Consumer Preference for mobile phone services in the city of LucknowStudy Conducted At

BHARAT SANCHAR NIGAM LIMITED LucknowSUBMITTED BY

Mohit Chandra MBA (Marketing & Sales) A7002209007 UNDER THE GUIDANCE OFINDUSTRIAL GUIDE FACULTY GUIDE

Mr H.L. Rai Divisional Engineer, Bharat Sanchar Nigam Ltd. Lucknow A Project report

Prof. Manoj Joshi ABS, Lucknow

Submitted to Amity University In partial fulfilment of the requirement for the degree of

MASTER OF BUSINESS ADMINISTRATION2009-2011

AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH LUCKNOW

STUDENTS CERTIFICATE

Certified that this report is prepared based on the summer internship project undertaken by me in BHARAT SANCHAR NIGAM LTD. from 31st May 2010 to 10th July 2010, under the able guidance of Professor Manoj Joshi in partial fulfilment of the requirement for award of degree of Master of Business Administration (MBA-M&S) from Amity University, Uttar Pradesh.

Date.______________

Signature Mohit Chandra Student

Signature Professor M Joshi Faculty Guide

Signature R P Singh Director (ABS)

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Certificate by Faculty Guide

Forwarded here with a summer internship report on Consumer preference for mobile phone services in the city of Lucknow of BHARAT SANCHAR NIGAM LIMITED submitted by MOHIT CHANDRA Enrolment No. A7002209007, student of MBA (M & S) 3rd Semester (2009-2011). This project work is partial fulfilment of the requirement for the degree of Master in Business Administration from Amity University Lucknow Campus, Uttar Pradesh.

PROF. MANOJ JOSHI AMITY UNIVERSITY, LUCKNOW CAMPUS UTTAR PRADESH

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ACKNOWLEDGEMENT

I wish to acknowledge my indebtedness to my Project guide Mr H.L. Rai and my Faculty guide Prof. Manoj Joshi. The project could not have been a success without their able support and guidance. Thanking them is a small gesture for the generosity shown. I am grateful to my project guide, for providing me the chance to do my SIP in a reputed organization like Bharat Sanchar Nigam Limited. I will always be obliged to my Company guide Mr H.L. Rai and faculty guide Prof. Manoj Joshi, who had given their precious support and guidance in every step of the project otherwise it would have been difficult on my part to bring this project work to completion. I am sure the knowledge imparted will go in a long way in enriching my career.

DATE: 10th July, 2010

Mohit Chandra MBA (Marketing & Sales) 2009-2011

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TABLE OF CONTENTS

I.

Chapter IINTRODUCTION OF THE TOPIC i) ii) iii) iv) v) Abstract Introduction Of Topic Consumer Buying Behaviour Consumer Buying Process Marketing Research Process

Page No.1 2 3-4 5-7 8-24

II.

Chapter IIORGANIZATIONAL PROFILE OF THE COMPANY i) Background of the Company ii) Position of BSNL in Telecom sector iii) SWOT Analysis iv) Balance Sheet Of Telecom Industry- Service Providers v) History of the BSNL vi) Organisational Chart vii) Products Offered viii) Marketing Strategies ix) Present & Future Of BSNL x) Competitors 25-26 27 28 29-30 31-32 33 34-35 36-44 44-46 46-60 61-62 63 63 64-78 79 80 81 82-83 84-86 87

III.

IV.

Chapter III i) Research Methodology ii) Tools and techniques of analysis iii) Limitations of the Study iv) Data Analysis & Interpretation Chapter IVi) Findings ii) Suggestions iii) Conclusion ANNEXURE i) Questionnaire 1 ii) Questionnaire 2 iii) Bibliography

V.

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LIST OF TABLES

i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii.

Consumer preference towards service providers On the basis of marital status On the basis of Educational Qualification On the basis of Occupation of the respondents Influencing factors of purchasing mobile connection On the basis of purpose for purchase of mobile connection On the basis of influencing factors for purchasing mobile Consumers attitude towards importance of having mobile On the basis of income (per month) Consumers satisfaction on the performance of the service providers On the basis of usefulness of mobile connection On the basis of periodical offers given by the service providers

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OBJECTIVE Objectives of the study:1. To ascertain the attributes which influenced the customers in selecting a particular cell phone services provider. 2. To study the consumers satisfaction towards different cellular service providers. 3. To assess the general problems faced by the cellular service users. 4. To offer valuable suggestions to improve the customer base of BSNL.

Need of the study:Exchange of information becomes the necessity of life to a common man. In the modern world an individual tends to communicate anything to everything right from the place where he/she stands. Even while riding a vehicle he / she wants to communicate within a fraction of second at quick speed with clear voice, without any disturbance like line crossing, out of order, etc. ; most of which lack in the connectivity given by the department of telecommunication. Cellular service providers emerge as a boon quench such a thirst, thus by providing facilities, which a common man cannot imagine. Though the telecom industry has its origin in the recent past and the growth has been excellent. Day by day many new competitors enter the market with new attractive schemes, provide additional facilities, add new features to existing ones, reduce the charges of incoming and outgoing calls, introduce varieties of handsets, models a healthy competition that benefits the subscribers. Hence in this context, it is important to study the various attributes or factors which shape the consumers mind during taking or switching over to new mobile connections.

In terms of value- addition to the organization, this study will definitely help the Company to grow in future. As, we all are aware of the fact that a fierce competition is going on, in order to stay alive in the market place. In this situation, one competitor tries to penetrate through the loop holes of the other competitor. This project will visualize all sorts of loop holes which the BSNL possesses right now and will also give a

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complete insight to all types of problems such as, whether the products & services are competent enough to fight back their competitors products & services or not.

Scope of this study:The present study is contained to Lucknow and it is decided to consider Airtel, BSNL and other cell phone service rendered to the customers. In Lucknow there are nine cellular services available - Airtel, Aircel, BSNL, Tata Indicom, Vodafone, Reliance, Idea, Virgin and Uninor. The main objectives of this study is to analyse the customer behaviour during taking new mobile connections and consumers of different cellular service providers of Lucknow city has been taken for the current research work.

Statement of problem:In our country the growth of service marketing especially telecom industry is still in its infancy stage, as compared to the industrially advanced countries. It is for the fact that the economy of our country has been in the developing stage. There are various cellular service services providers in our country and they are playing an essential role in fulfilling the needs of the customers. Now-a-days, the customers are more dynamic. Their taste, needs and preference can be changing as per current scenario. Hence the development of cellular industry mainly depends on the customer satisfaction. However the following questions may arise regarding customer satisfaction 1. Does the cell industry satisfy the social responsibility? 2. What are the expectations by the customers regarding service provided by the cell phone service provider? 3. Whether the service provided by cell phone industry is satisfying the customers? 4. Are the facilities available adequate to satisfy the customers?

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CHAPTER IINTRODUCTION THEORETICAL PRESENTATION OF THE TOPIC

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ABSTRACT

Consumer behaviour during taking new mobile connections is a vast topic to study. In order to analyse the subject minutely the topic is being divided into three parts. First part of my project is all about designing a suitable questionnaire so that the various variable factors that the consumer behaviour and their effectiveness in moulding the same can be studied. The next part is dedicated to selection a suitable sample size of consumers using mobile connections and taking their feedback through the questionnaire. Well in the last part of my study is devoted on doing the analysis and interpretation from the feedback collected from the respondents. Then application of suitable statistical tool is decided on to arrive at some results. Based on these results, a conclusion will be drawn thereafter which will stand as an ultimate result of my study in the concerned field so called

CONSUMER PREFERENCE FOR MOBILE PHONE SERVICES IN THE CITY OF LUCKNOWThe services structure can be renewed based on the provide suggestions and recommendations which can help to increase the client base and increase the market share in the concerned field as the findings will basically revolve around the most favoured services by the investors and locate the core areas where the services can be improved further according to the market demand.

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INTRODUCTIONAs the title of my project is Consumer Preference for the mobile phone services in the city of Lucknow first of all we need to understand that What is consumer buying behaviour?

