strategic marketing & planning (ufone)new

Strategic Marketing & Planning

Presented By Saad Khan

Faisal Nasir Nagjee

Business Scope

• Business• Region• What Needs• Who Needs• Value Addition• Business We are Not In• Future Direction

External Analysis

CONVENTIONAL MARKET STRUCTURE

COMPANY

FRANCHISE & SERVICE CENTRE RETAILERS

DIRECT SALES

Family members/Friends/Celebrities

INFLUENCERS Admin, Colleagues & friends

PRODUCT

Jazz, Ufone Prepay, Telenor Talkshawk, Djuice, Zem

Indigo, Ufone postpay, Persona, Zahi

Price Range Rs 30/=- Rs 2,000/= Rs 2,000 onwards

END USERSYoungsters, Housewives, Price Sensitive

Business units

SEGMENT Pre-Paid Connections Post Paid Connections

FURTHER CLASSIFICATION OF MARKET STRUCTURE

COMPANY

FRANCHISE & SERVICE CENTRE

RETAILERS

Pre-Paid Connections

YOUTH AGE GROUP 15-30 YRS

HOUSEWIVES

MIDDLE AGE GROUP

URBAN MARKET RURAL MARKET

CATTLE FARMERS

YOUTH

KISAN (FARMERS)

OLD AGE GROUP

LAND LORDS AND MIDDLEMEN

HOUSEWIVES

MARKET STRUCTURE ANALYSIS

• POSTPAID SEGMENT

• PREPAID SEGMENT– URBAN– RURAL

• URBAN MARKET

ASSUMPTIONS– Segment distribution amongst

urban-rural is based on 32.34% based on the urbanization rate.

– We are also assuming that 98% of the urban population has been already catered

MARKET STRUCTURE ANALYSIS

Historical populations

Census Population Urban

1951 33,816,000 17.80%

1961 42,978,000 22.46%

1972 65,321,000 25.40%

1981 84,254,000 28.28%

1998 130,580,000 32.51%

2008 172,800,000 32.34%

URBAN MARKET

• HOUSEWIVES

– Market 11.24 million– Needs=communicating with family

member, friends or calling on food shows & talk shows.

– Average spending on calls Rs 300-900/= per month

– Product targeting this segment=jazz ladies first (Mobilink)

Total Population 172 Million

Total Urban Population (32.34%)

55.62 Million

Proportion of females in Urban Areas (51%)

28.36 Million

Women under the age of 15 years(43.4%)

12.3 million

Working women (30%) 4.82 Million

Housewives(70%) 11.24 Million

• YOUTH

– MALE/FEMALE BETWEEN 15-30 YEARS

– Market is about 16.21 Million– Needs=socialize with friends, family

members, lovers. Security need and need to help

– Average spending of Rs 300-1500 per month

– Products targeting this segment are • Djuice(Telenor), • Talkhshalk(Telenor), • uth(Ufone,• Jazz(Mobilink), • Glow (Warid)

Total youth population (29.15%)

50.14 Million

Proportion of youth population living

in urban areas(32.34%)

16.21 Million

URBAN MARKET

• OLD AGED

– Males/females above 60 years.– Market= 2.78 Million– need= to stay in touch with old

friends, family members or get driver, doctor etc

– Average spending is Rs 300-700 per month

Total Population of old aged people (5%)

8.6 Million

Proportion of old age group in Urban Areas

2.78 Million

URBAN MARKET

RURAL MARKET

• LANDLORDS

– Individuals holding more than 300 acres of land

– Market= assuming 3% of rural population

– Needs=business needs, social needs, security needs, information transfer needs

– Average spending is Rs 2000-5000 per month


Rural Population (67.66%)

116.37 Million

Land Lords (3%) 3.49 Million

RURAL MARKET• YOUND INDIVIDUALS

– Males/females between ages of 15-30 years

– Market 33.93 Million– Needs=social needs, since

they travel to other villages & regions they need to stay in touch with family & business partners. entertainment need

– Average spending is Rs 10-20 per day


Total Youth population 50.14 Million

Total youth in rural areas (67.66%)

33.93 Million

RURAL MARKET

• RURAL WOMEN

– Females who live at home & work in farms

– Market is 59.35 Million– Needs= to communicate with

other females, children & husband.

