Marketing Report on Sales Promotion and Advertising UFone Telecom

This Report Is a Collaborative Effort Of: (MB-08-12) (MB-08-16) (MB-08-06) (MB-08-20) (MB-08-61) (MB-08-33) (MB-08-48) Iqra Khan Sidra Ghazanfar Zoya Chaudhry

Kokab Khalid Mudassir Khalid Faizan Muzammil Hanan REPORT SUBMISSION With Due Respect We the Group Members Submit This Marketing Report to Our Instructor of Marketing Management Madam Bushra Baig TABLE OF CONTENTS
Preface Company Profile Vision & Mission Statement of Ufone Marketing Department Business Portfolio

 PREFACE
This report reviews the marketing of Ufone, the second largest telecom company in Pakistan. We give a brief history of the company and tell about the achievements and growths of Ufone. It put light on the whole organization specifically its marketing department and the activities ongoing in its marketing department. These activities include two of its major components i.e. Sales Promotion and Advertising. These two are the main topics of this report which we have discussed in the depths of the companys strategies and functioning. Further we review Ufones strengths, weaknesses, Opportunities and Threats (SWOT Analysis). In the end we give the future plans of Ufone and conclude with our views and suggestions for Ufone.

 COMPANY PROFILE
BRIEF HISTORY OF UFONE PTML is a subsidiary of PTCL (Pakistan Telecom Company Limited), the largest operator in Pakistan.PTML was established to operate cellular telephony. The company commenced its operations, under the brand name of Ufone from Islamabad on January 29 2001.Since Etisalat took over PTCL in 2006, during the year as a consequence of PTCLs privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been handed over to Etisalat. In September 2006, Ufone selected Huawei to deploy the nationwide GSM network at a contract value of above USD550 million. Ufone adopted Huawei's new-generation GSM solution, including All-IP core network and BTS, to construct a GSM network covering 1,500 cities and towns of Pakistan.

MISSION OF UFONE

Our mission is to provide best services with best coverage that would eventually generate profit for the company and its stakeholders

 UFONEs ACHIEVEMENTS During 2006 Ufone successfully completed the network expansion of Phase 4 in existing as well as in new cities and towns which amounted to more than US Dollar 170 million. As a result the asset base of the Company has increased from Rs. 20 billion to Rs. 27 billion. Ufone adopted the policy of simplified tariffs with no hidden charges, which resulted in positive impacts on total subscriber base, which has increased from 2,579k in June 2005 to 7,487k in June 2006. Ufone currently caters for international roaming to more than 195 live operators across 119 countries and introduced International roaming facility for Prepaid subscribers in Saudi Arabia, United Kingdom, United Arab Emirates, Singapore, Portugal and Kuwait with lowest rates, featuring no security deposit and activation charges. GPRS roaming facility is available with more than 75 Live Operators across 59 countries. The Company has also been awarded a new License for providing cellular services in Azad Jammu & Kashmir and the Northern Areas. OPERATING PERFORMANCE Ufones operational performance has been very encouraging. Despite the stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level, due to its aggressive policies and exercising strict control over expenses the Company managed to improve its revenue and after-tax profit by 87% and 54% respectively, as compared to last year. GROWTH RATE As mobile users in the country have reached over 28 million at a very rapid pace, Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of around 6.5 million and a market share of nearly 25%. Ufone has seen a subscriber growth rate of over 200% in the last year, and since the start of 2005 Ufone added nearly 5 million subscribers onto its network. A remarkable achievement indeed, especially considering the fact that two new international players also entered into the market in 2005. Subsequently the growth in subscriber base caused a healthy trend in revenues which have doubled.