Before business can develop marketing strategies, they must understand what factors influence buyers behaviour and how they make purchase decisions to satisfy their needs and wants. Buyers are moved by a complex set of deep and subtle emotions. Their behaviour result from deeply held values and attitudes; their perception of the world and their place in it, from common sense, impulse or just plain whimsy. There are also several stages through which the consumer exhibit before deciding to purchase goods or services. These include 5 steps which are: problem or need recognition, information search, alternative evaluation, purchase and post-purchase evaluation.

IMPORTANCE OF CONSUMER SATISFACTIONThe needs to satisfy customer for success in any commercial enterprise is very obvious. The income of all commercial enterprise is derived from the payments received for the products and services supplied to its customers. If there is no customer there is no income and there is no business. Then the core activity of any company is to attract and retain customers. It is therefore no surprise that Peter F Drucker the renowned management Guru, has said to satisfy the customers is the mission and purpose of every business. Satisfaction of customer is essential for retention of customers and for continuous sales of the products and services of the company to customers. This establishes the needs for and the importance of customer satisfaction. The satisfaction of consumers is different from one to another. Became, each consumer has the different behaviour in their life. So, the marketer satisfies the consumer, he must very well know the behaviour of consumer.

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CONSUMER BUYING BEHAVIOURConsumer behaviour refers to the mental and emotional process and the observable behaviour of consumers during searching, purchasing and post consumption of a product or service. Consumer behaviour involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, socio-psychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general. Buyer behaviour has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone.

FACTORS AFFECTING CONSUMER BUYING BEHAVIORConsumer buying behaviour is influenced by the major three factors: 1. Social Factors 2. Psychological Factors 3. Personal Factors. A. SOCIAL FACTORS Social factors refer to forces that other people exert and which affect consumers purchase behaviour. These social factors can include culture and subculture, roles and family, social class and reference groups.

Example: By taking into consideration Reference group, these can influence/ affect the consumer buying behaviour. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behaviour of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behaviour but also socially unacceptablePage | 12

and even personal destructive behaviour. For example, if fresher student joins a college / university, he/she will meet different people and form a group, in that group there can be behaviour patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behaviour such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / her to that particular reference group, this will influence and change his/her buying behaviour. B. PSYCHOLOGICAL FACTORS These are internal to an individual and generate forces within that influence her/his purchase behaviour. The major forces include motives, perception, learning, attitude and personality. Example: Attitude is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumer form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand. C. PERSONAL FACTORS These include those aspects that are unique to a person and influence purchase behaviour. These factors include demographic factors, lifestyle, and situational factors. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. Example: A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behaviour of people differs from one another.Page | 13

CONSUMER BUYING DECISION PROCESSConsumer buying decision process is the processes undertaken by consumer in regard to a potential market transaction before, during and after the purchase of a product or service. Consumer decision making process generally involves five stages-:

Problem Recognition

Information Search

Alternative Evaluation

Purchase Action

Post Purchase Action

Problem RecognitionPurchase decision making process begins when a buyer becomes aware of an unsatisfied need or problem. This is the vital stage in buying decision process, because without recognizing the need or want, an individual would not seek to buy goods or service. There are several situations that can cause problem recognition, these include: Depletion of stock Dissatisfaction with goods in stock Environmental Changes Change in Financial Situation Marketer Initiated Activities Example: Its when a person recognizes that she cannot make a call from her mobile phone thats when she recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to be repaired or buying a new piece.

Information SearchAfter the consumer has recognized the need, he / she will try to find the means to solve that need. First he will recall how he used to solve such kind of a problem in the past, this is called nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend or goes to the market to seek advice for which product will best serve his need, this is called limited decision making.Page | 14

Sources of information include: Personal sources Commercial Sources Public sources Personal experience Example: (continuing from previous) The user of the phone after recognizing that his phone is damaged, he will eventually try to find out how she can repair her phone. If he cannot repair it himself he will ask a friend to help out, if the friend cannot solve the problem he will go to mobile repair shop, if they also cannot repair it then he will try to find which mobile phone is good and that can serve his need. In this process of information collection it will yield awareness of set of brands of mobile connections he can buy.

Alternatives evaluationConsumers evaluates criteria refer to various dimension; features, characteristics and benefits that a consumer desires to solve a certain problem. Product features and its benefit is what influence consumer to prefer that particular product. The consumer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he / she can get out of that feature. Example: (continuing from previous) When that user got enough information concerning the different brands of mobile connections available in the market, she will decide which kind of a mobile phone and brand shes going to buy depending upon her need for that particular mobile, either a mobile for multimedia and entertainment, Smartphone or classic phone.

Purchase ActionThis stage involves selection of brand and the retail outlet to purchase such a product. Retail outlet image and its location are important. Consumer usually prefers a nearby retail outlet for minor shopping and theyPage | 15

can willingly go to a far away store when they purchase items which are of higher values and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the consumer completes the final step of transaction by either cash or credit. Example: (continuing from previous) After selecting brand of the phone and model from different alternatives of mobile connections, she will make a final decision of where to buying that phone and make the final transaction procedures.

Post-purchase ActionsConsumer favourable post-purchase evaluation leads to satisfaction. Satisfaction with the purchase is basically a function of the initial performance level expectation and perceived performance relative to those expectations. Consumer tends to evaluate their wisdom on the purchase of that particular product. This can result to consumer experiencing post purchase dissatisfaction. If the consumers perceived performance level is below expectation and fail to meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet will not be considered by the consumer in the future purchases. This might cause the consumer to initiate complaint behaviour and spread negative word-ofmouth concerning that particular product. Example: (continuing from previous) If she decided to buy a multimedia phone she will try to compare the quality of music it provides and pictures taken if they meet her expectations. If she will find that her expectation are meeting she will be satisfied, if she found that there are more additional features that she did not expect this mobile phone to have, she will be delighted, otherwise, she will be dissatisfied. Since my title is Consumer behaviour during taking new mobile connections, I need to do the survey of existing/new consumers of the service of different cellular service providers. Hence, my project is totally based on comparative analysis of different attributes shaping the consumer behaviour during taking new mobile connections. Till date I have completed the survey of 150 consumers of different cellular service providers and I got many Suggestions & Recommendations from the customers.

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MARKETING RESEARCH PROCESS1. Define the problem 2. Determine research design 3. Identify data types and sources 4. Design data collection forms and questionnaires 5. Determine sample plan and size 6. Collect the data 7. Analyse and interpret the data

8. Prepare the research report

Problem DefinitionThe decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. Thus, the decision problem is translated into a research problem. For example, a decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product.

The objective of the research should be defined clearly. To ensure that the true decision problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences.

Research DesignMarketing research can be classified in one of three categories:Page | 17

Exploratory research Descriptive research Causal research

These classifications are made according to the objective of the research. In some cases the research will fall into one of these categories, but in other cases different phases of the same research project will fall into different categories.

Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test them. Exploratory research is characterized by its flexibility. Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words, the who, what, where, when, why, and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun.

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There are two basic types of descriptive research: longitudinal studies and cross-sectional studies. Longitudinal studies are time series analyses that make repeated measurements of the same individuals, thus allowing one to monitor behaviour such as brand-switching. However, longitudinal studies are not necessarily representative since many people may refuse to participate because of the commitment required. Cross-sectional studies sample the population to make measurements at a specific point in time. A special type of cross-sectional analysis is a cohort analysis, which tracks an aggregate of individuals who experience the same event within the same time interval over time. Cohort analyses are useful for long-term forecasting of product demand.

Causal research seeks to find cause and effect relationships between variables. It accomplishes this goal through laboratory and field experiments.

Data Types and SourcesSecondary Data Before going through the time and expense of collecting primary data, one should check for secondary data that previously may have been collected for other purposes but that can be used in the immediate study. Secondary data may be internal to the firm, such as sales invoices and warranty cards, or may be external to the firm such as published data or commercially available data. The government census is a valuable source of secondary data. Secondary data has the advantage of saving time and reducing data gathering costs. The disadvantages are that the data may not fit the problem perfectly and that the accuracy may be more difficult to verify for secondary data than for primary data. Some secondary data is republished by organizations other than the original source. Because errors can occur and important explanations may be missing in republished data, one should obtain secondary data directly from its source. One also should consider who the source is and whether the results may be biased.

