwashing, jumbo jets, multiple - unit motion picture theatres - all represent technological expansion of services. The fourth is to reduce or make absolute the need for a service by inventing a product solution. For example, television substituted for out-of-home entertainment, the washand-wear shirt reduced the need for commercial laundry, and certain antibiotics reduced the need for tuberculosis sanitariums. The fifth is to design a more effective service. How to-quit-smoking clinics and jogging may reduce the need for expensive medical services later on. Hiring paralegal workers reduces the need for expensive legal professionals. The sixth is to give customers incentives to substitute company labour with their own labour for example. Business firms that sort their own mail before delivering it to the post office pay lower postal charges. Companies must avoid pushing productivity so hard that it reduces perceived quality. Some productivity steps, by standardizing quality, increase customer satisfaction, other productivity steps lead to too much standardization and not the customer of customized services. 1.9 MARKETING MIX IN THE CASE OF SERVICE MARKETING: Marketing is an art, and the marketing manager, as a head, must creatively marshal all his marketing activities to advance, both the short and the long run interests of his firm8. In essence, a marketer is a "mixer of ingredients' who blends various marketing activities in a manner that further the interests of the firm. The crux of any marketing strategy is to bring about the desired operations in the light of prevailing circumstances. The strategy basically involves the utilization of the available

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tools, and their planned manipulation to get optimum results in a limiting environment. The phrase "Marketing mix" was first used by Neil H. Borden. The most regular 4 Ps' frame work is suggested by McCarthy with the marketing mix variables - product, place, promotion and price. Since the marketing mix tools originated from the study of the manufacturers i.e., the organization engaged in production and marketing of goods it is more oriented to deal with goods marketing situations. However, service characteristics are significantly different from goods, and so are the challenges in their marketing. Therefore, the conventional marketing mix needs to be modified and broadened. Given the service characteristics and activities in service firms, a seven P's frame work for services has been proposed9. The additional prescribed Ps in this framework refer to activities that are essential to meet the challenges posed by intangibility, service provider, customer interaction and customer involvement in service consumption and production. The service marketing MD is as follows Service core, levels, additional services branding. Price discounts, terms of payment. Location channels of distribution, coverage. Advertising, promotion, publicity. Customer - provider, relationship, training culture, skills, and attitudes. Physical Evidence: Ambience, appearance, equipment machines,

buildings, physical facilities. Process: Activity sequence, quality management, customer participation, delivery process.

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Bharti Airtel Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MolJ with Wal-Mart for the cash & carry business. It has successfully launched an international' venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management. Airtel comes to you from Bharti Airtel Limited, India's largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU's) - mobile services, broadband & telephone services (B&T) & enterprise services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the B&T business offers' broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand. Bharti Airtel offers GSM mobile services in a l l the 23-telecom circles of India and is the largest mobile service provider in the country, based on the number of customers. The group offers high speed broadband internet with a best in class network. With Landlinc services in 94 cities & help to stay in touch with friends & family and the world. The group focuses on delivering telecommunications services as an integrated offering including mobile, broadband & telephone, national and international long distance and data connectivity services to corporate, small and medium scale enterprises. The Company compliments its mobile and broadband & telephone services with national and international long distance services. It has over 35.016 route kilometers of optic fibre on its national long distance network. For international connectivity to east, it has a submarine cable landing station at. For international connectivity to the west, the Company is a member of the South East Asia-Middle East-Western Europe -4 (SEA-MEWE-4) consortium along with 1 5 other global telecom operators.

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Profile Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 50,950,700 customers as on October 31. 2007. consisting of 53,014,758 GSM mobile and 2,106,122 broadband & telephone customers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU's) - mobile services, broadband & telephone services (B&T) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 94 cities. The enterprise services group has two sub-units - carriers (long distance services) and services lo corporates. All these services are provided under the Airtel brand. Company shares are listed on The Stock Exchange. Vlumbai (BSE) and The National Slock Exchange of I n d i a Eimitcd (NSE), Partners The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. The company's mobile network equipment partners include Ericsson and Nokia. In the case of the broadband and telephone services and enterprise services (carriers), equipment suppliers include Siemens, Nortel, Corning, among others. The Company also has an information technology alliance with IBM for its group-wide information technology requirements and with Nortel for call center technology requirements. The call center operations for the mobile services have been outsourced to TBM Daksh. llinduja TMT, Tcletcch & Mphasis.

Shares

The equity shares of Bharti Airtel are currently listed on National Stock Exchange of India Limited (NSE) and The Stock Exchange, Mumbai, (BSE). Bharti Airtel offered 185,336.700 equity shares in the initial public offering (IPO) and raised Rs 8,340.15 million through this process. The shares were over subscribed 2.56 times. With t h i s IPO, Bharli Airtel established certain important landmarks in the history of the Indian capital market. Together with being the first 100% book building process that this 62

country has seen, the listing was completed within a record time often working days, of the close of the issue. Moreover the process of allotment and issue of shares was also completed within one day of the last day of pay-in. The book running lead managers for the IPO were JM Morgan Stanley and DSP Merrill Lvnch and the registrars to the issue was Karvv Consultants Limited.

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BSNL (Bharat Sanchar Nigam Ltd) :


Bharat India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN. VSAT. VoIP services. IN Services etc. Within a span of five years it has become one of the largest public sector unit in India. BSNL has installed Quality Telecom Network in the country and now focusing on improving it. expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity, more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkrn of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages. BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner of country and . operates across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier and North-eastern region of the country. BSNL serves its customers with its wide bouquet of telecom services. Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest

Telecommunications Company providing comprehensive range of telecom services in

BSNL is numero uno operator of India in all services in its license area. The company offers vide ranging & most transparent tariff schemes designed to suite every customer. BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering 24 percent of a l l mobile users as its subscribers. That means that almost every fourth mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up. Leased Line, DIAS, Account Less internct(CLl). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone 64

and Broadband Access Network. At present there are 0.6 million DataOne broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom Training Institute. Scaling new heights of success, the present turnover of BSNL is more than Rs.351,820 million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US S 2.26 billion) for last financial year. The infrastructure asset on telephone alone is worth about Rs.630,000 million (US $ 14.37 billion). BSNL plans to expand its customer base from present 47 millions lines to 125 million lines by December 2007 and infrastructure investment plan to the tune of Rs. 733 cores (US$ 16.67 million) in the next three years. The turnover, nationwide coverage, reach, comprehensive range of telecom services and the Desire to excel has made BSNI. The No. 1 Telecom Company of India. VISION To become the largest telecom Service Provider in Asia. MISSION I. To provide world class State-of-art technology telecom services to its customers on demand at competitive prices. II. To Provide world class telecom infrastructure in its area of operation and to contribute to the growth of the country's economy. OBJECTIVES To be a Lead Telecom Services Provider. To provide quality and reliable fixed telecom service to our customer and there by increase customer's confidence. To provide mobile telephone service of high quality and become no. 1 GSM operator in its area of operation. To provide point of interconnection to other service provider as per their requirement promptly. 65

To facilitate R & D activity in the country. Contribute towards: i. National Plan Target of 500 million subscriber base for the country by December 2010. ii. Broadband customers base of 20 million in India by 2010 as per 2004. iii. iv. Providing telephone connection in villages as per government proposition. Implementation of Triple play as a regular commercial proposition. Broadband Policy

Cellular Service Overview India's fastest growing cellular service , along with postpaid and prepaid services brings cellular telephony to the masses, through innovative technology and strategic pricing. This ambitious service uses state-of-the-art GSM technology to attain global excellence and leadership in business. Their entry into this sector has brought GSM cellular service at an affordable cost to the common man. All serving a single objective, to provide better communication to millions across India. Customers have reposed tremendous faith in BSNL and it has enrolled over 30 Lakh Cellular customers within ten months of launch of Cellular service, an unprecedented mark in Indian Cellular Market.

BSNL Service_Plus. CeliOne provides a number of global connectivity at doorstep. Voice Mail Service Value Added Services S|M_Based_sffirvi - SyviSjtassd Services Value Added Services. These services helps BSNL

serve you better & enhance the ease &

quality of communication thus bringing

Short Message Service (SMS)

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Group Messaging National & International tariffs Call forwarding Corporate Virtual Private Network Call conferencing Friend and Family Talk Call waiting and Call holding facility Minified Messaging Services: This provides Voice mail, FAX, e-mail, text to

voice services on your mobile phone. So stay in touch with your nears and dears by means you like the most. Wireless Application Protocol (WAP): Internet using this service. Telephone BSNL is the largest telecom operator in Basic Telephony Services for over India and is known to everybody for Surf WAP enabled websites on

100 years. Presently the Plain old, countrywide

telephone service is being provided through 32,000 electronic exchanges, 326 Digital Trunk Automatic Exchanges (TAX), Digitalized Public Switched Telephone Network (PSTN) all interlinked by over 2.4 lakh km of Optical Fiber Cable, with a host of network Phone Plus value additions to our valued Customers. BSNL's telephony of the country. BSNL is in the process of commissioning of a world class, multi-gigabit, multi-protocol, convergent IP infrastructure through National Internet Backbone-II (NIB-II), that w ill provide convergent services through the same backbone and broadband access network. The Broadband service will be available on DSL technology (on the same copper cable that is used for connecting telephone), on a countrywide basis spanning 198 cities. 67

expands throughout the vast expanses of the country reaching to the remotest part

In terms of infrastructure for broadband services NIB-II would put India at par with more advanced nations. The services that would be supported include always-on broadband access to the Internet for residential and business customers, Content based services,-Video multicasting, Video-on-demand and Interactive gaming, Audio and Video conferencing, IP Telephony, Distance learning, messaging: plain and feature rich, Multi-site MPLS VPNs with Quality of Service (QoS) guarantees. The subscribe will be able to access the above services through Subscriber Service Selection System (SSSS) portal. Key Objectives To provide high speed Internet connectivity (upto 8 Mbps) To provide Virtual Private Network (VPN) service to the broadband customers To provide dial VPN service to MPLS VPN customers. To provide multicast video services, video-on-demand, etc, through the Broadband Remote Access Server (BRAS). To provide a means to bill for the aforesaid services by either time-based or Volume-based billing. It shall provide the customer with the option to select the services through web server To provide both pre-paid and post paid broadband services

Technical Capability of the Backbone The Broadband Service will be given through the state of the art Multi Protocol Label Switching (MPLS) based IP Infrastructure, which is designed to provide reliable routes to cover all possible destinations within and outside the country. Layer 1 of the network will consist of a high speed Backbone comprising of 24 powerful Core Routers connected with high speed 2.5 Gbps (STM-16) links. The routers are located on the national DWDM network interfacing at STM-16 optical level to provide for high transmission speeds. ** Services available through Broadband High speed Internet Access : This is the-always-on Internet access service with speed ranging from 256 kbps to 8 Mbps. Bandwidth on Demand : This will facilitate customer to change band width as per his / her requirement. For example a customer with 256kbps can change to Mbps during the video Conferencing session. Multicasting : This is to provide video multicast services for application in distance education, telemedicine etc Dial VPN Service : This service allows remote users to access their 68

private network securely over the NIB-II infrastructure. Video and Audio Conferencing: Content based Services: Live and line shifted TV The Broadband Service has been launched in Bangalore, Chennai, Hyderabad and Kolkata from 14th January 2005. Soon, it will be extended to more than 200 cities. Like Video on Demand, Interactive Gaming,