– Average spending on calls is around Rs100-200 per month


Total Females in Pakistan( 51%)

87.72 Million

Proportion of females in Rural Areas (67.66%)

59.35 Million

Working women (20%)

11.87 Million

Housewives (80%) 47.48 Million

RURAL MARKET• FARMERS (KISAN)

– This segment consist of male/females working in the agriculture segment of Pakistan

– Market = 8.78 million Females & 17.02 million Males totaling to 30.13 million

– Needs = work related information required, social needs.

Total Rural Population

116.38 Million

Proportion of females in Rural Areas (51%)

59.35 Million

Working women (20%)

11.87 Million

Proportion of Women in Agriculture (74%)

8.78 Million

Proportion of Males in Rural Areas (49%)

57.02 Million

Working Men in rural areas(80%)

45.62 Million

Men working in agriculture (37.3%)

17.02 Million

MARKET STRUCTURE OF TELECOMMUNICATION INDUSTRY

Analysis • Cellular sector consists of

93% of the telecommunication industry, followed by the fixed lines and Wire less local loop

• WLL sector is still in the introductory stages and has been unable to grab much of the market because of their limited coverageWLL

2%

Fixed5%

Cellular93%

Market Structure Of Telecommunication Industry

*Source PTA (Pakistan Telecommunication Authority)