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There are several criteria that one should use to evaluate secondary data.

Whether the data is useful in the research study. How current the data is and whether it applies to time period of interest. Errors and accuracy - whether the data is dependable and can be verified. Presence of bias in the data. Specifications and methodologies used, including data collection method, response rate, quality and analysis of the data, sample size and sampling technique, and questionnaire design. Objective of the original data collection. Nature of the data, including definition of variables, units of measure, categories used, and relationships examined.

Primary Data Often, secondary data must be supplemented by primary data originated specifically for the study at hand. Some common types of primary data are:

Demographic and socioeconomic characteristics Psychological and lifestyle characteristics Attitudes and opinions Awareness and knowledge - for example, brand awareness Intentions - for example, purchase intentions. While useful, intentions are not a reliable indication of actual future behaviour. Motivation - a person's motives are more stable than his/her behaviour, so motive is a better predictor of future behaviour than is past behaviour.

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Primary data can be obtained by communication or by observation. Communication involves questioning respondents either verbally or in writing. This method is versatile, since one needs only to ask for the information; however, the response may not be accurate. Communication usually is quicker and cheaper than observation. Observation involves the recording of actions and is performed by either a person or some mechanical or electronic device. Observation is less versatile than communication since some attributes of a person may not be readily observable, such as attitudes, awareness, knowledge, intentions, and motivation. Observation also might take longer since observers may have to wait for appropriate events to occur, though observation using scanner data might be quicker and more cost effective. Observation typically is more accurate than communication. Personal interviews have an interviewer bias that mail-in questionnaires do not have. For example, in a personal interview the respondent's perception of the interviewer may affect the responses.

Questionnaire DesignThe questionnaire is an important tool for gathering primary data. Poorly constructed questions can result in large errors and invalidate the research data, so significant effort should be put into the questionnaire design. The questionnaire should be tested thoroughly prior to conducting the survey.

Measurement ScalesAttributes can be measured on nominal, ordinal, interval, and ratio scales:

Nominal numbers are simply identifiers, with the only permissible mathematical use being for counting. Example: social security numbers. Ordinal scales are used for ranking. The interval between the numbers conveys no meaning. Median and mode calculations can be performed on ordinal numbers. Example: class rankingPage | 21

Interval scales maintain an equal interval between numbers. These scales can be used for ranking and for measuring the interval between two numbers. Since the zero point is arbitrary, ratios cannot be taken between numbers on an interval scale; however, mean, median, and mode are all valid. Example: temperature scale Ratio scales are referenced to an absolute zero value, so ratios between numbers on the scale are meaningful. In addition to mean, median, and mode, geometric averages also are valid. Example: weight

Validity and ReliabilityThe validity of a test is the extent to which differences in scores reflect differences in the measured characteristic. Predictive validity is a measure of the usefulness of a measuring instrument as a predictor. Proof of predictive validity is determined by the correlation between results and actual behaviour. Construct validity is the extent to which a measuring instrument measures what it intends to measure.

Reliability is the extent to which a measurement is repeatable with the same results. A measurement may be reliable and not valid. However, if a measurement is valid, then it also is reliable and if it is not reliable, then it cannot be valid. One way to show reliability is to show stability by repeating the test with the same results.

Attitude MeasurementMany of the questions in a marketing research survey are designed to measure attitudes. Attitudes are a person's general evaluation of something. Customer attitude is an important factor for the following reasons:

Attitude helps to explain how ready one is to do something. Attitudes do not change much over time. Attitudes produce consistency in behaviour. Attitudes can be related to preferences.

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Attitudes can be measured using the following procedures:

Self-reporting - subjects are asked directly about their attitudes. Self-reporting is the most common technique used to measure attitude. Observation of behaviour - assuming that one's behaviour is a result of one's attitudes, attitudes can be inferred by observing behaviour. For example, one's attitude about an issue can be inferred by whether he/she signs a petition related to it. Indirect techniques - use unstructured stimuli such as word association tests. Performance of objective tasks - assumes that one's performance depends on attitude. For example, the subject can be asked to memorize the arguments of both sides of an issue. He/she is more likely to do a better job on the arguments that favor his/her stance. Physiological reactions - subject's response to a stimuli is measured using electronic or mechanical means. While the intensity can be measured, it is difficult to know if the attitude is positive or negative. Multiple measures - a mixture of techniques can be used to validate the findings, especially worthwhile when self-reporting is used.

There are several types of attitude rating scales:

Equal-appearing interval scaling - a set of statements are assembled. These statements are selected according to their position on an interval scale of favorableness. Statements are chosen that has a small degree of dispersion. Respondents then are asked to indicate with which statements they agree. Likert method of summated ratings - a statement is made and the respondents indicate their degree of agreement or disagreement on a five point scale (Strongly Disagree, Disagree, Neither Agree Nor Disagree, Agree, Strongly Agree).

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Semantic differential scale - a scale is constructed using phrases describing attributes of the product to anchor each end. For example, the left end may state, "Hours are inconvenient" and the right end may state, "Hours are convenient". The respondent then marks one of the seven blanks between the statements to indicate his/her opinion about the attribute. Stapel Scale - similar to the semantic differential scale except that 1) points on the scale are identified by numbers, 2) only one statement is used and if the respondent disagrees a negative number should marked, and 3) there are 10 positions instead of seven. This scale does not require that bipolar adjectives be developed and it can be administered by telephone. Q-sort technique - the respondent if forced to construct a normal distribution by placing a specified number of cards in one of 11 stacks according to how desirable he/she finds the characteristics written on the cards.

Sampling PlanThe sampling frame is the pool from which the interviewees are chosen. The telephone book is often used as a sampling frame, but has some shortcomings. Telephone books exclude those households that do not have telephones and those households with unlisted numbers. Since a certain percentage of the numbers listed in a phone book are out of service, there are many people who have just moved who are not sampled. Such sampling biases can be overcome by using random digit dialling. Mall intercepts represent another sampling frame, though there are many people who do not shop at malls and those who shop more often will be overrepresented unless their answers are weighted in inverse proportion to their frequency of mall shopping.

In designing the research study, one should consider the potential errors. Two sources of errors are random sampling error and non-sampling error. Sampling errors are those due to the fact that there is a non-zero confidence interval of the results because of the sample size being less than the population being studied. Non-sampling errors are those caused by faulty coding, untruthful responses, respondent fatigue, etc.

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There is a trade off between sample size and cost. The larger the sample size, the smaller the sampling error but the higher the cost. After a certain point the smaller sampling error cannot be justified by the additional cost.

While a larger sample size may reduce sampling error, it actually may increase the total error. There are two reasons for this effect. First, a larger sample size may reduce the ability to follow up on non-responses. Second, even if there is a sufficient number of interviewers for follow-ups, a larger number of interviewers may result in a less uniform interview process.

Data CollectionIn addition to the intrinsic sampling error, the actual data collection process will introduce additional errors. These errors are called non-sampling errors. Some non-sampling errors may be intentional on the part of the interviewer, who may introduce a bias by leading the respondent to provide a certain response. The interviewer also may introduce unintentional errors, for example, due to not having a clear understanding of the interview process or due to fatigue.

Respondents also may introduce errors. A respondent may introduce intentional errors by lying or simply by not responding to a question. A respondent may introduce unintentional errors by not understanding the question, guessing, not paying close attention, and being fatigued or distracted.

Such non-sampling errors can be reduced through quality control techniques.

Data Analysis - Preliminary StepsBefore analysis can be performed, raw data must be transformed into the right format. First, it must be edited so that errors can be corrected or omitted. The data must then be coded; this procedure converts the

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edited raw data into numbers or symbols. A codebook is created to document how the data was coded. Finally, the data is tabulated to count the number of samples falling into various categories. Simple tabulations count the occurrences of each variable independently of the other variables. Cross tabulations, also known as contingency tables or cross tabs, treats two or more variables simultaneously. However, since the variables are in a two-dimensional table, cross tabbing more than two variables is difficult to visualize since more than two dimensions would be required. Cross tabulation can be performed for nominal and ordinal variables.

