understanding consumer behavior in rural market for telecom
TRANSCRIPT
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by
B.Sandeep
PGDM-RM
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The Indian Telecom sector is thirdlargest network in the world.
Second largest wireless network inthe world.
Fastest growing telecom sector withan average addition of over 10-12
million subscribers per month. Tele density in India is 54.10 Tele density of rural in Andhra
Pradesh stands at 22.24while theurban at 131.10
Total telecom
subscribers :
638.05million
Wirelesssubscribers :
601.22 million
Wire linesubscribers :
36.83 million
Tele density : 54.10 %
Indias RuralMobile Phone
Users :
>100 Million
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Subscriber base in india
384.09429.72
464.82
562.16
632.18
0
100
200
300
400
500
600
700
Dec-08 Mar-09 Jun-09 Dec-09 Apr-10
Subscrib
erBase(millions)
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Tele Density in Indi
33.2236.98
43.547.88
54.1
0
10
20
30
40
50
60
Dec-08 Mar-09 Jun-09 Dec-09 Apr-10
Teledensit
y
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Wire less Wire line
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Rural Tele density
reached 21.16 and
urban Tele density
110.96 at the end
of Dec-09. Theshare of rural
subscribers
increased to 31%
in total
subscription.
Subscrs iber base in Rura l
0
5 0
1 0 0
1 5 0
2 0 0
2 5 0
3 0 0
3 5 0
4 0 0
D ec -08 M a r-0 9 Jun -0 9 S ep -0 9 D e c -0 9
SubscriberBase(millions)
Ru ra l
Urb a
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There are 6,38,365 villages in India and almost 74% of population are invillages.
The country saw addition of an average of around 10 Million subscribers
per month in its mobile subscriber base during 2009 with penetration
approaching saturation in urban India. With this, mobile operators in the
country are now vying rural India as their next area for growth in the nearfuture.
Striking points
Affordability
Acceptability
Availability
Awareness
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Brand Name: TATA Indicom
Network: CDMA 2000-1x Network Coverage: 22Telecom circles Subscriber base: > 39million Market Share: 9-11% Subscriptions: Post Paid, Pre Paid , internet facility
TATA Teleservices spearheads the Groups presence in the telecom sector.Incorporated in 1996, TATA Teleservices was the first to launch CDMAmobile services in India with the Andhra Pradesh circle.
TATA Teleservices is part of the INR Rs2,51,543Crore (US$ 62.5 billion)TATA Group, that has over 110 companies, over 3,30,000 employees andmore than 3.5million shareholders.
TATA Tele Services Limited along with TATA Tele Services (Maharashtra)Limited serves over 58.43 million customers in more than 6000 towns.
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To understand customer perception and preference for telecom service inrural.
To Study and analyze the consumer behavior in rural areas.
To determine the factors which influence the purchasing behavior of
mobile/landline phone.
To analyze the customers attitude towards TATA Indicom service
To determine the factors which influence the purchasing behavior of
mobile connection.
To study the customer satisfaction and understand the current
market scenario in Telecom Sector.
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Sample size
o The number of sample is 300 from different rural areas of Andhra Pradesh,
which fulfills the requirement. Each respondent is treated as a case of
detailed analysis
Data collection method
Primary Data:
o The Primary data was a detailed interview schedule with the help of a
detailed questionnaire. The samples were drawn purposively from various
areas for the relevance of the study.
secondary Data:o For this study the secondary data were collected from magazines, journals,
references and websites and manuals of the TATA Indicom.
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.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
features price schemes brand image others
Responsesin%
Factors
Factors influencing in purchase of mobile phone
Inference: Since customers are very much concerned about the
features, TATA Indicom should look forward to impart more
features in the coming models.
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Money spent on purchasing a mobile phone
.0
20.0
40.0
60.0
80.0
Rs1500
Money spent
Responsesin%
Inference: Customers are willing to spend more than 1500
i.e. around 2000 on mobile phone.
They are ready to pay an additional price for the features.
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Inference: Telecom service providers should concentrate more on signal
strength and the price as they are given much importance by the customer
while selecting a telecom service.
Factors influencing cutomers to select a particular telecom
15%
5%
46%
29%
1% 4%Price
Brand image
Coverage
Advice by freinds and relativ
Advertisements
Advice by dealer/retailer
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9.73.3
24.358.3
3.0 1.3
Sources through which Tata Indicom is reaching public
newspapers
radio
television
word of mouth
hoardings
pamphlets
Inference: In rural areas since most of population constitute
illiterates, Specific promotional activities should be adopted to get
along with the customers.
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30.7
69.3
Awareness of different products & services offered byTata Indicom
yes
no
Inference: In Rural, Media is not playing a major role in creating awareness
about the products and services of TATA Indicom. So separate promotional
activities should be designed which enable customers to know more about
the products and services.
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S a ti sf a c ti o n l e v e l w i th t h e ta r i ff p l a n o f
9 .3
5 9 .
1 6 .11 .1
3 .7
.0
10 .0
20 .0
30 .0
40 .0
50 .0
60 .0
70 .0
H ig h ly s a t is f i e d s a t is f ie d N e u tr a l D is s a t is f i e d Hig h ly D is s a t is f i e
S a t is f a c t io n l
Percentages
Inference: TATA Indicom is being preferred because of its economical tariff
plans. And customers are expecting the same from the company in the
coming future.
