Udit Kumar Singh is a student of PGDM of Accurate Institute of Management and Technology, Greater Noida. He has undertaken the project titled "The Analysis of Impact of Media Campaigns and Sponsorship on Sales and Visibility of Brands" at Matrix Cellular (International) Services Pvt. Ltd. From 04-05-2013 to 05-07-2013.
Original Description:
Original Title
&the Analysis of Impact of Media Campaigns and Sponsorship on Sales and Visibility of Brands - Copy
Udit Kumar Singh is a student of PGDM of Accurate Institute of Management and Technology, Greater Noida. He has undertaken the project titled "The Analysis of Impact of Media Campaigns and Sponsorship on Sales and Visibility of Brands" at Matrix Cellular (International) Services Pvt. Ltd. From 04-05-2013 to 05-07-2013.
Udit Kumar Singh is a student of PGDM of Accurate Institute of Management and Technology, Greater Noida. He has undertaken the project titled "The Analysis of Impact of Media Campaigns and Sponsorship on Sales and Visibility of Brands" at Matrix Cellular (International) Services Pvt. Ltd. From 04-05-2013 to 05-07-2013.
CAMPAIGNS AND SPONSORSHIP ON SALES AND VISIBILITY OF BRANDS
( Submitted in partial fulfillment of the requirements for PGDM )
By
SUMMER TRAINING COMPLETION CERTIFICATE
This is to certify that Mr. Udit Kumar Singh student of PGDM of Accurate Institute of Management & Technology , Greater Noida, has undertaken the project titled The Analysis Of Impact Of Media Campaigns And Sponsorship On Sales And Visibility Of Brands at Matrix Cellular (International) Services Pvt. Ltd. from 04-05-2013 to 05-07-2013 and has completed the project successfully. I wish him a success in all his future career endeavors. 2
Industry Guide Name: Designation: Organizations Seal
CERTIFICATE OF ORIGINALITY
I_____________________________________ Roll No ________________________of 2013,is a fulltime bonafide student of first year of PGDM Program of Accurate Institute of Management & Technology, Greater Noida. I hereby certify that this project work carried out by me at _____________________________________________________ the report submitted in partial fulfillment of the requirements of the program is an original work ___________________ Signature with Date 3
of mine under the guidance of the industry mentor __________________ and the faculty mentor ______________________________________________and is not based or reproduced from any existing work of any other person or on any earlier work undertaken at any other time or for any other purpose, and has not been submitted anywhere else at any time
(Student's Signature) Date: July, 2013
(Faculty Mentor's Signature) Date: July 2013
ACKNOWLEDGEMENT
Perseveration, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, training is like a bridge between theoretical and practical working; willingly I prepared this particular Project. First of all I would like to thank the supreme power, the almighty God, who is the one who has always guided me to work on the right path of my life.
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I would like to thank Matrix Cellular (International) Services Pvt. Ltd. for granting me permission to undertake the training in their esteemed organization.
I express my sincere thanks to Mr.Vipul Grover (manager Sales), Ms. Niti Nanra (Deputy Manager),Mr. AnujTyagi(Manager, Sales) , Mr. VaibhavArora(Sr.Business Development Exicutive) .
I would also like to thank the members of, Sales team which consists of Mr.RishiRai, Mr. MohitDua, Mr. SumitBaluni , Mr. NeerajNibhoriawho devoted their valuable time by helping me to complete myproject.
My faculty Mentor Prof. Rajeev Mathew, for the valuable suggestion and making this project a real success.
EXECUTIVE SUMMARY
The project deals with analyzing the impact of media campaigns and sponsorships on sales and brand visibility in current market scenario and what are the factors which influence the people for Matrixs Services. As we all know that India is one of countries where there is largest telecom sector in the world, a part from there are also competitors in this line.
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The purpose of this research is to find out what will be the future scope of increasing the sales and to see where the company is lacking behind. The research process chosen by me is qualitative and quantitative research. Questionnaire helps me a lot in finding the actual position of the market.
After analyzing the data the problem, which comes out is that the company still needs to improve its advertising on TV commercials and radio. The fact that people using Matrix is the convenience and reliability provided by Matrix staff.
A sample size of about 100 which includes individuals as well as corporate customers was taken for purpose from various parts of Delhi and N.C.R . After the survey was completed, the data was first stored and then analyzed on the chosen parameters. This analyzed data was later on converted into graphs. Such as pie chart, bar graphs, etc this was to make result easily comprehensible by any one going through the report. Later on, all this information was compiled in the form of a presentable and highly comprehensible report.
CONTNTS Page
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Sr. No Topic No.
Project Annexure A 1
Annexure B 2
Annexure C 3
Acknowledgment 4
Executive Summary 5
Chapter 1 Project Introduction 8
1.1 Company Profile 9
1.2 Current Portfolio 11
1.3 Matrix Clients 13
1.4 Matrix Products and Offerings 16
1.5 Media Campaign 17
1.6 Advertisements 22
1.7 TV Commercial 23
1.8 Planning and Sponsorship 24
Chapter 2 Literature Review 31
Chapter 3 Research Method 32
3.1 Research Problem 33
3.2 Research Methodology 32
3.2.1 Research Objectives 35
3.2.2 Research Design 36
3.2.3 Sampling Design 37
3.2.4 Data Collection Method 38
3.3 Scope of the Project 40
Page
Sr. No Topic No.
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Chapter 4 Findings And Analysis 41
4.1 Global scenario 42
4.2 S.W.O.T Analysis International Sim Sector 43
4.3 Comparison with Competitors 44
4.4 S.W.O.T Analysis Matrix Cellular 46
4.5 Affiliates 47
4.6 RBI (Foreign Exchange Management Act) 49
4.7 Financial Analysis 55
Chapter 5 Conclusion And Recommendations 72
5.1 References 74
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1.1 Company Profile
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Matrix Cellular International Services Pvt. Ltd. Is a Delhi basedCompany in the business of providing mobile phone and wireless communication service, on Domestic and International basis.
We have a very simple vision. A vision to get people connected cost effectively. Our Services are cheaper & convenient.
We started operations in 1995 by offering short term mobile phone service across New Delhi.
With the experience of these past several years, we have emerged as the undisputed leader in cellular phone rentals in India enabling individuals, corporate and foreign mission (during diplomatic visits) of all sizes to communicate wherever there is a cellular phone network. Today we offer
the best in mobile services both in India and overseas.
Since inception, we have aimed to be the best in service, quality,innovation and choice. We were the first to introduce concept of local connectivity, by offering country specific mobile connections.
Why Matrix?
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Global roaming costs are exorbitant.
Customer has to bear the ISD charges for all calls that you receive.
It may not be possible for customers to inform their contact personsthat they are traveling out of the country. In effect, customers receive a lot of unwanted calls.
Matrix provides country specific mobile connections that help save almost85% of International Roaming charges at the same time providing all theservices of the Network in that country.
We also provide the facility of paying in Indian Rupees. Thus, saving the hassle of procuring a mobile connection on arrival in that country, and spending valuable foreign exchange while clearing the mobile bills.
We act as Telecom Consultants and suggest a communication solution
which best suites a customer.
Our unique combination of low airtime rates, global coverage, and courteous 24X7 customer care and toll free number, gives us an edge inthe travel communications industry and the choice of many businesses, government agencies, and individual travelers.
