Airtel Magic - Selling a Pre-paid Cellphone Service
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Case Details:
Case Code : MKTG040
Case Length : 12 Pages
Period : 2002
Pub Date : 2003
Teaching Note : Available
Organization : Bharti Cellular Limited, Spice Telecom
Industry : Cellular
Countries : Switzerland
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
All Set to Create Magic
In early 2002, Magic decided to revamp its marketing strategies. There were plans to launch the service in newer areas and bring about changes in pricing, positioning and advertising. The company also planned to make new value additions by providing better services.
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As a first step in this direction, Magic was brought under
Bharti's umbrella brand, Airtel, and was renamed Airtel Magic. Company sources said that the move was aimed at banking on the strengths of Airtel as a brand.
While the earlier brand strategy aimed at customers interested in using mobile services, the new strategy was aimed at attracting even non-interested customers by appealing to their needs and requirements (offering them a value they did not perceive earlier).
In line with this strategy, Magic was positioned as a friendly, mass-market
brand...
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The Industry Strikes Back
Bharti's aggressive marketing, advertising and promotional efforts led other players to focus on their marketing efforts as well (Refer Exhibit IV for competition details). Companies resorted to price reductions, new service additions, value additions and focused advertising and promotional campaigns...
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The Future - Far From Magical
While the players in the cellular market in India were focussing heavily on the pre-paid card segment due to its high potential, some analysts expressed doubts about the profitability of this segment in the long run. They said that low profit margins from the pre-paid segment (on account of low tariff and high advertising, promotional and customer service costs) could lead to losses in the long run. As the fierce competition would make price-cuts and heavy investments in advertising and promotions inevitable, this seemed quite possible... |
Exhibits
Exhibit I: Cellular Telephony & The Pre-Paid/Post-Paid Issue
Exhibit II: About The Bharti Group
Exhibit III:
Exhibit IV: Post-Paid & Pre-Paid Cellular Brands in India (Late 2002)
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