Wireless in Local Loop (WLL) Mobile Telephone Connections:

BSNL WLL-M is a communication system that connects customers to the BSNL Landline network using radio frequency signals instead of conventional copper wires, for the full or part connection between the subscriber and the exchange this comes with superior voice quality and high speed data capabilities. CDMA is popular with more than 100 million subscribers worldwide, and the number keeps on increasing exponentially. Internet BSNL is India's no. 1 Internet service provider with more than 17 lakh subscribers, providing Internet service throughout the entire country (except in New Delhi and Mumbai) under the brand name of "Sancharnet". Sancharnet provides free all India roaming and enables, it's users to access their accounts, using the same access code (172233) and user ID from any where in the Country. In order to make Internet available through out the length and breadth of the Country Internet Dhabas are being commissioned at all the Block Headquarters. BSNL has also started D1AS and Account free internet access (CLI based) facility on few select cities recently. BSNL has launched "SANCHARNET CARD" recently. The Sancharnet Card " prepaid Internet Access Card with following features for customers: Is a Self-register for internet access with your choice of userid Renew your existing Sancharnet Account Wide Range of Internet Access Packages

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IDEA:
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March 2007. As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in all 22 Service Areas. Presently, operations exist in 11 Service Areas covering Delhi, Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh, UP-East, Rajasthan and Kerala. With a customer base of over 26 million, IDEA Cellular's footprint currently covers approximately 60% of India's telecom population. A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings, for the first time in India in an increasingly segmented market. Customer Service and Innovation are the drivers of this Cellular Brand. A brand known for their many firsts, Idea is only operator to launch GPRS and EDGE in the country. Idea has received international recognition for its path-breaking innovations when it won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. IDEA Cellular is part of the Aditya Birla Group, a US$ 24 billion corporation with a market cap of US$ 31.5 billion and in the league of Fortune 500. Anchored by an extraordinary force of over 100,000 employees belonging to 25 different nationalities, over 50% of its revenues flow from its overseas operations. The Group has been adjudged The Best Employer in India and among the Top 20 in Asia' by the HewittEconomic Times and Wall Street Journal Study 2007. The combined holding of the Aditya Birla Group companies in IDEA stands at around 57 percent. With ambitious future plans, the company is poised for rapid growth across the whole country.

Our Service Areas


The Indian telecommunications market for mobile services is divided into 22 "Service Areas" classified into "Metropolitan", Category "A", Category "B and Category "C "service areas by the Government of India. These classifications are based principally on a Service Areas revenue generating potential. Idea operational 11 Service Areas are broken up into Established and New Service Areas.

Established Service Areas


The established service areas are Delhi, Andhra Pradesh, Gujarat and Maharashtra, Haryana, Kerala, Madhya Pradesh and Uttar Pradesh (West). Licenses for the Maharashtra and Gujarat Service Areas were awarded in December 1995, with network rollout and commercial launch achieved in 1997. In January 2001 the mobile operations in Andhra Pradesh Service Area were integrated with IDEA through a merger with Tata Indicom Cellular Limited. In June 2001, the mobile operations in Madhya Pradesh Service Area were fully integrated with IDEA through an acquisition of RPG Cellcom Limited. In October 2001, the license for Delhi Service Area was acquired during the fourth mobile license auction, with network rollout and commercial launch in November 2002. In January 2004, Escotel Mobile Communications Private Limited ("Escotel"), was acquired with its original licenses in the Service Areas of Haryana, Uttar Pradesh (West) and Kerala. All these Service Areas were re-branded and integrated with IDEA in June 2004. New Service Areas The New Service Areas are Uttar Pradesh (East), Rajasthan and Himachal Pradesh. Licenses for these New Service Areas were acquired through the acquisition of Escotel (Escorts Telecommunications Limited). Following significant investment in the roll-out of network in the New Service Areas, amounting to approximately Rs. 4,678 million upto September 30, 2006, a full commercial launch of mobile services was achieved in the New Service Areas between September and November 2006 in a manner which also met the network roll-out requirements of the licenses in 2007. Brand Information The brand Idea. It is almost impossible to disintegrate brand Idea from the corporate Idea. Brand values are the company values and vise versa. Brand Vision: It goes without saying that the brand vision of idea mirrors the companys vision. The brand mission statement is...... To be the most customer-focused mobile service brand, continuously innovating to help liberate our customers from the shackles of time & space. IDEA - Brand Values Innovate, Stimulate, Liberate ....

It is these brand values, which have made us a formidable player in the telecom industry. Innovations that stimulate the customer and liberate him from the shackles of time and space are the core of our brand. This is what we strive for. Nothing, more, nothing less, nothing else. IDEA - Brand Mission The India footprint Idea Any where connectivity-bringing India closer. The Technology Advantage Idea Tomorrow's technology to enrich today. The Customer Focus Idea Make a single interaction a lasting relationship. The Employee Focus Idea Nurture the roots that nurture our ideas. Brand Initiatives Our aim, through media buying and planning, is to create year round impact. With the objective of strengthening our brand, we work with strategic communication partners on campaigns like sponsorship of the Idea International Indian Film Academy awards and the television programs Idea Rocks India, Idea Star Singer and Idea Andhra Idol. We seek engagement with subscribers on a variety of levels, from major celebrity fashion shows to small local events timed to coincide with new product offerings. Since August 2003, we have commissioned a Brand Track Index Study to evaluate the health of our brand. The Brand Track Index Study is a monthly study conducted by TNS, a marketing consultant engaged by us to evaluate our brand using face-to-face interviews on a random sample of mobile users a well as those intending to purchase mobiles within the next three months. According to the study our brand is perceived as reliable/trustworthy and one that offers cheaper and good promotional offers. We have improved our rating in the Brand Track Index calculated by the study in the past year reflecting, we believe, the growing strength of our brand. The main communication medium for the Idea brand is television, where we seek strategic Idea brand coverage in various formats. Billboards and hoardings are used as a secondary medium, customized for specific regional preferences to communicate effectively at the local level. We also use other mass communication media such as the press and radio to communicate price plans and other tactical and customer information. All our key initiatives are subjected to a rigorous testing and launch process to ensure accountability for all advertising spend and improve the chances of success of a new product. This process is followed up with extensive briefing of call

center agents and sales personnel and real-time tracking of the impact of the communication and feedback from subscribers.

Reliance A dream come true The Late Dhirubhai Ambani dream of a digital India an India where the common man would have access to affordable means of information and communication. Dhirubhai, who single-handedly built India's largest private sector company virtually from scratch, had stated as early as 1999: "Make the tools of information and communication available to people at an affordable cost. They w i l l overcome the handicaps of illiteracy and lack of mobility." It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm) started laying 60,000 route kilometres of a pan-India fibre optic backbone. This backbone was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai's 70th birthday, though sadly after h i s unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and wireline) and convergent (voice, data and video) digital network. It is capable of delivering a ranee of services spanning the entire infocomm (information and communication) value chain, including infrastructure and services for enterprises as well as individuals, applications, and consulting. Today, Reliance Communications is revolutionizing the way India communicates and networks, truly bringing about a new way of life. Few men in history have made as dramatic a contribution to their country's economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless. As with all great pioneers, there is more than one unique way of describing the true Genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, The leader of men, the architect of India's capital markets, the champion of shareholder interest. But the role Dhirubhai cherished most was perhaps that of India's greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, India's largest private sector enterprise. When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crorc colossusan achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so. Dhirubhai is widely regarded as the father of I n d i a ' s capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks. Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories

of mutual respect and reciprocal gain in the Indian markets. Under Dhirubhai's extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become India's largest private sector enterprise. Through out t h i s amazing journey. Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the world's largest shareholder families. VISION "We will leverage our strengths to execute complex global-scale projects to facilitate leading-edge information and communication services affordable to all individual consumers and businesses in India. We will offer unparalleled value to create customer delight and enhance business productivity. We will also generate value for our capabilities beyond Indian borders and enable millions of India's knowledge workers to deliver their services globally." BUSINESS India "s leading integrated telecom company Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group (A DAG) of companies. Listed on the National Stock Exchange and the Bombay Stock Exchange, it is India's leading integrated telecommunication company with over 38 m i l l i o n customers. Our business encompasses a complete range of telecom services covering mobile and fixed line telephony. It includes broadband, national and international long distance services and data services along with an exhaustive range of value-added services and applications. Our constant endeavour is to achieve customer delight by enhancing the productivity of the enterprises and individuals we serve. Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002, coinciding with the joyous occasion of the late Dhirubhai Ambani's 70th birthday, was among the i n i t i a l iniiiatives ofRelianee Communications. It marked the auspicious beginning of Dhirubhai's dream of ushering in a digital revolution in India. Today, we can proudly c l a i m that we were instrumental in harnessing the true power

of information and communication, by bestowing it in the hands of the common man at affordable rates. We endeavour to further extend our efforts beyond the traditional value chain by developing and deploying complete telecom solutions for the entire spectrum of society. Looking back, looking forward Reliance Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by Shri Dhirubhai H Ambani (1932-2002), ranks among India's top three private sector business houses in terms of net worth. The group has business interests that range from telecommunications (Reliance Communications Limited) to financial services (Reliance Energy Ltd). Reliance ADA Group's flagship company. Reliance Communications is India's largest private sector information and communications company, with over 38 m i l l i o n subscribers. It has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services spanning the entire infocomm value chain. Other major group companies Reliance Capital and Reliance Energy are Capital Ltd) and the generation and distribution of power (Reliance

widely acknowledged as the market leaders in their respective areas of operation. Anil D. Ambani of the regarded Reliance as one of the foremost corporate leaders of

contemporary India,Shri Anil D Ambani, 48, is the chairman of all listed companies ADA Group, namely, Reliance Communications, Reliance Capital, Reliance Energy and Reliance Natural Resources limited. Free talk time with Reliance prepaid Reliance Infocomm is slated to nationally launch its prepaid mobile service between January 15 and 18. To give the GSM operators a run for their money. Infocomm is l i k e l y to offer a minimum Rs 1,500 worth of free talk-time as part of its prepaid promotional offer for an undecided span. The free prepaid talk-time options ( i n the Rs 1,500-Rs 4,000 range) will be bundled

