Effectiveness of Sales Promotion Schemes on Mobile Phone services- A Comparative study of

Pre Paid V/S Post Paid Mobile User of Lucknow

Dr. D.S. Chaubey

Mr. Atul Kumar Pandey
Abstract
In the present day of information society the telecommunication services in India have
increased its horizon. The craze for mobile services in India is increasing substantially. Different
telecom service provider offer different promotional scheme to attract customer in favour of its
offer. The customers preference and their behaviour has become an essential input for making
efficient and effective decision. The present study aims to assess the consumers behaviour towards
different mobile service providers companies operating in Lucknow, their billing structure and the
level of satisfaction from the present mobile services they own. . It also intends to know the future
impact of mobile phone services on socio economic changes. To achieve the objective of the study
150 randomly selected mobile users of Lucknow city were chosen. From the analysis it is observed
that in comparison to post paid services, prepaid mobile services was preferred by most of the
respondent. Analysis also indicates that sales promotion scheme preferred by respondent is closely
associated with their level of monthly income and education qualification of the respondent.
Introduction:
At the threshold of new millennium, the country is witnessing the rapid expansion of
telecommunication services. The tele communication services in India have witnessed the
phenomenal change over the last few years. The craze for mobile services in India is increasing
substantially. It has helped a lot in developing the information society. Today the connectivity and
software product are contributing a lot in national economy. Keeping the high consumers demand
in to consideration, many big players like Reliance, Hutch, Airtel, BSNL, Tata Indicom, etc. have
launched their products in the market.

India is seen as a big market for mobile phone. According to one of the report , Less than
40 per cent of the country's total area is covered by mobile networks, and fewer than eight in every
100 Indians use mobiles, compared with China's 30 per cent. Information

Asst. Professor, Omkarananda Institute of Management and technology, Rishikesh

Lecturer, Moti Lal Rastogi School of Management, Lucknow-8

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 technology has brought tremendous change in day-to-day activities of common man to
entrepreneurs. Number of mobile subscriber went up from 10.4 million at the end of 2002 to 28.20
million in Dec 2003. The average monthly growth in mobile subscription is 1.5 million new users
in 2003as compared to this mobile phone growth have a registered growth of 4.5 million
connection per month in Dec2005 and is expected to grow at the rate of 6 million per month in year
2006. According to Telecom Regulatory Authority of India (TRAI), the primary reason for the
unprecedented growth was due to drastic decline in tariff over the previous year. During 2006 it is
expected that number of mobile subscribers in the country will be about 130-140 million.
According to analysts this figure may go bigger, with carriers aiming at the two-thirds of India's
billion-plus people living in villages and small towns. Carriers like Bharti Tele-Ventures Ltd. --
India's No. 1 carrier in which Vodafone Group Plc recently spent $1.5 billion on a near-10-percent
stake -- and Tata Tele services Ltd. are both aggressively pursuing rural India. At the moment,
4,000 towns and up to a third of India's more than 600,000 villages are connected by wireless
services. According to T.V. Ramachandran, director general at the Cellular Operators' Association
of India. "By end-2006, all the 5,200 towns and 300,000 villages will be covered." India's love
affair with cell phones started in the mid-1990s, as the mobile revolution took hold and India had
just 10 million mobile and landline connections. Growth then soared in the last four years due to
regulatory change and falling costs of calls and handsets. Cities such as Delhi and Mumbai boast
phone penetration rates of about 40 per cent, similar to East Asian levels, and by the end of 2006,
India is expected to be the world's third-largest mobile market by number of users, behind China
and the United States.
Today, the Cellular phone industry has seen its share of wars. These range from wars between
different service providers on tariffs, to dispute with Government on regulatory matters, to issues
between GSM mobile and limited mobility operators . With declining voice tariffs, where the main
price wars were fought, the service providers looked to generate revenue though non voice, and
value added services.
The issues in the telecom industry , with a multiplicity of players, services ,and technologies
are bound to be complex and multi-dimensional . Mobile v/s limited mobility has been only one
dimension. From the regulatory point of view, the others include CPP(Calling Party Pays) ,
interconnect charges, NLD charges, ADC/USO(Access Deficit Charge/ Universal Service
Obligation)for rural services , etc. Viewed in the larger perspective, the ultimate war for all players
is to get a larger share of the consumer pie, and these issues are only the battles along the way.
Tariff rate in India is the lowest in the world. On the other hand, in the race to get consumers, many
operators continued to stretch their service capacities, thereby affecting the quality of services.