1.2 Current portfolio
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Our portfolio of Countries includes
United States of America United Kingdom Australia Argentina Belgium Greece Holland Israel China Japan Germany Singapore Hong Kong Canada France New Zealand South Africa
Sri Lanka Israel 12
Italy Brazil Thailand Turkey Italy Malaysia Mauritius Mexico South korea Spain Switzerland Taiwan And many more Global sim card which works all aross the globe
1.3Matrix Clients
Following is a list of just a few of the better known clients of ours, - the list is 13
ever
growing
Embassies and High Commissions
US Embassy German Embassy Netherlands Embassy Embassy of Finland Embassy of Spain Embassy of Chile Embassy of Iran Embassy of Switzerland Embassy of Austria Korean Embassy British High Commission Canadian High Commission Australian High Commission British Council
Hotels
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Oberoi Hotels
Taj group of Hotels
Hyatt
Media
BBC
CNN
NDTV
Times of India
Hindustan Times
Organizations
U.N.O.
FICCI
CII
EPCH (Export Promotion Council of India)
CSIR
ITPO
Corporate Houses
Alvis OMC South Africa
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NR PTY Ltd, Australia
Reliance Industries
Hero Honda
Raymonds
TATA Motors
ProCall Pvt. Ltd.
Interglobe Enterprises Ltd.
British Gas
William Econer
Satya Paul
Ranbaxy
Travel Fraternity
Kuoni Travel Ltd.
Cox and Kings
Virgin Atlantic Airways
British Airways
Celebrities
AmitahabBachchan(The Actor)
Shah Rukh Khan (The Actor)
Sanjay Dutt (The Actor)
JuhiChawla (The Actress)
A.R. Rehman (The Music Director)
Farah Khan (Choreographer)
Indian Cricket Team Members 1.4 Matrix Products and Offerings
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MATRIX VOICE CARD MATRIX DATA CARD
MATRIX FOREX CARD CURRENCY
1.5Media Campaigns by Matrix Cellular
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Wills lifestyle fashion week 2011
Matrix Cellular announced its association with Asia's largest trade event, the Wills Lifestyle India Fashion Week (Spring/Summer 2011) as the official Telecom Partner for the event. Wills Lifestyle India Fashion Week is hosted by Indias apex fashion body, the Fashion Design Council of India (FDCI)
Matrix Cellular, the leading service provider of international telecommunication services, has announced its association with Kolkata Knight Riders for the 18
second consecutive year as the official sponsor in the fifth season of the Indian Premier League (IPL 2012). The Matrix logo is on the back of the KKR jersey and the partnership will entail a series of marketing activations and advertising campaigns to promote the brand values. As the Official Team Partner, Matrix will be entitled to a number of benefits besides its logo on the team jerseys. The smart and dynamic brand will also have significant in-stadia presence during Kolkata Knight Riders matches in the form of board branding, placards and cheer sticks in designated stand.
The Kolkata Knight Riders whose home games were played at Eden Garden stadium in Kolkata featured a host of household names in 2012, including the feisty and firm batsmen of the current era, GautamGambhir who lead the team, South African star Jacques Kallis, one of the fastest Australian bowler Brett Lee as well as Indian bowler/batsman Yusuf Pathan.
Association of Matrix cellular with the Kolkata Knight Riders for the second consecutive year. With a new, smart and dynamic team this year, along with 19
some of the highly experienced international players under the leadership of GautamGambhir, the team would continue to exemplify excellence thereby touching peoples heart and minds which goes in sync with our brand promise.
Being the most watched sports event, the Indian Premier League serves as a lucrative platform to reach out to customers and leverage the brand at a national as well as international level. Associating with KKR offers us the opportunity to raise awareness about the brand as KKR is the biggest franchise, with the largest fan following in the country.
Kolkata knight riders won IPL 2012 and created a bench mark for their own which increases brand visibility and brand awareness among Indian and international audience which will directly or indirectly increases affects the sales of the products.
Chandigarh hockey team 2012 sponsored by matrix cellular 20
Sponsoring a state team of Chandigarh may seems strange but even after being a state of farmers. Most of Punjabis travel abroad frequently because of so many reasons, their relatives living in abroad, sikh people wants to settle in abroad and so on. Which give Matrix a good platform to increase the visibility of their brand.
Golf events in Chandigarh golf club sponsored by matrix (2012)
Golf is a sport of kings. That actually means this game is played by rich/ royal people. So sponsoring this game makes sense because this provides Matrix brands awareness among people who visit abroad more often.
Theater festivals sponsored by Matrix in Delhi 2010 21
Habitat World presents The 6th Old World Theatre Festival which is regarded as one of the foremost Theatre Festivals in the city with a distinct identity of its own. Presented by Matrix Cellular the festival showcases a hand picked selection of plays by renowned personalities ranging from Chris BanfieldsMistakenAnnieBesant in India, RaellPadamseesRazmatazz, ManavKaulsIllhaam etc.
Matrix cellular also sponsors various student Pre-departures every year
The student consultants would include British Council, Study overseas. The USEducational Foundation in India (USEFI), New Delhi organizes pre- departure orientation programme for Indian students leaving for higher studies in the US. The panelists provided the students with a widespread synopsis of culture, academic environment and social life in the U.S. The sessions attracted numerous questions on cross-cultural issues which helped students get a clear perspective of what to expect in the US Informative presentations were made by the sponsors including American Express, Centurion Bank of Punjab, ICICI-Lombard General Insurance, Jet Airways and Matrix Cellular Services informing students about currency, travel, student insurance, air tickets and communication related options for their travel to the US Students also participated in a cultural quiz competition and received attractive prizes from the sponsors. Diverse sessions at the pre-departure programme provided several valuable tips to Indian students that were aimed at smooth adaptation to the US academic and social environment.
1.6 Advertisements done by Matrix Cellular 22
Matrix has launched its latest TVC for the Matrix ForEx Cards starring Shah Rukh Khan and key players from the Kolkata Knight Riders team. The commercial follows Matrixs tie-up with the KKR team for Indian Premier League Season 4 as Principle Sponsor. The TVC, created by Equus Red Cell, was released on-air on May 19, 2011.
The TVC first attracts attention for the use of the Don theme. Swapan Seth, Founder and CEO, Equus Red Cell, divulged that the forthcoming release of the movie played a role in taking the Don route. In a conversation with exchange4media, he said, We thought the theme would generate greater curiosity. In fact, it was SRK who kindly offered it since he loved the idea and the film.
In the ad film, SRK and his team players are arrested for killing cash. Much like the movie, the commercial also includes a chase sequence, followed by an interrogation, where Don and his team members speak on why cash had to die. Sharing more on what led to the use of this thought process, Seth said, The idea of humanising Cash was interesting. Then to create a murder, a chase, an arrest and consequent interrogation of SRK and the KKR Knights was all a juicy plot.
The TVC is planned to be on-air for at least another four weeks. In an earlier conversation, Matrix officials had informed that the brand was looking at spending around Rs 18-20 crore in the campaigns around KKR. The campaign would be seen in print as well.
Matrix has been niche in the manner it has advertised, but associating with a platform as large as the IPL would take the brand to a broader level of connecting with consumers. This was the reason to partner with KKR and the IPL in the first place, and this latest commercial is another step in that direction for Matrix.
1.7 Matrix Cellular launching new Television 23
Commercial on Data Services for Smart phones
Matrix Cellular Services, the leading service provider of internationaltelecommunication services, is all set to launch its new television commercial to apprise people about its Data Services for Smartphones.
The creative agency for the commercial is Equus Red Cell and it is produced by Frog Unlimited. The 60 second commercial highlights the fact that Matrix data services cost users just 1/10th the price of International Data Roaming Charges.
