Brm term paper final

A STUDY ON

PROMOTIONAL PRICING VS BRAND SWITCHING WITH RESPECT TO
1P/SEC SCHEME OF TATA DOCOMO

PROJECT Done By

BHANUCHANDER REDDY .P (09MBA010)

SAMPATH .V (09MBA117)

SHIVANI KUMARI (09MIB054)

VINUSHA .K (09MBA059)

UNDER THE GUIDANCE OF

Dr.P.GANESAN

PROFESSOR

JANUARY 2010

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CONTENTS
S.NO TITLE PAGE NO

1. INTRODUCTION 05

12
2. LITERATURE REVIEW

23
3. METHODOLOGY

27
4. DATA ANALYSIS

55
5. FINDINGS

59
6. CONCLUSION

TABLES
S.NO TITLE OF THE TABLE PAGE. NO
1 AGE OF THE RESPONDANT

2 GENDER OF THE RESPONDENT

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3 OCCUPATION OF THE RESPONDENT

4 MOBILE SERVICE THE RESPONDENT USES

5 PURPOSE OF USING THE MOBILE SERVICE

6 SPENDING PER MONTH

7 AIRTIME PER DAY

8 FACTOR CONSIDERED MOST WHILE SWITCHIG BRAND

DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER
9
SERVICES (LOCAL RATES)

DOCOMO’S 1 P/SEC PLAN IS BETTER THAN OTHER
10
SERVICES (STD RATES)

11 USAGE OF 1 P/SEC PLAN

12 WHICH SERVICE –IF USING 1 P/SEC SCHEME

13 INTERESTED IN 1 P/SEC SCHEME

14 IF INTERESTED – WHICH SERVICE

15 DOCOMO’S1P/SEC -BENEFICIARY IN TERMS OF TARIFFS

TATA DOCOMO’S 1P/SEC PLAN- AS A TACTIC TO
16
ATTRACT CUSTOMERS

17 PRICING POLICY OF AIRTEL

18 PRICING POLICY OF DOCOMO

19 PRICING POLICY OF AIRCEL

20 PRICING POLICY OF UNINOR

PRICE IS CONSIDERED AS AN IMPORTANT FACTOR WHILE
21
SWITCHINGBRAND

CONSIDERATION OF CALL TARIFFS WHILE SWITCHING
22
BRAND

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CONSIDERATION OF SMS CHARGES WHILE SWITCHING
23
BRAND

CONSIDERATION OF SIM RATES WHILE SWITCHING
24
BRAND

25 USAGE OF 1P/SEC PLAN- CONSIDERATION OF TARIFFS
WHILE SWITCHING BRANDS
USAGE OF 1 P/SEC PLAN- CONSIDERATION OF PRICE AS
26
AN IMPORTANT FACTOR WHILE SWITCHING BRAND

PURPOSE OF USAGE OF MOBILE SERVICE-RANKING OF
27
DOCOMO

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INTRODUCTION

Industry profile:

The Indian telecommunication industry, with about 506.04 million mobile
phone connections (Nov 2009), is the third largest telecommunication network in
the world and the second largest in terms of number of wireless connections. The
Indian telecom industry is one of the fastest growing in the world and is projected
that India will have ‘billion plus’ mobile users by 2015. Projection by several
leading global consultancies is that India’s telecom network will overtake China’s
in the next 10 years. For the past decade or so, telecommunication activities have
gained momentum in India. Efforts have been made from both governmental and
non-governmental platforms to enhance the infrastructure. The idea is to help
modern telecommunication technologies to serve all segments of India’s culturally
diverse society, and to transform it into a country of technologically aware people.

Modern growth:

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A large population, low telephony penetration levels, and a rise in consumers’
income and spending owing to strong economic growth have helped make India
the fastest-growing telecom market in the world. The first and largest operator is
the state-owned incumbent BSNL, which is also the 7th largest telecom company in
the world in terms of its number of subscribers. BSNL was created by
corporatization of the erstwhile DTS (Department of Telecommunication
Services), a government unit responsible for provision of telephony services.
Subsequently, after the telecommunication policies were revised to allow private
operators, companies such as Vodafone, Bharti Airtel, Tata Indicom, Idea
cellular, Aircel and Loop Mobile have entered the space. In 2008-09, rural India
outpaced urban India in mobile growth rate.
India’s mobile phone market is the fastest growing in the world, with companies
adding some 16.67 million new customers a month.
The total number of telephones in the country crossed the 543 million mark on Oct
2009. The overall tele-density has increased to 44.85% in Oct 2009. In the wireless
segment, 17.65 million subscribers have been added in Nov 2009. The total
wireless subscribers (GSM, CDMA & WLL (F)) base is more than 543.20 million
now. The wire line segment subscriber base stood at 37.16 million with a decline
of 0.13 million in Nov 2009.
The Mobile telecommunications system in India is the second largest in the world
and it was thrown open to private players in the 1990s. The country is divided into
multiple zones, called circles (roughly along state boundaries). Government and
several private players run local and long distance telephone services. Competition
has caused prices to drop and calls across India are one of the cheapest in the
world. The rates are supposed to go down further with new measures to be taken
by the Information Ministry. The mobile service has seen phenomenal growth
since 2000. In September 2004, the number of mobile phone connections has
crossed fixed-line connections. India primarily follows the GSM mobile system, in
the 900 MHz band. Recent operators also operate in the 1800 MHz band. The
dominant players are Airtel, Reliance, Vodafone, Idea cellular and BSNL/MTNL.
There are many smaller players, with operations in only a few states.
International roaming agreements exist between most operators and many foreign
carriers.

