Consumer Behavior and Market Survey of Vodafone in Pune

1. Introduction to Consumer Behavior:
‘Consumer behavior involves the psychological processes that consumers go through in
recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether
or not to purchase a product and, if so, which brand and where), interpret information, make
plans, and implement these plans (e.g., by engaging in comparison shopping or actually
purchasing a product).’ Consumer behavior reads studies and understands the targeted market in
order to serve them effectively and create the brand loyalty, cultural, social and personal are the
three major influencing factors of consumer behavior.

2. Industry Profile:
Cellular industry which was launched in the year 1999 is a part of the telecommunication
sector of India. It was launched under New National Telecom Policy by Telecom Regulatory
Authority of India (TRAI). The growth of India’s mobile communication market was rapid, the
lower tariffs and the falling prices of the handsets was the major driving factor. The push
towards the rural and poor market has been the driving force for the mobile service markets
growth.
Pre- paid and Post Paid are the two subscriptions provided by the cellular companies. In
the Indian market about 80% subscriber’s base is of Pre-Paid. The services under the cellular
industry are further segmented into two types which are GSM (Global System for Mobile
Communications) and CDMA (Code Division Multiple Access). GSM service providers consists
of Airtel, Vodafone, Loop Mobile, Aircel, Idea, BSNL etc. and the CDMA consists of Reliance,
Tata etc.
In the first three months, India’s mobile customer base has risen by 59.2 Million and
reached 584.3 Million in the March, 2010. The penetration rate of India’s mobile had risen to
49%. The number of Indian mobile users is continuously declining, and there have been reports
of reduction in the Average Revenue Per User (ARPU). This decline is expected to decline
continuously as long as the industry is dependent on the low spending rates of the pre-paid users.
The issue of licenses for 3G Mobile is a significant implication of India’s mobile sector. The bid
for the issue of license for 3G generated more than double of expected amount to the
government, which was participated by the 9 telecom giants of which seven companies were
issued the license; announced by the Department of Telecommunications.
In the month of June, along with the issue of 3g licenses, the DoT announced the sale of
new wireless broadband spectrum had also been completed. Infotel Broadband Services won the
Broadband Wireless Access (BWA) license for all the 22 of India’s telecom circles, paying
US$2.74bn (INR 128.48bn), Aircel, won eight licenses, the next largest no. for INR 34.38bn,
Tikona Digital Networks paid INR 10.58bn for the five licenses. The bid also included the US
based chipmaker Qualcomm and Bharti Airtel, with the four licenses apiece.

3. Company Profile:
Vodafone the largest telecom service provider of UK
had a market share of about £75bn by the June, 2008.
Vodafone has an equity stake in 25 countries around the
world and partner networks in which Vodafone has no equity
share. Vodafone the world’s leading international mobile
communication company has over 200 million customers
worldwide with the 25 operations in the 31 countries across
the 40 continents. At the time of acquisition with Hutchison Essar Ltd. (better known as Hutch)
for US$11.1bn and 67% controlling interest Vodafone agreed to sell back 5.6% stake of Airtel,
back to the Mittals.
Vodafone registered increase of 50% during the year followed by the rapid expansion of
customer with an average of 1.5mn additions a month from the time of its acquisition.
Vodafone in India:
The pug in a roaming with a little girl became the
brand face of Hutch and him leaving the pink dog house and
entering the red house was the indication of a change, claimed
‘change is good’. In the year 207 when the Vodafone acquired
Hutch, with 71.5mn subscribers, Vodafone became the second
largest mobile service provider in India by revenue. “We have
continued to drive penetration in India, generating strong
revenue growth from our brand and commercial offers and a
substantial investment in network coverage,” said Vittorio Colao, chief executive, Vodafone
Group, at the announcement of the last quarter results. According to the analysts, Vodafone’s
mobile user base will continue till 2011-2012. In the year 2009, for the quarter ended on
December, Vodafone Group India grew about 14% which was £767 million (INR5, 622.7 crore)
an increase from its last years revenue £674 million.
Vodafone’s revenues from the Indian market are smaller than other markets. During the
financial year 2009, it added 24.6 million customers in India and reported revenues of £2,689
million from £1,822 million in the last financial year. In Europe, organic service revenues
declined 1.7%, while in Africa and Central Europe, it grew 3.9%. In Asia Pacific and the Middle
East, revenues increased 19% on a pro-forma basis, reflecting a strong contribution from India,
where revenues grew by 32.9% on a pro-forma basis.
Vodafone’s advertising strategies also gave a huge impact on the Indian consumers. To
retain the consumer’s loyalty toward the company, they didn’t drop the idea of using the Pug in
their advertisements, as Hutch had used the man’s best friend (Dog) as a resemblance to their