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More and more plans and options, with frequent revisions, continued to be offered to woo the
consumer.
Consumer behaviour is a field of knowledge that has gained importance for the managers of
both the profit and non-profit making organisations and of policy makers. In the rationale of
modern marketing, the firms existence is dependent on customers satisfaction. Therefore, the
knowledge of what the customer thinks and what consequently would contribute to his
satisfaction, is at the requirement of the marketer.
Present Study
The present study is a focus as on the mobile phone users of Lucknow city. The study aims
to judge the perception of consumer towards the different promotional scheme adapted by different
mobile service provider companies from time to time. It tries to assess the market composition,
consumers awareness and their attitude towards different mobile service providers companies
operating in Lucknow. The study also intends to know the consumers satisfaction and its future
impact on socio economic changes.
Methodology:
The present study is an exploratory research study. In order to study the consumer
behaviour regarding the uses of pre paid v/s post paid mobile services offered by different telecom
companies in Lucknow city both primary and secondary data were collected. Secondary data was
collected from different magazines, newspapers and government publications and internet.
The primary data is collected through questionnaire survey method. For this purpose150
randomly selected mobile users of Lucknow city were chosen. An attempt was made to check their
preferences toward prepaid and post paid services, different promotional schemes offered to them,
their internal mobility from prepaid to post paid and vice versa, and the extend of satisfaction
derived from present service providers. The data thus received was tabulated, analyzed and
appropriate results was drawn. Univariate and Bivariate data analysis techniques were used to
analyze the data.
The following hypothesis was constructed for analyzing the data:-
H1: The nature of mobile service used by respondents is not associated with family income of
respondents.
H2: The different promotional schemes preferred by the respondents are not associated with the
level of educational qualification of the respondents.
H3: The different promotional schemes preferred by the respondents are not associated with the
level of monthly income of the respondents.

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Scope of the Study
Though the study represent the position of mobile services in Lucknow city, due to very
small sample size the finding may not be a true representation and it can not be generalized but it
will give a better prospect for future study and may have a wide application in future.

Findings:
a). Age analysis of respondents indicates that almost 13.3 percent respondents falls in the age
category of below 20 years. About three fourth respondent in the sample falls in the age group of
20-30 years as it was indicated by 73.33 percent respondents in the sample. The respondents in the
age group of 30-45 years accounts for 12 percent and the remaining 1.33 percent respondents falls
in the age group of above 45 years.
b). The information related to educational qualifications of the respondents indicates that most of
the respondents were having postgraduate degree and above to their credit as it was indicated by
72% respondents in the sample. As many as 8 percent respondent were educated up to matric only.
13.3% respondents are having education up to intermediate and only 6.7% respondents were
having education qualification up to graduation. .
c). Data relating to the income of the respondents indicated that as many as 39.33 percent
respondents were from the monthly income group of up to Rs. 10000 per month. 26.66 percent
respondents were having monthly family income between Rs.10000 to Rs15000 per month and 34
percent respondent were having more than Rs. 15000 monthly income.
d). Data relating to the profession of the respondents indicated that as many as 31..33 percent
respondent falls in the category of services. Business category person account to 18.66 percent. 14
percent respondent falls in the category of professional and remaining 36 percent respondents were
belong to other unclassified professions.
e). Information pertaining to the type of mobile services used indicates that 54 percent respondents
are in position of possessing BSNL connection. 20 percent respondent owns Hutch connections, 10
percent respondents were having Reliance, 12.66 percent respondents were having Airtel and 3.33
percent respondent were having Tata Indicom connections.
f). An attempt was made to assess the type of connection possessed by the respondents of Lucknow
city. The analysis indicates that 76.66 percent respondent were possessing prepaid connection.
Remaining 23.33 percent respondent were having post-paid connection.
Further attempt was also made to assess degree of association between nature of mobile
services used by respondent with their monthly income. The calculated value of the Chi-Square test
statistics ( 2 )=3.7201 at 5 percent level of significant is lesser than the tabulated value (5.992)