Cross tabulation is the most commonly utilized data analysis method in marketing research. Many studies take the analysis no further than cross tabulation. This technique divides the sample into sub-groups to show how the dependent variable varies from one subgroup to another. A third variable can be introduced to uncover a relationship that initially was not evident.

Conjoint AnalysisThe conjoint analysis is a powerful technique for determining consumer preferences for product attributes.

Hypothesis testingA basic fact about testing hypotheses is that a hypothesis may be rejected but that the hypothesis never can be unconditionally accepted until all possible evidence is evaluated. In the case of sampled data, the information set cannot be complete. So if a test using such data does not reject a hypothesis, the conclusion is not necessarily that the hypothesis should be accepted.

The null hypothesis in an experiment is the hypothesis that the independent variable has no effect on the dependent variable. The null hypothesis is expressed as H0. This hypothesis is assumed to be true unless proven otherwise. The alternative to the null hypothesis is the hypothesis that the independent variable does have an effect on the dependent variable. This hypothesis is known as the alternative, research, or experimental hypothesis and is expressed as H1. This alternative hypothesis states that the relationship

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observed between the variables cannot be explained by chance alone. There are two types of errors in evaluating a hypothesis:

Type I error: occurs when one rejects the null hypothesis and accepts the alternative, when in fact the null hypothesis is true. Type II error: occurs when one accepts the null hypothesis when in fact the null hypothesis is false.

Because their names are not very descriptive, these types of errors sometimes are confused. Some people jokingly define a Type III error to occur when one confuses Type I and Type II. To illustrate the difference, it is useful to consider a trial by jury in which the null hypothesis is that the defendant is innocent. If the jury convicts a truly innocent defendant, a Type I error has occurred. If, on the other hand, the jury declares a truly guilty defendant to be innocent, a Type II error has occurred.

Hypothesis testing involves the following steps:

Formulate the null and alternative hypotheses. Choose the appropriate test. Choose a level of significance (alpha) - determine the rejection region. Gather the data and calculate the test statistic. Determine the probability of the observed value of the test statistic under the null hypothesis given the sampling distribution that applies to the chosen test. Compare the value of the test statistic to the rejection threshold. Based on the comparison, reject or do not reject the null hypothesis. Make the marketing research conclusion.

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In order to analyse whether research results are statistically significant or simply by chance, a test of statistical significance can be run.

Tests of Statistical Significance2 The chi-square ( ) goodness-of-fit test is used to determine whether a set of proportions have specified

numerical values. It often is used to analyze bivariate cross-tabulated data. Some examples of situations that are well-suited for this test are:

A manufacturer of packaged products test markets a new product and wants to know if sales of the new product will be in the same relative proportion of package sizes as sales of existing products. A company's sales revenue comes from Product A (50%), Product B (30%), and Product C (20%). The firm wants to know whether recent fluctuations in these proportions are random or whether they represent a real shift in sales.

The chi-square test is performed by defining k categories and observing the number of cases falling into each category. Knowing the expected number of cases falling in each category, one can define chi-squared as:2 = ( O - Ei )2 / Ei i

Where,

Oi = the number of observed cases in category i, Ei = the number of expected cases in category i, k = the number of categories, the summation runs from i = 1 to i = k.

Before calculating the chi-square value, one needs to determine the expected frequency for each cell. This isPage | 28

done by dividing the number of samples by the number of cells in the table.

To use the output of the chi-square function, one uses a chi-square table. To do so, one needs to know the number of degrees of freedom (df). For chi-square applied to cross-tabulated data, the number of degrees of freedom is equal to

( number of columns - 1 ) ( number of rows - 1 )

This is equal to the number of categories minus one. The conventional critical level of 0.05 normally is used. If the calculated output value from the function is greater than the chi-square look-up table value, the null hypothesis is rejected.

ANOVA Another test of significance is the Analysis of Variance (ANOVA) test. The primary purpose of ANOVA is to test for differences between multiple means. Whereas the t-test can be used to compare two means, ANOVA is needed to compare three or more means. If multiple t-tests were applied, the probability of a TYPE I error (rejecting a true null hypothesis) increases as the number of comparisons increases. One-way ANOVA examines whether multiple means differ. The test is called an F-test. ANOVA calculates the ratio of the variation between groups to the variation within groups (the F ratio). While ANOVA was designed for comparing several means, it also can be used to compare two means. Two-way ANOVA allows for a second independent variable and addresses interaction. To run a one-way ANOVA, use the following steps:

1. Identify the independent and dependent variables. 2. Describe the variation by breaking it into three parts - the total variation, the portion that is within groups, and the portion that is between groups (or among groups for more than two groups). The total variation (SStotal) is the sum of the squares of the differences between each value and the grand mean of all the values in all the groups. The in-group variation (SSwithin) is the sum of the squares of

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the differences in each element's value and the group mean. The variation between group means (SSbetween) is the total variation minus the in-group variation (SStotal - SSwithin).

3. Measure the difference between each group's mean and the grand mean. 4. Perform a significance test on the differences. 5. Interpret the results.

This F-test assumes that the group variances are approximately equal and that the observations are independent. It also assumes normally distributed data; however, since this is a test on means the Central Limit Theorem holds as long as the sample size is not too small. ANOVA is efficient for analysing data using relatively few observations and can be used with categorical variables. Note that regression can perform a similar analysis to that of ANOVA.

Discriminant AnalysisAnalysis of the difference in means between groups provides information about individual variables, it is not useful for determine their individual impacts when the variables are used in combination. Since some variables will not be independent from one another, one needs a test that can consider them simultaneously in order to take into account their interrelationship. One such test is to construct a linear combination, essentially a weighted sum of the variables. To determine which variables discriminate between two or more naturally occurring groups, discriminant analysis is used. Discriminant analysis can determine which variables are the best predictors of group membership. It determines which groups differ with respect to the mean of a variable, and then uses that variable to predict new cases of group membership. Essentially, the discriminant function problem is a one-way ANOVA problem in that one can determine whether multiple

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groups are significantly different from one another with respect to the mean of a particular variable. A discriminant analysis consists of the following steps:

1. Formulate the problem. 2. Determine the discriminant function coefficients that result in the highest ratio of between-group variation to within-group variation. 3. Test the significance of the discriminant function. 4. Interpret the results. 5. Determine the validity of the analysis.

Discriminant analysis analyses the dependency relationship, whereas factor analysis and cluster analysis address the interdependency among variables.

Factor AnalysisFactor analysis is a very popular technique to analyse interdependence. Factor analysis studies the entire set of interrelationships without defining variables to be dependent or independent. Factor analysis combines variables to create a smaller set of factors. Mathematically, a factor is a linear combination of variables. A factor is not directly observable; it is inferred from the variables. The technique identifies underlying structure among the variables, reducing the number of variables to a more manageable set. Factor analysis groups variables according to their correlation.

The factor loading can be defined as the correlations between the factors and their underlying variables. A factor loading matrix is a key output of the factor analysis. An example matrix is shown below.

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Factor 1 Factor 2 Factor 3 Variable 1 Variable 2 Variable 3 Column's Sum of Squares:

Each cell in the matrix represents correlation between the variable and the factor associated with that cell. The square of this correlation represents the proportion of the variation in the variable explained by the factor. The sum of the squares of the factor loadings in each column is called an eigenvalue. An eigenvalue represents the amount of variance in the original variables that is associated with that factor. The communality is the amount of the variable variance explained by common factors. A rule of thumb for deciding on the number of factors is that each included factor must explain at least as much variance as does an average variable. In other words, only factors for which the eigenvalue is greater than one are used. Other criteria for determining the number of factors include the Scree plot criteria and the percentage of variance criteria. To facilitate interpretation, the axis can be rotated. Rotation of the axis is equivalent to forming linear combinations of the factors. A commonly used rotation strategy is the varimax rotation. Varimax attempts to force the column entries to be either close to zero or one.

Cluster AnalysisMarket segmentation usually is based not on one factor but on multiple factors. Initially, each variable represents its own cluster. The challenge is to find a way to combine variables so that relatively homogenous clusters can be formed. Such clusters should be internally homogenous and externally heterogeneous. Cluster analysis is one way to accomplish this goal. Rather than being a statistical test, it is more of a

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Collection of algorithms for grouping objects, or in the case of marketing research, grouping people. Cluster analysis is useful in the exploratory phase of research when there are no a-priori hypotheses.