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Introduction of TATA DOCOMO:
Tata Teleservices Provides mobile services under 3 Brand names:

 Tata Indicom (CDMA Mobile operator)
 Tata DoCoMo (GSM Mobile operator)
 Virgin Mobile (CDMA Mobile operator)

Tata DoCoMo was formed in November 2008 as an alliance between Tata
Teleservices and NTT DoCoMo
Currently, Tata Docomo Mobile service is available Bihar & Jharkhand, Tamil
Nadu, Orissa, Andhra Pradesh, Karnataka, Kerala, Kolkata, Mumbai,
Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Haryana, Chennai,
Eastern Uttar Pradesh, Western Uttar Pradesh, Punjab, Rajasthan, West Bengal.
NTT DoCoMo holds 26 % stake in the jointly formed company. It has also
emerged as the first mobile operator in India to have re-introduced ‘per second’
pulse, after Loop Mobile (formerly BPL Mobile) discontinued their 'pay per
second' service which was introduced in 2004.From October 2009 TRAI
announced that TATA tele service is India's no.1 tele service brand.

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STUDY OBJECTIVES

• Statement of the problem:

Today, with the increase in number of mobile users, the competition between
mobile network service providers is also increasing drastically. Companies are
introducing many promotional pricing schemes to attract the customers and
increase their market share. Tata docomo came into the market with its
introductory pricing scheme of 1paise billing- 1p/sec both for local and STD. This
offer was a huge success and captured considerable amount of market share.

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The study deals with whether this scheme (promotional pricing) made the
customers switch their usage of their brand.
MANAGEMENT QUESTION

Management question is a useful way to approach the research process is to state
the basic dilemma that prompts the research and helps to develop it more specific.

• MANAGEMENT QUESTION OF OUR STUDY:

How do consumers evaluate and respond (switch or stick) to promotional
incentives with reference to Tata Docomo’s 1p/sec plan?

RESEARCH QUESTION

A Research Question is the hypothesis of choice that best states the
objective of the research study. The research question is one of the first
methodological steps the investigator has to take when undertaking research.
The research question must be accurately and clearly defined.

• RESEARCH QUESTION OF OUR STUDY:

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• What is the effect of TATA DOCOMO’s promotional pricing on different
customer segments?

INVESTIGATIVE QUESTIONS

Investigative questions are questions the researcher must answer to satisfactorily
arrived at a conclusion about the research question. To formulate them the
researcher takes a general research question and breaks it into more specific
questions about which to gather data. Investigative questions should be included in
the research proposal as they guide the development of the research design. They
are the foundation for creating the research data collection instrument.

• INVESTIGATIVE QUESTIONS OF OUR STUDY:

 Which customer segments are more favorable to TATA DOCOMO’s
promotional pricing?

 Do other service providers lose their potential customers due to TATA
DOCOMO’s promotional pricing?

• SCOPE OF THE STUDY:

The present study titled “A study on the effect of promotional pricing on
brand switching with reference to Tata Docomo’s 1p/sec plan.”

 Attempts to analyze the effect of promotional pricing on brand switching.
 Attempts to analyze which customer segments are more favorable to 1p/sec
plan.

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LITERATURE REVIEW

Promotional pricing:

Promotional pricing is a sales and marketing technique. It involves reducing
the price of a product or service to attract customers. This technique can be
effectively used across numerous industries including food services, cosmetics,
and household cleaning supplies.

Promotional pricing often involves reducing prices to unsustainably low
levels. In some cases, products and services may be sold at or below cost. A buy
one get one free scheme may even be used. When this is done, interest in goods
can be greatly increased; meaning sales are also likely to increase dramatically.

This technique may be used by retailers or by producers. When it is used by
retailers, the goal is generally to attract attention to the business and to attract
regular customers. When the technique is used by producers, the goal is generally
to attract customers to a product or brand and to encourage brand loyalty.
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For example, a clothing store may offer clothing at prices that are below the
manufacturer’s suggested retail price. Shoppers, attracted by the low prices, are
likely to remember that store and visit again when they have apparel needs. A
cosmetic company may offer two compacts of eye shadow for the price of one.
When women need eye shadow again, it is hoped they will be motivated to buy
that brand again.

What customers are likely to find when they return for a future purchase is
that the prices of these goods have increased. Promotional pricing is usually
temporary. This means that in most cases, quality and experience need to
complement this pricing strategy. If it does not, and customers do not feel there is
anything significant about the product or service, it can be very difficult to get
them to purchase it at higher prices.

There are other reasons the use of promotional pricing must be used wisely.
If it is not, it can amount to a company losing a great deal of money without the
expected return. If the technique is used too often, for example, consumers may
anticipate the price lowering and refuse to buy goods at the normal price.

Promotional pricing is typically used when new products are being
introduced to the market. It can also be used to stimulate demand for products or
services with lagging demand. This strategy of price targets buyers who are
looking for the deal.