with multiple CDMA handset offers. Which means, a l l Infocomm prepaid customers will have to pay upfront the full price of the handset of their choice to activate their connections. Reliance prepaid customers, it is learnt, will be allowed to use their free talk-time to make local and STD calls besides sending SMS. They will be unable to make ISD calls with such free talk-time. "Local and inter-circle STD calls will be priced at Rs 2 per minute while local, national and international SMS will cost a flat 50 paise per message," sources close to the developments said. When contacted, top sources at Reliance Infocomm said: "BSNL has just opened up the Access Level 93 to facilitate the launch of Reliance Infocomm prepaid service nationally, l i c l d t r i a l s are under way on a war-footing. We expect to formalise the prepaid launch date by January 15." Details of Infocomms upcoming prepaid package remain shrouded in secrecy, but here's a hint of the shape of things to come. To start with. Reliance Infocomm w i l l offer a l l R I M prepaid customers a selection of Motorola; LG, Nokia and Samsung CDMA handsets on "a right to use basis". Under Infocomm's right-to-use handset offer, prepaid customers will be i n i t i a l l y given four handset options. Motorola 1 3 1 . LG 2030, Nokia 2280 and Samsung 1 9 1 . Indications are 'Motorola 1 3 1 ' will be the entry-level CDMA mobile phone in Infocomm's prepaid menu. Takers for Motorola 1 3 1 will pay Rs 4,500 for the phone to earn Rs 1,500 of talk-time. The high-end LG 2030, Nokia 2280 and Samsung 191 models will be priced higher in the Rs 6,300-6.500 range. R I M prepaid users opting for these high-end models will enjoy talk-time in excess of the Rs 1.500 base quota. Information available suggests the RIM prepaid recharge vouchers w i l l come in three denominations - Rs 250. Rs 500 and Rs 1000. I n i t i a l l y , the R I M prepaid connections will be available nationally at the 250odd Reliance Web Worlds. Subsequently, they will also be sold at the 1,200odd Reliance Web World Express outlets to be shortly rolled out nationally.

TATA INDICOM

Tata Indicom Tele services is part of the INR 76,929 Crore (US$17.8 b i l l i o n ) Tata Indicom Group, that has over 90 companies, over 220,000 employees and more than 2.8 million shareholders. With a committed investment of INR 36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Group has a formidable presence across the telecom value chain. TATA INDICOM TELESERVICES Tata Indicom Tele services is part of the INR Rs. 96723 Crore (US$ 22 billion) Tata Indicom Group, that has over 96 companies, over 250,000 employees and more than 2.8 m i l l i o n shareholders. With a committed investment of INR 36.000 Crore (US$ 7.5 b i l l i o n ) in Telecom (FY 2006). The Group has a formidable presence across the telecom value chain. A Tata Indicom Tele service spearheads the Group's presence in the telecom sector. Incorporated in 1996, a Tata Indicom Tele service was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. Starting with ihe major acquisition of Hughes Telecom (India) Limited [now renamed Tata Indicom Tele services (Maharashtra) Limited] in December 2002 the company swung into an expansion mode. With the total Investment of Rs 19,924 Crore, Tata Indicom Tele services has created a Pan India presence spread across 20 circles that includes Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (VV), Kerala, Kolkata, Madhya Pradesh and West Bengal. Having pioneered the CDMA 3Glx technology platform in India, Tata Indicom Tele services has established a robust and reliable 3G ready telecom infrastructure that ensures quality in its services. It has partnered with Motorola, Ericsson. Lucent and ECI Telecom for the deployment of a reliable, technologically advanced network. The company, which heralded convergence technologies in the Indian telecom sector, is today the market leader in the fixed wireless telephony market with a total customer base of over 3.8 million. Tata Indicom Tele services' bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wire line services. Other services include value added services l i k e voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.

Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games. Voice Portal, picture messaging, polyphonic ring tones, interactive applications l i k e news, cricket, astrology, etc. Tata Indicom redefined the existing prepaid mobile market in India, by unveiling their offering Tata Indicom 'Non Stop Mobile' which allows customers to receive free incoming calls, tata Tele services today has India's largest branded telecom retail chain and is the first service provider in the country to offer an online channel www.i-choose.in to offer postpaid mobile connections in the country. A Tata Indicom Tele service has a strong workforce of 6000. In addition, TTSL has created more than 20,000 jobs, which will include 10,000 indirect jobs through outsourcing of its manpower needs. Today, Tata Indicom Tele services Limited along with Tata Indicom Tele services (Maharashtra) Limited serves over 19 million customers in over 3400 towns. With an ambitious rollout plan both within existing circles and across new circles, Tata Indicom Teleservices offers world-class technology and user-friendly services in 20 circles. Tata Indicom Tele services (Maharashtra) Limited (TTML) spearheads the fata Group's presence in the Indian telecom sector by being the premier telecommunication service provider, licensed to provide services in Maharashtra (including Mumbai) and Goa.

TTML Organization Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata Indicom Group's presence in the Indian telecom sector by being the premier telecommunication service provider, licensed to provide services in Maharashtra (including Mumbai) and Goa. TTML's bouquet of telephony services include mobile, fixed wireless phones (FWP), public telephone booths & wireline services. Its suite of broadband Data Network & Application services include Leased Lines, DSL, Wi-Fi, Ethernet, Managed Gateway services & Web Conferencing services. The company has deployed the latest 3G IX CDMA technology in the state to offer

wireless communication services like mobile & Fixed Wireless phones to its customers. Tins siaie-of-ihe-ari technology caters to the needs of all market segments i.e. commercial, residential and PCO facilitates the company's aim to provide good network coverage, high voice quality, reliable service and comprehensive as well as customeroriented value-added services. TTML, in a very short span, has also emerged as the market leader in FWP services in Maharashtra circle. Formerly Hughes Felc.com (India) Ltd., the company was renamed to Tata Indicom services Maharashtra Ltd subsequent to the acquisition of 70.83% equity shareholding by TATA INDICOM Group in December 2002. The company's shares are traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Vodafone Essar Vodafone Essar in I n d i a is a subsidiary of Vodafone Group Pic and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. Vodafone Essar now has operations in 16 circles covering 86% of India's mobile customer base, with over 35.6 m i l l i o n customers*. Over the years, Vodafone Hssar, under the Hutch brand, has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the country' and the 'Most Creative and Most Effective Advertiser of the Year'. Vodafone is the world's leading international mobile communications company. It now has operations in 25 countries across 5 continents and 40 partner networks with over 200 m i l l i o n customers worldwide. Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market.

The Essar Group is a diversified business corporation with interests spanning the manufacturing and service sectors like Steel, Energy. Power, Communications, Shipping & Egoistic and Construction. The Group has an asset base of over Rs.400 b i l l i o n (US$ 10 billion) and employs over 20000 people. Vodafone Group Pic is the world's leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company's subsidiary undertakings, joint ventures, associated undertakings and investments. The Group's mobile subsidiaries operate under the brand name

'Vodafone'. In the United States the Group's associated undertaking operates as Verizon Wireless. During the last two financial years, the Group has also entered into arrangements with network operators in countries where the Group does not hold an equity stake. Under the terms of these Partner. Network Agreements, the Group and its partner networks co-operate in the development and marketing of global services under dual brand logos. At 30 September 2007, based on the registered customers of mobile telecommunications ventures in which it had ownership interests at that date, the Group had 241 m i l l i o n customers, excluding paging customers, calculated on a proportionate basis in accordance with the Company's percentage interest in these ventures. The Company's ordinary shares are listed on the London Stock Exchange and the Company's American Depositary Shares ('ADSs') are listed on the New York Stock Exchange. The Company had a total market capitalisation of approximately 88 billion at 3 July 2007. Vodafone Group Pic is a public limited company incorporated in England under registered number 1833679. Its registered office is Vodafone House. The Connection, Newbury. Berkshire, RG14 2FN, England. Vodafone over the years Vodafone was formed in 1984 as a subsidiary of Racal Electronics Pic. Then known as Racal Telecom Limited, approximately 20% of the company's capital was offered to the public in October 1988. It was fully demerged from Racial Electronics Pic and became an independent company in September 1991, at which time it changed its name to Vodafone Group Pic. Following its merger with Air Touch Communications, Inc. (Air Touch), they changed their name to Vodafone Air Touch Pic on 29 June 1999 and, following approval by the shareholders in General Meeting, reverted to their former name, Vodafone Group Pic. on 28 July 2000. milestones in the development of Vodafone in the year 2007 Vodafone agrees to acquire Tele2 Italia SpA and Tele2

Telecommunication Services SLU from Telc2 AB Group. (October) Vodafone announces completion of the acquisition of Hutch Essar from

Hutchison Telecommunications International Limited. (May) Safari.com. Vodafone's partner in Kenya announces the launch of M-PESA, an innovative new mobile payment solution that enables customers to complete simple financial transactions by mobile phone. (February) Vodafone agrees to buy a controlling interest in 1 Hutchison Essar Limited, a leading operator in the fast growing Indian mobile market, (February) Vodafone announces agreements with both Microsoft and Yahoo! to bring seamless Instant Messaging (IM) services to the mobile which can be accessed from both the PC and mobile handsets. (February) Vodafone signs a series of ground-breaking agreements which w i l l lead to the mobilising of the internet. YouTube agrees to offer Vodafone customers specially rendered YouTube pages on their mobile phones. With Goggle, Vodafone announces its intention to develop a location-based version of Goggle Maps for. With eBay, Vodafone announces it is to offer the new eBay mobile service to customers, With MySpace.com Vodafone announces an exclusive partnership to offer Vodafone customers a MySpace experience via their mobile phones. (February). Vodafone reaches 200 m i l l i o n customers (January).

Consumers are quite different from each other because their ways and means of buying differ considerably. Different groups of buyers are likely to respond in different ways to price, product features, buying attitudes, need for information, promotional appeals etc., because they differ in their wants and resources. better. Therefore, it is essential to sub-divide the buyers into different meaningful groups with those having similar characteristics in order to serve them

A broad understanding about the consumers is, therefore, required to study their characteristics. Economic and demographic factors may have their greatest influence in determining the types of products people need and can purchase but have important influences on brand choice and supplier patronage as well. A market is usually defined as people, with ability to buy and willingness to do so. As a first area for in-depth study of consumer behaviour, therefore, it is appropriate to talk about people in quantitative terms like how many, how old, where they live, and their ability to buy or income 1 . The demographic characteristics, such as age, sex,

location, occupation, income, family size, etc., will have i t s consumer.

influence on

CHAPTER III

CONSUMER PROFILE & INFLUENCES ON MOBILE SERVICE USERS


Consumers are quite different from each other because their ways and means of buying differ considerably. Different groups of buyers are likely to respond in different ways to price, product features, buying attitudes, need for information, promotional appeals etc., because they differ in their wants and resources. Therefore, it is essential to sub-divide the buyers into different meaningful groups with those having similar characteristics in order to serve them better.