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 with 2 degree of freedom . Hence the hypothesis is accepted indicating that nature of mobile
services owned by respondent is not associated with the family income of the respondents.
g). an attempt was made to know the perception of customer towards billing structure of pre-paid
and post paid connection offered by the different mobile service providers . data pertaining to this
indicates that 20 percent user of prepaid mobile services are of the opinion that rate are high. 70
percent respondent feels that relates are normal and 10 percent are of the opinion that billing rates
of prepaid mobile is low. On the other hand opinion about post paid indicates that 56.6 percent
feels that rates are very high. 43.33 percent feels rates are normal. The analysis significantly
highlights the different of opinion about billing structure of prepaid v/s post paid mobile services.
h). An attempt was made to know the intention of respondent whether they wants to convert the
services from pre-paid to post paid and vice versa. Analysis indicates that almost two third (64.66
percent) wants to convert their mobile services and only one third (35.33)want to remain with their
present services.
i). Today there is a cutthroat competition among the different services provider. Mobile service
provider companies offers different sales promotion schemes like reduction in tariff rates, increased
pulse rate, reduction in fixed cost, reduction in rental fees and so many to attract consumers
towards their services. The analysis indicates that 34.66 percent respondents are of the opinion that
reductions in tariff rates are the best-suited schemes for them . 27.33 percent respondent feels that
increased pulse rate are the best-suited promotional scheme to purchase the services. Reduction in
fixed cost are preferred by only 7.33 percent respondents in the sample. Reduction in rental fees
was preferred by 30.67 percent respondent in the sample.
Further attempt was also made to assess degree of association between different
promotional schemes preference by the respondents with their educational profile and monthly
income.
The calculated value of the Chi-Square test statistics ( 2 )=37.9651 at 5 percent level of significant
is lesser than the tabulated value (12.592) with 6 degree of freedom . Hence the hypothesis is
rejected indicating that sales promotion scheme preferred by respondent is associated with their
level of education.
The calculated value of the Chi-Square test statistics ( 2
)=23.10935 at 5 percent level of
significant is lesser than the tabulated value (12.592) with 6 degree of freedom . Hence the
hypothesis is rejected indicating that sales promotion scheme preferred by respondent is associated
with their level of monthly income
j) An attempt was made to know the perception of customer that if there is any significant
difference in tariff rate between pre-paid and post paid connection offered by the different mobile
service providers . data pertaining t this indicates that almost three fourth(73.33%) respondents in