4. network saying “Where you go the network follows you”. The simple and yet effective
advertisements using Zoo-Zoo’s, which was famous in rural as well as the urban market.
Major Competitors in Indian Market:
“Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among
India's largest mobile phone and Fixed Network operators. With more than 60 million
subscriptions as of 13th February 2008, it offers its mobile services under the Airtel brand. Airtel
is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel
owns the Airtel brand and provides the following services under the brand name Airtel: Mobile
Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet
Connectivity (DSL) and Leased Line), Long Distance Services and Enterprise Services
(Telecommunications consulting for corporate).
Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom
and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). According to
National Stock Exchange data, Anil Ambani controls 66.75 per cent of the company, which
accounts for more than 1.36 billion shares of the company. Reliance Infocomm is an Indian
telecommunications company. It is the flagship company of the Reliance-Anil Dhirubhai
Ambani Group, comprising of power (Reliance Energy), financial services (Reliance Capital)
and telecom initiatives of the Reliance ADA Group. Reliance Infocomm is currently managed by
Anil Dhirubhai Ambani.
Reliance Communications has a reliable, high-capacity, integrated (both wireless and
wire line) and convergent (voice, data and video) digital network. It is capable of delivering a
range of services spanning the entire infocomm (information and communication) value chain,
including infrastructure and services — for enterprises as well as individuals, applications, and
consulting.

5. As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate
in 11 circles. With a customer base of over 17 million, IDEA Cellular has operations in Delhi,
Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Uttaranchal,
Haryana, UP-West, Himachal Pradesh and Kerala.
Idea Cellular is a wireless telephony company operating in various states in India. It
initially started in 1995 as a joint venture between the Tata, Aditya Birla Group and AT&T by
merging Tata Cellular and Birla AT&T Communications. On April 10, 2006, the Aditya Birla
Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share
amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla
Nuvo, a company in-charge of the Birla’s' new business initiatives, the remaining stake was
acquired by Birla TMT holdings Private Ltd., an AV Birla family owned company. Currently,
Birla Group holds 98.3% of the total shares of the company.
Tata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an Indian
Conglomerate. The company forms part of the Tata Group's presence in the
Telecommunication Industry in India, along with Tata Teleservices (Maharashtra) Limited
(TTML) and VSNL.
In December 2002, the company acquired the erstwhile Hughes Telecom (India) Ltd.
which was renamed Tata Teleservices (Maharashtra) Limited. Tata Teleservices is part of the
INR Rs. 119000 Crore (US$ 29 billion) Tata Group, that has over 87 companies, over 250,000
employees and more than 2.8 million shareholders. With a committed investment of INR
36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Group has a formidable presence
across the telecom value chain. Tata Teleservices has created a Pan India presence spread
across 20 circles that include Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra,
Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar
Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal.

6. BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL
has a customer base of 68.5 million (Basic & Mobile telephony). It has footprints throughout
India except for the metropolitan cities of Mumbai and New Delhi which are managed by
MTNL. As on December 31, 2007 BSNL commanded a customer base of 31.7 million Wireline,
4.1 million CDMA-WLL and 32.7 million GSM Mobile subscribers. BSNL's earnings for the
Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR
78.06b (US$ 1.90 billion). Today, BSNL is India's largest Telco and one of the largest Public
Sector Undertaking with estimated market value of $ 100 Billion.