A broad understanding about the consumers is, therefore, required to study their characteristics. Economic and demographic factors may have their greatest influence in determining the types of products people need and can purchase but have important influences on brand choice and supplier patronage as well. A market is usually defined as people, with ability to buy and willingness to do so. As a first area for in-depth study of brand loyalty, therefore, it is appropriate to talk about people in quantitative terms like how many, how old, where they live, and their ability to buy or income 1 . The demographic characteristics, such as age, sex, location, occupation, income, family size, etc., will have i t s influence on

consumer Behavior to purchase or repurchase. The knowledge of consumers' demographic variables helps in knowing the consumer purchasing and repurchasing behavior and also in identifying the potential buyers. Hence, it is appropriate to analyse the consumers' characteristics before making an in-depth analysis of brand loyalty. In this chapter a discussion is made on consumer profile with a view to provide an insight into the various demographic variables of the respondents. The analysis is made by segmenting the sample, which comprises 300 possessors of cellular services, on the basis of age, Gender, educational qualifications,

occupational status, income, etc., to group the sample under different sub-groups and to study their impact on consumer behavior to purchase or repurchase.

AGE LEVEL & GENDER WISE CLASSIFICATION:

As the behavior of consumers differs among gender categories and different age groups, an attempt is made to analyse the consumer profile by classifying the consumers on the basis of their gender and age. The age of the respondents is classified into five groups that is below 20 years, 21-30 years, 31-40 years, 41-50 years and above 50 years on the assumption that the consumer behavior for cellular services differ in these five age groups. Since, almost all the members now a days utilize cellular services they may have their own interest in selecting the brand of the service provider which they want to purchase. Gender shape and influence the individual consumer's selfconcept, personality, evaluate criteria, attitudes and other behavioral patterns. The influence of the gender in selecting a brand of service provider may differ from gender to gender. Similarly age of the gender will, also, have its impact on consumption pattern of the consumers of a service provider because the life of a service provider depends upon the usage by the number of members and usage frequency. Therefore, an attempt is made to analyze age and gender. Table -3.1 AGE & GENDERWISE CLASSIFICATION
GENDER MALE FEMALE TOTAL < 20 20 (6.67) 15 (5.00) 35 % 12.05 11.19 11.67 21-30 25 (8.33) 30 (10.00) 55 % 15.06 22.39 18.33 31-40 40 (13.33) 30 (10.00) 70 AGE GROUP % 41-50 24.10 58 (19.33) 22.39 42 (14.00) 23.33 100 % 34.94 31.34 33.33 >50 23 (7.67) 17 (5.67) 40 % 13.86 12.69 13.33 TOTAL 166 134 44.67 300 100.00 % 55.33

Source: Questionnaire

Table-3.1 shows the data relating to gender wise, classification in different age groups of the respondents. In the sample selected the male and female respondents are approximately 166 i.e. 55.33 percent and 134 i.e. 45 percent respectively.

The classification reveals that majority of respondents is in the age group of 4 1 -5 0 years, which accounted for approximately 33 percent and 35 percent of male respondents are in this age group only. The percentages of male

respondents in the age group of below 20 years is 12, in the age group of 21-30 years is 15, in 31-40 years is 24 and in above 50 years group is 14 percent. The female respondents are 11 percent in the age group of below 20 years and 22 percent of respondents are in 21-30 years and 31-40 years age group. But 31 and 13

percent are in the age groups of 41-50 years and above 50 years respectively.

INTREPRETATION: It is noted that 58 male members are in the age group of 41-50 years followed by 40 members in the age group of 31-40 years and 25 members are in the age group of 21-30 years. Therefore, it is very clear from the data that majority of male members are from age 21 years to 50 years.

It is also seen that 42 female members are in the age group of 41-50 years as in the case of male members. It is then followed by 30 each between age groups 21-30 years and 31-40 years. Therefore it is clear that as in the case of male members, female members are also more in number between age groups 21 years to 50 years. The data reveals that approximately 55 percent of total are male respondents and remaining 45 percent are female respondents. REASONS: It is seen that majority of male members are using mobile phones. It may be due to high male population compared to female members in Andhra Pradesh. Moreover, the highest age group of 41-50 years among male members is using mobile phone. It may be to have contacts with their relatives and friends as they cannot travel much.

AGE AND EDUCATIONAL LEVEL CLASSIFICATION:


Educational level of a consumer helps in evaluating various alternatives available in the market for making a rational purchase decision with available resources. In case of Cellular Service Providers, the market is flooded with a variety of brands. Therefore, the educational level helps them in collecting, processing the service related information, and in choosing the best among the available brands.

The educational level of all the selected respondents is classified under five categories viz., Up to Secondary, Higher Secondary, Graduation, Postgraduation and Professional Qualification. The educational level of the respondents is cross analysed with age. Table - 3.2
AGE & EDUCATION LEVEL CLASSIFICATION

AGE SECOND ARY 18 (6.00) 21-30 31-40 41-50 > 50 TOTAL 11 (3.67) 18 (6.00) 20 (6.67) 8 (2.67) 75 25.00 20.00 20.00 25.71 20.00 % 51.43 HIGHER SECONDARY 17 (5.67) 8 (2.67) 20 (6.67) 25 (8.33) 10 (3.33) 80 26.67 25.00 25.00 28.57 14.55 % 48.57 GRADUA TION 0 (0.00) 13 (4.33) 15 (5.00) 30 (10.00) 5 (1.67) 63

EDUCATION % 0.00 23.64 21.43 30.00 12.50 21.00 POST GRADUATION 0 (0.00) 10 (3.33) 12 (4.00) 21 (7.00) 9 (3.00) 52 17.33 22.50 21.00 17.14 18.18 % 0.00 PROFESS IONAL 0 (0.00) 13 (4.33) 5 (1.67) 4 (1.33) 8 (2.67) 30 10.00 300 20.00 40 13.33 100.00 4.00 100 33.33 7.14 70 23.33 23.64 55 18.33 % 0.00 TOTAL 35 11.67 %

< 20

Source: Questionnaire

Analysis made in the Table-3.2 reveals that the educational qualification of majority of the respondents is higher secondary, which accounted for 27 percent, Post-graduates are 17 percent, 21 percent are graduates, 10 percent are with professional qualifications and 25 percent are with educational qualifications of up to secondary. Interpretation and Reasons: Below 20 years of age, 35 members have educational qualification up to higher secondary only. None, in this age group, are neither graduates nor post graduates and professionals. It may be because of many dropouts amongst low income group and low literacy rate in A.P. ALIGN KAR BHAGATH NEECHAY In the age group 31-40 and 41-50 years, majority of them are graduates followed by respondents with higher secondary qualification. Majority of them are educated and fall in the age group 41-50 years (100 and 70 respondents) and 31-40 years respectively. This might be because of low fee structure during their study period.

MARITAL STATUS AND AGE LEVEL CLASSIFICATION:


Marital status of the consumers will have an influence on consumer behavior as it decides the purchasing and repurchasing decision based on their requirements. For the purpose of analysis, all the respondents, on the basis of their marital status, are classified into five groups i.e. single, married, separated, and divorced and widow. TABLE - 3.3
AGE & MARITAL LEVEL CLASSIFICATION
AGE < 20 21-30 SINGLE 20 (6.67) 11 % 57.14 20.00 MARRIED 5 (1.67) 15 % 14.29 27.27 SEPARATED 5 (1.67) 10 MARITAL % DIVORCED 14.29 5 (1.67) 18.18 8 % 14.29 14.55 WIDOW 0 (0.00) 11 % 0.00 20.00 TOTAL 35 55 % 11.67

31-40 41-50 > 50 TOTAL

(3.67) 14 (4.67) 20 (6.67) 8 (2.67) 73

20.00 20.00 20.00 24.33

(5.00) 18 (6.00) 25 (8.33) 5 (1.67) 68

25.71 25.00 12.50 22.67

(3.33) 20 (6.67) 30 (10.00) 9 (3.00) 74

28.57 30.00 22.50 24.67

(2.67) 9 (3.00) 10 (3.33) 10 (3.33) 42

12.86 10.00 25.00 14.00

(3.67) 9 (3.00) 15 (5.00) 8 (2.67) 43

18.33 12.86 15.00 20.00 14.33 70 23.33 100 33.33 40 13.33 300

100.00

Source: Questionnaire

Interpretation and Reasons: 100 respondents in the age group of 41 -50 years and 70 respondents in the age group of 31-40 years are separated (30 & 20 respectively) followed by married (25 & 18 respectively) and single (20 & 14 respectively). The phenomena of either being single or separated may be due to the thinking of being independent especially between 31 50 years. None are widow in the age group of below 20 years. but 5 respondents are divorcees at this young age and 5 others are separated. These rare phenomena in this age group might be due to illiteracy , social or psychological problems. Hence, from the table 3.3, it is clear that majority of the respondents are separated i.e. 25 percent followed by single i.e. 24 percent, 23 percent are married, 14 percent each are widow and divorced.

OCCUPATIONAL STATUS AND AGE LEVEL CLASSIFICATION:

The Occupational status of all the respondents is classified in six categories viz., executives, unemployed, professionals, student, service and others. All the respondents, whose occupation is not covered under starting five categories that is executives, unemployed, Professional, student and service are categorized under last group that is Others. Service category include persons rendering services in charitable institutions, religious places and Government service and others are rickshaw walas, kabadi walas, vegetable vendors etc.,. Table - 3.4
AGE & OCCUPATION LEVEL CLASSIFICATION
AGE EXECUTIVE % UNEMPLO YED 5 (1.67) 18.18 17.14 28.00 12.50 18.33 8 (2.67) 15 (5.00) 26 (8.67) 4 (1.33) 58 19.33 10.00 26.00 21.43 14.55 % PROFESSION NAL 0 (0.00) 13 (4.33) 5 (1.67) 4 (1.33) 8 (2.67) 30 10.00 20.00 4.00 7.14 23.64 % OCCUPATION STUDENT % SERVICE % OTHERS % TOTAL

< 20 21-30 31-40 41-50 > 50 TOTAL

0 (0.00) 10 (3.33) 12 (4.00) 28 (9.33) 5 (1.67) 55

0.00

14.29

0.00

20 (6.67) 9 (3.00) 8 (2.67) 0 (0.00) 0 (0.00) 37

57.14 16.36 11.43 0.00 0.00 12.33

5 (1.67) 7 (2.33) 18 (6.00) 35 (11.67) 13 (4.33) 78

14.29 12.73 25.71 35.00 32.50 26.00

5 (1.67) 8 (2.67) 12 (4.00) 7 (2.33) 10 (3.33) 42

14.29 14.55 17.14 7.00 25.00 14.00

35 55 70 100 40 300

11.

18.

23.

33.

13.