TECHNOLOGY After Mobilink, Ufone is the second cellular service provider company that is based on GSM technology. Basically they are using GSM 900 technology with version 2001. Apart from this they are very strong in technological developments especially they have a well-established research and development department that is working on new technological developments in their products. Like they are the first company in Pakistan that is offering GPRS facility to their subscribers

STRUCTURE OF THE ORGANIZATION

In Ufone the hierarchy is very lean, in general the whole setup is centralized, all the matters are to be reported to the main company and all the policies and targets are approved at the higher level. But at the department level the structure is decentralized. UFONE has following functional departments:Technical Customer operations Finance Administration & Procurement Human Resource Co-ordination (Govt. relations) Marketing Current CEO (Chief Executive Officer) & President of UFONE is Mr.Mubashir Naqvi Ufones Head Offices is in Islamabad

MARKETING DEPARTMENT
Marketing department handles all the marketing activities concerning all Ufone packages and brands. A recent marketing survey conducted by a prominent marketing research company showed that Ufone has considerably increased its brand visibility and image through its vibrant marketing strategies. Marketing departments hierarchy is as follows:-

CMO
ASSISTANT MANAGERS HEAD OF DEPARTMENTS/// MANAGEMENT TRAINEES SENIOR EXECUTIVES INTERNEES (Head Office : Islamabad) (Head Office : Islamabad) (Regional) (Regional) (Regional) (Regional)

Sub Departments of Marketing Department:Brand Activation Value Added Services International Roaming Media Planning (Marketing Strategies) Marketing Finance Marketing Operations Current CMO (Chief Marketing Officer) of Ufone is Mr. Arshad Yaqoob Khan

BUSINESS PORTFOLIO
BRANDS: BRANDS PostPay Life TARGET MARKET Corporate class Youth REASON FOR TARGETTING High usage for business & working people Night dwellers

PACKAGES: PACKAGES Public Demand UWON 5 ka 15 Walkie talkie TARGET MARKET Lower class/Rural youth Lower/socio economic class Ladies Working class/ business class REASON FOR TARGETTING High usage High usage Ladies intention of 5 min chat usually exceeds to 15 min or more Call conferencing

 SERVICES Both Post-Paid and Pre-Paid Ufone subscribers can enjoy any/all Ufone services including GPRS based services (MMS, Ufone Internet, Pocket Stocks), Global SMS, etc Ufone is proving these all services to its consumers: Internal Excess Online Billing Payment Power SIM WAP International Roaming Voice Mail Call Management Messaging MOBILE PRODUCTS Ufone is offering the following Mobile Products:Utalk Missed Call Notification Phonebook Saver Trivia Quiz Ushare Uloan Voice Bucket

Utunes Awaz SMS Uchat Ugames Call Block Self Service Kiosk U kisaan U health Ufone prize bond Ubazar Hajj Guide

MARKETING STRATEGIES
MARKET SEGMENTATION
Cellular service market is a diverse set of people. Ufone as well as other cellular service companies segment their market on four bases: - economy, age, gender & occupation. I. ECONOMY : Upper class, Middle class, socio-economic class, lower class II. AGE : Teenagers, youngsters, middle age, aged people III. GENDER : Male & Female IV. OCCUPATION : corporate class, Business class, working class etc

TARGET MARKETS
Cellular phones are the technology of new era, the 21st century. These cellular phones are the main focus of our youngsters. All
the cellular companies are targeting The Youth one way or other. Ufone is no longer a follower in this race. Its main focus is THE YOUTH of Pakistan which is its Target Market.

Target marketing strategy

Ufone has always been targeting Youth Market by using young brand endorsers or ambassadors. It always brings such packages and offers that precisely meet the needs of our young people. No doubt it has also launched packages, brands and offers for working people, business class, ladies and aged ones. Ufone seeks to target masses in the long run.

POSITIONING

Positioning is the process of creating an image of companys brand in the mind of market. Companies position themselves emotionally, functionally or on the basis of brand quality. Ufone is still a market challenger in comparison to market leader MOBILINK. It is still to reach to the top most position of cellular companies. So Ufone positions itself on the basis of its services.