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the sample feels that there is significant difference in the tariff rate between pre-paid and post paid
connection. Remaining respondent (26.66%) feels that there is no difference of tariff rates between
pre-paid and post paid connection offered by the different mobile service providers.
j). An attempt was made to know from the respondent that out of five major mobile service
provider in Lucknow city who gives better connectivity. The information thus received indicates
that 46.6 percent respondent were of opinion that Hutch gives the better connectivity. 20 percent
respondent feels that Reliance gives the better connectivity. 20 percent respondents feel that BSNL
gives the better connectivity. 13.126 percent respondent are equally divided in their opinion and
indicated that Airtel and Tata Indicom give the better connectivity.
k). The data pertaining to the level of consumer satisfaction from the present mobile service
provider indicates that 70% respondents are satisfied with the present mobile service providers.
Only 30 percent respondents are not satisfies with present services. The important reasons emerged
out due to poor connectivity, problems with Internet and other related services etc.
m). The information technology has brought a tremendous change in knitting the whole country
together. Today people can have common experience and aspiration through the mediation of
various communications. But the social development and traditional societies is not easy because of
close interrelationship, which exist among technical, economic, cultural religious and other social
aspect. Keeping this into consideration, an attempt was made to know the future prospect of mobile
services by assessing its utility as perceived by the respondents. It is significant to know that
almost all 96.66 percent respondent opined that it would be an essential item in the future. A very
few 3.33 percent feels that it will be of moderate use in future.
Conclusions
The communication services in the Uttar Pradesh state have witnessed phenomenal change
over the last few years. The number of competitors has significantly increased. The study indicated
that majority of consumer prefers pre paid connection. Sales promotion scheme like reduction in
tariff rate and reduction in rental fees have emerged most important promotional tool which liked
by majority of the respondents in the sample. It was also found that the different promotional
scheme preferred by the respondents is associated with their educational profile and monthly
income. Hence, marketer should design the sales promotion scheme in such a way that it should
meet the expectations of the future generation. Almost all respondent are of the opinion that
mobile services have a bright future prospect. Consequently it can be concluded that there is scope
for mobile service providers in the city.

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 Appendix-I- List of Tables
Table No. 1: Age Classification of Respondents
Sl. Total No. of
Description Percentage
No. Respondent
1. 20 13.33
Below 20 years
2. 110 73.33
20 to 30 years
3. 18 12
30-45 years
4. 02 1.33
Above 45 year
Total 150 100

Table No. 2: Educational Qualification wise Classification of Respondents

Sl. Total No. of
Description Percentage
No. Respondent
1. Upto Matric 12 8
2. Upto Intermediate 20 13.3
3. Up to Graduation 10 6.6
Post Graduate and
4. 108 72
above
Total 150 100

Table No. 3: Income Classification of Respondents

Sl. No. Description Total No. of Respondent Percentage
1. Upto Rs.10000 per month 59 39.33
2. From Rs. 10000 15000 pm 40 26.66
3. Above Rs.15000 pm 51 34
Total 150 100

Table No.4: Profession wise Classification of Respondents

SL. NO. DESCRIPTION TOTAL NO. OF RESPONDENT PERCENTAGE
1. Service 47 31.33
2. Business 28 18.66
3. Professional 21 14
4 Others 54 36
Total 150 100

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 Table No. 5: Type of Service Provider Used
TOTAL NO. OF
SL. NO. SERVICE PROVIDER USED PERCENTAGE
RESPONDENT
1 BSNL 81 54
1. Tata Indicom 05 3.3
2. Reliance 15 10
3. Airtel 19 12.66
4. Hutch 30 20
Total 150 100

Table No. 6: Types of Mobile Services Used

Sl.
Nature Total No of Respondent Percentage
No.
1. Pre Paid 115 76.66
2. Post Paid 35 23.33
Total 150 100

Table no 6A Degree of association between nature of mobile services used by respondent with
their monthly income
AboveRs
Upto 10000PM Rs.10000-15000 15000PM
Pre Paid 115
49 30 36
Post Paid 35
10 10 15
( 2 )= 3.7201

Table No. 7 : Billing Structure

High rate Normal Rate Rate are low
No of No of % No of
Sl.
Nature Respon % Respondent Responde %
No.
dents s nts
1. Pre Paid 30 20 105 70 15 10
2. Post Paid 85 56.6 65 43.33 00 00

Table No. 8 : Intention to convert Billing Structure

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 Sl.
Nature Total No of Respondent Percentage
No.
1. Customer with positive response 97 64.66
2. Customer with negative response 53 35.33
Total 150 100

Table No 9:Most Effective Sales Promotion Scheme

Sl. Sales Promotion
Total No of Respondent Percentage
No. Scheme
1. Reduction in tariff rates 52 34.66
2. Increased pulse rate 41 27.33
3. Reduction in fixed casts 11 7.33
4. Reduction in rental fees 46 30.67
Total 150 100