100

Source: Questionnaire

The occupational status of the consumers will have an impact on their consumption pattern. The consumption pattern differs from occupation to occupation, as the needs of different occupations are not same. So, the age level and occupational status of the respondents are analysed in the Table-3.4 to study the impact of these factors on consumer behaviour to purchase or repurchase a brand. Out of 300 respondents, 55 respondents are executive employees, 58 are unemployed, 30 are professionals, 37 are students, 78 are service and remaining 42 respondents are others, which accounted for approximately 18, 19, 10, 12, 26 and 14 percent respectively. It is clear that majority of executive employees are between the age group 41-50 years, which accounted for 28 per cent. The respondents rendering service are 35 i.e.35 percent, the highest in number in the age group of 41-50 years. The least number of respondents are professionals with 30 in all in 300 respondents accounting for 10 percent. Among the executive 18 per cent are in the age group of 21-30 years, 17 per cent are in 31-40 years and 13 per cent are above 50 years. 24 percent of the professionals are in the age group of 21-30 years. In the occupational category of others, there are 25 percent in the age group of above 50 years, 17 percent in the age group of 41-50 years, 17 percent are in the age group of 31-40 years, 15 percent are in the age group of 21-30 years and just 14 per cent below 20 years. Interpretation and reasons: It is noted that majority in the age group of 41-50 years is rendering services (35) followed by executives (28) and unemployed (26). This may be due to that majority in this age group would like to spend their time with their family members or spend time in religious matters as average life span has decreased because of pollution, lack of diet control and exercises.

AGE LEVEL AND INCOME LEVEL CLASSIFICATION: The income of consumers will, directly, have an influence on consumer behaviour as it decides the purchasing and repurchasing power of the consumers.

For the purposes of analysis, all the respondents, on the basis of their income, are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,001-15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000.

Table - 3.5 AGE & INCOME LEVEL CLASSIFICATION


AGE < 5000 < 20 21-30 31-40 41-50 > 50 TOTAL 5 (1.67) 15 (5.00) 10 (3.33) 16 (5.33) 3 (1.00) 49 INCOME % 14.29 27.27 14.29 16.00 7.50 16.33 500110000 10 (3.33) 8 (2.67) 12 (4.00) 18 (6.00) 6 (2.00) 54 % 28.57 14.55 17.14 18.00 15.00 18.00 1000115000 0 (0.00) 10 (3.33) 10 (3.33) 5 (1.67) 5 (1.67) 30 % 0.00 18.18 14.29 5.00 12.50 10.00 1500120000 3 (1.00) 9 (3.00) 8 (2.67) 20 (6.67) 8 (2.67) 48 % 8.57 16.36 11.43 20.00 20.00 16.00 2000125000 6 (2.00) 8 (2.67) 13 (4.33) 30 (10.00) 9 (3.00) 66 % 17.14 14.55 18.57 30.00 22.50 22.00 > 25001 11 (3.67) 5 (1.67) 17 (5.67) 11 (3.67) 9 (3.00) 53 % 31.43 9.09 24.29 11.00 22.50 17.67 TOTAL 35 11.67 55 18.33 70 23.33 100 33.33 40 13.33 300 100.00 %

Source: Questionnaire

So, the income group and age level of the respondents are analyzed in the Table-3.5 to study the impact of these factors on consumer behavior. INTERPRETATION AND REASONS: In the age group 31-40 years and 41-50 years majority of the respondents are earning above Rs.15001 and above Rs.25000 and Rs. 15001 and below Rs. 25000 respectively. This is because they may have other sources of income like rent, interest on deposits, mutual funds etc., as these age groups start thinking about future as their age might not support them to earn by working. Hence they make alternative arrangements like income from rent, interest on their savings and mutual funds. The age group of 21 30 years are earning below Rs. 5000. This may be due to lack of opportunities in employment and that they are bound to work for less pay.

MARITAL STATUS AND EDUCATIONAL LEVEL CLASSIFICATION:


Marital status of the consumers will have an influence on consumer behavior as it decides the purchasing and repurchasing decision based on their requirements. For the purpose of analysis, all the respondents, on the basis of their marital status, are classified into five groups i.e. single, married, separated, and divorced and widow.

Educational level of a consumer helps in evaluating various alternatives available in the market for making a rational purchase decision with available resources. In case of Cellular Service Providers, the market is flooded with a variety of brands. Therefore, the educational level and marital status helps them in collecting, processing the service related information, and in choosing the best suitable to their needs among the available brands.

The educational level of all the selected respondents is classified under five categories viz., Up to Secondary, Higher Secondary, Graduation, Postgraduation and Professional Qualification. The educational level of the respondents is cross analysed with age. Table - 3.6
EDUCATION & MARITAL LEVEL CLASSIFICATION
EDUCATION SECONDARY HIGHER SECONDARY GRADUATION POST GRADUATION POFESSIONAL QUALIFICATION TOTAL Source: Questionnaire SINGLE 31 (10.33) 4 (1.33) 26 (8.67) 8 (2.67) 4 (1.33) 73 24.33 % 41.33 5.00 MARRIED 14 (4.67) 26 (8.67) 10 (3.33) 12 (4.00) 6 (2.00) 68 22.67 % 18.67 32.50 SEPARATED 14 (4.67) 28 (9.33) 10 (3.33) 15 (5.00) 7 (2.33) 74 24.67 MARITAL % DIVORCED 18.67 8 (2.67) 35.00 12 (4.00) 5 (1.67) 9 (3.00) 8 (2.67) 42 14.00 % 10.67 15.00 WIDOW 8 (2.67) 10 (3.33) 12 (4.00) 8 (2.67) 5 (1.67) 43 14.33 300 % 10.67 12.50 TOTAL 75 80 26.67 19.05 15.38 63 21.00 52 17.33 16.67 30 10.00 100.00 % 25.00

41.27 15.38

15.87 23.08

15.87 28.85

7.94 17.31

13.33

20.00

23.33

26.67

In table 3.6, an attempt is made to analyze education and marital status of the respondents as both attributes decides the behavior of consumers to purchase or repurchase. INTERPRETATION AND REASONS: Most of the respondents are higher secondary accounting for 27 percent and about 35 percent are separated having higher secondary qualification, 33 percent are married and 15 percent are divorcees. This may be due to lack of understanding between couples as their educational status is very low. Among respondents with educational qualification up to secondary, majority

of them are single. This may be because that the majority prefer high qualified partners these days. Among graduates, majority of them are single as they may be searching for jobs or other opportunities to earn followed by 12 being widows which may be due to natural cause like death for which cause can be anything like accidents, domestic harassment, poverty etc.,. Among post graduates, majority of them are separated may be because of egoism and lack of understanding among partners as it is commonly seen among people these days. Among respondents with professional qualification, majority of them are divorcees may be because that they do not give much time to each other.

EDUCATIONAL STATUS AND OCCUPATIONAL LEVEL CLASSIFICATION:

Educational level of a consumer helps in evaluating various alternatives available in the market for making a rational purchase decision with available resources. In case of Cellular Service Providers, the market is flooded with a variety of brands. Therefore, the educational level and marital status helps them in collecting, processing the service related information, and in choosing the best suitable to their needs among the available brands.

The educational level of all the selected respondents is classified under five categories viz., Up to Secondary, Higher Secondary, Graduation, Postgraduation and Professional Qualification. The educational level of the respondents is cross analysed with education. The Occupational status of all the respondents is classified in six categories viz., executives, unemployed, professionals, student, service and others. All the respondents, whose occupation is not covered under starting five categories that is executives, unemployed, Professional, student and service are categorized under last group that is Others. Service category include persons rendering services in charitable institutions, religious places and Government service and others are rickshaw walas, kabadi walas, vegetable vendors etc.,. Table - 3.7

EDUCATION & OCCUPATION LEVEL CLASSIFICATION


EDUCATION EXECUT IVE SECONDARY HIGHER SECONDARY GRADUATION POST GRADUATION POFESSIONAL QUALIFICATION TOTAL % UNEMPLO YED % PROFESSI ONAL % OCCUPATION STUDE NT % SERVICE % OTHERS % TOTAL %

10 (3.33) 18 (6.00) 17 (5.67) 10 (3.33) 0 (0.00) 55

13.33 22.50

18 (6.00) 13 (4.33) 10 (3.33) 17 (5.67) 0 (0.00)

24.00 16.25

0 (0.00) 0 (0.00) 0 (0.00) 0 (0.00) 30 (10.00)

0.00 0.00

16 (5.33) 10 (3.33) 6 (2.00) 5 (1.67) 0 (0.00)

21.33 12.50

18 (6.00) 27 (9.00) 20 (6.67) 13 (4.33) 0 (0.00)

24.00 33.75

13 (4.33) 12 (4.00) 10 (3.33) 7 (2.33) 0 (0.00)

17.33 15.00

75 80

25.0

26.6 15.87 13.46 63 52

26.98 19.23

15.87 32.69

0.00 0.00

9.52 9.62

31.75 25.00

21.0

17.3 0.00 30

0.00

0.00

100.0 0 10.00

0.00

0.00

10.0 14.00 300

18.33

58

19.33

30

37

12.33

78

26.00

42

100.0

Source: Questionnaire

INTERPRETATION AND REASONS: Table 3.7 clearly reveals majority of the respondents are rendering services that possess the educational qualification of higher secondary certificate followed by 18 executives. This may be because that they find no employment. Majority of them with secondary qualification are unemployed and rendering services as they might have seen no opportunities.

EDUCATIONAL STATUS AND INCOME LEVEL CLASSIFICATION:


Educational level of a consumer helps in evaluating various alternatives available in the market for making a rational purchase decision with available resources. In case of Cellular Service Providers, the market is flooded with a variety of brands. Therefore, the educational level and marital status helps them in collecting, processing the service related information, and in choosing the best suitable to their needs among the available brands.

The educational level of all the selected respondents is classified under five categories viz., Up to Secondary, Higher Secondary, Graduation, Postgraduation and Professional Qualification. The educational level of the respondents is cross analysed with income category. The income of consumers will, directly, have an influence on consumer behaviour as it decides the purchasing and repurchasing power of the consumers. For the purposes of analysis, all the respondents, on the basis of their income, are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,001-

15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000.