Ufones former Positioning Statement:

Everybody Loves to Ufone Prepay

Ufones new Positioning Statement:

Ufone tum hi toh ho!

Or

Its All About U

Ufones positioning strategy:

Ufone changed the image of mobile phones from a luxury only affordable by the elite, to a necessity affordable by the common man. Since its inception, Ufone has positioned its brand for MASSES on the basis of services it is providing and its lowest call rates. It makes them believe that it satisfies the needs of everyone (viz all classes, age & genders). It tells them that Ufone is there when anybody needs it. The brand name UFONE itself is a positioning statement.

DIFFERENTIATION

In these days of intense competition marketers find it hard to differentiate their services from those of competitors. Now customer care about only price. An unsatisfied customer will immediately go for brand switching. Thus leaving a customer unsatisfied and not meeting his/her demands is out of question for marketers.

Differentiation Strategy :

Ufone has always strategized in satisfying the demands of its customers. In doing so it has been successful in differentiating itself in terms of:-

Price

Quality service

Technology

 CUSTOMER RELATIONSHIP

With 28 million mobile users in Pakistan, Ufone is having a subscriber base of around 7 million. Ufone is showing a remarkable growth rate. It is maintaining a healthy customer relationship through its customer service centers and call centers. Its department of Customer Operations is specially designed for maintaining Customer Relationships.

Customer Relationship Strategy:

Ufone strategize to build and maintain strong customer relationships in order to build long-term customer loyalty and to capture customer lifetime value. In this context Ufone has been training its internees and permanent employees in the fine art of interacting with customers. It is also strategizing to offer gifts & rewards for its longterm customers in its PostPay to match the wonderful customer relationship strategy of INDIGO.

TOTAL MARKET ORIENTATION

Total Market Orientation is about understanding and meeting customers expressed and latent needs.

Strategy :

Ufone has always considered the ever growing needs of low call rates and quality service. It has provided its customers their needed packages and has introduced such brands & packages that meet customers latent needs as well. For example 5 ka 15 is result of a latent need of women of our society. They plan to make a short call but it becomes a long one unintentionally due to gossips and chit chats

COMPETITORS

There is a hard core competition among the cellular service providers in Pakistan. Ufone is a market challenger in its competitive position, where MOBILINK is the market leader. Warid, Telenor and newly introduced ZONG are also strong contenders in market challenger category. Ufone has the following four direct competitors:-

Mobilink

Telenor

Warid

Ufone also considers the following as its competitors:-

ZONG (former PAKTEL)

PTCL WIRELESS

Wateen

WorldCall

Competitive strategy:

Ufones competitive strategies are Customer intimacy and Differentiation. Ufone aims at fore passing Mobilink in its competitive race.

MARKETING MIX

1 - PRODUCT/SERVICES

Ufone is a service providing company. Service is any intangible product that consists of activities, benefits or satisfactions offered for sale.

Strategy:

Ufone makes strategies to provide a better cellular telephonic service which excels its competitors at all levels. When Ufone launches a new package in a market, it actually makes it a complete package of core benefit, design, features, brand name, quality, and after sale service.

2 - PRICE

Cellular service providers are facing intense price competition in contemporary market. Customers perceive pricing as the heart of brand selection. Price has always been the core differentiation of Ufone. Ufone is the one who is offering least call rates off-network.

Strategy :

Ufone strategize to capture the existing pricing needs of its customers and use it well on occasional or timely basis. For example Ufone offered very good call rates on international calls in Eid days. It offered hourly call rates in Ramadan when people were least likely to avail the offer that much that it might prove unprofitable for Ufone. It was a fantastic strategy to beautify the brand image in term of pricing in customers minds as well as remain profitable in doing so. Ufone follows market penetration pricing strategy and dynamic pricing strategy to meet the customer needs and ever changing price competition.

3 PLACE

Place plays a very important part in the distribution and promotion of services.