Some examples of promotional pricing are:

• Special event pricing. Pricing that is 'special' (or lowered) for special
events such as Christmas, Easter, Valentine's Day, Mother's Day, Super
Bowl, Thanksgiving and Back to School.
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• Rebate programs. Such as a rebate or allowance when buying a home and
the seller offers a move-in allowance, or a carpet replacement or renovation
allowance or a rebate for all cash, no financing, and purchases of big ticket
items like cars.
• Low or no-interest financing. A number of furniture stores will advertise
no-interest financing loans for furniture purchases. Car dealerships also offer
these pricing programs - often for last year's models. This strategy has been
a sales success for a number of industries in the past, be careful how you use
it though as consumers are becoming more sensitive to the true value of the
strategy.
• Buy One, Get One free or Two for the Price of One. If product costs are
low, and price includes a healthy profit margin, this may be a good strategy
to use if you have an overabundance of inventory. Even better if competitive
pricing comparisons result in your product offer being the better deal.
• Extended payment terms. This can also be viewed as a hold and pay, or
lay-away, pricing model. You typically pay a deposit and pay over time.
You do not get the product until paid up. The renovation and construction
industry do a variation on this strategy: you usually are required to pay one
third of the projected cost for the project up-front - this is to help pay for the
materials; one third about half way through the project and the balance on
completion. For the business-to-business market, the extended payment
terms might be pays in net 30 days, or net 60 days or a discount if you pay
in net 15 days. There are many variations to this pricing strategy.
• No charge or low-cost warranties. If a business has a good warranty or
return program (good in the sense that there are no, or few, product failures
and no, or few, product returns), then it is not a high cost investment for
them to offer low cost or no cost warranties. Buyers view these types of
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promotional prices very positively because they believe it shows that the
business has high confidence in the product's performance.

The promotional pricing strategy has been over-used in the retail markets and
buyers have developed a healthy skepticism about the reality of the 'deal'. One of
the most often used promotional pricing strategies is the "Going out of Business"
sale; the sale seems to last for years and the business eventually just 'goes out of
business' at that location but then restarts elsewhere.

Brand switching:

Brand switching is the process of choosing to switch from routine use of one
product or brand to steady usage of a different but similar product. Much of the
advertising process is aimed at encouraging brand switching among consumers,
thus helping to grow market share for a given brand or set of brands.

Convincing consumers to switch brands is sometimes a difficult task. It is
not unusual for customers to build up a great deal of brand loyalty due to such
factors as quality, price, and availability. To encourage switching brands,
advertisers will often target these three areas as part of the strategy of encouraging
brand switching.

Price is often an important factor to consumers who are tight budgets. For
this reason, advertisers will often use a price comparison model to entice long time
users of one brand to try a new one. The idea is to convince the end user that it is
possible to purchase the same amount of product while spending less money.
Ideally, this means that the consumer can use the savings for other purchases,

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possibly even a luxury item of some sort. The idea of more discretionary resources
in the monthly budget can be an effective in the encouragement of jumping brands.

However, price is not always enough to encourage brand switching. When
this is the case, comparing the quality of one brand to another is a common
approach. With this model, the motivation is that the new Brand B will work just
as well as the more established Brand A. When coupled with a cost savings, the
comparison of quality can often sway long time consumers at least long enough to
give the newer product a try.

There are consumers who are less concerned with cost. For these users, the
approach is to present the new brand as being of superior quality to the established
brand. Essentially, this means demonstrating that the new brand can do everything
the older brand can do, plus a little more. For example, a product that can be used
to dust wood, glass, and plastic surfaces may be more attractive than a product that
is formulated for glass only. The implication is that the one product can take the
place of three products, and may motivate brand switching.

Article reviews:

Assessing the impact of a very successful price promotion on brand,
category and competitor sales:

Price promotions are endemic in consumer packaged goods markets. In
1987, Abraham and Lodish reported that many consumer goods categories sold 90
percent of their volume on deal (Abraham and Lodish, 1987).Ten years later, trade
promotions reportedly accounted for 50 per cent of the marketing budgets of US
consumer goods firms (Mela et al., 1997). It is well known that price promotions
produce a short-term volume gain for the brand being promoted (e.g. Blattberg and
Neslin, 1990). Previous research has also indicated that price promotions are
unlikely to have any long-term positive impact for the brand by attracting new
buyers who repeat-buy, as per Ehrenberg et al. (1994). This promotion, with its
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massive volume uplift and temporary category expansion, did not yield any longer-
term benefits for the brand. The implications for manufacturers are that price
promotions, even those that engender massive short-term volume uplifts, do not
appear to induce new buyers to the brand who buy again later. This means that the
evaluation of such promotions should be strictly based on the immediate effect on
profit margins. This criterion is likely to show price promotions, particularly deep
ones, in a negative light. Dickson (1997, Chapter 16) shows that it is virtually
impossible to make additional contribution to profit from deep price reductions.
From the manufacturer’s perspective, however, this research also showed no
appreciable long-term negative impact on brand sales. If there were such negative
effects, the profit potential from temporary price reductions would be even more
tenuous than currently thought. This is not to say that price promotions do not or
cannot have longer-term negative effects. Evidence shows that repeated use of
promotions can lower reference prices (Kalyanaram and Winer, 1995) and induce
habitual deal-buying (e.g. Blattberg and Neslin, 1990, Chapter 5; Mela et al., 1997,
1998). For managers concerned about the effects on their brands from competitor’s
promotions, this analysis demonstrates that in grocery goods, unpromoted brands
may still sell at approximately normal volume levels even when a competing brand
is being promoted and enjoying a massive sales uplift. The possible problem for
competitor brands in this case appeared to be the longer-termcategory effects. This
massively successful promotion for one brand reduced the total category sales for
the retailer that ran it, for approximately ten weeks following the promotion. This
means that for ten weeks after the promotion, competitor brands had a smaller
market from which to obtain sales in retailer. It is indeed surprising that given this
contraction in category sales, sales for brand X itself did not exhibit a post-
promotion trough. For the retailer, there are also clear implications for current
practice. The results suggest that the benefits to grocery retailers of low-price, high
uplift promotions should be evaluated over the longer-term. Due to the longer-term
negative effect on the category, the total extra volume to the retailer was
considerably less than what immediate reporting would indicate. Indeed, if the
retailer had reduced its own margins during the promotion the overall profit result
might have been negative. This is because it has simply transferred a considerable
amount of normal price sales in future periods to discounted sales (with possibly
lower margins) in the period of the promotion.