Table - 3.8
EDUCATIONAL STATUS & INCOME LEVEL CLASSIFICATION
EDUCATION < 5000 SECONDARY HIGHER SECONDARY GRADUATION POST GRADUATION POFESSIONAL QUALIFICATION TOTAL Source: Questionnaire 15 (5.00) 8 (2.67) 10 (3.33) 12 (4.00) 4 (1.33) 49 16.33 % 20.00 10.00 500110000 8 (2.67) 12 (4.00) 10 (3.33) 16 (5.33) 8 (2.67) 54 18.00 % 10.67 15.00 1000115000 4 (1.33) 8 (2.67) 10 (3.33) 3 (1.00) 5 (1.67) 30 10.00 % 5.33 10.00 INCOME 15001% 20000 15 20.00 (5.00) 20 25.00 (6.67) 8 (2.67) 2 (0.67) 3 (1.00) 48 16.00 2000125000 20 (6.67) 18 (6.00) 15 (5.00) 7 (2.33) 6 (2.00) 66 22.00 % 26.67 22.50 > 25001 13 (4.33) 14 (4.67) 10 (3.33) 12 (4.00) 4 (1.33) 53 17.67 300 % 17.33 17.50 TOTAL 75 80 %

25.00

26.67 15.87 23.08 63 52

15.87 23.08

15.87 30.77

15.87 5.77

12.70 3.85

23.81 13.46

21.00

17.33 13.33 30

13.33

26.67

16.67

10.00

20.00

10.00

100.00

INTERPRETATION AND REASONS:

An analysis is made from table 3.8,

which shows that majority of them with secondary qualification and higher secondary qualification earn between Rs. 15001 to above Rs. 25001. This may be due to hereditary property inherited by them or from income from other sources like rent, interest on deposits etc. The respondents with higher educational qualifications like graduation, post graduation and professional qualification are earning less than those with just secondary and higher secondary qualification (below RS 5000 to Rs.15000 only). The reason may be competition among many jobs and hesitation to do low profile jobs due to their high level qualifications.

MARITAL STATUS AND OCCUPATIONAL LEVEL CLASSIFICATION:


Marital status of the consumers will have an influence on consumer behavior as it decides the purchasing and repurchasing decision based on their requirements. For the purpose of analysis, all the respondents, on the basis of their marital status, are classified into five groups i.e. single, married, separated, and divorced and widow. The Occupational status of all the respondents is classified in six categories viz., executives, unemployed, professionals, student, service and others. All the

respondents, whose occupation is not covered under starting five categories that is executives, unemployed, Professional, student and service are categorized under last group that is Others. Service category include persons rendering services in charitable institutions, religious places and Government service and others are rickshaw walas, kabadi walas, vegetable vendors etc.,.

The occupational status of the consumers will have an impact on their consumption pattern. The consumption pattern differs from occupation to occupation, as the needs of different occupations are not same. So, the marital status and occupational level of the respondents are analysed in the Table-3.9 to study the impact of these factors on consumer behaviour to purchase or repurchase a brand. Table - 3.9
MARITAL STATUS & OCCUPATION LEVEL CLASSIFICATION
MARITAL EXECUT IVE 8 (2.67) MARRIED SEPARATED DIVORCE WIDOW TOTAL 9 (3.00) 16 (5.33) 10 (3.33) 12 (4.00) 55 18.33 27.91 23.81 21.62 13.24 % 10.96 UNEMPLO YED 12 (4.00) 12 (4.00) 14 (4.67) 7 (2.33) 13 (4.33) 58 19.33 30.23 16.67 18.92 17.65 % 16.44 PROFESSI ONAL 10 (3.33) 8 (2.67) 6 (2.00) 4 (1.33) 2 (0.67) 30 10.00 4.65 9.52 8.11 11.76 % 13.70 OCCUPATION STUDENT 18 (6.00) 4 (1.33) 6 (2.00) 4 (1.33) 5 (1.67) 37 12.33 11.63 9.52 8.11 5.88 % 24.66 SERVICE 18 (6.00) 19 (6.33) 20 (6.67) 10 (3.33) 11 (3.67) 78 26.00 25.58 23.81 27.03 27.94 % 24.66 OTHERS 7 (2.33) 16 (5.33) 12 (4.00) 7 (2.33) 0 (0.00) 42 14.00 300 0.00 43 14.33 16.67 42 14.00 16.22 74 24.67 23.53 68 22.67 % 9.59 TOTAL 73 24.33 %

SINGLE

100.00

Source: Questionnaire

INTERPRETATION AND REASONS:

It

is

very

clear

from

cross

tabulation

between marital and occupation in table 3.9 that majority of the respondents who fall in the category of separated under marital status are rendering services(20) followed by executive occupation(16). This may be due to that they can devote their much time in the occupation chosen by them. Those who are single are rendering service (18), are students (18) and are unemployed (12). The less responsibility and independence nature are the features of being single which might be the reason for them to either go for service or be a student or search for jobs and other opportunities. The married respondents are also doing service (19) followed by other

occupations like rickshaw pulling etc (16) and 12 are unemployed. This may be due to lack of employment opportunities and lack of vocational training.

MARITAL STATUS AND INCOME LEVEL CLASSIFICATION:


Marital status of the consumers will have an influence on consumer behavior as it decides the purchasing and repurchasing decision based on their requirements. For the purpose of analysis, all the respondents, on the basis of their marital status, are classified into five groups i.e. single, married, separated, and divorced and widow.

The income of consumers will, directly, have an influence on consumer behaviour as it decides the purchasing and repurchasing power of the consumers.

For the purposes of analysis, all the respondents, on the basis of their income, are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,00115,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000. Hence, an attempt is made to analyze by cross tabulation between marital status and income level of the respondents. Table - 3.10
MARITAL STATUS & INCOME LEVEL CLASSIFICATION
MARITAL < 5000 SINGLE MARRIED SEPARATED DIVORCE WIDOW TOTAL 10 (3.33) 8 (2.67) 14 (4.67) 6 (2.00) 11 (3.67) 49 % 13.70 11.76 18.92 14.29 25.58 16.33 500110000 12 (4.00) 15 (5.00) 12 (4.00) 5 (1.67) 10 (3.33) 54 % 16.44 22.06 16.22 11.90 23.26 18.00 1000115000 8 (2.67) 6 (2.00) 10 (3.33) 4 (1.33) 2 (0.67) 30 % 10.96 8.82 13.51 9.52 4.65 10.00 INCOME 15001% 20000 10 13.70 (3.33) 9 13.24 (3.00) 11 14.86 (3.67) 8 19.05 (2.67) 10 23.26 (3.33) 48 16.00 2000125000 19 (6.33) 18 (6.00) 14 (4.67) 10 (3.33) 5 (1.67) 66 % 26.03 26.47 18.92 23.81 11.63 22.00 > 25001 14 (4.67) 12 (4.00) 13 (4.33) 9 (3.00) 5 (1.67) 53 % 19.18 17.65 17.57 21.43 11.63 17.67 TOTAL 73 24.33 68 22.67 74 24.67 42 14.00 43 14.33 300 100.00 %

Source: Questionnaire

INTERPRETATION AND REASONS: From table 3.10 it is clear that majority of the respondents who fall in the category of single, married, separated and divorce categories if marital status are earning between Rs. 15001 to above Rs. 25000. The reason may be that the single may be spending more time to earn for their

better future, the married to keep their family happy, and the separated and divorcees earn more may be to keep their future safe and secured but the income of widow category is more between Rs. Below 5000 and Rs 15000. The reason may be that they may not know that they can claim more alumni from their exhusbands and that they should rely on their own earning capacity by doing jobs or service.

The Occupational status of all the respondents is classified in six categories viz., executives, unemployed, professionals, student, service and others. All the respondents, whose occupation is not covered under starting five categories that is executives, unemployed, Professional, student and service are categorized under last group that is Others. Service category include persons rendering services in charitable institutions, religious places and Government service and others are rickshaw walas, kabadi walas, vegetable vendors etc.,.

The occupational status of the consumers will have an impact on their consumption pattern. The consumption pattern differs from occupation to occupation, as the needs of different occupations are not same.

The income of consumers will, directly, have an influence on consumer behaviour as it decides the purchasing and repurchasing power of the consumers.

For the purposes of analysis, all the respondents, on the basis of their income, are classified into six income groups they are below Rs. 5000, 5001-10,000, 10,001-15,000, 15,001-20,000, 20,001-25,000 and above Rs. 25,000. So, the income level and occupational level of the respondents are analysed in the Table-3.11 to study the impact of these factors on consumer behaviour to purchase or repurchase a brand.
Table - 3.11 OCCUPATION & INCOME LEVEL CLASSIFICATION
OCCUPATION < 5000 EXECUTIVE UNEMPLOYEE 6 (2.00) 8 % 10.91 13.79 500110000 10 (3.33) 12 % 18.18 20.69 1000115000 8 (2.67) 5 % 14.55 8.62 INCOME 15001% 20000 7 12.73 (2.33) 9 15.52 2000125000 12 (4.00) 13 % 21.82 22.41 > 25001 12 (4.00) 11 % 21.82 18.97 TOTAL 55 18.33 58 %

PROFESSIONAL STUDENT SERVICE OTHERS TOTAL

(2.67) 5 (1.67) 4 (1.33) 13 (4.33) 13 (4.33) 49

16.67 10.81 16.67 30.95 16.33

(4.00) 6 (2.00) 8 (2.67) 16 (5.33) 2 (0.67) 54

20.00 21.62 20.51 4.76 18.00

(1.67) 4 (1.33) 6 (2.00) 5 (1.67) 2 (0.67) 30

13.33 16.22 6.41 4.76 10.00

(3.00) 4 (1.33) 2 (0.67) 10 (3.33) 16 (5.33) 48

13.33 5.41 12.82 38.10 16.00

(4.33) 8 (2.67) 9 (3.00) 18 (6.00) 6 (2.00) 66

26.67 24.32 23.08 14.29 22.00

(3.67) 3 (1.00) 8 (2.67) 16 (5.33) 3 (1.00) 53

19.33 10.00 21.62 20.51 7.14 17.67 30 10.00 37 12.33 78 26.00 42 14.00 300 100.00

Source: Questionnaire

INTERPRETATION AND REASONS: Table 3.11 deals with cross tabulation between occupation and income level of the respondents. The respondents rendering service are earning between Rs. 15001 to above Rs. 25000. The reason may that they may get many offerings and those in government service are getting good remuneration after fifth pay commission. There is a peculiar feature observed from the table that even unemployed are having more income i.e. between Rs. 15001 to Rs. 25000. The reason could be that they get income from rent, interest from deposits etc and it is followed by executives and professionals as their earning capacity itself fetches them such a huge income. Brands bring loyalty. With loyalty come additional revenue streams. The brand propagates building a set of satisfied customers. The set of satisfied customers build communities around the brand and use their associations as a platform to build permanent loyalty.

GENDER AIRTEL MALE FEMALE TOTAL 38 (12.67) 19 (6.33) 57 % 22.89 14.18 19.00 BSNL 26 (8.67) 28 (9.33) 54 % 15.66 20.90 18.00 IDEA 30 (10.00) 20 (6.67) 50 % 18.07 14.93 16.67 RELIANCE 29 (9.67) 26 (8.67) 55

BRAND % 17.47 19.40 18.33

TATA INDICOM 16 (5.33) 24 (8.00) 40

% 9.64 17.91 13.33

VODAFONE 27 (9.00) 17 (5.67) 44

% 16.27 12.69 14.67

TOTAL 166 134 300

55.

44.