Market Share

2005-2006 2006-2007 2007-2008 2008-2009

MARKET SEGMENT Realized

Un-Realized Realized


Un-Realized

Realized

Un-Realized

Urban market

HOUSEWIVES 9.95 0.64 10.14 0.65 10.60 0.44 11.01 0.23

YOUTH (15-30 years) 14.73 0.92 14.9 0.61 15.62 0.31 15.88 0.32

MIDDLE AGED (31-60 years) 11.75 0.82 12.18 0.51 12.51 0.52 12.9 0.26

OLD AGED(60 and above) 1.98 0.11 2.06 0.08 2.11 0.1 2.18 0.04

2005-2006 2006-2007 2007-2008 2008-2009

MARKET SEGMENT Realized



Un-Realized

Realized

Un-Realized

Rural Market

Landlords 1.97 1.31 2.00 1.34 2.22 1.20 2.44 1.05

Youth 19.05 12.70 19.33 12.89 21.51 11.58 23.57 10.10

Kisan(Farmers) 24.3 16.2 24.75 16.5 27.4625 14.7875 21.09 9.03

Rural Women 33.45 22.31 34.07 22.72 37.79 20.3 41.54 17.8

Market Share

COMPETITION / SEGMENT ANALYSIS


Urban Competitor's Analysis

Figures in million Current

Market Share

Housewives Youth Middile Aged Old Aged

Realized

Unrealized

Realized

Unrealized

Realized

Unrealized

Realized

Unrealized

Mobilink 30.88% 3.42

0.23

4.90

0.32

3.98

0.26

0.67

0.04

Ufone 21.20% 2.33 3.37 2.73 0.46

Warid 18.96% 2.09 3.01 2.44 0.41

Telenor 22.15% 2.43 3.52 2.86 0.48

Zong 6.77% 0.74 1.07 0.87 0.15

Instaphone 0.04% -

- 0.12 0.02

100.00%

Rural Competitor's Analysis

Figures in million

Assumed Market Share

Landlords Youth Kisan(Farmers) Old Aged

Realize

dUnrealize

dRealize

dUnrealize

dRealize

dUnrealize

dRealize

dUnrealize

d

Mobilink 52.50% 1.28

1.05

12.37

10.10

11.07

9.03

21.81

17.80

Ufone 15.00% 0.37 3.54 3.16 6.23

Warid 3.00% 0.07 0.71 0.63 1.25

Telenor 28.00% 0.68 6.60 5.91 11.63

Zong 1.50% 0.04 0.35 0.32 0.62

Instaphone 0.00% -

-

-

100.00%

UFONE DISTRIBUTION STRUCTURE

Old Structure

*Source Ufone

New structure

DISTRIBUTION STRUCTUREDISTRIBUTION STRUCTURE CONNECTION/ SIMS

SERVICE CENTER 5%

RETAILERS 90%

DIRECT SELLING 5%

TOTAL 100%

*Source Ufone

Proposed Distribution Structure

COMPANY

RETAILERS

Pre-Paid Connections URBAN MARKET

YOUTH AGE GROUP 15-25 YRS

HOUSE WIFES

MIDDLE AGE GROUP

OLD AGE GROUP

Urban Market’s Product Life Cycle

Prepaid

Prepaid

Rural Market’s Product Life Cycle

INDUSTRY DRIVING FORCESPOLITICAL

• The current political situation in Pakistan is driving investors out of the industry, the impact of which can also be seen in the telecom sector. As investors have reduced there investment share in Pakistan during last year

• With the budget year 2010 it was proposed by the political parties that certain laws should be passed to discourage the ill saying against the political leaders/government officials, the suggestion further included increased in the tariff rate of value added services such as SMS


INDUSTRY DRIVING FORCESEconomical

• The economic condition of Pakistan has declined due to which the average income of the country is going down, considering this fact as Telecomunication industry is planning to enter the rural regions of Pakistan where Cell phone are still considered as a luxury and not a necessity, therefore the companies will find it difficult to position its product as ever day required product.

Social

• The social situation has been favorable for the telecom sector as the as now cell phones are considered as a basic necessity rather than a luxury. Besides that due to the current security threats to the country people feel comfortable while they are having cell phones which provides instinct access to all news at any given point in time

Technological

• There is a huge room in this particular industry as new technologies are already in use in western countries which are yet to be introduced in Pakistan such as 3G service which enables a person to make video calls through these mobile devices.

Internal Analysis

Lagging IndicatorsDescription 2005-06 2006-07 2007-08 2008-09

Subscribers (Mn) 7.5 14 18 20

Growth Rate- Subscribers - 87% 29% 11%

Market Share (%)- Subscribers 22% 22% 20% 21%

Revenue (Rs. In Mn) 16,098 21,867 27,466 40,062

Growth Rate- Revenue - 36% 26% 45%

Market Share (%)-Revenue 17.90 16.42 15% 18.86%

0

5

10

15

20

2005-06

2006-07

2007-08

2008-09

Ufone subscribers

0

0.2

0.4

0.6

0.8

1

2005-06

2006-07

2007-08

2008-09

UfoneSubscribersGrowth Rate

Lagging Indicators

Lagging Indicators

05,000

10,00015,00020,00025,00030,00035,000

2005-06 2006-07 2007-08 2008-09

Ufone'sRevenue(Mn)

00.050.1

0.150.2

0.250.3

0.350.4

2005-06 2006-07 2007-08 2008-09

Ufone's RevenueGrowth

S.W.O.T Analysis• STRENGTHS:

– Ufone is the subsidiary of PTCL, which is owned by Etisalat (Emirates Telecommunication Corporation), thus it has strong financial backing.

– International Roaming to more than 210 live operators across 123 countries; without any security deposit or activation charges.

– Ufone has the 1st mover advantage to cater the price sensitive customers

– Ufone is offering more and better Value Added Services (VAS) than its competitors i.e. Ufone’s Walkie talkie, Call block service etc.

• WEAKNESSES:– Ufone’s network connectivity is weak.– Operational issues in converting packages.– Ufone has comparatively lesser network coverage in rural areas.

• OPPORTUNITIES:– Reduction in the cost of Mobule Handsets making it

affordable to lower income class– Huge market potential of Women in rural Areas– Emerging technology such as 3G

• THREATS:– Further aggressive price wars by the competitors – mobile portability service enable users to switch

services without changing their numbers and codes – Political instability & poor economic condition and

direct threat to infrastructure

S.W.O.T Analysis

Confrontation MatrixS-O Strategies W-O Strategies

With great financial backing and decreasing mobile handset cost Ufone can now offer its products to lower income class also more aggressively

With this great financial backing Ufone will have an edge to reach the emerging market such as rural women.

Since Ufone has always been in the first row to implement new technologies therefore with good financial backing it will be helpful for implementing 3G

As Ufone has an brand image of low cost service provider thereforer this will give Ufne an extra edge to penetrate in Rural Markets of Pakistan

Huge potential market in the rural area of Pakistan requires good network coverage.