Dynamics of price sensitivity among mobile service customers:

Price sensitivity is one of the key factors affecting to companies pricing
choices. Yet in mobile services sector business practitioners are facing problems in
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pricing decisions as they are short of knowledge on their customers’ price
sensitivity levels and dynamics. Price has been observed as an important element
affecting the diffusion of new products and services, but pricing of a new product
or service is particularly difficult (Foxall, 1984). To enable accurate pricing
decisions for new products or services, a detailed knowledge on the potential
customers’ perceptions and characteristics is needed. However, though it is known
that price is an integral part of diffusion enhancement activities, we have a very
limited knowledge on its actual effects on the diffusion of mobile services. It is
also more or less unknown how customers of mobile services perceive the charged
prices and what are the dynamics affecting to price perceptions. The perceived
price is formed from the bases of a customer’s experience about mobile services
and in comparison to prices of other optional service delivery channels. Further
challenges for pricing of mobile services is brought by the fast evolving new
wireless technologies and business practices. In this new service environment
traditional pricing strategies have brought unsatisfactory results, a need to develop
pricing has generated. For that purpose it is necessary to study the customers’
subjective price perceptions to enable the creation of more effective pricing
schemes.
In this study the researcher concentrates on studying how mobile service
customers perceive the prices, do customers differ in their price sensitivity levels,
and could customers’ price sensitivity levels be accurately predicted. For these
purposes we have divided mobile service customers into three segments which are
believed to differ in terms of their price sensitivities:
1 mobile segment;
2 combined segment; and
3 fixed-line segment
At an aggregated level, price sensitivity is often used as a synonym for price
elasticity (Link, 1997) and thus also in this study these two terms are seen to as
synonyms. Sensitivity of demand refers to how volume-sensitive a product or a
service is to price changes. Sensitivity represents a valuable strategic tool in
pricing (Tucker, 1966).Price sensitivity on the individual adopter level appears to
be equivalent to the concept of price consciousness for a potential buyer of any
product. Price consciousness has been defined as:
. . . the degree to which he or she is unwilling to pay a high price for a product and
willing to refrain from buying a product whose price is unacceptably high
(Monroe, 1990).Price consciousness is related to the price acceptability level as
well as to the width of latitude of price acceptability(Lichtenstein et al., 1988).
Individuals, who are price conscious, are generally not willing to pay high prices
for the product in question. Furthermore, the range of acceptable prices is
relatively narrow for price conscious individuals (Link, 1997).In studies on price
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sensitivity in telecommunication industry three different consumer segments have
been identified (e.g. Kollmann, 2000). It has been found that in both ends of
pricing (high-end versus low-end) the price sensitivity is substantially lower, in
other words insensitive. Influencing on these two market segments with pricing
would be most probably ineffective. Thus, for these market segments it would be
most effective to pursue quality-focused marketing strategies (e.g. improvement of
service/speech quality). Along with consumer attitudes and shopping orientation,
there has been significant weight given to price perceptions of consumers, and its
impact on the adoption of product and service innovations.

The price/acceptance function: perspectives of a pricing policy in
European telecommunication markets

Innovation management success for telecommunication products depends not only
on sales, but also, and primarily so, on actual call times by subscribers (e.g. on
their mobile phones). It is not only the purchase price that plays a major role for
this type of service, but also call and rental charges. This study investigates two
potential subscribers' decisions, using the graphic device of a price/acceptance
function and a charge/acceptance function. The first decision is to buy
telecommunications products (accepting the purchase price), and the second
decision is to use these products (accepting the charges for using the product).
In particular, an attempt is made to describe the general profile of the
price/acceptance function through considerations of plausibility. Based on an
empirical experiment, conclusions are drawn for the pricing policy of
telecommunication products. The policy emerging is one of abandoning fixed
basic charges and of giving away end-user sets (e.g. mobile phones) free of charge.

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The price and acceptance pricing:

The charges/acceptance function:

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Switching costs and consumer behavior: implications for
telecommunications regulation
Switching patterns provide an important indicator that the demand-side of a market
is well-developed and that consumers are sufficiently empowered to participate
actively. The motivation to switch is generally a function of consumers’ estimate
of the performance of their existing supplier; and whether or not they believe there
are better alternatives available from other suppliers on the aspects of service that
matter to them. If the market is perceived to be undifferentiated and/or if their
current supplier is perceived to be the best on the market on the criteria that are
important, there is no expected benefit from switching. The ability and willingness
of consumers to switch is critically important. If switching is discouraged or
impeded this could impact not only on the demand-side but also potentially raise
supply side barriers (Barrow, 2007). This is because new entrants could be
deterred from entering the market in the belief that it will be difficult to persuade
consumers to switch from their existing provider. This could diminish the
effectiveness of competition and serve to limit the benefits that consumers would
otherwise derive from it. It is important to note, however, that switching is not the
only measure of a vibrant demand-side, nor is switching necessarily always in a
consumer’s best interests. The decision to engage in co-ordinate information
gathering that will support the decision to switch or not to switch is also important.
If a consumer is satisfied with a current provider, switching is not necessarily an

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improvement. Moreover, choosing a new service does not necessarily mean
switching provider.