Using data services such as downloading emails, browsing or using BBM on a Smartphone while traveling abroad can be very expensive as charges as levied on a per MB basis on International Roaming. Activating data services with a Matrix SIM card on a Smartphone costs customers one- tenth the cost of International Data Roaming charges that helps customers save more when travelling abroad.
The TVC follows a conversation between two wives waiting for their husbands at an airport with one showing the other pictures of accessories her husband has bought her on his trip abroad. The other wife complains that despite her husband being on a business trip abroad since past 10 days, hasnt called/BBMed her at all primarily because of high International Roaming rates. The first wife then informs her about the benefits of using a Matrix Cellular SIM card while traveling abroad.
The sole purpose of this commercial is to educate people about the benefits and savings of using Matrix Data Services on their Smartphones while traveling abroad. Our data services allow customers to read emails, share images and videos and use other data services such as BBM as and when they choose. We have always believed in satisfying the changing needs of customers and we look forward to Matrix being synonymous with International travel solutions
1.8 Need of media planning and Sponsorships
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We've all heard the old adage 'never put all of your eggs in one basket,' and when it comes to developing an online presence for yourself or your brand this saying could not fit more perfectly. While it's great to develop a strong and comprehensive website to serve as a hub of information, it's just as important to develop a presence in different channels so that your brand can reach as many people as possible. And while almost every brand has a Facebook and Twitter account, many fail to take advantage of other media-specific channels such as YouTube, Flickr and Slideshare.
The great thing about utilizing such websites is that you are placing your name and multimedia in front of an audience of people who are already looking for it. Users will be able to find you in the type of medium they want instead of having to sift through general search results. These websites also make it incredibly easy to redirect traffic to your individual site, creating an easy way to garner a new variety of interested visitors.
The Facts
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People are watching 2 billion videos a day on YouTube and uploading hundreds of thousands of videos daily.
The user base is broad in age range, 18-55, evenly divided between males and females, and spanning all geographies.
Fifty-one percent of users go to YouTube weekly or more often; 52 percent of 18-34 year-olds share videos often with friends and colleagues. Flickr hosts more than 4 billion images.
Flickr allows you to connect with friends and family and allows you to set special viewing privileges.
Slideshare garners 25 million visitors a month and 70 million monthly pageviews
Slideshare allows you to share presentations, documents, and pdfs with colleagues and interested users.
Building your presence on YouTube As one of the most visited sites on the Internet, YouTube is a place with unbridled opportunity. By placing your videos on the site, youre sharing your brand and message with people who will actively seek it out. When you create your YouTube account, you also create a user page that maintains all of your videos in one central location making it easy for visitors to view videos in succession.
YouTube also allows for tagging so that you can list keywords that relate to your video and keywords that your visitors may use when searching for similar content. By optimizing the titles of your videos and the key words and phrases you use in your tags, youll be able to reach new visitors through search.
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Once you upload your videos to YouTube its easy to embed those videos on your website creating a direct link between YouTubes services and your website. Other features of YouTube include:
Public or private videos: Users can elect to broadcast their videos publicly or share them privately with friends and family upon upload. Subscriptions: Users are able to keep track of their favorite users' new videos.
Record from Webcam: Users with a webcam and Flash software are able to instantly record video responses or normal videos onto the site rather than having to prerecord and then upload the video.
Separate index on Google: When users upload videos to YouTube, these videos are indexed separately on Google searches displaying as video results instead of in the general results.
Building your presence on Flickr
Flickr works similarly to YouTube in that you can easily embed photos on your website that draw from the photos on your Flickr account.
Flickrs clean and organized layout makes adding and searching for photos easy for users and visitors alike. It also allows you to tag photos so that they can be tied to a certain topic. Flickr also allows you to create sets of photos that display as slideshows a feature that is particularly useful when showcasing photos from a specific event or time period. By including rich descriptions such as titles, tags, location, and people, you give your images context and a life of their own.
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Flickr also encourages users to comment on each others photos, facilitating a sense of community amongst its users. By using Flickr, youre reaching out to others through a channel that devotes itself to one type of media. Flickr also offers flexible privacy controls making sharing images simple, secure, and comfortable.
Building your presence on SlideShare Simply put, SlideShare is the best way to get your presentations and documents out there on the web. Its a place where you can share your ideas and learn from the ideas of others. Users regularly comment, favorite, and download content. And just like Flickr and YouTube, SlideShare offers an easy way to embed their presentations on your website.
Other features of SlideShare include:
Embed slideshows into your own blog or website.
Share slideshows publicly or privately. There are several ways to share privately. Synch audio to your slides. Market your own event on slideshare. Join groups to connect with SlideShare members who share your interests. Download the original file.
Analysis of Impact of Media campaigns
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Save time
Time is money. Especially when youre running a business. Traditional marketing campaigns often require a huge time investment to develop and launch. If youre looking for instant gratification for your marketing efforts, social media is a great solution.
Setting up a social media marketing campaign can be quick and often youll see results within days (sometimes even hours!). By making use of Facebook, Twitter, LinkedIn, YouTube and other social media outlets, you are able to quickly create an Internet presence and b.e connected to potential clients.
Save money
Radio, television and newspaper advertising can be costly; especially if youre trying to create a creative and eye catching campaign. Social media, on the other hand, is extremely inexpensive. In many instances, its even free! Theres no cost involved in creating a Facebook page, Twitter account or LinkedIn profile. And you can upload a video to YouTube for free.
Many companies do make the small investment of having contests and giveaways to attract attention. However, the premiums associated with these giveaways often cost just the fraction of the price that you would have spent in a traditional marketing campaign.
Make smarter connections
Social media enables you to make smarter connections with potential clients. You can be much more targeted with your efforts than with advertising and other traditional marketing methods.
Friends often solicit each other for advice before making a purchase or enrolling in a service. They want to utilize a company that others like them trust. On Facebook and Twitter people are connected with others who have similar interests and needs. Simply by getting your current clients to Like your Facebook comments and become Fans of your Facebook page, you are becoming connected to all of their likeminded friends.
Web Presence
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The other advantage of social media campaigns is the development of web presence. No site gets the traffic it wants if no-one knows about it. SEO is about attracting attention in the search engine results pages, but there are other ways to get traffic. Your web presence is about the number of people who know you all over the net. Social media campaigns actively spread word about your business.
Influence
This is the last advantage that occurs to most people, perhaps because it takes a while to impact on your business. In participating regularly on a social media network, your name gradually gets known. If your campaign has been planned properly, your name will be linked to intelligent discussion and knowledge of your industry. This adds up to lend your business a certain authority.
Having authority in your industry gets you lots of free publicity, influences the number of links you receive and helps your business image. Many companies have found that this is the biggest benefit of all from a social media campaign and the longest-lasting. If you have acquired authority you must sustain it via reputation management.
taking advantage of these services youre not only reaching out to followers in a channel that they are familiar and comfortable with but youre also creating direct links between these services and your main website.
The more a person can get involved with your company and its products and services, the more likely it becomes that youll be able to convert them into a customer. And, thankfully, people go onto social media sites with the sole purpose of being active
In nut shell directly or indirectly all these media campaigns are helping an organization to Increase the sales and their visibility of brands.
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Literature Review 1.Product and Sales Analysis, Analyst-Mr. Rishi Rai, MDI GGN Nov 11
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2.Media campaign and sales analysis, Analyst- Ms. SandhyaTugatkar, November 11
3.Brand and Media Campaign, Analyst- Mr. AnandGovind, PSB, GGN May 2012
4.Effect of globalization and Advertisement over sales, NSHM, GGN Analyst- Ms. RittuBhagat March 2013.