Cluster analysis steps: 1. Formulate the problem, collecting data and choosing the variables to analyse. 2. Choose a distance measure. The most common is the Euclidean distance. Other possibilities include the squared Euclidean distance, city-block (Manhattan) distance, Chebychev distance, power distance, and percent disagreement. 3. Choose a clustering procedure (linkage, nodal, or factor procedures). 4. Determine the number of clusters. They should be well separated and ideally they should be distinct enough to give them descriptive names such as professionals, buffs, etc. 5. Profile the clusters. 6. Assess the validity of the clustering.

Marketing Research ReportThe format of the marketing research report varies with the needs of the organization. The report often contains the following sections:

Authorization letter for the research Table of Contents List of illustrations Executive summary Research objectives Methodology Results Limitations Conclusions and recommendations Appendices containing copies of the questionnaires, etc.

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CHAPTER - IIORGANIZATIONAL PROFILE

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ABOUT BHARAT SANCHAR NIGAM LIMITEDBharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wire line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc. Presently it is one of the largest & leading public sector units in India. BSNL has installed Quality Telecom Network in the country and now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about 46 million line basic telephone capacity, 8 million WLL capacity, 52 Million GSM Capacity, more than 38302 fixed exchanges, 46565 BTS, 3895 Node B ( 3G BTS), 287 Satellite Stations, 614755 Rkm of OFC Cable, 50430 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.6 Lakhs villages. BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner of country and operates across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier and North-eastern region of the country. BSNL serves its customers with its wide bouquet of telecom services. BSNL is numero uno operator of India in all services in its license area. The company offers vide ranging & most transparent tariff schemes designed to suite every customer. BSNL cellular service, CellOne, has 55,140,282 2G cellular customers and 88,493 3G customers as on 30.11.2009. In basic services, BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, and Account Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone and Broadband Access Network. At present there are 0.6 million Data One broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom Training Institute. Scaling new heights of success, the present turnover of BSNL is more than Rs.351, 820 million (US $ 8 billion) with net profit to the tune of Rs.99, 390 million (US $ 2.26 billion) for last financial year. The infrastructure asset on telephone alone is worth about Rs.630, 000 million (US $ 14.37 billion). The turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to excel has made BSNL the No. 1 Telecom Company of India.

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Particulars of organisationDate of incorporation: Incorporated on 15.9.2000, vide Registration No.55-107739, dated the 15th September, 2000 and became entitled to commence business with effect from 19th September, 2000. The Company (BSNL) took over the .business of providing telecom services and network management throughout the country except the metro cities of Delhi and Mumbai of the erstwhile service providing departments of the Govt. of India, i.e., the Departments of Telecom Services and Telecom Operations w.e.f. 1.10.2000 pursuant to a MoU signed between the BSNL and the Govt. of India. Type of Company: - Government Company under Section 617 of the Companies Act, 1956. Administrative Ministry: Govt. of India, Ministry of Communication and Information Technology, Department of Telecommunications. Details of Disinvestments: - The entire share capital of the Company is held by the Govt. of India. Shareholding pattern: - Government of India is holding 100% of the share capital of the Company. Listing with Stock Exchanges: - Not applicable, as the BSNL is an unlisted company. Share Capital: -Authorised Capital Rs.17, 500 crores, divided into 1, 000, 00, 00,000[One Thousand Crores] Equity Shares of Rs.10/- each; and 750, 00, 00,000 [Seven Hundred and Fifty Crores] Preference Shares of Rs.10/- each. Paid Up Share Capital - Rs.5, 000/- crores of Equity Shares and Rs.7, 500/- crores of Preference Share Capital Objectives of the Company: - As set out in the objects clause of the Companys Memorandum of Association. VISION To become the largest telecom Service Provider MISSION i. To provide world class State-of-art technology telecom services on demand at affordable price. ii. To Provide world class telecom infrastructure to develop country's economy.

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BSNLs POSITIONING IN TELECOM INDUSTRY To understand and suggest how strategic management can help BSNL the first thing is to understand the Telecom industry environment and the stakeholders involved. Apart from having to cope with the change in structure and culture (government to corporate), BSNL has had to gear itself to meet competition in various segments basic services, long distance (LD), and International Long Distance (ILD), and Internet Service Provision (ISP), and Mobile services. With the advent of competition the private operators have been impacting the strategic matrix by influencing regulatory bodies, adopting intelligent media strategies, and by targeting the creamy layer of customers. While, political control over the public sector remains a contentious strategic issue in the country; with the formation of a company, the internal strategy of the BSNL board will be of gaining considerable autonomy. Labour unions are powerful internal stakeholders, as are the middle managers/ other staff that have the primary responsibility for customer care. The following stakeholders diagram gives an insight about the changing telecom industry environment for BSNLFIG 1 - STAKEHOLDERS IN BSNLs STRATEGIC MANAGEMENT

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BSNLs SWOT ANALYSISThe changing external environment for BSNL can be well captured by the Potters model diagram which shows that the industry structure has become bit unfavourable. In such an environment BSNL definitely requires to redefine its strategies. What is required is to identify the potential opportunities and threats implied by this changing environment for the BSNL. In changing trends, situations, and events gaining an accurate understanding of BSNLs strengths and limitations will help in better strategic management of organization. The SWOT analysis for BSNL is as follows BSNL SWOT ANALYSIS STRENTHSPan-India reach Experienced telecom service provider Total telecom service provider Huge Resources (financial & technical pool) Huge customer base Most trusted telecom brand Transparency in billing Easy deployment of new services Copper in last mile can be used for easy broadband deployment Huge Optical Fibre network and associated bandwidth

WEAKNESSESNon-optimization of network capabilities Poor marketing strategy Bureaucratic organizational set up Inflexibility in mind set (DOT period legacies) Limited number of value added services Poor franchisee network Legacy of poor service image Huge and aged manpower Procedural delays Lack of strategic alliances Problems associated with incumbency like outdated technologies, unproductive rural assets, social obligations, political interference, Poor IT penetration within organization Poor knowledge Management

OPPORTUNITIESTremendous market growing at 20 lac customers per month Untapped broadband services Untouched international market Can capitalize on public sector image to grab governments ICT initiatives ITEB service markets Diversification of business to turn-key projects Leveraging the brand image to source funds Almost un-invaded VSAT market Fuller utilization of slack resources Can make a kill through deep penetration and low cost advantage Broaden market expected from convergence of broadcasting, telecom and entertainment industry

THREATSCompetition from private operators Keeping pace with fast technological changes Market maturity in basic telephone segment Manpower churning Multinational eyeing Indian telecom market Private operators demand for sharing last mile Decreasing per line revenues due to competitive pricing Private operators demand to do away with ADC can seriously effect revenues Populist policies of government like One India rates

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Telecommunications Industry - Service ProviderYear SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets 30,234.56 10,180.26 40,414.82 4,654.97 10,475.96 5,836.69 16,312.65 8,574.34 28,810.57 9,162.93 37,973.50 4,877.15 27,691.88 6,996.58 34,688.46 8,090.28 34,629.79 5,441.99 40,071.78 -1,787.74 Page | 39 3,476.73 9,289.00 8,473.25 23,830.81 45,069.79 151.58 3,216.05 4,331.90 17,187.46 24,886.99 3,523.81 8,646.62 8,427.12 22,253.10 42,850.65 4,512.36 8,720.12 8,015.88 21,530.38 42,778.74 3,636.18 7,029.97 9,747.61 17,870.28 38,284.04 126,924.93 35,713.57 120,233.14 98,262.45 87,396.07 28,439.74 52,774.07 81,213.81 14,451.92 17,678.43 32,130.35 113,344.16 12,827.82 10,906.21 23,734.03 10,143.80 7,744.99 17,888.79 41,622.82 25,278.10 54,166.95 79,445.05 10,426.83 15,082.31 25,509.14 104,954.19 22,704.22 55,092.90 77,797.12 7,967.86 17,931.40 25,899.26 103,696.38 11,673.74 47,627.92 59,301.66 4,914.03 15,814.61 20,728.64 80,030.30 Latest 2004 2003 2002 2001