Competitors of Ufone are seeking to penetrate into places where others havent reached. Cellular service providers are drastically widening their network & coverage in every area of Pakistan. Mobilink has this edge in place excellence because it is the pioneer in cellular telephonic field.

Strategy :

Ufone strategize to widen its coverage to all places in Pakistan in order to meet the requirements of its increasing customer base. Now Ufone is heading from cities to remote northern areas in expanding its network. Ufone has intensive promotion in cities, but it is also considering improving its promotion in rural areas as well.

4 - PROMOTION

Ufone believes in Integrated Marketing Communication which is a carefully blended mix of promotion tools. Ufone employ different marketing activities and channels to communicate and deliver value to customer. These activities are coordinated to provide maximum communication output. These communication channels includes:-

Advertising, sales promotion, public relations, direct marketing & personal selling.

Ufone strategize to carry out promotion in order to increase its market share.

Strategy :

Advertising (discussed later)

Sales Promotion (discussed later)

Public Relations : Ufone is less conscious of developing its general public relations. But recently it has launched its Hajj Guide service on Ufone. It avoids getting in news stories and controversies but sometimes it proves inevitable.

Direct Marketing : Ufone employ on-road umbrella franchises where the directly market and sell their connections and Sims.

Personal Selling : Ufone administer personal selling facility to sell their PostPay connections targeting well to do people and businessmen

It wont be an exaggeration to say that Ufone has placed itself where it is now through brilliant promotions.

REPORT TOPIC: SALES PROMOTION & ADVERTISING

SALES PROMOTION

Sales promotions are short term incentives to encourage the purchase or sale of a product or service

Ufone utilizes sales promotion activities to boost its sales. It follows all four of the promotion budgeting methods viz affordable method, percentage of sales method, competitive parity method and objective & task method.

Ufone uses following sales promotion tools

Contests:

Ufone carried out contest for cricket talent hunt in the year 200_______. Our renowned Pakistani cricketer Shoaib Akhtar was used as patron for this contest. However this contest didnt do much good to Ufones image or sales. But Ufone holds future plans to carry out such activities in more effective and profitable ways.

Games:

Ufone is currently running its game show on ATV prime time. This game show rewards the winning participants. Ufone updates its customers every now and then to participate in this game show. The problem we see in this activity is that Ufone is not properly advertising it.

Premiums:

All the cellular services are now offering premiums for their customers. This premium is offered, when a customer dont use his/her sim for more than 3-6 months, in the form of extra credit balance delivered to their numbers for free

Free tickets:

Ufone recently offered free trip to Dubai. It was Ufones first Eid offer. Every time you make any international call of 5 minutes or longer than 5 minutes, you enter the lucky draw to win a return ticket to Dubai. The more calls you make, more is your chance to win.

Promotional Products:

Phone bhi Ufone bhi. It was a promotional offer By Ufone where it offered a mobile phone, free air time, Ufone connection and Rs.100 airtime all for Rs.999.And now Ufone also offers Blackberry mobile sets with PostPay connection.

Another recent promotional offer by Ufone is that with your HBL Credit Card; get a free handset of your choice, a Ufone PostPay connection and airtime. Existing as well as new HBL Credit Card customers may avail this offer.

SALES PROMOTION STRATEGY:

Ufone strategize to take aid of sales promotion whenever it sees a minor drop in its usage by its customers. They mostly go for pull strategy in promotion i.e. they spend a lot on advertising and consumer promotion to induce final customers to avail their services. Ufone applies sales promotion schemes continually in order to keep its customers loyal and happy.

ADVERTISING (& DEVELOPING AD COMPAIGNS)

Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor

ADVERTISING OBJECTIVES:

Ufone use advertisements when

It has to inform the customers about new or available services

It seeks to persuade people to purchase their service or switch to their connection from any other connection

ADVERTISING BUDGET

Ufone is a heavy spender on advertising in electronic media as well as other media. Recently Ufone invested a huge amount on mass advertising. It was definitely a risk to take such decision. They are developing and playing new advertisements on electronic media not even with a months gap or so.