100

Source: Questionnaire

An analysis between gender & brand is made from the table 3.13 which shows that male members 166 in number(55%) use more number of mobile services than female members (134 accounting to 45%). It is found that 10% difference is there between male & female members which is negligible. 38 male members have Airtel connection followed by Idea (30), Reliance (29),

Vodafone (27), BSNL (26) and Tata Indicom least with 16. Many female member i.e (28) opted for BSNL services followed by Reliance (26), Tata Indicom (24), Idea (20), Airtel (19) and Vodafone (17).

Table 3.14
BRAND & TYPE OF CONNECTION CLASSIFICATION
CONNECTION AIRTEL PREPAID POSTPAID TOTAL 30 (10.00) 27 (9.00) 57 19.00 16.98 % 21.28 BSNL 20 (6.67) 34 (11.33) 54 18.00 21.38 % 14.18 IDEA 28 (9.33) 22 (7.33) 50 16.67 13.84 % 19.86 RELIANCE 20 (6.67) 35 (11.67) 55 18.33 22.01 BRAND % 14.18 TATA INDICOM 22 (7.33) 18 (6.00) 40 13.33 11.32 % 15.60 VODAFONE 21 (7.00) 23 (7.67) 44 14.67 300 14.47 159 53.00 % 14.89 TOTAL 141 47.00 %

100.00

Source: Questionnaire

INTERPRETATION AND REASONS: To know the association between type of connection and brand possession Cross tabulation between brand and type of connection is done in table 3.14 which shows that majority of them have chosen post paid connection. The reason may be that the respondents might have felt the benefits derived from postpaid connection are more than that of benefits from prepaid connection. The post paid connection is more popular amongst BSNL (34), Reliance (34) and Airtel (27) whereas prepaid connection is more popular amongst Airtel, Idea and Tata Indicom. On an aggregate BSNL is dominating in post paid connection and Airtel is dominating in prepaid connection. When comparing with the prepaid and post paid mobiles most of the customers prefer post paid phones than pre paid phones as it suits to their requirements. The post paid customers are more when compared to pre paid customers. Table 3.15
BRAND & EDUCATIONAL STATUS CLASSIFICATION

EDUCATIONAL STATUS SECONDARY HIGHER SECONDARY GRADUATION POST GRADUATION PROFESSIONAL QUALIFICATION TOTAL

BRAND AIRTEL 14 (4.67) 16 (5.33) 9 (3.00) 8 (2.67) 10 (3.33) 57 19.00 33.33 15.38 14.29 20.00 % 18.67 BSNL 18 (6.00) 14 (4.67) 6 (2.00) 13 (4.33) 3 (1.00) 54 18.00 10.00 25.00 9.52 17.50 % 24.00 IDEA 19 (6.33) 15 (5.00) 12 (4.00) 2 (0.67) 2 (0.67) 50 16.67 6.67 3.85 19.05 18.75 % 25.33 RELIANCE 11 (3.67) 12 (4.00) 14 (4.67) 12 (4.00) 6 (2.00) 55 18.33 20.00 23.08 22.22 15.00 % 14.67 TATA INDICOM 7 (2.33) 13 (4.33) 10 (3.33) 6 (2.00) 4 (1.33) 40 13.33 13.33 11.54 15.87 16.25 % 9.33 VODAFONE 6 (2.00) 10 (3.33) 12 (4.00) 11 (3.67) 5 (1.67) 44 14.67 300 16.67 30 21.15 52 19.05 63 12.50 80 % 8.00 TOTAL 75

25.0

26.6

21.0

17.3

10.0

100.

Source: Questionnaire

Table 3.15 depicts brand & educational status of the customers is analyzed to know the association between them i.e. brand possession and education. It is clear from the table that majority i.e. 80 have higher secondary certificate of which 16 have Airtel services followed by Idea (15), BSNL (14), Tata Indicom (13), Reliance (12) & Vodafone (10). Those with secondary qualification have Idea (19) at the top & Vodafone at the bottom with just 6. Among graduates, Reliance (14) being highest to BSNL being lowest (5). People with post graduation have 13 BSNL connection and just 2 Idea connections. Those with professional qualification have in descending order the following connections, Airtel (10), Reliance (6), Vodafone (5), Tata Indicom indicom (4), BSNL (3) and Idea (2). Therefore, it is clear that Airtel (16), Idea (15) and BSNL (14) are very popular amongst customers who possess higher secondary certificates. It is been said by them that they have chosen those brands because of many offers and schemes and low tariff plan as it suits to their requirements. It is also seen that the brands Airtel, BSNL and Idea are very popular amongst customers who have Secondary certificates as it suits to their requirements. Amongst Graduates, the brands Reliance, Tata Indicom and Vodafone are very popular. It may be due to low tariff plans and their ability as graduate to compare and contrast among all the available brands in the market which may lack with people up to higher secondary level as they just rely on their friends or relatives to choose a brand. Table 3.16
BRAND & MARITAL STATUS CLASSIFICATION
MARITAL BRAND

AIRTEL SINGLE MARRIED SEPARATED DIVORCED WIDOW TOTAL 14 (4.67) 7 (2.33) 16 (5.33) 12 (4.00) 8 (2.67) 57

% 19.18 10.29 21.62 28.57 18.60 19.00

BSNL 12 (4.00) 14 (4.67) 15 (5.00) 7 (2.33) 6 (2.00) 54

% 16.44 20.59 20.27 16.67 13.95 18.00

IDEA 14 (4.67) 18 (6.00) 11 (3.67) 4 (1.33) 3 (1.00) 50

% 19.18 26.47 14.86 9.52 6.98 16.67

RELIANCE 14 (4.67) 10 (3.33) 12 (4.00) 8 (2.67) 11 (3.67) 55

% 19.18 14.71 16.22 19.05 25.58 18.33

TATA INDICOM 9 (3.00) 10 (3.33) 8 (2.67) 5 (1.67) 8 (2.67) 40

% 12.33 14.71 10.81 11.90 18.60 13.33

VODAFONE 10 (3.33) 9 (3.00) 12 (4.00) 6 (2.00) 7 (2.33) 44

% 13.70 13.24 16.22 14.29 16.28 14.67

TOTAL 73

24.33 68 22.67 74 24.67 42 14.00 43 14.33 300 100.00

Source: Questionnaire

Brand & marital status are cross tabulated in table 3.16 which shows that those single have more number of connection (14) and less number of Tata Indicom connection (9). Those who are married have more number of idea providers (18) and least number of airtel (7). Those separated have 16 Airtel, 15 BSNL, 12 Reliance & Vodafone, 11 Idea and just 8 Tata Indicom indicom connections. Among divorced group, many have Airtel connection and very few have Idea connection. That widow group has more number of Reliance connections (11) & least number of Idea connections. So, it is clear that Airtel, BSNL, Reliance and Vodafone are very popular brands among those customers whose marital status is separated. The reason may be that these brands are providing those schemes suited to their different classes of customers like low tariff plans, recharge cards with lowest denominations etc. Almost all the brands are popular among those customers who are single but Airtel, Idea and Reliance are most popular. The reason could be same as what the separated have stated, low tariff plans, recharge cards with lowest denominations etc. Airtel, BSNL, Reliance and Vodafone are very popular among those customers who are separated; Idea and Tata Indicom indicom are very popular amongst married

customers and Airtel is very popular amongst divorced and widow category of customers. On an aggregate, Airtel and BSNL are popular in almost all the categories of customers with different marital status i.e. their schemes and plans suits to all the categories of customers.

Table 3.17
BRAND & OCCUPATIONAL STATUS CLASSIFICATION

OCCUPATION AIRTEL EXECUTIVE UNEMPLOYEE PROFESSIONAL STUDENT SERVICE OTHERS TOTAL 16 (5.33) 6 (2.00) 8 (2.67) 8 (2.67) 15 (5.00) 4 (1.33) 57 19.00 9.52 19.23 21.62 26.67 10.34 % 29.09 BSNL 12 (4.00) 11 (3.67) 6 (2.00) 3 (1.00) 16 (5.33) 6 (2.00) 54 18.00 14.29 20.51 8.11 20.00 18.97 % 21.82 IDEA 9 (3.00) 11 (3.67) 5 (1.67) 6 (2.00) 12 (4.00) 7 (2.33) 50 16.67 16.67 15.38 16.22 16.67 18.97 % 16.36

BRAND RELIANCE 8 (2.67) 10 (3.33) 4 (1.33) 9 (3.00) 11 (3.67) 13 (4.33) 55 18.33 30.95 14.10 24.32 13.33 17.24 % 14.55 TATA INDICOM 6 (2.00) 14 (4.67) 3 (1.00) 6 (2.00) 7 (2.33) 4 (1.33) 40 13.33 9.52 8.97 16.22 10.00 24.14 % 10.91 VODAFONE 4 (1.33) 6 (2.00) 4 (1.33) 5 (1.67) 17 (5.67) 8 (2.67) 44 14.67 300 19.05 42 14.00 100.00 21.79 78 26.00 13.51 37 12.33 13.33 30 10.00 10.34 58 19.33 % 7.27 TOTAL 55 18.33 %

Source: Questionnaire

To understand the association between the occupational status and brand possession data presented in table 3.17 is analyzed. Airtel is very popular amongst the respondents who are executives and who are in service category. BSNL seems to be equally popular among all the categories of occupations. Idea seems too popular amongst those who are in service category followed by unemployed category. Reliance is seen popular amongst others category which includes rickshaw walas, vegetable vendors etc. Tata Indicom is popular amongst unemployed category and Vodafone is popular amongst service category. It is found that almost all the brands are popular in respondents who are in service category followed by unemployed category. The reason may be that the brands and their schemes suits to their requirements.

Table 3.18
BRAND & INCOME LEVEL CLASSIFICATION

INCOME AIRTEL < 5000 10 % 20.41 BSNL 12 % 24.49 IDEA 8 % 16.33 RELIANCE 7

BRAND % 14.29

TATA INDICOM 9

% 18.37

VODAFONE 3

% 6.12

TOTAL 49

500110000 1000115000 1500120000 2000125000 > 25001 TOTAL

(3.33) 12 (4.00) 5 (1.67) 10 (3.33) 13 (4.33) 7 (2.33) 57

22.22

(4.00) 14 (4.67) 4 (1.33) 8 (2.67) 12 (4.00) 4 (1.33) 54

25.93

(2.67) 7 (2.33) 3 (1.00) 9 (3.00) 13 (4.33) 10 (3.33) 50

12.96

(2.33) 6 (2.00) 8 (2.67) 7 (2.33) 14 (4.67) 13 (4.33) 55

11.11

(3.00) 5 (1.67) 6 (2.00) 8 (2.67) 4 (1.33) 8 (2.67) 40

9.26

(1.00) 10 (3.33) 4 (1.33) 6 (2.00) 10 (3.33) 11 (3.67) 44

16.33 18.52 54 18.00 13.33 30 10.00 12.50 48 16.00 15.15 66 22.00 20.75 14.67 53 17.67 300 100.00

16.67

13.33

10.00

26.67

20.00

20.83

16.67

18.75

14.58

16.67

19.70

18.18

19.70

21.21

6.06

13.21 19.00

7.55 18.00

18.87 16.67

24.53 18.33

15.09 13.33

Source: Questionnaire

From the table 3.18, it is seen that those with less than Rs. 5000 income level have more BSNL (12) brand and least i.e. 3 Vodafone brand. Those respondents whose income is between Rs.5001 to Rs. 10,000 also have more BSNL brand and least Tata Indicom indicom brand (5). Those respondents whose income is between Rs. 10,001 to Rs. 15,000 have Reliance at the top and Idea at the bottom. Those respondents, whose income is between Rs. 15,001 to Rs 20,000, have more Airtel brand and least Vodafone brand. Those respondents whose income is between Rs. 20,001 to Rs. 25,000, Reliance brand is found more and Tata Indicom the least and those above Rs.25,001 have more Tata Indicom brand and least BSNL brand. It is clear that Airtel, Idea, Reliance and Vodafone are popular in the income group of Rs.20001 to Rs 25000. BSNL seems to be equally popular in all the income categories. Tata Indicom indicom is popular among those respondents whose income is below Rs 5000. BSNL is best suited to all the respondents of all income groups followed by Airtel.