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METHODOLOGY

RESEARCH METHODOLOGY

Research simply means a search for facts, answers to questions and solution to
problem. It is a purposive investigation, an organized inquiry. It seeks to find
explanations to unexplained phenomenon, to clarify the doubtful propositions and
to correct the misconceived facts. In order to comply with our objective and test
our research hypotheses we design a study based on the effect of corporate social
responsibility on the consumer purchase behavior.

• TYPE OF RESEARCH
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Descriptive Research

Descriptive research, also known as statistical research, describes data and
characteristics about the population or phenomenon being studied. Descriptive
research answers the questions who, what, where, when and how.

Although the data description is factual, accurate and systematic, the research
cannot describe what caused a situation. Descriptive research can be said to have a
low requirement for internal validity.

Descriptive research deals with everything that can be counted and studied. But
there are always restrictions to that. Your research must have an impact to the lives
of the people around you.

• TYPE OF SAMPLING

Sampling is the use of a subset of the population to represent the whole population
for the purpose of. Probability sampling, or random sampling, is a sampling
technique in which the probability of getting any particular sample may be
calculated. For the present study we have taken convenience sampling, a type of
non random/ non probability sampling techniques.

• SAMPLE SIZE

The sample size for our research is 100 which includes sample of age groups
below 30 and above 30.
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DATA COLLECTION-

Data collection is the process of collecting information for use in evaluation. The
most common methods are surveys, interviews, pre and post-testing, professional
observation, self-report and review of existing records. The gathering of
information (figures, words or responses) from administered questionnaires that
describe some situation from which conclusions can be drawn. It is also the
process of gathering and measuring information on variables of interest, in an
established systematic fashion that enables one to answer stated research
questions, test hypotheses, and evaluate outcomes. There are two types of data in
data collection:-

• Primary Data-it is the first hand information that is collected for the survey.
It includes the behavioral responses, measuring attitudes, observation.

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• Observation

Consumer’s purchasing behavior of FMCG products

(P&G, ITC, Britannia, HUL)

• Questionnaire: Structured and unstructured

• Secondary data- a secondary source is a document or recording that relates
or discusses information originally presented elsewhere. A secondary source
contrasts with a primary source, which is an original source of the
information being discussed. Secondary sources involve generalization,
analysis, synthesis, interpretation, or evaluation of the original information.

• Literature review

DATA ANALYsIs AND
INTERpRETATION
Page | 26

Data analysis:

TABLE 1: AGE OF THE RESPONDENT

Valid Cumulative
Respondents Frequency Percent Percent Percent
<30 70 70.0 70.0 70.0
>30 30 30.0 30.0 100.0
Total 100 100.0 100.0

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>30

<30

Inference:

Out of 100 respondents 70% falls under the age group of less than 30 and 30%
falls under the age group of above 30.

TABLE 2: GENDER OF THE RESPONDENT

Frequen Valid Cumulativ
cy Percent Percent e Percent
Vali male 47 47.0 47.0 47.0
d fema
53 53.0 53.0 100.0
le
Total 100 100.0 100.0

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male

female

Inference:

Out of 100 respondents, 47% are male and 53% female.

Table 3: Occupation of the respondents

Occupation cy Percent Percent e Percent
busines
12 12.0 12.0 12.0
s
housew
7 7.0 7.0 19.0
ife
job 11 11.0 11.0 30.0
student 70 70.0 70.0 100.0
Total 100 100.0 100.0

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80

60

40

20

0
business housewif job student

Inference:

Out of 100 respondents, 12% comes under the category “business”, 7% are house
wives, 11% comes under the category “job”, and 70% are “students”.

Table 4: mobile service the respondent uses

Mobile Frequen Valid Cumulative
service cy Percent Percent Percent
Airtel 37 37.0 37.0 37.0
Vodaf
13 13.0 13.0 50.0
one
idea 9 9.0 9.0 59.0
cell
1 1.0 1.0 60.0
one
relian
6 6.0 6.0 66.0
ce
doco
34 34.0 34.0 100.0
mo
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Total 100 100.0 100.0

40

30

20

10

0
airtel vodafone idea cellone reliance docomo

Inference: Out of 100 respondents the mobile users of Airtel are 37%, Vodafone
13%, idea 9%, cell one 1%, reliance 6% and docomo 34%

Table 5: purpose of usage of mobile service

Valid busin
3 3.0 3.0 3.0
ess
perso
64 64.0 64.0 67.0
nal
both 33 33.0 33.0 100.0
Total 100 100.0 100.0

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70

60

50

40

30

20

10

0
business personal both

Inference:

Out of 100 respondents, 3% use it for business, 64% for personal use and 33% for
business as well as for personal use.

Table 6: spending per month

Valid <100 14 14.0 14.0 14.0
100-3
59 59.0 59.0 73.0
00
301-5
18 18.0 18.0 91.0
00
>500 9 9.0 9.0 100.0
Total 100 100.0 100.0

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70

60

50

40

30

20

10

0
<100 100-300 301-500 >500

Inference:

In a month Out of 100 respondents, 14% spend less than 100, 59% spend between
the range of 100- 300, 18% spend between the range of 301-500 and 9% spend
more than 500.

Table 7: airtime per day

Valid <30mi
31 31.0 31.0 31.0
n
30min-
45 45.0 45.0 76.0
2hrs
2hrs-5
18 18.0 18.0 94.0
hrs
>5hrs 6 6.0 6.0 100.0
Total 100 100.0 100.0

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50

40

30

20

10

0
<30min 30min-2hrs 2hrs-5hrs >5hrs

Inference:

Out of 100 respondents, 31% talk for less than 30 min per day, 45% talk between
30 min to 2 hours, 18% talk between 2 hours to 5 hours and 6% for more than 5
hours.

