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

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TABLES
S.NO 1 2 3 4 5 6 7 8 TITLE OF THE TABLE AGE OF THE RESPONDANT GENDER OF THE RESPONDENT OCCUPATION OF THE RESPONDENT MOBILE SERVICE THE RESPONDENT USES PURPOSE OF USING THE MOBILE SERVICE SPENDING PER MONTH AIRTIME PER DAY FACTOR CONSIDERED MOST WHILE SWITCHIG BRAND DOCOMOS 1 P/SEC PLAN IS BETTER THAN OTHER SERVICES (LOCAL RATES) DOCOMOS 1 P/SEC PLAN IS BETTER THAN OTHER SERVICES (STD RATES) USAGE OF 1 P/SEC PLAN WHICH SERVICE IF USING 1 P/SEC SCHEME INTERESTED IN 1 P/SEC SCHEME IF INTERESTED WHICH SERVICE

PAGE. NO

10

11 12 13 14

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15

DOCOMOS1P/SEC -BENEFICIARY IN TERMS OF TARIFFS TATA DOCOMOS 1P/SEC PLAN- AS A TACTIC TO ATTRACT CUSTOMERS PRICING POLICY OF AIRTEL PRICING POLICY OF DOCOMO PRICING POLICY OF AIRCEL PRICING POLICY OF UNINOR PRICE IS CONSIDERED AS AN IMPORTANT FACTOR WHILE SWITCHINGBRAND CONSIDERATION OF CALL TARIFFS WHILE SWITCHING BRAND CONSIDERATION OF SMS CHARGES WHILE SWITCHING BRAND CONSIDERATION OF SIM RATES WHILE SWITCHING BRAND USAGE OF 1P/SEC PLAN- CONSIDERATION OF TARIFFS WHILE SWITCHING BRANDS USAGE OF 1 P/SEC PLAN- CONSIDERATION OF PRICE AS AN IMPORTANT FACTOR WHILE SWITCHING BRAND PURPOSE OF USAGE OF MOBILE SERVICE-RANKING OF DOCOMO

16

17 18 19 20

21

22

23

24

25

26

27

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INTRODUCTION

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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 Indias telecom network will overtake Chinas 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 Indias culturally diverse society, and to transform it into a country of technologically aware people. Modern growth: 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. Indias 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
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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.

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.

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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. 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 Docomos 1p/sec plan?
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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: What is the effect of TATA DOCOMOs 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.

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INVESTIGATIVE QUESTIONS OF OUR STUDY: Which customer segments are more favorable to TATA DOCOMOs promotional pricing? Do other service providers lose their potential customers due to TATA DOCOMOs 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 Docomos 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

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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. For example, a clothing store may offer clothing at prices that are below the manufacturers 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
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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.

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
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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 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"

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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, 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
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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 massive volume uplift and temporary category expansion, did not yield any longerterm 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.
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From the manufacturers 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 competitors 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 postpromotion 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 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
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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 customers 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 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,
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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 consumers 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
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satisfied with a current provider, switching is not necessarily an 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

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

DATA COLLECTIONData 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:Page | 26

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

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Data analysis and interpretation

Data analysis:
TABLE 1: AGE OF THE RESPONDENT Valid Cumulative Frequency Percent Percent Percent 70 70.0 70.0 70.0 30 30.0 30.0 100.0 100 100.0 100.0
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Respondents <30 >30 Total

>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 Cumulati Valid ve Percent Percent 47.0 47.0 53.0 100.0
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Vali d

Frequen cy Percent male 47 47.0 fema 53 53.0 le

Total

100

100.0

100.0

male female

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

Table 3: Occupation of the respondents Cumulati ve Percent 12.0 19.0 30.0

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Occupation busines s housew ife job