6.Global Sales And Advertisement,Analyst -Thakur kumarVikram, IILM,GGN, Nov08
7.Human Resource and media campaign requirement in the growth of manpower, Analyst Kishore Anand, J.K Business School, GGN,March 2008
8.E-Book of Research Methodology by C.R Kothari.
9.SIP Report on benchmarking the quality of services by recording the customer satisfaction index of the existing customers By Anita Chandra from FORE SCHOOL OF BUSINESSVasantkunj 2011-12
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3.1RESEARCH PROBLEM Stage 1: Problem Definition
The first step in this project is to define the problem. In defining the problem, I 33
took into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in this project.
Stage 2: Development of an Approach to the Problem
Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design.
Stage 3: Research Design Formulation
A research design is a framework or blueprint for conducting the research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will determine possible answers to the research questions, and provide the information needed for decision making.
Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design.
The issue of how the data should be obtained from the respondents must be addressed. It is also necessary to design a questionnaire.
More formally, formulating the research design involves the following steps : Data analysis Qualitative research Methods of collecting quantitative data (survey, observation, and experimentation) Definition of the information needed Measurement and scaling procedures Questionnaire design Sampling process and sample size Plan of data analysis
3.2 RESEARCH METHODOLOGY
Assumptions
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It has been assumed that sample of 100 respondents represents the whole population.
The information given by consumers is not biased.
Research Instrument
The research instrument used in the study was the Questionnaire. While designing the questionnaire care has been taken in formulating and sequencing the questions so that it allows logical thinking processes for the respondents.
Use of both close ended and open ended questions were made so the analysis becomes easy and respondents can freely answer the question.
3.2.1RESEARCH OBJECTIVE
To find out the future opportunities of the product.
To identify Matrixs brand value and reliability.
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To find out impact of sponsorship and media campaigns on sales.
To understand perception of customers for Matrixs Services.
To identify the hidden expectations of customers from the company.
To understand the satisfaction level of customer for international services provided by Matrix.
3.2.2RESEARCH DESIGN FORMULATION
A research design is a framework or blueprint for conducting the research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will determine possible answers to the research questions, and provide the information needed for 36
decision making.
Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design.
The issue of how the data should be obtained from the respondents must be addressed. It is also necessary to design a questionnaire.
3.2.3 SAMPLING DESIGN
Large sample gives reliable result than small sample. However, it is not feasible to target entire population or even a substantial portion to achieve a reliable result. So, in this aspect selecting the sample to study is known as sample size. 37
Hence, for my project my sample size was 100.
The Sample Size of 120 is not enough to draw a conclusion but as per the time assigned it was difficult to take a sample size more than 100.
This research is related to the individual customer segment. For this research only those people who fly abroad were the target respondents.
Thus the target respondents were:-
1. Matrix Cellular services existing user individual customer.
2. Matrix Cellular services existing user corporate customer.
3.2.4 DATA COLLECTION METHOD
In this project primary data collection method has been used. The data which is valid data, used in project is first times. 38
In this project questionnaire has been used as primary data. There are open- ended and close-ended questions. There are some multiple choice questions as well, For knowing the satisfaction level for Matrix cellular services
Stage 1: Execution of project
It is the very important step in the research process accuracy findings depends on how systematically the study has been carried out in time so that it can make some sense when required. I have executed the project after prior discussion with the guide and structured in following steps:-
Preparation of questionnaire.
Before preparing questionnaire discussion with guides and concern people has been done.
Stage 2: Field Work or Data Collection
Field work consist of direct interaction with clients (corporate as well as individual). Documentation needs to be done at every connection purchased. And all documents needs to be verified also, and Filling up questionnaire forms by clients .
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Stage 3: Data Preparation and Analysis
Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected.
Number or letter codes are assigned to represent each response to each question in the questionnaire
Verification ensures that the data from the original questionnaires have been accurately transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected.
.
Stage 4: Report Preparation and Presentation
The entire project is documented in a written report which addresses the specific research questions identified, describes the approach, the data collection, and data analysis procedures adopted, and presents the results and the major findings.
The findings should be presented in a comprehensible format so that they can be readily used in the decision making process.
3.3 SCOPE OF THE PROJECT
The international travelers are increasing every year. Hence to find how 40
this information can be used from business perspective.
Even the existing clients of the company once satisfied with the services will help the company grow as the company gets its business mainly through references given by the clients instead of the regular advertisements.
Its very important to keep the existing customers satisfied with the belief that small customer will become a big customer tomorrow and a big customer will become a bigger customer tomorrow.
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4.1Global Scenario
Telecommunication is among the fastest growing service in the world. In the developed nation, with saturation demand of basic services the accent is on 42
value added services.
Developed nation are trying to augment basic services, infrastructure and also introduce value added services. Over the past few decades most nation include Japan, USA, UK, Singapore, and New Zealand have allowed private sector industry in the telecom services.
Others like India, china, France and Germany are following suit.
In developing nations even international services are offered by operators but in most developing countries overseas are controlled with competitive prices reduction in tariff charged for overseas calls from developed nations.
At the time internet technology that is voice services via internet medium is on rise. This enables international connectivity at the price of a local call and eats into revenue of international carriers
In order to carry out Analysis of domestic sim operations and international sim operations between Matrix and other cellular Companies and network Operators, operating in India, first we have to know about the strengths, weakness, opportunities and threats that pre dominantly exist in this sector.
4.2 S.W.O.T Analysis of International Sim Sector Strength Reduced calling and data cost 43
Lower service providing and hiring costs Reduced problems regarding connectivity Higher reliability; safe and secure communication Customized services Reduced services charges Development of specialized services Weaknesses Highly capital-intesnsive business Long break even period High concentration of traffic by some service provider Lack of coordination with abroad service providers High dependency on external agencies Changes in government polices Pricing policy by Indian and Foreign Government Opportunities Increase in voice and data charges in the country Growing organized sector Increasing international sector Developments in governments policies Liberalization and privatization of the sector Threats Competition from small and huge service providers Concentration on Domestic sim for foreign use and direct purchase of foreign sim.
4.3 Comparison of Matrix with its Competitors
MATRIX
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March 1995, Matrix came into existence.
Indias 1 st company to venture into such a niche segment Country specific Simcards
By 2007 Pan India presence.
UNICONNECT
Started in October 1996 2 nd company to venture in this market segment.
UNICONNECT was established in 1983 as an investment vehicle, however, eventually moved into the emerging telecom sector
CLAY TELECOM
1 st April 2000 Clay telecom was setup.
Incepted nearly a decade ago,
Clay Telecom is a dynamic global provider of wireless telecom solutions catering to both B2B and B2C market segments
RELIANCE COMMUNICATIONS
27 December 2002, Reliance infocomm inaugurated.
June 2008 Reliance touched 50 million mark.
Launched its Country specific sim cards business a year ago in the name of RELIANCE PASSPORT SERVICE
BHARTI AIRTEL LTD Ranked number#1 today in Indian mobile market.
April 2006 Bharti global limited was awarded a telecommunications license inJersey in the channel Island. 45
Launched its Country specific sim cards business a year ago in the name of AIRTEL WORLD Started only in Delhi & NCR regions
Matrix provides better services and rates in comparison of its competitors
Matrix hires the services from international service provider, which helps in saving of cost and need for setup own network. Using internationalnetwork would result in a savings of approx. Rs.100. Over the calls made from abroad would result in a savings of approx. Rs,150. Over theinternational calling. This would help the customer of ALL in reducing the calling cost and reduction in money as compared to other cellular operators, moreover, Clay Communication, Uniconnect, BhartiAirtel and Reliance Communication are also located in India, which provides good and easy connectivity in abroad including data services.