Table 8: factor considered while switching brand

Valid price 45 45.0 45.0 45.0
good
network 48 48.0 48.0 93.0
coverage
customer
6 6.0 6.0 99.0
service
other
1 1.0 1.0 100.0
factors
Total 100 100.0 100.0

Page | 34

60

50

40

30

20

10

0
price customer service
good netw ork coverag other factors

Inference:
Out of 100 respondents, 45% consider price, 48% good network coverage, 6%
customer service and 1% other factors (location of dealers, the service providers
used by family members) as an important factor while switching their brand.

Table 9: Docomo’s 1p/sec plan is better than other services (local)

Valid yes 38 38.0 38.0 38.0
no 43 43.0 43.0 81.0
can't
19 19.0 19.0 100.0
say
Total 100 100.0 100.0

Page | 35

50

40

30

20

10
yes no can't say

Inference:
Out of 100 respondents, 38% think, while 43% don’t, 19% can’t say that
Docomo’s 1p/sec plan is better than other services providers for local call rates.

Table 10: Docomo’s 1p/sec plan is better than other services (STD)

Valid yes 47 47.0 47.0 47.0
no 35 35.0 35.0 82.0
can’t
18 18.0 18.0 100.0
say
Total 100 100.0 100.0

Page | 36

50

40

30

20

10
yes no can't say

Inference:
Out of 100 respondents, 47% think, while 35% don’t, 18% can’t say that
Docomo’s 1p/sec plan is better than other services providers for STD call rates.

Table11: use of 1p/sec plan

Vali yes 51 51.0 51.0 51.0
d no 49 49.0 49.0 100.0
Tota
100 100.0 100.0
l

Page | 37

51.5

51.0

50.5

50.0

49.5

49.0

48.5
yes no

Inference:
Out of 100 respondents, 51% use, while 49 don’t use 1p/sec plan

Table12: if yes which service

Valid Cumulative
Frequency Percent Percent Percent
Airtel 14 14.0 27.5 27.5
Vodafon
1 1.0 2.0 29.4
e
reliance 3 3.0 5.9 35.3
docomo 32 32.0 62.7 98.0
others 1 1.0 2.0 100.0
Total 51 51.0 100.0

Page | 38

if yes which which service
40

30

20

10

0
airtel vodafone reliance docomo others

Inference:
Out of 51 respondents who use 1p/sec scheme, 14% use Airtel, 1% use Vodafone,
3% use reliance, 32% use docomo and 1% use other network services.

Table13: if not interested in 1p/sec plan?

Valid yes 20 20.0 40.8 40.8
no 29 29.0 59.2 100.0
Total 49 49.0 100.0
Missi Syste
51 51.0
ng m
Total 100 100.0

Page | 39

if no - interested in 1p/sec plan?
30

20

10

0
yes no

Inference:
Out of 49 respondents, who don’t use 1p/sec scheme 20% are interested to opt
1p/sec plan while 29% are not.

Table14: if interested, which service

Valid Cumulativ
Respondents Frequency Percent Percent e Percent
Airtel 8 8.0 40.0 40.0
Vodafone 4 4.0 20.0 60.0
Idea 1 1.0 5.0 65.0
cell one 1 1.0 5.0 70.0
docomo 5 5.0 25.0 95.0
others 1 1.0 5.0 100.0
Total 20 20.0 100.0

Page | 40

10

8

6

4

2

0
airtel vodafone idea cellone docomo others

Inference:
Out of 20 respondents, who don’t use this scheme but are interested in using this
scheme, 8% prefer Airtel, 4% prefer Vodafone, 1% prefer idea, 1% prefer cell one,
5% prefer docomo, the remaining 1% prefer others (Aircel)

Table15: rating for docomo: beneficiary in terms of tariffs


Page | 41

Valid strongly
4 4.0 4.0 4.0
disagree
disagree 5 5.0 5.0 9.0
neither
agree nor 30 30.0 30.0 39.0
disagree
agree 50 50.0 50.0 89.0
strongly
11 11.0 11.0 100.0
agree
Total 100 100.0 100.0
60

50

40

30

20

10

0
strongly disagree neither agree nor di strongly agree
disagree agree

Inference:
Out of 100 respondents, 4% strongly disagree, 5% disagree, 30 %are neutral, 50%
agree, 11% strongly agree that Docomo’s 1p/sec plan is beneficiary in terms of
tariffs.
Table16: rating for Docomo’s tactic to attract customers (1 p/sec plan)


Page | 42

Valid strongly
2 2.0 2.0 2.0
disagree
disagree 1 1.0 1.0 3.0
neither
agree nor 38 38.0 38.0 41.0
disagree
agree 25 25.0 25.0 66.0
strongly
34 34.0 34.0 100.0
agree
Total 100 100.0 100.0

50

40

30

20

10

0
disagree agree

Inference:
Out of 100 respondents, 2% strongly disagree, 1% disagree, 38 %are neutral, 25%
agree, 34% strongly agree that Docomo’s 1p/sec plan as a tactic to attract
customers.
Table17: rating for Airtel


Page | 43

Valid excell
37 37.0 37.0 37.0
ent
good 53 53.0 53.0 90.0
poor 5 5.0 5.0 95.0
no
opinio 5 5.0 5.0 100.0
n
Total 100 100.0 100.0
60

50

40

30

20

10

0
excellent good poor no opinion

Inference:
Out of 100 respondents, 37% feel that Airtel’s pricing scheme are excellent, 53%
feel it’s good, 5% feel it is poor, while the remaining 5% have no opinion.