Frequen cy Percent 12 7 11 12.0 7.0 11.0

Valid Percent 12.0 7.0 11.0

student Total
80

70 100

70.0 100.0

70.0 100.0

100.0

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 service Frequen cy Percent Airtel 37 37.0 Vodaf 13 13.0 one idea 9 9.0 cell 1 1.0 one Valid Cumulative Percent Percent 37.0 37.0 13.0 9.0 1.0 50.0 59.0 60.0
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relian ce doco mo\ Total

40

6 34 100

6.0 34.0 100.0

6.0 34.0 100.0

66.0 100.0

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 Cumulati ve Percent 3.0 67.0 100.0
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Frequen cy Percent Valid busin ess perso nal both 3 64 33 3.0 64.0 33.0

Valid Percent 3.0 64.0 33.0

Total

100

100.0

100.0

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 Cumulati Valid ve Percent Percent 14.0 14.0 59.0 18.0 73.0 91.0
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Valid <100 100300 301500

Frequen cy Percent 14 14.0 59 18 59.0 18.0

>500 Total

9 100

9.0 100.0

9.0 100.0

100.0

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 Cumulati ve Percent 31.0 76.0 94.0
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Frequen cy Percent Valid <30mi n 30min2hrs 2hrs31 45 18 31.0 45.0 18.0

Valid Percent 31.0 45.0 18.0

5hrs >5hrs Total

50

6 100

6.0 100.0

6.0 100.0

100.0

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 Cumulati Valid ve Percent Percent 45.0 45.0 48.0 93.0
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Valid

price good network coverage

Frequen cy Percent 45 45.0 48 48.0

customer service other factors Total

60

6 1 100

6.0 1.0 100.0

6.0 1.0 100.0

99.0 100.0

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: Docomos 1p/sec plan is better than other services (local) Cumulati Valid ve Percent Percent 38.0 38.0 43.0 81.0 19.0 100.0
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Valid yes no can't

Frequen cy Percent 38 38.0 43 43.0 19 19.0

say Total

100

100.0

100.0

50

40

30

20

10 yes no can't say

Inference: Out of 100 respondents, 38% think, while 43% dont, 19% cant say that Docomos 1p/sec plan is better than other services providers for local call rates.

Table 10: Docomos 1p/sec plan is better than other services (STD) Cumulati Valid ve Percent Percent 47.0 47.0 35.0 82.0 18.0 100.0
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Valid yes no cant

Frequen cy Percent 47 47.0 35 35.0 18 18.0

say Total
50

100

100.0

100.0

40

30

20

10 yes no can't say

Inference: Out of 100 respondents, 47% think, while 35% dont, 18% cant say that Docomos 1p/sec plan is better than other services providers for STD call rates.

Table11: use of 1p/sec plan Cumulati Valid ve Percent Percent 51.0 51.0 49.0 100.0 100.0
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Frequen cy Percent Vali yes 51 51.0 d no 49 49.0 Tota 100 100.0

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 dont use 1p/sec plan

Table12: if yes which service Valid Percent 27.5 2.0 Cumulative Percent 27.5 29.4
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Airtel Vodafon e

Frequency Percent 14 14.0 1 1.0

reliance docomo others Total

3 32 1 51

3.0 32.0 1.0 51.0

5.9 62.7 2.0 100.0

35.3 98.0 100.0

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? Cumulati Valid ve Percent Percent 40.8 40.8
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Valid

yes

Frequen cy Percent 20 20.0

Missi ng Total

no Total Syste m

29 49 51 100

29.0 49.0 51.0 100.0

59.2 100.0

100.0

if no - interested in 1p/sec plan?