For private visits abroad, other than to Nepal and Bhutan, any resident can obtain foreign exchange up to an aggregate amount of USD 10,000 in anyone financial year, on self-declaration basis, irrespective of the number ofvisits undertaken during the year. This limit of USD 10,000 or its equivalent per financial year for private visits can also be availed of by a person who is availing of foreign exchange for travel abroad for any purposes, such as, for employment or immigration or studies. For private visits abroad, other than to Nepal and Bhutan, any resident can obtain foreign exchange up to an aggregate amount of USD 10,000 in anyone financial year, on self-declaration basis, irrespective of the number ofvisits undertaken during the year. This limit of USD 10,000 or its equivalent per financial year for private visits can also be availed of by a person who is availing of foreign exchange for travel abroad for any purposes, such as, for employment or immigration or studies For business trips abroad to countries, other than to Nepal and Bhutan, a person can avail of foreign exchange up to USD 25,000 per visit. Release of foreign exchange exceeding USD 25,000 for business travel abroad (other than to Nepal and Bhutan), irrespective of the period of stay, requires prior permission from the Reserve Bank. Travelers are allowed to purchase foreign currency notes / coins only up to USD 3000
Approximate Number of times a person/corporate purchases Matrix services in an year
50
Purchases
2%
8%
0 -20
15% 32%
20-40
40-60
60-80
80-100 43%
Interpretation:
The data collected was both from individual clients as well as corporate which shows Matrix focuses on corporate more than individual clients because the no. of clients who visit abroad 0-20 times is very less, there is possibility that they carry their local to abroad on international roaming rates.
Suggestions:
Matrix should do more campaigns to make people aware of Matrix as a brand.
1.Attribute most liked about Matrix
Response 51
12%
convenience
14% value for money
previous experience 11% 63% personal contact
Interpretation:
Convenience is what people like about Matrix the most. Personal contacts is playing a good part in sales, on the other hand previous hassle free experience affects their sales on a large number.
Suggestions:
Matrix should increase customer convenience as much as they can. But value for money is also needs to increase so that people buy matrix services for their economic prices.
Earlier Matrix deals in voice cards only, which is affecting their sales till now, the highest portion of sales is voice cards, whereas forex currency is among the lowest. The sales of data cards is increasing but needs to increase more.
Suggestions:
Matrix should start telling their existing clients that they deal in forex cards and currency too, because whosoever is going abroad would require currency. That will increase the sales.
53
3.How customer get to know about Matrix
Response
22% News Paper
32% Radio
0% Television Commercial
8% Friends
Relatives
13% 25%
Office colleauges
Interpretations:
The major sector of Matrix clients are corporate so it affects the brand awareness of matrix, people get to know about matrix mostly from their office colleagues, newspaper plays an important role but radio doesnt .
Suggestions:
Matrix should start advertising on radio it will definitely increase the sales and brand awareness. Tv commercials appearance also needs to increase because Tv has vast audience.
4.Where customer find Matrix appearance the most
Response 54
3% 1%
News Paper
27% Radio
Television Commercial IPL Matches 58% WEB Appearance 11% Baners and Hordings
0%
Interpretation:
More than 50 percent people see Matrix appearance in newspapers that shows it plays an important role in brand awareness. On the other hand banners and hording has the least no. IPL matches and sponsoring KKR team was a profitable decision for Matrix. Match lovers and KKR supporters must know about matrix after IPL.
Suggestions:
Should continue sponsoring KKR and should increase the no. of TV commercial. Banners and hording plays an important role in brand visibility which will make people aware of Matrix as a brand so they need to work upon it.
4.9FINANCIAL ANALYSIS
BhartiAirtel Common Size Balance Sheet Airtel Common Size Balance Sheet 55
Particulars As at As at As at Common Size Common Size Common Size 31st March, 2009 March 31, 2010 March 31, 2011 31st March, 2009 31st March, 2010 31st March, 2011 SOURCES OF FUNDS Shareholders Funds Share Capital 1,89,82,398 18,988 18,988 5% 4.54% 3.36% Reserves and Surplus 25,62,95,074 3,46,523 4,19,342 72% 82.94% 74.17% Employee Stock Options Outstanding 19,83,331 2,839 3,694 1% 0.68% 0.65% Less: Deferred Stock Compensation 8,24,092 978 908 0.23% 0.23% 0.16% 11,59,239 1,861 2,786 0.33% 0.45% 0.49% Share Application Money Pending Allotment 2,933 0 0 0.00% 0.00% 0.00% Loan Funds Secured Loans 5,17,304 394 171 0.15% 0.09% 0.03% Unsecured Loans 7,66,19,167 49,995 1,18,804 22% 11.97% 21.01% Deferred Tax Liability (Net) 0 33 5,276 0% 0.01% 0.93% TOTAL 35,35,73,182 4,17,794 5,65,367 100% 100% 100%
APPLICATION OF FUNDS Fixed Assets Gross Block 37,26,67,023 4,42,125 6,14,375 105% 106% 109% Less: Accumulated Depreciation 12,25,33,438 1,61,875 2,07,367 35% 39% 37% Net Block 25,01,33,585 2,80,250 4,07,008 71% 67% 72% Capital Work-in-Progress 2,56,66,693 15,947 64,976 7% 4% 11% 27,58,00,278 2,96,197 4,71,984 78% 71% 83% Investments 11,77,77,582 1,57,733 1,18,130 33% 38% 21% Deferred Tax Asset (Net) 32,71,103 0 0 1% 0% 0% Current Assets, Loans and Advances Current Assets Inventories 6,21,510 272 344 0.176% 0.07% 0.06% Sundry Debtors 2,55,00,488 21,050 23,758 7.212% 5.04% 4.20% Cash and Bank Balances 2,25,16,027 8,167 1,338 6.368% 1.95% 0.24% Other Current Assets 11,97,127 664 1,015 0.339% 0.16% 0.18% 0.00% Loans and Advances 4,44,14,947 63,146 1,03,037 12.562% 15.11% 18.22% Total Current Assets 9,42,50,099 93299 129492 27% 22% 23% Less: Current Liabilities and Provisions Current Liabilities 13,11,79,816 1,22,848 1,47,963 37% 29% 26% Provisions 63,44,004 6,587 6,276 2% 2% 1% Total Current liabilties 13,75,23,820 1,29,435 1,54,239 39% 31% 27% Net Current Assets -4,32,73,721 -36,136 -24,747 -12% -9% -4% TOTAL 35,35,75,242 4,17,794 5,65,367 100% 100% 100%
BhartiAirtel Common Size Profit and Loss Account
Airtel Common Size Profit and Loss Account Particulars For the year ended For the year ended For the year ended Common Size Common Size Common Size March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2009 March 31, 2010 March 31, 2011 56