Table No 9A Degree of Association to Consumers Preference of Sales Promotion Scheme

with their Education Qualification
Upto Matric Post Graduate and
Up to Intermediate Upto Graduation others
Reduction in tariff rates 04 52
05 0 43
Increased pulse rate 02 41
10 10 19
Reduction in fixed casts 01 11
0 0 10
Reduction in rental fees 5 46
05 0 36
( 2 )= 37.9651
Table no 9bDegree of Association to Consumers Preferemnce of Sales Promotion Schme with
their income
Abovwe
Rs15000
Upto 10000PM Rs.10000-15000 PM
Reduction in tariff rates 52
26 20 06
Increased pulse rate 41
16 10 15
Reduction in fixed casts 11
05 01 05
Reduction in rental fees 46
12 09 25
( 2 )= 23.10935

Table No. 10: Consumers Perception in Significant difference in billing between prepaid and
post paid

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Sl. Description Total No. of Percenta
No. Respondent ge
1 Customer with positive opinion 110 73.33
2. Customer with negative opinion 40 26.66
Total 150 100

Table No. 11: Consumers Recommendation of mobile services to their friends

Sl. Description Total No. of Percenta
No. Respondent ge
1 Pre paid 130 86.66
2. Post Paid 20 13.33
Total 150 100

Table No. 12: Better Connectivity

Sl. Service Provider Total No of Respondent Percentage
1.
No. BSNL 30 20
2 Tata Indicom 10 6.66
3 Reliance 30 20
4 Airtel 10 6066
5 Hutch 70 46.66
Total 150 100
Table no 13 -Satisfaction with Present Brand
Sl. Description Total No. of Respondent Percentage
1No. Satisfied 105 70
2. Not satisfied 45 30
Total 150 100
Table No. 14: Future Prospect of Mobile Services
Sl. Total No. of Percenta
Description
No. Respondent ge
1 It will be an essential item in future 145 96.66
2. It will be of moderate use 05 3033
3. It will be of no use 0 0
Total 200 100

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 Appendix-II-
QUESTIONNAIRE
EFFECTIVENESS OF SALES PROMOTION SCHEMES ON MOBILE SERVICES:
A COMPARATIVE STUDY OF PREPAID V/S POST PAID MOBILE USERS OF LUCKNOW CITY
1. Name :
2. Age :
3. Educational Qualification : Upto Matriculate
Intermediate
Graduate
Post Graduate and others
4. Family Income(Per Month) : Upto Rs. 10000/-
Rs. 10000/- to Rs. 15000/-
Rs. 15000/- and above
5.What is your Profession? Occupation
(a) Service (b) Business
(d) Professional (f) Any other
6.Which mobile service you are using at present?
(a) BSNL (b) Tata Indicom
Reliance (d) Airtel
(e) hutch If any other please specify
7.The mobile service you are using at present is
(a) Pre paid (b) Post paid
8. How do you rate the billing structure of your mobile services?
Rates are very Rate are Rate are low
high Normal
Prepaid mobile services
Post paid mobile services
9Would you like to convert your post-paid mobile to prepaid mobile? Yes No

11. Which promotional schemes are most suitable to you

Reduction in tariff rates Increased pulse rate
Reduction in fixed casts Reduction in rental fees
If any other please specify..
12.Do you feel any significant difference in tariff rate between prepaid and post paid mobile
services
Yes No
13. Which mobile services would you like to suggest to your friends?
Prepaid mobile services Post paid mobile services
14 Which Company gives you better connectivity?
BSNL Tata Indicom Hutch
Reliance Airtel
15.Are you satisfied with the mobile services provided by your present mobile service providers?
Yes No
If no, then what are the reasons behind it. ..
16.How do you see the future prospect of mobile services.
(a) It will become an essential item
(b) It will be of moderate use
(c) It will be of no use
(d) Any other please specify____________________________________

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