30

20

10

0 yes no

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

Table14: if interested, which service Valid Cumulativ Frequency Percent Percent e Percent 8 8.0 40.0 40.0 4 4.0 20.0 60.0
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Respondents Airtel Vodafone

Idea cell one docomo others Total

1 1 5 1 20

1.0 1.0 5.0 1.0 20.0

5.0 5.0 25.0 5.0 100.0

65.0 70.0 95.0 100.0

10

0 airtel vodafone idea cellone docomo others

Inference: Out of 20 respondents, who dont 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 Cumulati ve Percent

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Frequen cy Percent

Valid Percent

Valid

strongly disagree disagree neither agree nor disagree agree strongly agree Total

4 5 30 50 11 100

4.0 5.0 30.0 50.0 11.0 100.0

4.0 5.0 30.0 50.0 11.0 100.0

4.0 9.0 39.0 89.0 100.0

60

50

40

30

20

10

0 strongly disagree disagree neither agree nor di agree strongly agree

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

Valid Percent

Valid

strongly disagree disagree neither agree nor disagree agree strongly agree Total

2 1 38 25 34 100

2.0 1.0 38.0 25.0 34.0 100.0

2.0 1.0 38.0 25.0 34.0 100.0

2.0 3.0 41.0 66.0 100.0

50

40

30

20

10

0 strongly disagree disagree neither agree nor di agree strongly agree

Inference: Out of 100 respondents, 2% strongly disagree, 1% disagree, 38 %are neutral, 25% agree, 34% strongly agree that Docomos 1p/sec plan as a tactic to attract customers. Table17: rating for Airtel Cumulati ve Percent
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Frequen cy Percent

Valid Percent

Valid

excell ent good poor no opinio n Total

37 53 5 5 100

37.0 53.0 5.0 5.0 100.0

37.0 53.0 5.0 5.0 100.0

37.0 90.0 95.0 100.0

60

50

40

30

20

10

0 excellent good poor no opinion

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

Table18: rating for docomo Cumulati ve Percent

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Frequen cy Percent

Valid Percent

Valid

excell ent good poor no opinio n Total

39 48 5 8 100

39.0 48.0 5.0 8.0 100.0

39.0 48.0 5.0 8.0 100.0

39.0 87.0 92.0 100.0

60

50

40

30

20

10

0 excellent good poor no opinion

Inference: Out of 100 respondents, 39% feel that Docomos 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 Cumulati ve Percent
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Frequen cy Percent

Valid Percent

Valid

excell ent good poor no opinio n Total

3 28 56 13 100

3.0 28.0 56.0 13.0 100.0

3.0 28.0 56.0 13.0 100.0

3.0 31.0 87.0 100.0

60

50

40

30

20

10

0 excellent good poor no opinion

Inference: Out of 100 respondents, 3% feel that aircels 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 Cumulati ve Percent

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Frequen cy Percent

Valid Percent

Valid

excell ent good poor no opinio n Total

13 38 35 14 100

13.0 38.0 35.0 14.0 100.0

13.0 38.0 35.0 14.0 100.0

13.0 51.0 86.0 100.0

40

30

20

10

0 excellent good poor no opinion

Inference: Out of 100 respondents, 13% feel that uninors 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 cy Percent 1 1.0 Valid Percent 1.0 Cumulative Percent 1.0
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strongly

disagree disagree neither agree nor disagree agree strongly agree Total
60

3 7 51 38 100

3.0 7.0 51.0 38.0 100.0

3.0 7.0 51.0 38.0 100.0

4.0 11.0 62.0 100.0

50

40

30

20

10

0 strongly disagree disagree neither agree nor di agree strongly 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 Freque ncy Percent 6 6.0 Valid Percent 6.0 Cumulative Percent 6.0
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not very

important not important neither important nor not important important very important Total

5 14 26 49 100

5.0 14.0 26.0 49.0 100.0

5.0 14.0 26.0 49.0 100.0

11.0 25.0 51.0 100.0

60

50

40

30

20

10

0 not very important neither important no not important important very 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
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Freque ncy not very important not important neither important nor not important important very important Total
40