INCOME Service Revenue 33,99,95,752 3,55,861 3,79,924 99.96% 99.93% 99.94% Sale of Goods 1,47,150 234 234 0.04% 0.07% 0.06% Total Income 34,01,42,902 3,56,095 3,80,158 100.00% 100% 100.00% EXPENDITURE Access Charges 5,20,34,149 44,357 49,872 15.30% 12.5% 13.12% Network Operating 6,32,68,921 74,467 85,712 18.60% 20.9% 22.55% Cost of Goods Sold 1,24,051 203 161 0.04% 0.1% 0.04% Personnel 1,43,36,407 15,305 14,512 4.21% 4.3% 3.82% Sales and Marketing 2,17,63,991 24,049 31,802 6.40% 6.8% 8.37% Administrative and Other 2,08,75,328 22,401 21,353 6.14% 6.3% 5.62% Total Expenditure 17,24,02,847 1,80,782 2,03,412 50.69% 50.8% 53.51% Profit before Licence Fee, Other Income, Finance Expense (Net), Depreciation, Amortisation, Charity and Donation and Taxation 16,77,40,055 1,75,313 1,76,746 49.31% 49.2% 46.49% Licence fee & Spectrum charges (revenue share) 3,58,21,761 37,549 42,903 10.53% 10.5% 11.29% Profit before Other Income, Finance Expense (Net), Depreciation, Amortisation, Charity and Donation and Taxation 13,19,18,294 1,37,764 1,33,843 38.78% 38.7% 35.21% Other Income 14,07,368 897 1,129 0.41% 0.3% 0.30% Finance Expense (net) 1,76,39,842 -8,556 1,308 5.19% -2.4% 0.34% Depreciation 3,20,62,839 37,939 41,937 9.43% 10.7% 11.03% Amortisation 17,88,151 2,106 4,179 0.53% 0.6% 1.10% Charity and Donation [Rs 30,000 thousand 2,19,463 179 290 0.06% 0.1% 0.08% Profit before Tax 8,16,15,367 1,06,993 87,258 23.99% 30.0% 22.95% MAT credit -13,96,304 -10,386 -12,469 -0.41% -2.9% -3.28% Tax Expense 0.00% 0.0% 0.00% Current Tax 91,73,614 19,813 17,315 2.70% 5.6% 4.55% Deferred Tax -39,59,059 3,304 5,243 -1.16% 0.9% 1.38% Fringe Benefit Tax 3,58,731 0.11% 0.0% 0.00% Profit after Tax 7,74,38,385 94,262 77,169 22.77% 26.5% 20.30% Profit/ (Loss) Before Tax and adjustments Transferred from Debenture Redemption Reserve 4,411 38 65 0.0013% 0.0% 0.02% Transferred to General Reserve 60,00,000 7,100 5800 1.76% 2.0% 1.53% Dividend Proposed 37,96,480 3,798 3,798 1.12% 1.1% 1.00% Dividend Paid 0.00% 0.0% 0.00% Tax on Dividend Proposed / Paid 6,45,212 645 601 0.19% 0.2% 0.16% Profit after Appropriation 6,70,01,104 82,757 67,035 19.70% 23.2% 17.63% Profit brought forward 11,79,72,158 1,85,028 2,67,785 34.68% 52.0% 70.44% Profit carried to Balance Sheet 18,49,73,262 2,67,785 3,34,820 54.38% 75.2% 88.07%
Reliance Common Size Balance Sheet
Reliance Common Size Balance Sheet (in Crores) Particulars As at As at As at Common Size Common Size Common Size 57
APPLICATION OF FUNDS Fixed Assets Gross Block 37941.15 39838.17 40904.17 45.94% 53.13% 51.39% Less: Accumulated Depreciation 6533.38 9225.69 12063.27 7.91% 12.30% 15.16% Net Block 31,407.77 30,612.48 28,840.90 38.03% 40.83% 36.23% Capital Work-in-Progress 3643.86 1683.52 9907.66 4.41% 2.25% 12.45% 35,051.63 32,296.00 38,748.56 42.44% 43.07% 48.68% Investments 31,364.75 31,898.60 32,102.13 37.97% 42.54% 40.33% Current Assets, Loans and Advances Current Assets Inventories 253.14 298.34 306.11 0.31% 0.40% 0.38% Sundry Debtors 1482.22 1738.63 1969.25 1.79% 2.32% 2.47% Cash and Bank Balances 535.15 82.18 3813.21 0.65% 0.11% 4.79% Other Current Assets 1919.38 1928.72 2110.82 2.32% 2.57% 2.65% 4189.89 4,047.87 8199.39 5.07% 5.40% 10.30% Loans and Advances 21353.12 15958.07 10954.43 25.85% 21.28% 13.76% 25,543.01 20,005.94 19,153.82 30.93% 26.68% 24.06% Less: Current Liabilities and Provisions Current Liabilities 5781.49 5836.53 7551.94 7.00% 7.78% 9.49% Provisions 3583.97 3386.84 2855.35 4.34% 4.52% 3.59% 9,365.46 9,223.37 10,407.29 11.34% 12.30% 13.07% Net Current Assets 16,177.55 10,782.57 8,746.53 19.59% 14.38% 10.99% TOTAL 82593.93 74977.17 79597.22 100.00% 100.00% 100.00%
Reliance Common Size Profit and Loss Account
Reliance Commom Size Profit and Loss Account (in Crores) Particulars For the year ended For the year ended For the year ended Common Size Common Size Common Size March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2009 March 31, 2010 March 31, 2011 58
INCOME Service Revenue and Other Operating Income 13,610.58 12,290.61 12,129.77 99% 98% 96% Other Income 84.08 221.11 484.25 1% 2% 4% 13,694.66 12,511.72 12,614.02 100% 100% 100% EXPENDITURE Access Charges, License Fees and Network Expenses 7,054.74 9,017.64 9,327.66 52% 72% 74% Payments to and Provisions for Employees 758.36 671.79 608.07 6% 5% 5% Commission to Non Executive Directors -3.8 0.6 0 -0.03% 0.0048% 0% Sales and General Administration Expenses 2,252.55 1,731.01 1,772.15 16% 14% 14% 10061.85 11,421.04 11,707.88 73% 91% 93% Profit before Financial Charges, Depreciation and Amortisation, Exceptional Items and Tax 3,632.81 1,090.68 906.14 27% 9% 7% Financial Charges (net) 344.06 -1,058.38 178.11 3% -8% 1% Profit before Depreciation and Amortisation, Exceptional Items and Tax 3,288.75 2,149.06 728.03 24% 17% 6% Depreciation and Amortisation 2,296.53 2,795.22 2,855.62 17% 22% 23% Depreciation adjusted against Provision for Business Restructuring -363.02 -107.5 -86.39 -3% -1% -1% Depreciation adjusted against General Reserve III 0 -1,176.48 -1,174.96 0% -9% -9% Profit/ (Loss) before Exceptional Items and Tax 1,355.24 637.82 -866.24 10% 5% -7% Exceptional Items 0% Stamp Duty paid on Demerger 0 25 0.00 0% 1% 0% Amortisation/ (write back) of Compensation under ESOP 7.47 -6.65 -6.73 0.05% 0% 0% Revaluation of Investments -404.03 -3% Profit on transfer of Optic Fiber Undertaking pursuant to the Scheme of Aggrangement -3,063.27 -22% Adjustments pursuant to the Scheme of Amalgamation/ Arrangement, inter alia, for merger of Reliance Gateway Net Limited into the Company Investments in Reliance Gateway Net Limited written off 2,096.43 15% Equivalent amount withdrawn from General Reserve III -2,096.43 -15% Adjustments pursuant to the Scheme of Arrangement, inter alia, for demerger of Optic Fiber Undertaking into Reliance Infratel Limited Losses on account of change in exchange rate relating to loans/ liablities (net) 4,464.57 33% Equivalent amount withdrawn from General Reserve III -4,464.57 -33%
Profit/ (Loss) Before Tax and adjustments 4,815.07 619.47 -859.51 35% 5% -7% Provision for Current Tax 0 140.54 0 0% 1% 0% Short/(Excess) provision for tax of earlier years 0 0 -101.52 0% 0% -1% Fringe Benefit Tax 12.4 0 0 0.09% 0% 0% Profit/ (Loss) After Tax and before Adjustments 4,802.67 478.93 -757.99 35% 4% -6% Investments in Global Innovative Solutions Private Limited written off 0 0 1 0% 0% 0% Equivalent amount withdrawn from General Reserve III 0 0 -1 0% 0% 0% Profit/ (Loss) After Tax and Adjustments 4,802.67 478.93 -757.99 35% 4% -6% Add : Balance Brought Forward from Previous year 4,300.24 502.75 662.14 31% 4% 5% Amount available for Appropriations 9,102.91 981.68 -95.85 66% 8% -1% APPROPRIATIONS 0% Transferred to Debenture Redemption Reserve 6.98 74.96 0% 1% Transferred to/ (from) General Reserve III 8,400.00 40 -216.19 61% 0.32% -2% Proposed Dividend on Equity Shares 175.44 103.2 0% 1% 1% Interim Dividend on Equity Shares 165.12 1% 0% Tax on Proposed Dividend 28.06 29.14 17.14 0% 0.23% 0% Balance carried to Balance Sheet 502.75 662.14 0.00 4% 5% 0%
COMPARITIVE RATIO ANALYSIS OF BHARTI AIRTEL LIMITED AND RELIANCE COMMUNICATION LIMITED
59
Liquidity Ratio
Liquidity Ratio refers to the ability of a firm to meet its short term obligations. (i.e. obligations that will mature within the next twelve months). Such ability comes from holding of liquid assets which are readily convertible into cash.CURRENT RATIO
The current ratio measures whether or not a firm has enough resources to pay its debts over the next 12 months. Potential creditors use this ratio in determining whether or not to make short-term loans. The current ratio can also give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. The current ratio is also known as the working capital ratio.