Table18: rating for docomo


Page | 44

Valid excell
39 39.0 39.0 39.0
ent
good 48 48.0 48.0 87.0
poor 5 5.0 5.0 92.0
no
opinio 8 8.0 8.0 100.0
n
Total 100 100.0 100.0

60

50

40

30

20

10

0

Inference:
Out of 100 respondents, 39% feel that Docomo’s pricing scheme are excellent,
48% feel it is good, 5% feel it is poor, while the remaining 8% have no opinion.

Table19: rating for Aircel


Page | 45

Valid excell
3 3.0 3.0 3.0
ent
good 28 28.0 28.0 31.0
poor 56 56.0 56.0 87.0
no
opinio 13 13.0 13.0 100.0
n
Total 100 100.0 100.0

60

50

40

30

20

10

0

Inference:
Out of 100 respondents, 3% feel that aircel’s pricing scheme are excellent, 28%
feel it is good, 56% feel it is poor, while the remaining 13% have no opinion.

Table20: rating for uninor


Page | 46

Valid excell
13 13.0 13.0 13.0
ent
good 38 38.0 38.0 51.0
poor 35 35.0 35.0 86.0
no
opinio 14 14.0 14.0 100.0
n
Total 100 100.0 100.0

40

30

20

10

0

Inference:
Out of 100 respondents, 13% feel that uninor’s pricing scheme are excellent, 38%
feel it is good, 35% feel it is poor, while the remaining 14% have no opinion.

Table21: price is considered as an important factor while switching brand

Frequen Valid Cumulative
cy Percent Percent Percent
strongly
1 1.0 1.0 1.0
disagree
Page | 47

disagree 3 3.0 3.0 4.0
neither
agree nor 7 7.0 7.0 11.0
disagree
agree 51 51.0 51.0 62.0
strongly
38 38.0 38.0 100.0
agree
Total 100 100.0 100.0
60

50

40

30

20

10

0
disagree agree

Inference:

Out of 100 respondents, 38% strongly agree, 51% agree, 7%neither agree nor
disagree, 3% disagree and 1% strongly disagree that they consider price as an
important factor while switching their brand.

Table22: consideration of call tariffs while switching brand

Page | 48

Freque Valid Cumulative
ncy Percent Percent Percent
not very
6 6.0 6.0 6.0
important
not important 5 5.0 5.0 11.0
neither
important nor 14 14.0 14.0 25.0
not important
important 26 26.0 26.0 51.0
very important 49 49.0 49.0 100.0
Total 100 100.0 100.0

60

50

40

30

20

10

0
not very important neither important no very important
not important important

Inference:
out of 100 respondents, 6% consider call tariffs as not very important, 5%
consider as not important while 14% consider neither important nor not important,
26% consider as important, 46% consider it as very important while switching
brands.
Table23: consideration of sms tariffs while switching brand

Page | 49

Freque Perce Valid Cumulative
ncy nt Percent Percent
not very
8 8.0 8.0 8.0
important
not important 10 10.0 10.0 18.0
neither
important nor 36 36.0 36.0 54.0
not important
important 20 20.0 20.0 74.0
very important 26 26.0 26.0 100.0
Total 100 100.0 100.0

40

30

20

10

0

Inference:
brands.
Table24: consideration of sim prices while switching brand

Page | 50

Freque Valid Cumulative
ncy Percent Percent Percent
not very
26 26.0 26.0 26.0
important
not important 25 25.0 25.0 51.0
neither
important nor 25 25.0 25.0 76.0
not important
important 18 18.0 18.0 94.0
very
6 6.0 6.0 100.0
important
Total 100 100.0 100.0

Page | 51

30

20

10

0

Inference:
brands.
Table 25: cross tabulation of usage of 1 p/sec and consideration of tariff s
while switching brand:

H0: There is no significant relationship between the usage of 1 p/sec plan and
consideration of call tariffs while switching brand.

consideration of call tariffs while switching brand Total
neither
important
not very not nor not importa very
important important important nt important
use of yes
1p/sec 3 3 8 17 20 51
plan
no 3 2 6 9 29 49
Total 6 5 14 26 49 100
Page | 52

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 4.562a 4 .335
Likelihood Ratio 4.612 4 .329
Linear-by-Linear
1.253 1 .263
Association
N of Valid Cases 100
a. 4 cells (40.0%) have expected count less than 5. The
minimum expected count is 2.45.

From the above table, minimum expected count is less than the value. Therefore
the null hypothesis is not accepted.

From the table and from the test we can say that the there is significant relationship
between the usage of 1 p/sec plan and consideration of call tariffs while switching
their brands.

Table 26: Usage of 1p/sec plan and price is consideration as an important
factor while switching brand

H0: there is no significant relationship between the usage of 1 p/sec plan and
consideration of price while switching brand

price is considered as an important factor while
switching brand Total
neither
strongly disagre agree nor strongly
disagree e disagree agree agree
use of yes
1p/sec 1 0 6 31 13 51
plan
no 0 3 1 20 25 49
Total 1 3 7 51 38 100
Page | 53

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)
Linear-by-Linear
3.377 1 .066
Association
minimum expected count is .49.

the null hypothesis is not accepted. Therefore it is inferred that here is a significant
relationship between considering price as an important factor while switching
brand and the usage of 1 p/sec plan.