A single Ufone advertisement played 15-20 times per day on a TV channel costs millions varying with the time of day when it is played. Ufone spends 20% of its profit on advertising and sales promotion.

ADVERTISING STRATEGIES

Advertising strategy consists of two major elements: Advertising Message & Advertising Media. Ufone has the following strategies regarding the Message and Media of advertising:-

ADVERTISING MESSAGE:

Message Content --The very first content of Ufones advertising message was humor, and then in its blooming stage it shifted its message content to youthful excitement. Recently Ufone has again adopted humorous theme for its message content. This time Ufone is winning the hearts of people through humor and it has increased RPI of Ufone. Ufone has already generated much revenue through it.

Message Format --The format of Ufones advertisements has always been very colorful and eye catching. The shocking Orange & Green colours used by Ufone have always attracted people. These colors look beautiful on wall printing of Ufone.

Message Source --The very first Ufone advertisements had Faisal Qureshi as its message source. Afterwards Ufone hired non-celebrity young models for its youthful message theme. Ufone also hired three lollywood queens i.e. Meera, Jia Ali and Veena Malik with Mikaal in an advertisement of Baat Ban Jaye. This advertisement created a big controversy regarding the erotic and sexually attracting acts by the three female models. Due to negative response by people Ufone had to vacate its billboards and eradicate its banners, posters etc overnight, as directed by CEO and CMO of Ufone.

But now Ufone has again hired a comedian trio featuring Faisal Qureshi, Mikaal & Hammad. The strategy behind hiring this trio is that they are economical and are personal favorites of people. Ufone always hire endorsers in group

Mr.Waqas Anjum (Senior Marketing Executive-Multan) is of view that you must bring changes in marketing to attract customers. For this purpose Ufone is re-launching itself under the name of one single brand called UFONE. This brand would have Orange & Black as its corporate color instead of conventional Orange & Green color.

ADVERTISING MEDIA: To increase the reach and frequency of advertisement Ufone is using repetitive strategy for its advertisements. And the humorous theme always makes the ads more appealing and engaging the minds of customers. Ufone advertise in the following media types:-

Print Media --Ufone tries and print ads in all leading newspapers including The Dawn, Jung, Nawa-i-Waqt, Khabrain and local Sindhi newspapers as well. Ufone place its ads in all leading magazines as well i.e. Sunday magazine, akhabr-e-jahan, Libas, Mag etc

Broadcast Media -- It is the prior choice for Ufone. It includes the electronic media television and radio. Ufone is advertising in all Pakistani channels including GEO, Hum, ARY, Indus, TV one, HBO, Cartoon Network etc (except MTV Pakistan). Ufone also plays its ads on local channels like WASEB and Punjab TV.

Display Media --This type of media is the second choice of Ufone where it carries out its most of sales promotion and advertising. Ufone advertise using billboards, hoardings, signs (on Shop boards etc), posters, wall paintings etc. SME Multan has used a new and innovative vehicle in display media i.e. Ufones painted rickshaws

Online Media -- Internet is the online media. Ufone places flashing ads on famous portals like coolbuddy.com, pakfellows.com etc. But Ufone is not carrying out direct mail or direct e-mail advertising

Events -- Ufone has sponsored many events in the past and holds future plans concerning it. The famous event sponsored by Ufone in 2006 was a series of musical concerts did all over Pakistan, featuring Mikaal Hassan and Junoon, it named UROCK

AD SHOOTS: The ads of Ufone are shot mostly within Pakistan. But the PostPay ads are shot in foreign locations. Recently Ufone shot in the picturesque locations of northern areas of Pakistan in its advertisement of UWON sabse sasti call

SWOT ANALYSIS
SWOT analysis is an overall evaluation of the companys

Strengths (S)

Weaknesses (W)

Opportunities (O)

Threats (T)

STRENGTHS

Strengths include internal capabilities, resources, and positive situational factors that may help the company to serve its customers and achieve its objectives.