34,116.63 92,808.30 -6.26 10,917.34 7,608.10

10,405.60 25,307.97 0 1,563.64 6,168.32

33,282.86 86,950.28 -6.26 11,138.97 5,364.25

21,432.09 76,830.36 -21.89 13,068.44 3,734.98

11,688.11 75,707.96 -20.34 1,878.94 2,312.91

Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets

1,437.77 3,228.79 7,304.85 -4,076.06 113,344.16

366.69 1,315.16 1,673.30 -358.14 41,622.82

1,134.39 2,542.44 7,047.03 -4,504.59 104,954.19

2,367.83 780.56 1,154.18 -373.62 103,696.38

1,936.63 1.94 0 1.94 80,030.30

BRIEF HISTORY OF BSNLTelecommunication is one of the most important infrastructures required for the modern life. Telephone instrument, which has the capability of practical use, has been introduced in 1876. The first telephone exchange was established at New Haven, in 1878. After that, two telephone companies arose and they are: The Oriental Telephone Company Limited and the Anglo-Indian Telephone Company. By 1881, Government of India granted original oriental

Telephone Company, the license to open Telephone exchanges at Calcutta, Bombay, Madras, Karachi and Ahmedabad. The first telephone exchange with 17 connections was commissioned on 19/08/1881 at

Chennai. By the end of the year 1881 the telephone exchange expanded to 24 lines with 40 subscribers. The direct exchange lines moved from 24 in 1882 to only 350 in 1910. At the time of renewal of license in 1922, the Government laid three conditions:1. The business should pass in to local company. 2. The system should be modernized. 3. The rates have to be raised. Under the first objective a RUPEE Company was formed in 1923 in the name of MADRAS TELEPHONE COMPANY LIMITED. Since then, the direct exchange line rose to 1244 lines, apart from 1224 subscribers, public call offices were also opened at five places namely, Central station, Egmore station, Madras Harbor, Salt Cotars. To overcome the problem of overhead lines, underground cable network were laid up to Guindy in 1923 and extended to Perambur, Royapuram and Harbour in 1932 and the exchange lines also raised to 1832. Due to the automation of telephone services and its use for business promotion, the demand for telephone connection spread over the South Madras area. In 1929, a satellite automatic exchange of 200 lines capacity was commissioned at Mount Road exchange In 1932 the exchange was further expanded

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Perceiving a galloping growth in future, the Madras Telephone Company conceived a New Mount Road with 1500 lines in 1933 that was commissioned only in 1947. Due to the increase in the demand for more telephones in South Madras area, the company decided to open one satellite exchange in the Mambalam area. A Satellite exchange of 500 lines capacity was commissioned during 1937. In 1944, a 100 lines satellite exchange was commissioned at St. Thomas Mount. The Chennai Telephones organization consisting of 115 telephone exchanges with a total equipped capacity of 9, 68,243 lines are spread over an area of 1,105 sq. km. The management responsibility is vested with the Chief General Manager, Telephones. He is assisted by 6 General Managers: G.M. (Development, GM (North), GM (South), G.M. (Central), G.M (Telephone Exchanges) and G.M. (Finance) 33 Deputy General Managers in the common functions and 5 directors in the area of Financial Advice and Accounting. The Exchanges and the external plants are maintained by specially trained Divisional Engineers, Sub Divisional Engineers, Junior Telecom Officers and Technical Staff, who receive purpose oriented training in Telecom training centers situated in different parts of the country. They are also given refresher training from time to time to update their knowledge and skills in the changing technologies increasingly brought into the Telecom Services. Telephone systems in Calcutta, Madras, and Bombay were taken over directly by the Indian Posts and TeleCHARTs department. The exchange at Calcutta has been named as Central Exchange. On 30.6.1882 it had 93 numbers of subscribers. In 1985, Indian P&T was bifurcated and the control of telephone has been transferred to Department Of Telecom. Now recently in 1999, DOT was further bifurcated into DOT and DTS service provider, which was incorporated as BSNL from 1.10.2000. Role of these two departments:DEPARTMENT OF TELECOM (DOT) Governments policymaking, Licensing and co-ordination of matters relating to telephone service, international relations, promotion of private investment in telecom. Frequency management in radio communication, Nodal department for TRAI, control of ITI and HTL etc BSNL (DTS) DTS is the part of the old DOT, which is responsible for providing telecom services in India. The main function include: - Planning, Engineering, Installation, Maintenance Management, and Operation of voice and Non-voice Telecommunication Services all over the country.

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DOTS MISSION IS BETTER COMMUNICATION DOT is committed to provide latest in telecommunication technology and the best of the services to its esteemed customers. Madras Telephones covers an extensive area of approximately 1,105 sq. kms. The total area is served by 115 telephone exchanges with a total equipped capacity of 9,68,243 lines of the capacity of EIOB, 15395 lines of EWSD, 133480 lines of AXE-10, 340484 lines of OBC, 25000 lines of FITEX and 78992 of 5ESS. DOT/BSNL is the biggest telecom service provider of the country. It is having a vast telecom network, spread throughout the country. All the cities (300) and Towns (4689) in the country as per 1991 census have access to the telephone network through telephone exchanges. STD connectivity is provided to all the District Headquarters and it is planned to extend the same to cover all the Sub-Divisional headquarters/Tehsil Head Quarters. About 19000 places in the country have STD codes/access. The network is equipped with the state of the art technologies. Now all the exchange in urban and rural areas of country is of Electronic Digital type. In rural area almost all telephone exchanges are of Electronics Digital type. The Network of BSNL can be segmented in to following networks:

Telephone Network or Public Switched Telephone Network (PSTN) Telex and TeleCHART Network Transmission Network Leased Line Network Data Network Satellite Based Network

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ORGANISATION CHART

The Organizational hierarchy with respect to the Department of Telecommunication BSNL is shown in figure 1.2

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MAIN SERVICES OFFERED 1. BASIC AND LIMITED MOBILE TELEPHONE SERVICES BSNL is the leading service provider in the country in the Basic Telephone Services. As of now more than 35 million Direct Exchange Lines & more than 2.2.Million telephones in the Limited Mobile telephone Services are existing. BSNL has provides a number of attractive tariff packages & Plans which shall further strengthen its subscriber base.

2. CELLULAR MOBILE TELEPHONE SERVICES BSNLs GSM Technology based Cellular Network reached a long way, covering 20,836 cities/towns with a subscriber base of over 4.67 Crores as on 31st March 2009 out of which 4.31 crores cellular telephone are in pre-paid segment

3. INTERNET SERVICES BSNL offers Dialup Internet services to the customers by Post-paid service with the brand name Netone, and pre-paid service with the brand name Sancharnet. The post-paid service is a CLI based access service, currently operational in 100 cities. Sancharnet is available on local call basis throughout India to ISDN and PSTN subscribers. The Internet Dhaba scheme of the Company aims to further promote Internet usage in rural and semi urban areas. To keep pace with the latest and varied value added services to its customers, BSNL uses IP/MPLS based core to offer world class IP VPN services. MPLS based VPNs is a very useful service for Corporates, as it reduces the cost involved as well as the complexity in setting up VPNs for customers networking. As on 31.03.2005, your Companys total Internet customer base was 17,98,089 and total Internet Dhabas were 4143. A total of 708594 dial up Internet connections have been given during 2004-2005, against a target of 7 lakhs. BSNL plans to give 1215980 more dial up connections during the year 2005-06. As on 31.1.2006, there were 2367404 internet subscribers working in BSNL net work.

