Omnitel Pronto Italia

Team
Deccan Challangers

Premkumar Sharafath Narayana Hariharan Biswa Ranjan Narasimha Raju

Q1 .
A. Competitive Advantage
Superior Customer service
Polite operators, Short waiting time, One stop calling

B. Launch Failure
Launching was not able to increase the :
Trial Rate
No focus to increase mobile penetration No attraction for Existing Mobile Users to switch over from TIM

Only focus on Post Sales Service

Q2.
A. High Churn rate
Customer trend which goes with latest fashion, looking for New Gadgets every time Low Entry & Exit Barriers for a customer to switch

B. Libero Implications

Launch below expectations ?

Launching was not able to increase the :
Trial Rate
No focus on increasing mobile penetration No attraction for Existing Mobile Users to switch over from TIM

Only focus on Post Sales Service

For increasing customer Retention ( Lower churn Rate)

High Churn rate

Subsidies on handsets gives an advantage to the customer to switch over on another network inorder to get the latest gadget on expiry of the contract.
High Churn rate-UK-28%,Sweden-20.5% &Lowest Finland-12%

Incentivizing dealers to sign up new customers instead of retaining the exsisting customers(Proaching). Librelization of Telecom Industry introduced competition. Customer switching cost must have been relatively low, or incentives to switch relatively high. Telecom offers undifferential products/services.New tariffs easily get replicated by competitors & all offer the same phone resuling on low brand royality
.

Churn rate implications-LIBERO Launch

The rate plan targeted for the cost conscious customers,dissatified with TIM services-Churn rate to increase for TIM Decrease for Omnitel as new customers would be roped in & exsisting would be retained. Aggressive advertizing and distribution campaigns will attract the 1st time customers rather than siphoning the TIM customers. Increase in market penetration(presently 7%).New customers to increase more rapidly than lost custmer hence churn rate to decrease as such for Italy.

Learning from Customer research

Helps to develop effective marketing strategies by uncovering customer preferences as well as-ve perceptions/objectives that could limit a strategy effectiveness. Identify unexplored product benefits/features,optimal target markets &potential product spinoff/strategies(Segmentation/Differentiation). Allows marketers to guage the relative importance or utility of a proposed product attributes &to uncover differentiate various market segments. Stategies can be tailor made to address specific needs of these segments and marketing ,R&D budgets can be alloted accordingly.

Learning from conjoint analysis

Telecom industry is heterogenous/Stratified. (2) Groups-Cost Sensetive group & Brand/Service sensetive group. 8 Identified groups (3) considered monthly charges to be more important than peak/off peak tariffs wheres (5) groups repoted the reverse. Rejector group call rate (Tariffs) ranked high in importance followed by monthly fee & activation charges. Rate plans should be tailored to address specific market segmentsPeak vs.off peak users/Monthly charge vs.tariff sensetive users/Frequent vs. Infrequent users. Prospect group representing the largest potential market segment given Italy(Penetration of 6.5%) & projected growth of 30% by 2000,higly driven by Cost/Sp. Tariffs(52%) & Service(33%) & predominantly represented by 24-54 age group.

Overview of Mobile Communication history in Northern & Western Europe,95

100000 33737

10000 3471 1371 3794 2066 1024 1000 1090

5416

Subscribers

100 40

58 20

58 42

61

80

Subscribers Growth

48
25 23

54 Penetration

13
10 4 2 9 7

1 USA Finland France Germany Italy Norway Sweden UK

Low penetration vs.Subsribers

Will LIBERO lead to price war?

Designed to avoid price war by setting higher tariffs. Strategy to commoditize cellphones as announced in vision statement. Cater different market segment-Market cellphones as Status Symbol.If u have a cellphone u are somebody My mass marketing to attract the lower/under markets,and have a greater pie. Would attract enough cost conscious new customers to gain market share,Brand recognition & greater financial security in order to survive a future war game.

Redesigning LIBERO
Instead of completely waiving monthly fee,use an incentive structure that gradually reduces the monthly fee as usage increase(0 to 193min.) No subsidy on handsets,instead keep the tariff & monthly charges lower. Partner with established mass retailers-Wal Mart/Target/Costco to delelop new low cost phone distribution channel for the untapped,cost sensetive markets. Aggressive advertizing campaigns to generate consumer awareness & demand for low cost phones in order to make consumes buy the phone.