Already Ufone has a weak network coverage and with the upcoming 3G technology Ufone will have to spent more on its network coverage in order to support it.

Since the urban markets have reached its saturation and most part of the rural markets have also been covered Ufone has to work on its network in rural areas to reach the market.

S-T Strategies W-T Strategies

Ufone should develop attractive product and packages to cover the customer base more as price war will result in the shrinkage in the Profit contribution and market will be volume base.

As market is highly competitive and % of profits per call has reduced and profitability is now more volume based therefore with less network coverage u fone is losing out on its potential customers in the rural area of country. Which will as a result effect its profits

Problem in the operation leads more customer dissatisfaction and with the introduction of MNP customer are more active in switching networks

Customer Buying Criteria Important Factors

Important Factors Urban Areas

Absolutely Critical

Very Important

Quite Important

Nice to Have

Not significant

Don’t Want it

5 4 3 2 1 0

Tariff Rates

SMS Package

MMS Package

GPRS Service

3 G service

Voice Clarity

Network Coverage

Customer Buying Criteria Important Factors

Important Factors Rural

Areas

Absolutely Critical

Very Important

Quite Important

Nice to Have Not significant

Don’t Want it

5 4 3 2 1 0

Tariff Rates

SMS Package

MMS Package

GPRS Service

3 G service

Voice Clarity

Network Coverage

NON PRICE

UFONE

TELENOR WARID ZONG

ATTRIBUTES AFFECTING WEIGHTAGE

CUSTOMER CHOICE %

MOBILINKPRODUCT

RELATED 50% Rating on the scale of 1 to 101. Tariffs 25% 9 7 9 8 92. VAS 25% 8 6 8 7 8SERVICE

RELATED 50% 1. Network

Coverage 25% 8 10 7 7 6

2. Voice Clarity 25% 8 9 9 9 6

Total 100% 82.5 80 82.5 77.5 72.5

Vision Statement

• UFONE VISION“In order to evolve with our customers and to keep pace with your needs, we rejuvenated and revamped our image by changing our visual identity.”

PROPOSED VISION OF UFONE“To become number one cellular service provider in Pakistan by gaining excellence in communication services”

Mission Statement

UFONE MISSION STATEMENT“At Ufone we understand the value of words and the need

to communicate effectively and efficiently at all levels of society, which is why our primary focus is on U, our valued customers bring strength to our company.”

PROPOSED MISSION STATEMENT“To become number one by exploring new and untapped

market increasing our customer based by providing new and unique Services”

• OBJECTIVES– Increase network coverage area atleast by 15-20% by

the end 2011– To become the leading mobile operator in the country

by achieving subscriber wise market share of 35% or more by 2011.

– To install 4500 additional cell sites to ensure customer satisfaction in terms of connectivity by year end of 2010

– To implement new distribution channel by promoting it on all major platforms starting from December 2010

STRATEGIC INTENTBecome the 1st choice of the customer in both

urban & Rural Areas

• Key issues – Network Coverage (Rural Areas)– Operational Issues (Billing & package conversion

issues)– Cultural Issue at Ufone

STRATEGIC DIRECTION• UFONE’S STRATEGIC DIRECTIONS:

– Since the urban markets have been saturated and with the ongoing price wars with the competitor on existing customer base. Ufone will have to focus on new emerging markets such as Females, Farmers, Youth in the rural areas of Pakistan

– Since the profitability in the future will be based on volume therefore it is very important for Ufone to come up with services that are unique.

– To beat its major competitor like Mobilink and the other emerging operators like Telenor and Warid, Ufone needs to increase its availability by increasing its network coverage. It needs to go into extensive expansion into the untapped markets so that it can expand its operations and also increase its market share. Ufone has finalized a network expansion contract amounting to about $50 million, which will enhance the subscriber’s capacity by 10 million.