Current Ratio (CR) = (Current Assets/Current Liability)
Current Ratio Company Name March '09 March '10 March '11 Reliance 1.45 1.37 0.96 Airtel 0.69 0.7 0.7
Current Ratio
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0 March '09 March '10 March '11
Reliance 1.45 1.37 0.96
Airtel 0.69 0.7 0.7
Interpretation:
Reliance has seen decline in the Current Ratio over the years while Airtel has 60
been able to maintain the same ratio for past 3 years. Reliance falling ratio accounts for increase in Current Liability from 11.34% in 2009 to 13.07% in 2012 increase in Current liability from 9,223.37 in 2010 to 10,407.29 crores in 2011including the amount payable to subsidiary, dues to small medium enterprises etc.
Airtel has decreased its doubtful debtors that but has increased almost same amount of short term loans, cash and bank balances have decreased and inventory have increased over the years. Current Liabilities have also increased to 154,239 millions in 2011. Overall in Airtel there is a similar amount of increase in current assets and current liabilities.
QUICK RATIO
The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets (near cash or quick assets). Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. The ratio tells creditors how much of the company's short term debt can be met by selling all the company's liquid assets at very short notice.
Quick Ratio Company Name March '09 March '10 March '11 Reliance 2.7 2.14 1.81 Airtel 0.65 0.67 0.77
Quick Ratio
3
2.5
61
2
1.5 Reliance 1 Airtel
0.5
0
March '09 March '10 March '11
Interpretation: Airtel increase in quick ratio is mainly because of increase in short terms loans and advance given to subsidiary while Reliance has taken loan from its subsidiaries and dues to micro and small units has also in increased year 2011 as compared to year 2010.
CASH RATIO
Cash ratio (also called cash asset ratio) is the ratio of a company's cash and cash equivalent assets to its total liabilities. Cash ratio is a refinement of quick ratio and indicates the extent to which readily available funds can pay off current liabilities. Potential creditors use this ratio as a measure of a company's liquidity and how easily it can service debt and cover short-term liabilities.
CASH RATIO = (CASH & CASH EQUIVALENTS / CURRENT LIABILITIES)
Cash Ratio Company Name 2008-09 2009-10 2010-11 Reliance 0.025 0.006 0.191 Airtel 0.160 0.060 0.010
Cash Ratio
0.191
62
0.200 0.160
0.150
0.100
0.060
Reliance
0.050 0.025 0.006 0.010
Airtel
0.000
2008-09 2009-10 2010-11
Year
Interpretation:
Cash of Airtel has decreased from 6.368% (by the end 2009) to 0.24% (by the end of 2011) and Current Liability has also increased in past 3 years due to which there is a decline in Cash Ratio.
Reliance has increased its Cash and Bank Balance due to which cash ratio has increased over the period of time. But idle cash means loss of profitability to the company.
PROFITABILITY RATIO
Profitability represents the financial performance of a company.
NET PROFIT MARGIN
It denotes overall profitability- profit from operations as well as profit/loss from non-operating activities.
NET PROFIT MARGIN (%) = (PAT/ Net Sales)*100
Net Profit Margin(%) Company Name March '09 March '10 March '11 Reliance 30% 3% -5% Airtel 23% 26% 20%
63
Net Profit Margin(%)
35%
30%
30%
26%
25% 23% 20%
20%
15%
Reliance
10%
Airtel
3%
5%
0%
-5% March '09 March '10 March '11
-5%
-10%
Interpretation:
Due to decrease in total income and increase in Access Charges, License Fees, Network Expenses, Depreciation, other expenditure reliances net profit margin has declined tremendously over the years. As far as Airtel is concerned there is an Increase in income for service revenue from 355,861 million in the year 2009-10 to 379,924 million in the year 2010-11 but increase in license fees, depreciation, and financial charge led to decrease in net profit margin.
OPERATING PROFIT MARGIN
Operating Profit Ratio indicates profitability from a firms main operating activities.
A higher operating profit margin implies better sales realization and effective cost control. Given selling price, a firm can improve operating profit margin by reducing operating cost. Operating Cost includes manufacturing, administrative, selling and distribution costs and depreciation.
Airtel has performed better in controlling their expenditure only to 53% of total income in the year 2011 while Reliance expenditure has increased from 73% of total income in 2008 to 93% of the total income in the year 2011. Due to which operating profit margin of reliance is decreasing and Airtel is consistent over the years.
RETURN ON EQUITY (ROE)
Return on Equity shows return to the share holders and can be 65
expressed as a percentage on net worth or as an amount per unit of shares.
Return on Equity = (Profit after Tax/Net Worth)*100
Airtel Reliance Return on equity Return on equity PARTICULARS 08-09 09-10 10-11 PARTICULARS 08-09 09-10 10-11 (PAT) 77438385 94262 77169 (PAT) 4802.67 478.93 -757.99 Net worth 275277472 365511 4,38,330 Net worth 51690.32 50498.89 48144.48 Return on equity 28.13% 25.79% 17.61% Return on equity 9.29% 0.95% -1.57% *Net Worth = Shareholders funds Miscellaneous Expenditure- Accumulated losses
Return on Equity
30.00% 28.13% 25.79%
25.00%
17.61%
20.00%
15.00%
9.29%
10.00%
0.95%
5.00% -1.57%
0.00%
-5.00%
08-09 09-10 10-11
Reliance 9.29% 0.95% -1.57%
Airtel 28.13% 25.79% 17.61%
Axis Title
Interpretation:
Both companies has seen decline in ROE. Profit after Tax and Net wealth of Reliance has decreased over the period of 3 years which led to the negative return on equity in 2010-11. Similarly the Airtel has also seen decline in PAT though there net worth has increased, still the decrease in overall percentage of Airtel ROE is 10.52% (28.13-17.61) % and for Reliance ROE overall decrease is 10.86% i.e. from 9.29% to -1.57%. But Airtel has maintained positive Return on Equity while Reliance has negative ROE at the end of 2011. 66
ACTIVITY RATIOS
DEBTORS TURNOVER RATIO
It represents the number of times average dues from customers are realised. Lower debtors turnover denotes poor collection and hence would mean that funds remain invested for longer period.