The strengths of Ufone are as follows:-

Ufones differentiation is its biggest strength. Ufone offers lowest off-net call rates that differentiate it from its competitors

Ufone is offering more and better Value Added Services (VAS) than its competitors i.e. Ufones Walkie
talkie,_______________________________

Ufone is enjoying the second largest cellular network in Pakistan

Ufone has the most promising and attractive ATL (Above The Line) activities

Ufone has great management within the organization (internally & externally)

WEAKNESSES

Weaknesses include internal limitations and negative situational factors that may interfere with the companys performance.

The weaknesses of Ufone are as follows:-

Ufone has less professionalism within the organizational members

As Ufone is a subsidiary of PTCL, which was formerly under government management, Ufone still has a shadow of a government
organization

Ufone still has room for the betterment of its network coverage in comparison to The Market Giant MOBILINK

Ufone has pathetic billing system for postpaid connections. This faulty system creates a negative vibe among its customers

OPPORTUNITIES

Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage.

Ufone has following opportunities in its way:-

Ufones biggest opportunity lying ahead in near future is the phase of conversion of their GSM technology Into 3G (satellite based)
technology

Ufone has the opportunity of growing its customer base due to increasing trend of using mobile phones

Ufone has the opportunity to win the customers of its competitors by providing them superior services on lower price

Ufone has the opportunity that it is pioneer in southern Punjab where it can promote itself and become market leader on the basis of this
very fact

THREATS

Threats are unfavorable external factors or trends that may present challenges to performance.

Ufone is facing/about to face the following threats:-

Ufones biggest opportunity is its biggest threat as well. The phase of its conversion of GSM technology to 3G technology can be a threat
for it if not carried out properly

The boosting customer base of Warid and Zong is also a big threat for Ufone

The decreasing economy rate and instability of Pakistan is a big threat for all businesses in Pakistan including Ufone

COMPETITIVE ADVANTAGES
Its an advantage over competitors gained by offering consumers greater value than competitors offer. Ufone strategizes to gain more and more competitive advantages. It also uses these competitive advantages well enough for its promotion. Currently Ufone is enjoying the following competitive advantages:-

Lowest overall call rates

Value added Services (VAS)

Call block service

Corporate color

CHALLENGES
Ufone face many challenges with the ever growing needs of telecommunication. It must remain profitable with the decreasing economical situation of Pakistan. It must grow as well in these dark times if it has to remain IN the market. Ufone face very strong competition from its competitors. It must offer lowest rates with better quality service. New features and services should be introduced to make its customers loyal, happy and satisfied.

FUTURE PLANS
Keeping in view the growth potential of the cellular industry there is no option but to be aggressive in order to remain a potent force in the cellular industry.

In order to extend cellular network Ufone has finalized a huge network expansion contract amounting to about USD 550 million, which will enhance the subscribers capacity by 10 million. This is the largest ever expansion project of Ufone.

A strong focus will be on maintaining high quality of service, which is always a benchmark of Ufone, increasing usage and exploring new revenue streams on value added services, market visibility through various market initiatives to fulfill subscribers satisfaction and demand and above all to increase the value of investment for the shareholders.

CONCLUSION
By keenly analyzing the marketing of Ufone, we group member agree that Ufone is not a safe player in the market. It is penetrating its market by taking risks and aggressively promoting & advertising itself. It holds second largest market share and is seeking to become the market leader anyway possible. We came through very unconventional strategies and ad campaigns while working on this report. We believe that mobile services are the toughest market to enter and survive. And in this tough market Ufone isnt only surviving but growing at an exceptional rate.

Ufone is using humorous theme in its ads which has become its benchmark. People enjoy watching, discussing and following Ufone ads the most. And it is the biggest achievement of Ufone in recent times.

We wish a very best of luck to Ufone. May it progress in this field and achieve its desired goals. (AMEEN)