4. Intelligent Network Intelligent Network Services is a service that incorporates several value added facilities, thoroughly designed to save time and money, and enhance productivity. At present, your company offers Free Phone (FPH), Premium Rate Service (PRM), India Telephone Card (ITC), Account Card Calling (ACC), Virtual Private Network (VPN), Universal Access Number (UAN) and Tele voting IN services. With the commissioning of five numbers of new technology IN Platforms (Four General purpose and One Mass Calling) at Kolkata, Bangalore, Ahmedabad and Hyderabad, the India Telephone Card facility and new value added services are being provided throughout the country. Activation of these new IN platforms had increased the sale of ITC Cards taking the figure to Rs.265 crores in 2004-05 alone. 5. BROADBAND SERVICES BSNL has launched its broadband services under brand name BSNL BROADBAND on 14-01-05. This offers High Speed Internet Access with speed ranging from 256 Kbps to 8 Mbps. Ever since its inceptionPage | 44

BSNL is continuously expanding its broadband network in response to ever growing demand of broadband service throughout India Present customer base is 3.56 million, with equipped capacity of 6.1 million. BSNL Broadband service is available in more than 3800 cities & 83000 villages.

The services provided are: High Speed Internet Connectivity (up to 8 Mbps) Band width on Demand (planned) Virtual Private Network (VPN) service over broadband Dial VPN services to MPLS VPN customers IPTV services (at present available in 66 cities) Games on Demand Service Video tutoring service VOIP Video Surveillance service Entertainment portal.

Products BSNL LANDLINE BSNL MOBILE _ POSTPAID _ PREPAID _ UNIFIED MESSAGING _ GPRS/WAP/MMS _ DEMOs _ TARIFF BSNL WLL INTERNET SERVICES _ NETWORK _ BROADBAND _ WI-FI _ CO-LOCATION SERVICE _ BSNL WEB HOSTING _ DIAL UP INTERNET _ SMS& BULK SMS BSNL BROADBAND BSNL MANAGED NETWORK SERVICES BSNL MPLS-VPN ISDN LEASED LINE INTELLIGENT NETWORK _ FREE PHONE SERVICE _ PREMIUM RATE SERVICE _ INDIA TELEPHONE CARD _ VIRTUAL PRIVATE NETWORK (VPN) _ VOICE VPN _ UNIVERSAL NUMBER _ UNIVERSAL PERSONAL NUMBER _ TELE VOTING VIDEO CONFERENCING AUDIO CONFERENCING TELEX/ TELEGRAPH EPABX _ EPABX _ FREE EPABX _ CENTREX

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Marketing strategies of BSNL

Our visions begin with our desires.

- Audre Lorde We all have some visions of ourselves and our future, and that vision creates consequences. More than any other factor, vision affects the choices we make and the way we spend our time.

Visions drive consequences. Principles drive results. Key is to base vision on principles.

-

Stephen R Covey.

It is true for individuals as well as organizations. The strongest form of vision / motivation is to base vision on What Legacy we want to leave. And to achieve it we must take a principled centered path. History is full of examples that many organizations have vanished grown and vanished overnight as their path to achieve vision was not based on principled way. Vision of the organization can only be translated into reality, if it is shared by one and all. The best way to implement is to involve them in formulation. But even if it is conceived by higher management then it has to be explained to each and every individual of the organization, otherwise it may remain as a showpiece.

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Marketing vision of the BSNL has to be based on overall mission and vision of the organization. The mission of BSNL is i. To provide world class State-of-art technology telecom services on demand at affordable price.

ii.

To provide world class telecom infrastructure to develop country's economy.

And the vision of BSNL is: i. To become the largest telecom Service Provider in Southeast Asia.

In dynamic environment anything permanent is CHANGE. So we must revise and review so that focus is never lost. Strong lives are motivated by dynamic purposes. Kenneth Hildebrand.

Marketing ObjectiveThe ultimate objective of any marketing activity is to satisfy the customers and today even a step ahead i.e. delighting the customers, for which customers are offered something beyond their expectations from the service or the product. The objective being to acquire and retain the customers, who should continually feel that they are getting more value of the money, they are departing with. Marketing is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and organisation. Successful Marketing focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of business by integrating them with the organisation strategy, people, technology and business processes. At its most basic, Marketing involves customers, organisations and relationships and the combination creates the need for the management.

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Marketing is about creating a competitive advantage by being the best at understanding, communicating, and delivering and developing existing customer relationships in addition to creating and keeping new customers. The concept of the product life cycle is giving way to customer life cycle, focusing on developing products that anticipate the future needs of existing customers and creating services that extend the existing customer relationship beyond the mere transaction. The customer life cycle will focus on lengthening the life span of the customer with the organisation rather than the endurance of a particular product. Customers have changing needs as their life styles alter- the development and provision of products and/or services that continuously seek to satisfy those needs is good Marketing. The Marketing will focus greater attention on how to deliver customer satisfaction and organisation will begin to structure itself around customer segments and not product lines. A good Marketing Strategy will take the business vision and apply it to the customer base. According to the Dictionary of Marketing Terms, 2nd edition, published by the American Marketing Association, c1995,

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Once marketing is understood, we can define marketing management process as analysing marketing opportunities, researching and selecting target markets, designing marketing strategies, planning marketing programs, and organizing, implementing, and controlling the marketing efforts. In simple words it implies a buyer, a seller, bonded by the mutual need, satisfying offer and a medium/process to exchange the offer.

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Marketing ProcessWe often talk of marketing & Sales and often use it interchangeably without understanding the difference in it. Marketing is everything we do to get and leverage a client relationship. Marketing process is broad and includes all of the following: -

Discovering what product, service or idea customers want. Producing a product with the appropriate features and quality. Pricing the product correctly. Promoting the product; spreading the word about why customers should buy it. Selling and delivering the product into the hands of the customer.

Selling is one activity of the entire marketing process. Selling is the act of persuading or influencing a customer to buy (actually exchange something of value for) a product or service. Marketing activities support sales efforts.

Contrasting the Sales Concept with the Marketing Concept:-

We Sell Confidence. The concepts surrounding both selling and marketing also differ. There is a need for both selling and marketing approaches in different situations. One approach is not always right and the other always wrong it depends upon the particular situation.

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In a marketing approach, more listening to and eventual accommodation of the target market occurs. Twoway communication (sometimes between a salesperson and a customer) is emphasized in marketing so learning can take place and product offerings can be improved. A salesperson using the sales concept, on the other hand, sometimes has the ability to individualize components of a sale, but the emphasis is ordinarily upon helping the customer determine if they want the product, or a variation on it, that is already being offered by the company. In the sales approach, not much time is spent learning what the customer's ideal product would be because the salesperson has little say in seeing that their company's product is modified. Furthermore, they aren't rewarded for spending time listening to the customer's desires unless they have a product to match their desires that will result in a sale. The 7Ps for service marketing (Product, price, place, promotion, physical evidence, people & process) are the means to attain, nurture, & retain the customers and not the end.

Mission & VisionYour mission on earth is finished: Most of the big companies have a Vision & Mission statement so as to guide their all energy, efforts to realize it. BSNL also has a vision To become the largest Telecom Service provider in South East Asia. Firstly we need to understand the parameter for being the largest. Is it revenue, ARPU, profit, subscribers, Network (no of exchanges, BTS etc)? From monopoly to multi operator scenario, BSNLs market share is bound to reduce. But how much down we will let it? There are lot of similarities between British Telecom & us. One must keep watch on market share in monthly growth and take timely action. To improve our share, we need to acquire more than 50% of new acquisitions while maintaining earlier. This is quite challenging in this dynamic environment. Today landline base is reducing across globe, but why? Europe defines an operator with 25% or more market share as Significant market Power

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(SMP), while they intend to increase it to 40%. BSNL has been the largest operator and we must strive not only to maintain but enhance it. We need to act fast. Timely action is an essence. What should be our marketing Vision, will it help us in inspiring to achieve higher. Can it be something such as To retain the highest market share, build highest brand equity and maximizing the profits?