Table 27: purpose of usage of mobile service * rating for docomo

rating for docomo
no Total
excellent good poor opinion
purpose of business 1 2 0 0 3
usage of personal 22 33 3 6 64
mobile both
service
16 13 2 2 33

Total 39 48 5 8 100

Page | 54

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)
Linear-by-Linear
.653 1 .419
Association
minimum expected count is .15.

Inference:

the null hypothesis is not accepted. Therefore it is inferred that there is a
significant relationship between purpose of usage of mobile service and rating for
docomo.

Page | 55

FINDINGs

Findings:

• Among the sample, Tata docomo stands second among various brands used
by the respondents.

• Most of the respondents spend on an average of Rs.100- 300 per month and
talk between 30 min to 2 hours per day.

Page | 56

• While switching their brands, customers mostly consider good network
coverage followed by price.

• On an average, half of the samples feel Docomo’s 1p/sec plan is good for
local and STD call rates.

• Among half of the respondents, who use 1p/sec plan docomo stands first
followed by Airtel.

• Among the remaining half who are not using and interested to use in the
recent future, docomo stands second.

• More than half of the samples feel that Docomo’s pricing scheme is
beneficiary in terms of tariffs.

• Most of the respondents agreed that price is considered as an important
factor while switching their brand.

• While switching brand call tariffs, sms charges are more considered than the
sim rates.

Page | 57

CONCLUsION

Conclusion:

It is a rewarding exercise “to study the promotional pricing vs. brand switching
with reference to 1p/sec scheme of Tata docomo”. From the overall analysis of the

Page | 58

study it is noted that promotional pricing plays an important role while brand
switching. But it is also observed that this scheme(promotional pricing) is more
favorable among the customer segments who talk and spend more.

Page | 59

AppENDIx

Bibliography:

Websites and links:

www.tatadocomo.com
Page | 60

http://www.telesutra.com/2009/09/25/indian-telecom-update-for-august-2009/

http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-
base-soars-to-543m-as-mobile-cos-add-record-1765m-in-
Nov/articleshow/5370510.cms

http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/712/pr23dec09no
79.pdf

Books:

 Marketing Research, Rajendra Nargundkar- Tata McGraw-Hill Publishing
House,2003

 Marketing Management-A South Asian Perspective, Kotler, Keller, Koshy
and Jha- Pearson Education, 13th edition.

 Business Research Methods, Donald R. Cooper and Pameela S. Schindler-
Tata McGraw-Hill Publishing House,2003

Journals:

 Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 ·
pp. 303–314
 Journal of Product & Brand Management, Volume 13 · Number 5 · 2004 ·
pp. 303–314
 European Journal of Innovation Management, Volume 3 . Number 1 . 2000 .
pp. 7-14
 VOL. 10 NO. 4 2008, pp. 13-29, Emerald Group Publishing Limited, ISSN
1463-6697

Page | 61

Questionnaire:
Age: ___________ Gender: _________ Occupation: _____________

1. Which mobile service do you use?

a. Airtel ( ) b. Vodafone ( ) c. Idea ( )

d. Cell one ( ) e. Reliance ( ) f. TATA DOCOMO ( ) g. Uninor ( )

h. TATA Indicom ( ) i. Other specify.................

2. What is the purpose of your mobile service?
Page | 62

a. Business ( ) b. Personal ( ) c. Both ( )

3. How much do you spend on mobile service per month?

a. <100 ( ) b. 100-300 ( ) c. 301-500 ( ) d. >500 ( )

4. How much air time you spend daily on your phone?

a. >30 min ( ) b. 30min -2hrs ( ) c. 2hrs – 5hrs ( ) d. >5 hrs ( )

5. What is the most important factor you consider when you choose mobile service
provider?

a. Price ( ) b. Good network coverage ( ) c. Customer service ( )

d. Location of dealer ( ) e. Other please specify: _____________

6. Do you think 1paise/second Tata DOCOMO plan is better than any other
services (for local call rates)?

a. Yes ( ) b. No ( ) c. Can’t say ( )

7. Do you think 1paisa/second Tata DOCOMO plan better than other offers of
other network providers (for STD call rates)?

a. Yes ( ) b. No ( ) c. Can’t say ( )

8. Are you using any of the 1 paisa/ sec scheme?

a. Yes ( ) b. No ( )

9. If yes please specify which mobile service? __________________

10. If no, then are you interested in 1 paisa/second scheme?

a. Yes ( ) b. No ( )

11. If you are interested then specify which mobile service would you prefer?

Page | 63

Please specify: ____________________

12. What is your opinion about TATA DOCOMO’s one paisa per second billing?
Rate 1 to 5 for the following attributes (1 – strongly agree 2 – agree 3 – neutral 4 –
disagree 5 – strongly disagree)

a. Beneficiary in terms of tariffs ___________

b. As a tactic to attract customers ____________

13. Rate the pricing policy of following telecom services.

(1-excellent 2-good 3- poor)

a. Airtel (RS 22 with validity period 1 year-1 p/sec):___

b. Tata DOCOMO (Rs 49 with life time validity with sim):___

c. Aircel (Rs 47 with validity 1 month):___

d. Uninor (Rs. 110 sim + 29 p/min offer): ____

14. While switching the brand, you consider price (call n sms rates) as an
important factor

a. Strongly agree ( ) b. Agree ( ) c. Neither agree nor disagree ( )

d. Disagree ( ) e. strongly disagree ( )

15. Rank the following attributes from 1 to 5(1- not very important to 5-very
important) when switch your brand

a. Call tariffs ________

b. Sms tariffs _______

c. Sim prices ________

Page | 64

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