Perce nt 8.0 10.0 36.0

Valid Percent 8.0 10.0 36.0 20.0 26.0 100.0

Cumulative Percent 8.0 18.0 54.0 74.0 100.0

8 10 36

20 20.0 26 26.0 100 100.0

30

20

10

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

Inference: out of 100 respondents, 8% consider call tariffs as not very important, 10% consider as not important while 36% consider neither important nor not important, 20% consider as important, 26% consider it as very important while switching brands. Table24: consideration of sim prices while switching brand
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Freque ncy Percent not very important not important neither important nor not important important very important Total 26 25 25 18 6 100 26.0 25.0 25.0 18.0 6.0 100.0

Valid Percent 26.0 25.0 25.0 18.0 6.0 100.0

Cumulative Percent 26.0 51.0 76.0 94.0 100.0

30

20

10

0 not very important neither important no not important important very 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. Table 25: cross tabulation of usage of 1 p/sec and consideration of tariff s while switching brand:
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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 neither important not very not nor not importa very important important important nt important use of 1p/sec plan Total yes 3 no 3 6 3 2 5 8 6 14 17 9 26 20 29 49 51 49 100 Total

Chi-Square Te s ts Value 4.562a 4.612 1.253 100 df 4 4 1 Asy mp. Sig. (2-s ided) .335 .329 .263

Pearson Chi-Square Likelihood Ratio Linear-by -Linear Ass ociation N of Valid Cases

a. 4 cells (40.0%) hav e ex pec ted count less than 5. The minimum ex pec ted 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
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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 neither strongly disagre agree nor strongly disagree e disagree agree agree use of 1p/sec plan Total yes 1 no 0 1 0 3 3 6 1 7 31 20 51 13 25 38 51 49 100

Total

Chi-Square Te s ts Value 13.699 a 15.714 3.377 100 df 4 4 1 Asy mp. Sig. (2-s ided) .008 .003 .066

Pearson Chi-Square Likelihood Ratio Linear-by -Linear Ass ociation N of Valid Cases

a. 6 cells (60.0%) hav e ex pec ted count less than 5. The minimum ex pec ted count is .49.

From the above table, minimum expected count is less than the value. Therefore 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

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rating for docomo excellent 1 22 16 39 good 2 33 13 48 poor 0 3 2 5 no opinion 0 6 2 8 Total 3 64 33 100

purpose of usage of mobile service Total

business personal both

Chi-Square Te s ts V alue 2.816a 3.175 .653 100 df 6 6 1 A sy mp. Sig. (2-s ided) .832 .787 .419

Pearson Chi-Square Likelihood Ratio Linear-by -Linear A ss ociation N of V alid Cases

a. 7 cells (58.3%) hav e ex pec ted count less than 5. The minimum ex pec ted count is .15.

Inference: From the above table, minimum expected count is less than the value. Therefore 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.

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Findings

\ Findings:

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 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. While switching their brands, customers mostly consider good network coverage followed by price. On an average, half of the samples feel Docomos 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 Docomos 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.

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Conclusion

Page | 58

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 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.

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Appendix

Page | 60

Bibliography: Websites and links: www.tatadocomo.com http://www.telesutra.com/2009/09/25/indian-telecom-update-for-august-2009/ http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Tele-basesoars-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. SchindlerTata McGraw-Hill Publishing House,2003 Journals: Journal of Product & Brand Management, Volume 13 Number 5 2004 pp. 303314 Journal of Product & Brand Management, Volume 13 Number 5 2004 pp. 303314
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 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

Questionnaire:
Age: ___________ Gender: _________ Occupation: _____________ 1. Which mobile service do you use?
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a. Airtel

( ) b. Vodafone ( ) c. Idea ( ) f. TATA DOCOMO ( ) g. Uninor ( ) i. Other specify.................

d. Cell one ( ) e. Reliance ( ) h. TATA Indicom ( )

2. What is the purpose of your mobile service? 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. Cant 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. Cant say ( ) 8. Are you using any of the 1 paisa/ sec scheme? a. Yes ( ) b. No ( ) 9. If yes please specify which mobile service? __________________
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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? Please specify: ____________________ 12. What is your opinion about TATA DOCOMOs 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 ________
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b. Sms tariffs _______ c. Sim prices ________

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