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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"Magic's success can be attributed to the one on one relationship that the brand has built successfully with its customers. Add to that the vibrant colours, the local language and simplicity that the brand communicates with, and the celebrity association, Magic creates a lasting bond with its customers."

- Vivek Goyal, CEO, Bharti Mobitel Ltd., in January 2002.

Casting The Celebrity Magic

In 2002, the leading Indian telecommunications company, Bharti Cellular Limited (Bharti) signed the famous cricket player Saurav Ganguly and leading movie stars, Madhavan and Kareena Kapoor as endorsers for its brand, Airtel Magic (pre-paid cellular card). Its objective was to create the highest recall for Magic in the pre-paid cellular telephony segment by cashing in on the two biggest passions of India - movies and cricket. Bharti also changed the tagline for Magic from 'You Can Do Magic' to 'Magic Hai To Mumkin Hai' (If there is Magic, it's possible). The move attracted considerable media attention, as it was unusual for a company to spend so lavishly to promote a single brand.

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In October 2002, Bharti launched a television commercial (TVC), featuring Shah Rukh Khan (leading actor, already endorsing Magic since a couple of years) and Kareena Kapoor. The TVC, developed by one of India's leading advertising agencies, Percept Advertising, was the first of the series of four TVCs for Magic's new campaign.

According to Bharti, the TVCs aimed at attracting young adults in SEC B and C categories of the Indian market¹.

Commenting on the new developments, Hemant Sachdev (Hemant), Director, Marketing and Corporate Communications, Bharti Enterprises, said, "The aim is to be relevant to the masses and make all their dreams, hopes and desires come true instantly, at Rs 300² per month."

However, industry observers felt that these actions were necessiated by the intensifying competition in the pre-paid cellular card segment in India in the early 21^st century (Refer Exhibit I for a note on cellular telephony).

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1] Socio-Economic Classification (SEC) categorized urban Indian households into five segments SEC A, SEC B, SEC C, SEC D and SEC E, based on education, occupation and chief wage earner's profile. A&B are high SEC classes. Mid SEC class is SEC C and low SEC classes include D&E.

2] In November 2002, Rs 48 equaled 1 US $.