Brand EquityWe may think what is Brand equity? In simple words it is how far people are willing to pay if we increase our prices i.e. premium for our services. We may feel happy to say there is lot of black marketing of our SIM cards. Is it a healthy sign? We reduce prices when competitors launch new schemes. Does it imply poor brand equity? Brand Equity can be built with good equity of quality of services at the affordable price. Continuous innovation in product and delivery of services with the appropriate pricing is the key strategy for developing the trust in customer so that he keeps his loyalty with BSNL. We have to be first mover in our efforts for product and price differentiation. Presently the market is in growth phase and price could be a differentiating factor, but how long? Is any scope left for further cuts? Ultimately it is the quality, customer care, and timely availability apart from price, which will matter. Quality depends on many parameters such as tangibles (like physical facilities, Appearance of personnel, Tools or equipment used to provide service, Physical appearance of service, Other customers in the service facility), Reliability, Responsiveness, Competence, Courtesy, Credibility, Security, Access, and Communications with customer, Understanding etc. Quality definitely commands premium. Why are people willing to pay more for Raymonds or Adidas or Sony when comparable offers exist in market? One may say that customer perception of quality is not built overnight; it may require a brand and brand building investments apart from a quality product. How many brands do we have? Our investments get diluted with more number of brands. Even Airtel merged the Touchtel brand with more popular one. Cant we have just one brand i.e.

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BSNL? Have we ever tried to examine our revenue breakup? While majority of the revenue comes from landline (DELs plus PCOs), how many people know of Bfone? CellOne happens to be more popular. So where should our marketing & sales effort be more? Wholesale, retail or corporate! What means do we need to use to promote our products and in what proportion? Advertising, PR, Franchisees, 24x7 customer care, business development etc. What activities should be taken up by Corporate Office, Circles and SSAs? In advertising there is need to synergize our activities at Corporate, Circle and SSA level. In this regard Corporate office has issued division of work guidelines. There is also a need to have good relation with our advertising agencies and simultaneously their performance need to be monitored for taking quality output from them. What is USP (Unique Selling Proposition) for BSNL? A Government company which delivers. A government company which gives service better than private could be a deadly combination, which no competitor can copy.

Social ResponsibilityWe were the most trusted telecom brand in year 2003 & 2004. We have been given Golden Peacock award for Best Corporate Social responsibility. How can we leverage these distinctions? These achievements need to be highlighted through public relation exercise like press meet. This will help us in building our marketing image. In sales and distribution front though we have over one-lakh retailers, 1000 franchisees, 3300 CSCs, 36000 exchanges why are we not visible like others? Why cant we utilize all possible space? Cant we leverage our franchisee and STD-PCO strengths? Can we make these outlets as our core strength? Why our recharge coupons, India Telephone Cards are in shortage when there is no capacity constraint? Does it imply that our planning for printing, inventory management, logistics, and supply chain and of course franchisee management is inefficient? Do we have targets for these just like DELs & CellOne? Why cant we leverage this huge network for better customer care and improve collection efficiency? We must realize that with waiver of security deposits, no OYT schemes,Page | 52

no advance rentals, adjustment of landline security for CellOne, we dont get fixed deposits to meet our funds requirements. Everything has to be met from Operating revenues. We need to improve collections, realize bills early, not on the last day of payment and reduce bad debts. We need to provide 24X7 culture in our organization, though we have been providing operation and maintenance on 24X7 basis in the past and we will continue to provide in future too, but what about provisioning customer care and marketing on 24X7 basis?

Business DevelopmentBusiness development units have been given the task to develop and nurture long-term relations with corporate houses. Many MoUs have been signed. Bulk bills are being issued. One-point payments are being realized for multiple service locations. Key Account Manager concept has been introduced. All this requires change of mindset in addition to the skills of marketing & sales. Do we have skilled manpower? Is our organization setup apt for better results? The staff expense to revenue ratio could be a good indicator. No doubt our revenues are up. Profit has increased. But consider the marketing budget we have in comparison to others. Even with this little budget many circles are unable to utilize it. We need to probe ourselves. Corporate office has permitted delegation of upto 70% of Circle budget to SSAs. Does it mean that our budget planning is wrong? How should we allocate marketing budget and which parameter to weigh? Per DEL/Mobile Acquisition cost Life time value Competitor spend Growth targets

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Life Time ValueYou cant give people pride, but you can provide the kind of understanding that makes people look to their inner strength and find their own sense of pride. Charleszetta Waddles.

Let us understand what is the lifetime value of our customers? Paying commission of Rs 100-200 to franchisee is not a cost considering the future flow of revenue from the customer. How many of our decisions are based on scientific analysis of the precious customer data we already have such as calling pattern, payment habits, usage profile etc.? How many surveys we do how much customer research we carry out? Net growth in mobile is high but what about churn? Cant we analyse & reduce it? Acquisition cost is usually said to be 5-8 times the retention cost. It is high time we learn fast, groom ourselves, improve our mind-set and act fast. Business perspective is equally important as excellence in Telecom operations, maintenance, and installations & planning. Our core competence should be telecom business acumen and not just traditional expertise developed over the years. It is usually much easier to sell additional things to existing customers than to add new customer. Let us try to upgrade each customer by RS 20 RS 50 by offering them more add on relevant services.

PRESENT & FUTURE OF BSNLBSNL (then known as Department of Telecom) had been a near monopoly during the socialist period of the Indian economy. During this period, BSNL was the only telecom service provider in the country (MTNL was present only in Mumbai and New Delhi). During this period BSNL operated as a typical state-run organization, inefficient, slow, bureaucratic, and heavily unionised. As a result subscribers had to wait for as long as five years to get a telephone connection.The corporation tasted competition for the first time after the liberalisation of Indian economy in 1991. Faced with stiff competition from the private telecom service providers, BSNL has subsequently tried to increase efficiencies itself. DoT veterans, however, put the onus for the sorry state of affairs on the Government policies, where in all state-owned service providers werePage | 54

required to function as mediums for achieving egalitarian growth across all segments of the society. The corporation (then DoT), however, failed miserably to achieve this and India languished among the most poorly connected countries in the world. BSNL was born in 2000 after the corporatisation of DoT. The efficiency of the company has since improved. However, the performance level is nowhere near the private players. The corporation remains heavily unionised and is comparatively slow in decision making and implementation. Management has been reactive to the schemes of private telecom players. Over the past five years BSNL's management is not able to absorb Group A(ITS) officers, who are working in BSNL as borrowed staff. This has considerably reduced the ability of management to take risks and get rewarded in open telecom field. Though it offers services at lowest tariffs, the private players continue to notch up better numbers in all areas, years after year. BSNL has been providing connections in both urban and rural areas. Pre-activated Mobile connections are available at many places across India. BSNL has also unveiled costeffective broadband internet access plans (DataOne) targeted at homes and small businesses. At present BSNL enjoy's around 60% of market share of ISP services.

2007 has been declared as "Year of Broadband" in India and BSNL is in the process of providing 5 million Broadband connectivity by the end of 2007. BSNL has upgraded existing Dataone (Broadband) connections for a speed of up to 2 Mbit/s without any extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost of just US$ 11.7 per month (as of 21/07/2008 and at a limit of 2.5GB monthly limit with 0200-0800 hrs as no charge period). Further, BSNL is rolling out new broadband services such as triple play. BSNL is planning to increase its customer base to 108 million customers by 2010. With the frantic activity in the communication sector in India, the target appears achievable. BSNL is a pioneer of rural telephony in India. BSNL has recently bagged 80% of US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India.Page | 55

On the 20th of March, 2009, BSNL advertised the launch of BlackBerry services across its Telecom circles in India. The corporation has also launched 3G services in select cities across the country. Presently, BSNL and MTNL are the only players to provide 3G services, as the Government of India has completed auction of 3G services for private players.BSNL shall get 3G bandwidth at lowest bidder prices of Rs 18,500 crore,which includes Rs 10,186 crore for 3G and Rs 8313crore for BWA.[One crore is 10 million.]BSNL management has paid this money under protest seeking refund.

BSNL has also launched an Entertainment Portal called BSNL Hungama Portal from where subscribers could download contents like music, music videos for free and also download or play various games online. Only Tamil, Kannada, Telugu & Hindi are provided at present. Hopes are there that the database could be expanded. BSNL charges a fixed monthly subscription fee for this function.

DETAILS ABOUT THE COMPETITORS AIRTELFormerly known as Bharti Tele-Ventures LTD (BTVL) is an Indian company offering telecommunication services in 18 countries. It the largest cellular service provider in India, with more than 135 million subscriptions as of May 2010. Bharti Airtel is the world's third largest, single-country mobile operator and fif