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Business – The luxurious touch to telecom

Neha Kalra

This is a problem that handset makers do not face while targeting the super rich. Neither do marketers of fast moving consumer goods (FMCG), consumer durables or even financial services. Telecom services, interestingly, is the only category where there is no distinction per se, in the offerings to customers despite a difference in income levels. Or is there?

The very fact that a telecom company has nothing ‘extra’ to offer to its high income customers, stems from the fact that companies offer broadly two services — voice and text (or video, MMS) — and neither of the two services is priced on the grounds of income level. The pricing strategy, being a clean, well-laid out one, applies to all alike. But do they want to target specific SECs?

The great leveller?

For starters, one could begin with looking at the intent of the telecom companies tapping consumers of diverse income level groups in various ways.

Shireesh Joshi, director – marketing, Bharti Airtel, is clear about the brand not being skewed towards any particular income level group. “We choose to focus more on the larger opportunities, rather than niche ones. That rules out the option of us looking at targeting SEC A in particular. Neither do we wish to uniquely create something like this.”

Mass media advertising by telecom brands is targeted at and consumed by one and all, in the same fashion, irrespective of their income. Press coverage in key business dailies is considered a way of reaching out to the upper rung of the society. Brands may have supplementary plans too.

Idea Cellular, for example, apart from using one-on-one interactions with its high profile customers, offers ground engagement of mass events such as the Idea IIFA Awards (an award ceremony awarding excellence in cinema) and similar meet-and-greet hospitality opportunities for this stratum of consumers.

Pradeep Srivastava, chief marketing officer, Idea Cellular reveals that about 100-200 VIP boxes are reserved for select high-end customers, channel partners, distributors and contest winners at such mass events.

Sanjay Behl, group head – brand and marketing, Reliance Communications understands that micro-targeting a customer segment is integral for optimising marketing investments on a vast array of products and services.

Reliance Communications has been using a combination of sharply-segmented conventional mass media platforms and a highly focussed direct marketing approach, for engaging the SEC A target group with its offerings.

Behl brings out the instance of the launch phase of Reliance’s wireless broadband services – Reliance Netconnect. It was launched through the digital medium and a database driven direct mail initiative. A targeted mass media plan was supplemented with product demonstration through corporate road-shows in the top 45 cities and demo-kiosks in relevant retail shops.

Kumar Ramanathan, chief marketing officer, Vodafone Essar, understands that the brand can definitely have segmented engagement targeting various income level groups, but not segmented communication.

Anything more than this provided to a small segment of consumers, would be incongruent at the brand level, the obvious reason being that network service is a mass category offering.

Vodafone UK, for instance, has been the title sponsor and official mobile partner of the McLaren Mercedes team since 2007. The brand’s commitment to the Formula One World Championship is in line with the significant appeal for the sport for Vodafone’s customers around the world. Though the sport is considered an elite one,
Ramanathan believes that it reaches out to a very large segment.

Involving its customers from India, Vodafone had Lewis Hamilton of the McLaren Mercedes team, flagging off the McLaren Mercedes – Race to Abu Dhabi promotion in New Delhi in August. Sixteen lucky participants will win a trip to Abu Dhabi to attend the final of the 2009 Formula One Grand Prix season on November 1, 2009. The promotion is being run over 16 rounds.

Waiting for 3G

A significant landmark in the Indian telecom industry would be the much-awaited 3G. With it, the game is set to change drastically in the mobile space. With higher speeds, and plush services such as live streaming of television channels (mobile TV), the SEC A class is undoubtedly to be a beneficiary of the best that 3G would have to offer.

Ramanathan is sure that 3G will make waves in the kind of services network service providers would be able to offer – experience would have a major role to play. Difference in income levels would be the key driver.

The second, and most important factor that comes into consideration while taking specific strata targeting (in this case, SEC A) into account is the spread of costs. The enormous amount of investments in technology, does not allow telecom companies to offer differentiated network. The system and processes have to be geared up for everybody, which does not make it a feasible option to offer any benefit to a particular set of people on the network front.

The two platforms used for interaction on a mobile phone — voice or text (video or MMS) — help a telecom operator determine the usage pattern, as well as the kind of handset the consumer utilises, which proves as a broad indicator of the profile of a mobile user. “It is a window through which we observe our consumers,” reveals Srivastava.

For the rich, it is simply the intensity of the consumption of the services offered, that varies — the usage of services such as voice, text, MMS and, most of all, GPRS (General Packet Radio Service) through mobile handsets by SEC A is comparatively higher compared to other segment of consumers.

At Airtel, there are multiple levels of messaging – text messages are sent in a targeted manner while there is a mix and match of products and services offered. Consumers are offered some products and services based on their profile, as well as their consumption pattern of various products and services.

Joshi of Airtel clarifies that “there are no ‘big’ products that are offered by us for consumers with higher incomes. In any case, many more people will be moving into the SEC A classification in the near future, bridging the gap.”

Looking forward to 3G, targeting the SEC A would become easy for telecom operators considering the kind of an upper edge it would bring in. It could also bring in more concerted efforts for getting the plum audience. However, the other rules of the game cannot be overlooked.

It remains a question if SEC A would gain more significance with 3G especially in a mass category product such as network services.


September 25, 2009 - Posted by | Uncategorized |

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