Debtors Turnover Ratio = Net Sales/ Average Debtors
Debtors Turnover Ratio Company Name March '09 March '10 March '11 Reliance 11.72 8.42 7.18 Airtel 12.78 15.3 16.97
Debtors Turnover Ratio
18 16.97
16
15.3
14
12 12.78
11.72
10 Reliance 8 8.42
7.18
6
Airtel
4
2
0
March '09 March '10 March '11
Interpretation:
Sundry Debtors of reliance has increased from 1.79% in the year 2008 to 2.47% in the year 2010 which shows blockage of fund while Airtel has decreased its debtors from 7.21% in the year 2008 to 4.20% in the year 2011. Similarly there is an increase in Airtel income while reliance has seen decrease in its total income in the year 2010-11 as compared to the year 2008-09. Due to which Airtel is performing better in Debtors Turnover Ratio. WORKING CAPITAL TURNOVER RATIO 67
The working capital turnover ratio is used to analyze the relationship between the money used to fund operations and the sales generated from these operations. In a general sense, the higher the working capital turnover, the better because it means that the company is generating a lot of sales compared to the money it uses to fund the sales.
WORKING CAPITAL TURNOVER RATIO = Net Sales / Net Working Capital
Working Capital Turnover Ratio Company Name 2008-09 2009-10 2010-11 Reliance 0.85 1.16 1.44 Airtel -7.86 -9.85 -15.36
Working Capital Turnover
4.00 0.85 1.16 1.44
2.00
0.00
-2.00 2008-09 2009-10 2010-11
-4.00
-6.00 -7.86 Reliance -8.00
-9.85
-10.00 Airtel
-12.00 -15.36
-14.00
-16.00
-18.00 Year
Interpretation
The fact that net working capital of airtel is in negative there working Capital Ratio is also negative. Increase in revenue for reliance has improved its working capital
FIXED ASSETS TURNOVER RATIO
Fixed Assets Turnover Ratio shows the productivity of fixed assets. It measures the sales revenue per rupee of fixed assets. A fixed ratio of 2 indicates that a 68
rupee of fixed assets has generated sales of Rs. 2.
Fixed Assets Turnover Ratio=Sales/ [Net block + Capital WIP]
Fixed Asset Turnover Company Name 08-09 09-10 10-11 Reliance 0.39 0.39 0.33 Airtel 1.23 1.2 0.81
Fixed Assets Turnover
1.4 1.23 1.2
1.2
0.81
1
0.8
0.6
Reliance
0.39 0.39 0.33
0.4
Airtel
0.2
0
08-09 09-10 10-11
Year
Interpretation
Airtel has generated Rs 0.81 of sales from a rupee of fixed assets but they have purchased new assets due to which there has been a decline in year 2011 as compare year 2010 while Reliance has generated Rs 0.33 of sales from a rupee of fixed assets they also have bought new assets and increased their investment in Capital work in progress. LEVERAGE RATIOS
DEBT-EQUITY RATIO
Debt-Equity Ratio shows the mix of debt and equity used. Higher the ratio, larger will be the loan component.
Debt-Equity Ratio (D/E) = (Longterm debt/Equity)
*Equity = Share capital+ Reserves and surplus Miscellaneous Expenditure-Accumulated Loses
69
Debt-Equity Company Name March '09 March '10 March '11 Reliance 0.6 0.48 0.65 Airtel 0.28 0.14 0.27
Debt-Equity
0.7 0.6 0.65
0.6 0.48
0.5
0.4 0.28
0.27 Reliance
0.3
Airtel
0.2 0.14
0.1
0
March '09
March '10
March '11
Interpretation:
Reliance has taken secured loans of 12000 crore in the year 2010-11 and used its reserves and surplus to write off its investment in Reliance Gateway Net Limited due to which its debt portion has increased while Airtel has been successfully able to decrease its secured and unsecured loan over the period of 3 years due to which it has less debt component in its capital structure as compared to Reliance
INTEREST COVERAGE RATIO (ICR)
If Interest Coverage Ratio is less than one, it implies that a firm has negative PAT. The entity could not earn sufficient profit to service the interest on loan in full. It reflects poor solvency ratio.
Interest Coverage Ratio Company Name 08-09 09-10 10-11 Reliance 5.98 1.43 -0.13 70
Airtel 71.86 88.85 78.56
Interest Coverage Ratio
100 88.85
90 71.86 78.56
80
70
60
50
40 Reliance 30 Airtel
20
5.98 1.43
10 -0.13
0
-10 08-09 09-10 10-11
Year
Interpretation:
Reliance declining Interest Coverage ratio accounts for increase in expenses which is 93% of total income by the end of March 2011, due to which its PAT is negative.
Airtel have generated enough profit to meet the interest payments over the period of 3 years. DEBT RATIO
Debt ratio is a ratio that indicates the proportion of a company's debt to its total assets. It shows how much the company relies on debt to finance assets. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The higher the ratio, the greater the risk associated with the firm's operation. A low debt ratio indicates conservative financing with an opportunity to borrow in the future at no 71
significant risk.
Debt Ratio = Total Debt / Total Assets
Debt Ratio Company Name 08-09 09-10 10-11 Reliance 0.37 0.33 0.4 Airtel 0.22 0.12 0.21
Debt Ratio
0.37 0.4
0.4
0.33
0.35
0.3 0.22
0.21
0.25
0.2
0.12
Reliance
0.15
0.1
Airtel
0.05
0
08-09 09-10 10-11
Year
Interpretation:
Reliance has taken more secured loans of 12000 crores from the market in the year 2011 due to which there is an increase in debt ratio. Airtel has decreased its secured loan but has taken unsecured loans from the market due to which there is a increase in debt ratio but it is still less as compared to reliance.
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5.1CONCLUSIONS AND RECOMMENDATION
Matrix Cellular International Services Ltd. (MCIS) is the leading company in 73
India to provide international country specific sim cards to customers who fly abroad.
The company is growing rapidly as more and more people are flying abroad every year either due to education or work or for leisure purposes. The company is investing a lot in order to grow by putting its efforts to build a technology driven and consumer focused.
In research it has been seen that Matrix Cellular services is an excellent service provider and very cheap also when compared to International Roaming costs one has to bear through service providers like Vodafone, Airtel, Etc.
The reason for people who opt for Matrixs Services is the low cost and good connectivity along with convenience and the ease of availing the service and the settlement of the bill. The process being entirely automated it creates a positive impact on the customer.
Matrix was not know as a brand earlier. But now MATRIX is a very well known brand name because of its advertisement in newspapers, media campaigns and also after sponsoring KKR team in IPL, to increase the brand visibility and sales matrix need to continue the same.
5.1 REFERENCE For the purpose of preparation of the project and giving it the valuable also, a helping hand is taken from the most precious reserve of knowledge i.e. the books and internet. 74
Encyclopedia Article:
Wikipedia Advertising (http://en.wikipedia.org/wiki/Advertising) Wikipedia Public Relationship(http://en.wikipedia.org/wiki/Public_relations)