Product Plan

RURAL MARKET

YOUTH

KISAN (FARMERS)


HOUSEWIVES

Product

hUm-Jawan

hUm-Kisan

hUm-Karobar

hUm-Aurat

Product Pricing

• 25 pc per 30 Seconds on any network• 1 hour free after 2 mins• 24 FM services free• Free Sports update • 5 Friends and family numbers (Rs 10 per addition charges)

– 45 pc per Minute all day• On per minute incoming call subscriber will get 10 Pc

YOUTHhUm-Jawan

Product Pricing

• 65 pc per Minute• Comodity Market Updates (Pricing) (Rs 100 per month charges)• 24 hours FM services free• Free Sports update• News Updates (Rs 50 activation charges) and monthly Rs 10• 100 free minutes per month Ufone to Ufone only • F & F services totaling 7

– 55 pc per minute

Land lordshUm-Karobar

Product Pricing

FarmershUm-Kisan

• 25 pc per 30 Seconds on any network• 24 FM services free• Free weather updates• Experts opinion for agriculture in local languages• 5 Friends and family numbers (Rs 10 per addition charges)


Product Pricing

HouswiveshUm-Aurat

• 35 pc per 30 Seconds on off network• 20 pc per 30 seconds on on network• 24 FM services free• Free Cooking recipes • Health & Care advices • 5 Friends and family numbers


MARKET SEGMENTATION & PRODUCT POSITIONINGAssumption:We are assuming that out of 100% of Ufone’s market share, 85% is urban and 15% is rural

Market Segment

Current Revenue Projected Growth Existing/new packages

Contribution in Profitability

%

Prepaid Urban 34,053 M 1.5%

Prepay existing-Ufone Prepaid-Ufone Super Ghanta -Ufone Ghanta Package-U Fone Life Plus -Uth Package-Tension free package -Ufone Paanch Ka Pandrah-Ufone Uwon

90%

Prepaid Rural 6,009 M 20%

Prepay New-Hum Jawan-Hum Karobar-Hum Kisan-Hum Aurat

10%

Proposed Distribution Structure

YOUTH


HOUSEWIVES

KISAN (FARMERS)

Pre-Paid Connections RURAL MARKET

RETAILERS

COMPANY

• Marketing in the Rural• Step 1:• Free distribution of SIMS & Cell phones with local languages targeted to different

segments differently– Kisan: collaboration with various agri products like pestisides, fertilizer etc– Rural Females: Door to Door our female sales representative will distribute free cell phones

by competition

– Youth: Introductory Mela will be organized to target this segment and we will distribute free phones by simple competitions like one leg race, Kabadi Match etc

– Landlords: This segment will be targeted by our senior sales representative.

• The main aim behind organizing the carnival and other activities is with the sole purpose of breaking into the market and expanding the customer base

• Step 2:• Offering insentives to the existing subscribers as and when they introduce a new

subscriber to Ufone, by doing so Ufone will save the cost of developing a sales team in rural areas and in return the subscriber will also benefit. This will help create a sense of belongingness to our customer with Ufone making them a more brand loyal person and making the customer not just customer but an integral part of the Ufone Family

• The following diagram represents how our customers will work as a sales men and in return both the company and subscriber will benefit

• With the introduction of every new customer(A) by existing subscriber(B) will get Rs 20 balance and going forward every call that Customer A does Subscriber B will get 5 Bonus points which he can utilize at various places acting as discount

ACTION PLANWhat How Who When

Business Scope

Increase the coverage to Rural regions

Installing new infrastructure which will enable to reach rural market customers

Engineering and finance CFO of U Fone

Jan-11

Market structure / Distribution

o Conventional and outdated structure

o Reducing the role of middle men from the structure

o Head of Marketing and distribution

Jun-11

Conventional distribution structure is not appropriate for the rural market

Targeting the new market with entirely new method

Product manager and sales managers

Market Share By introducing new products for each identified market segments and working our way into these segment.

Sales team initially and followed by our new distribution method by which ever subscriber will at as our salesmen

Jun-11

Markets in the rural areas are in the Growth stage

showing huge potentials

New Product

hUm Jawan New packages specially design for the targeted segments

Ufone – Marketing, Sales & Distribution Department

Jun-11

hUm Karobar

hUm Kisan

hUm Aurat

Infrastructure

Expanding network coverage area

Setting up new cell sites in rural areas

Ufone technical Department Jan-11

strategic marketing & planning (ufone)new

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