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54%
6%7%
15%
18%
Tariff plan of Tata Indicom currently using
Pay per call
Pay per call flexi plan
3 pay 3 offer
Chatter box plan
Others
Inference: Pay per call is famous among the other plans since it has
been in the market for a long time. Customers are also impressed with
the fares of the plan.
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Inference: Extent of connectivity and awareness of schemes are the major
issues for which TATA Indicom is not being preferred by the customers.
Reasons for which Tata Indicom is not being preferr
58%27%
4%11% Extent of connectivity
Lack of aw areness of th
schemes
Quality of services
Others
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Money spent per month on mobile phone
34.338.3
11.7
6.79.0
.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Up to Rs200 Rs200-500 Rs500-1000 Rs1000-1500 Above 1500
Money spent
Percentage
Inference:
From the above graph we can understand the affordability of the consumers.
So telecom service providers should come up with new plans which fall into
above mentioned category.
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Inference: From the graph we can interpret that per call charges of TATA
Indicom are highly satisfactory and also the per call charges of the other
telecom service providers are not as good as TATA Indicom.
5.812.5
62.5
17.31.9
3.321.3
52.5
19.73.3
1.93.722.2
44.4
27.8
18.5
18.5
33.3
25.9
3.7
0
20
40
60
80
100
120
Airtel Idea Tata Indicom BSNL
Satisfaction level on per call charges of customer with their
respective telecom service
Highly satisfied
SatisfiedNeutral
Dissatisfied
Highly dissatisf ied
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Inference: From the graph, we can interpret that most of the respondents who are
availing Airtel & Idea, BSNL are highly satisfied with the wide network
coverage (signal strength) where as the respondents who are availing TATA
Indicom are dissatisfied with the same.
1.93.83.8
64.4
26
3.31.73.3
78.3
13.3
14.8
42.6
22.2
18.51.9
7.4
14.8
22.2
51.9
3.7
0
20
40
60
80
100
Airtel Idea Tata Indicom BSNL
Satisfaction level on network of customer with their respective
telecom service
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied
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Inference: Majority of the respondents who are availing TATA Indicom are
satisfied with schemes where as the respondents availing Airtel,Idea,BSNL are
dissatisfied with the same.
5.8
20.2
53.8
19.21
8.313.3
40
35
3.3
1.93.711.1
53.7
29.6
14.8
18.5
37
25.9
3.7
0
20
40
60
80
100
Airtel Idea Tata Indicom BSNL
Satisfaction level on schemes of customer with their respective
telecom service
Highly satisf ied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied
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Inference: Most of the customers are interested in value added services related to
entertainment such as Mp3 tones, dialer tones etc and general news related to
their regions. Youngsters are showing interest in value added services related to
sports.
6 % 1 3 %
1 0 %
4 3 %
2 8 %
T y p e o f v a l u e a d d e d s e r vi c e s t h a t a r e in t e r e s t e d
A st ro lo g
S p o rt
B u sin e s
E n te rt a in m
G e n e ra l n e
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Inference: Customers dont want to migrate to new service providers unlessthey are dissatisfied with the current service provider. More the consumer is
satisfied with the products and services of the company eventually more they
will become loyal to the company.
65.0
30.3
3.7 1.0
.0
10.0
20.0
30.040.0
50.0
60.0
70.0
percentage
No Once Tw ice >2
No. of times
Freuency of switching to the other telecom s ervices from the
current telecom service
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Inference: Extent of connectivity and the better schemes (in sense Economical
&Value creating) offered by the alternative service provider are the major
reasons for withdrawing from the current service provider.
36.4
47.7
3.7.9
11.2
.0
10.0
20.0
30.0
40.0
50.0
Percentag
Coverage Schemes Serv ice Vo ice c la r it y Others
Factors
Reasons for w ithdraing from the c urrent telecom operator se rvice to
service provider
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Inference: Most of the customers are expecting good tariff plans and wide
network coverage from their respective telecom service provider.
0
10
20
30
40
50
60
Percentage
Good service Network Schemes voice quality
Type of expectations
Expectations of the customer from their respective
service provider
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Reluctance on the part of the respondents to provide exact details. Sample size may not sufficient.
Assumptions:
The area selected is assumed to represent whole universe of Indian rural
telecom market.
Data collected are assumed to be bias free from side of respondents,
interviewer or any other.
Whole research and analysis part based on data collected is carried out
under unbiased environment and without any influence of any factor
which can lead to deviation in result.
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Over two thirds of India's population live in rural surroundings and inthese telecoms have not really made their presence felt to any real extent.So telecom service providers should concentrate in rural areas.It is probable in these rural areas that cheap call rates will link with state-of-the-art technology to boost tele density and offer more freedom.Most of the customers in rural areas are less aware of different andservices of different telecom service providesNetwork is the main concern than the tariff plans.Word of mouth influence the purchasing behavior of the target market somobile operator should adopt some tactic to promote word of mouthpromotion.The customers are not satisfied with services because of the low quality
high price, poor after sales services, less network coverage etc.
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First of all more sales promotions required for mobile handset
Set Quality & features should be improved. Training must be given to the retailer for increasing the sales.
Training must be given to retailer about product knowledge, so that they cancompete with other companys product.
To increase the sales, the telecom service providers should concentrate on the
following aspects Establishment of More towers in rural market Availability of all types of recharge vouchers at distributors house. To briefly describe all type of prepaid plan and recharge voucher. More promotional activities are to be made in rural market such as
1.campaigning 2. Direct Marketing 3. Banner 4. Leaflet 5. Advertisement by
Cable Opening service centers in rural market
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