7. Questionnaire:
Name: Age:
A. Which mobile network do you use?
Airtel Aircel
BPL – LOOP BSNL
Idea Reliance
Tata Vodafone
B. What kind of subscription do you have?
Prepaid Post-paid
C. How many mobile networks do you use at a time?
1 2
3 More than 3
D. How long have you been using this network service?
0-1 Month 1-6 Months
6-12months 12 Months and More
E. What is the monthly expenditure on the mobile bill or refill?
Rs. 500/- and less Rs. 500/- to Rs. 1000/-
Rs. 1000/- and More
F. Have you ever used any other mobile network? If yes, please mention the company
names.
Yes, ______________________ No
G. Are you satisfied with the service provided by the company?
Very Satisfied Satisfied
Not Satisfied Doesn’t Matter
If not satisfied kindly mention the problems:

8. Analysis:
The uses of vodafone mobile network users are higher in the survey near the college of MIT.
The basic reason given by the network users was just that they are happy with the high network
and the campus pack which attracts a group of people who contact and communicate majority of
the times with each other. Airtel, Aircel, Idea and the Tata DoCoMo are the other networks used
by the students surveyed. The factor on which the competitors have the edge over Vodafone is
the mobile internet charges which are higher than others.
Vodafone has been the highly popular mobile communication service provider in India.
The reason of its popularity is its constant efforts towards innovations and reaching the end users
with advertisements and the promotional activities it does. A small girl and the pug following
her and the very famous Zoo-Zoo’s have become the face of Vodafone. Vodafone is famous in
the students as company sponsors the sports events and the teams. In the survey people could
identify the Vodafone just looking at the photo of a Pug and that of a Zoo-Zoo.
In the competitive scenario of mobile network market in India the tariff rates are falling
day by day at it’s lowest as of now. Majority of the students prefer the pre-paid subscription and
use it for SMS which costs less than a call. Hence the Vodafone’s, per call charge is attempted to
attract and retain the users. The one day usage packs for Internet, SMS, and Call Charges are the
newest attractions for the users. The Vodafone’s promotion with Blackberry for a combined sale
is a path Vodafone is using for better opportunities to reach the fashionable and snobby students
and the working class.
Vodafone has the largest no. of consumer services centers in India in the various
locations working from 8am to 8 pm. The consumers using Vodafone have been loyal to the
company even after the company’s change from Orange to Hutch to Vodafone.
The availability of the networks at cheaper rates and with only one or two documents
makes the market more fluctuating. With every new promotional offer by the company people
tend to opt for new no. utilize the no. for a month and two and then opt for new service provider
again. Being a student, where retaining the mobile no. for long is not necessary, changing the
network service provider in a group affects the purchase and the company in a small proportion.
Such small proportion will impact the company to have a check at the overall consumers.
Airtel stood as the best competitor in the survey as it has also got the best plans in the
market and has the lowest mobile internet charges. The group calling availability provided by the
Airtel is another attraction to the students and it has got the lowest call rates for the internal
group talk. Idea is also used by the numerous students basically because of its network at the end
areas, where other networks may fluctuates, but Idea do not offer a variety of offers in it that
affects in turn reduces the consumers.

9. Idea, Airtel, Reliance and Tata do not charge the roaming for the Mumbai networks used
in Pune or rest of the Maharashtra, but Vodafone does the same; complained a student. There is
also discomfort in using any of the networks as the networks promotions are continuously done
via messages and the pre recorded calls at any time of the day as well as the night. Hence many
companies now have also started the Do Not Disturb service for the users who do not wish to
have any promotional offers.
The companies have been trying to imply different tariff offers in their network and
variety of voucher packs for availing the offers of call rates and the SMS as per the need. But,
Uninor, the recent entrant in the market came up with the distinct offer which has the offers
changing with the time and cut in the tariff rates up to 60%. With the entry of the company many
player took it as a tough competition but the low quality network provided by the Uninor became
its drawback and many students switched from Uninor to other available networks.
4% Market share % 1%
1%
7% 32%
15%
16% 24%
Bharti Airtel Vodafone Essar BSNL
IDEA Aircel Reliance
MTNL Loop
Conclusion:
The Vodafone has been a preferred brand in the market, with less complaints and a
steadily growing in the services provided. The mobile market is still headed by the Bharti –
Airtel and has been improving in targeting and reaching the inner India- rural India after serving
its urban market for long time now. With the increase in no. of the service providers the market
share of these companies if affecting, as it is getting divided in the small parts held by these new
players.
The Indian market has more potential to grow as the population is high and the people
also like change and better services. Very few customers like to be loyal to the company, but
majority prefer to try other services and keep on changing the mobile no’s.