Table - 3.19
NATURE OF SCHEME & GENDER LEVEL CLASSIFICATION
GENDER MALE FEMALE TOTAL PREPAID 77 (25.67) 64 (21.33) 141 % 46.39 47.76 47.00 NATURE OF SCHEME POSTPAID % 89 53.61 (29.67) 70 52.24 (23.33) 159 53.00 TOTAL 166 134 44.67 300 100.00 % 55.33

Source: Questionnaire

The nature of scheme & gender is cross tabulated in table 3.19 which shows that

54 percent male & 52 percent female members have post paid connection whereas 48 percent female & 46 percent male have prepaid connection respectively. It is clear from the table that post paid is dominating among both the genders i.e. male and female respondents whereas prepaid connection is more popular among male gender than female gender. On an aggregate pre paid and post paid are popular among both the genders. The post paid connection is dominating among male and female genders. The reason may be that they have selected according to their requirements. Table - 3.20
NATURE OF SCHEME & OCCUPATION LEVEL CLASSIFICATION
NATURE OF SCHEME PREPAID POST PAID TOTAL OCCUPATION EXECUT IVE 30 (10.00) 25 (8.33) 55 18.33 15.72 % 21.28 UNEMPLO YED 29 (9.67) 29 (9.67) 58 19.33 18.24 % 20.57 PROFESSI ONAL 15 (5.00) 15 (5.00) 30 10.00 9.43 % 10.64 STUDE NT 18 (6.00) 19 (6.33) 37 12.33 11.95 % 12.77 SERVICE 30 (10.00) 48 (16.00) 78 26.00 30.19 % 21.28 OTHERS 19 (6.33) 23 (7.67) 42 14.00 300 14.47 159 53.00 100.00 % 13.48 TOTAL 141 47.00 %

Source: Questionnaire

Table

3.20

depicts

the

association

between

nature

of

scheme

and

occupational level of the respondents. The pre paid and post paid connection are very popular amongst executives, unemployed and service category of occupation. Amongst students and others category, post paid is dominating. On an aggregate post paid scheme is popular in almost all the occupational level of the respondents as it suits to their requirements.

Table -3.21
NATURE OF SCHEME & INCOME LEVEL CLASSIFICATION

Bhagath 25001 3000 ka column nahi hai


NATURE OF SCHEME <5000 PREPAID POST PAID TOTAL 25 (8.33) 24 (8.00) 49 % 17.73 15.09 16.33 500110000 32 (10.67) 22 (7.33) 54 % 22.70 13.84 18.00 1000115000 12 (4.00) 18 (6.00) 30 % 8.51 11.32 10.00 INCOME

1500120000 24 (8.00) 24 (8.00) 48

% 17.02 15.09 16.00

2000125000 32 (10.67) 34 (11.33) 66

% 22.70 21.38 22.00

>30000 16 (5.33) 37 (12.33) 53

% 11.35 23.27

TOTAL 141 159 300

47.00

53.00

100.00

Source: Questionnaire

To find the association between nature of scheme and the income level of

the respondents data presented in the form of cross tabulation is analyzed. It is found that pre paid connection is popular amongst those respondents whose income is between Rs. 5001 to Rs. 10000 and Rs.20001 to Rs. 25000 whereas post paid connection is popular among high income group i.e. between Rs. 20001 to Rs. 25000 and above Rs.30000. Table - 3.23
NATURE OF SCHEME & MARITAL STATUS CLASSIFICATION
NATURE OF SCHEME PREPAID POST PAID TOTAL Source: Questionnaire SINGLE 38 (12.67) 35 (11.67) 73 % 26.95 22.01 24.33 MARRIED 43 (14.33) 25 (8.33) 68 % 30.50 15.72 22.67 SEPARATED 34 (11.33) 40 (13.33) 74 % 24.11 25.16 24.67 MARITAL

DIVORCE 20 (6.67) 22 (7.33) 42

% 14.18 13.84 14.00

WIDOW 6 (2.00) 37 (12.33) 43

% 4.26 23.27 14.33

TOTAL 141 159

% 47.00 53.00

300

100.00

To know the association between nature of scheme and the marital status, cross tabulation is done to analyze. It is observed from the table that the pre paid connection is very popular amongst those respondents who are single, married and separated whereas post paid connection is popular amongst those respondents who are widow, separated and single. Therefore it is clear that pre paid and post paid connections are popular among those who are single and those who are separated. The reason could be that they have selected as per their requirements. It is also seen that there is no much difference in selecting the nature of connection/ scheme among all the categories of marital status. Therefore marital status does not effect much to the respondents to choose between pre paid and post paid connections (6% difference between post paid and pre paid which is negligible).

Table 3.24
NATURE OF SCHEME & EDUCATION LEVEL CLASSIFICATION
NATURE OF SCHEME SECONDARY PREPAID 40 % 28.37 HIGHER SECONDARY 30 % 21.28 EDUCATION

GRADUATION 23

% 16.31

POST GRADUATION 25

% 17.73

PROFESSIONAL QUALIFICATION 23

% 16.31

TOTAL 141

(13.33) POST PAID TOTAL 35 (11.67) 75 25.00 22.01

(10.00) 50 (16.67) 80 26.67 31.45

(7.67) 40 (13.33) 63 21.00 25.16

(8.33) 27 (9.00) 52 17.33 16.98

(7.67) 7 (2.33) 30 10.00 300 4.40 159

47.00 53.00 100.00

Source: Questionnaire

In order to analyze the association between nature of scheme and education level of the respondents, cross tabulation between them is drawn. It is seen that pre paid connection is popular among those respondents who completed secondary connection schooling is and higher secondary education whereas post as paid as popular among higher secondary respondents well

graduates. Those with professional qualification certificates preferred pre paid to post paid may be due to have control over their monthly bills. Those respondents who possess post graduation certificates preferred post paid to pre paid so as to enjoy the services of having a mobile phone. On an aggregate pre paid and post paid connection are popular among all the categories of educational level as seen from the negligible difference of 6 per cent between them. They have chosen the connection as per their requirements.

TABLE 3.25 Source of variation Between Brands Within nature of scheme Total ANOVA BETWEEN BRAND & NATURE OF SCHEME Sum of df Mean F Sig. Squares Square 113.000 243.000 356.000 5 6 11 22.600 40.500 .558 .731

To test the hypothesis that, there is no association between brands and type of connection, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 6) degrees of freedom is 0.558. The table value of F at 5% level of significance is 4.39. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and type of connection. It can be concluded that the effects of the different types of connection which cause variation in selection of a brand are the same.

TABLE 3.26 ANOVA BETWEEN BRAND & GENDER Source of variation Between Brands Within Gender Total
Source: Questionnaire

Sum of Squares 113.000 319.000 432.000

df 5 6 11

Mean Square 22.600 53.167

F .425

Sig. .817

To test the hypothesis that, there is no association between brands and gender, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 6) degrees of freedom is 0.425. The table value of F at 5% level of significance is 4.39. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and gender. It can be concluded that the effects of the different genders which cause variation in selection of a brand are the same. TABLE 3.27 ANOVA BETWEEN BRAND & AGE Source of variation Between Brands Within Age groups Total
Source: Questionnaire

Sum of Squares 45.200 628.800 674.000

df 5 24 29

Mean Square 9.040 26.200

F .345

Sig. .880

To test the hypothesis that, there is no association between brands and age, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is 0.345. The table value of F at 5% level of significance is 2.62. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and age. It can be concluded that the effects of the different age groups which cause variation in selection of a brand are the same. TABLE 3.28 ANOVA BETWEEN BRAND & EDUCATION Sum of df Mean F Sig. Squares Square

Source of variation

Between Brands Within Education Total


Source: Questionnaire

45.200 560.800 606.000

5 24 29

9.040 23.367

.387

.853

To test the hypothesis that, there is no association between brands and education, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is 0.387. The table value of F at 5% level of significance is 2.62. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and education. It can be concluded that the effects of the different education level which cause variation in selection of a brand are the same. Table 3.29 ANOVA BETWEEN BRAND & MARITAL STATUS Sum of df Mean F Sig. Squares Square 45.200 348.800 394.000 5 24 29 9.040 14.533 .622 .684

Source of variation Between Groups Within Groups Total


Source: Questionnaire

To test the hypothesis that, there is no association between brands and marital status, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 24) degrees of freedom is 0.622. The table value of F at 5% level of significance is 2.62. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and marital status. It can be concluded that the effects of the different marital status groups which cause variation in selection of a brand are the same. Table 3.30 ANOVA BETWEEN BRAND & OCCUPATION Sum of df Mean F Sig. Squares Square 38.368 547.542 585.910 5 30 35 7.674 18.251 .420 .831

Source of variation Between Brands Within Occupation Total


Source: Questionnaire

To test the hypothesis that, there is no association between brands and occupation,

One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 30) degrees of freedom is 0.420. The table value of F at 5% level of significance is 2.53. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and occupation. It can be concluded that the effects of the different occupation groups which cause variation in selection of a brand are the same. Table 3.31 ANOVA BETWEEN BRAND & INCOME Sum of df Mean Square squares 37.667 5 7.533 332.333 30 11.078 370.000 35

Source of variation Between Brand Within Income Total


Source: Questionnaire

F .680

Sig .642

To test the hypothesis that, there is no association between brands and income, One-way analysis of variance (ANOVA) is used. The calculated value of F at 5% level of significance for (5, 30) degrees of freedom is 0.680. The table value of F at 5% level of significance is 2.53. The calculated value is less than the table value. Therefore the hypothesis is accepted i.e. there is no association between brands and income. It can be concluded that the effects of the different income groups which cause variation in selection of a brand are the same.

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