International Marketing in India - Term Paper Example

International Marketing (2) Table of Contents Introduction 4 Overview of Telecom market of India 4 Brief introduction of DU Telecom 4 The rationale 4Discussion 4 Environmental analysis of Indian market with Porte’s five forces 4 Economic Environment of India regarding telecom services 6 Consumer behaviour of Indian Consumers 6 Market Share of the existing competitors 7 Country Opportunities regarding telecom sector 7 Market entry strategies of Du 8 Analysis 9 STP strategy of Du in Indian market 9 Development of the market of India with the existing services of Du 10 Findings 10 Offering high attention over promotional strategies to position itself 10 Conclusion 10 References 12 Introduction Overview of Telecom market of India Indian telecom market is considered as one of the largest advancing telecommunication industry. This is mainly due to the presence of numerous subscribers, approximately 225.21 million that enhanced the CAGR rate to a significant extent as compared to other sectors (Nextbigwhat.com, 2014). Brief introduction of DU Telecom DU Telecom organization is recognised as one of the largest telecommunication service provider, operating since 2005. The official name of the organization of DU is Emirates Integrated Telecommunication Company (EITC) operating in the regions of Abu Dhabi, Ajman, Dubai, Fujairah and many others. The organization of EITC or Du mainly offered services such as fixed lines, mobile services, internet services, telephony as well as digital television services that enhanced its revenues and net income by US$ 2.77 billion and US$ 540 million in the year 2012. Moreover, due to the presentation of varied types of services, the brand image and reputation of the organization enhanced by a significant extent as compared to many other rival players (Du, 2014). The rationale The rationale of this essay is to analyse the market entry strategy of Du Telecom of UAE into India so as to amplify its portfolio and reputation in the entire globe among others. Discussion Environmental analysis of Indian market with Porte’s five forces The market scenario of telecom segment of India is analysed with the help of Porter’s five forces. It is one of the recognised analytical tools that comprises of five elements. Bargaining power of the customer: the bargaining power of the customers of Indian market is extremely high. This is mainly due to the presence of numerous rival players such as BSNL, MTNL, Vodafone, Airtel, Aircel etc. As a result, the organization of EITC or Du need to offer new services at a competitive rate so as attract the customers of Indian market towards the brand as compared to others (Grant, 2010, pp. 110-123). Bargaining power of the suppliers: the bargaining power of the suppliers is quite low. This is mainly because; the branded and reputed organizations always try to maintain an agreement with the popular suppliers so as to attain best services to its target customers. Therefore, in order to retain its position and reputation in the market, the suppliers had to obey the rules and regulations of the organizations (Grant, 2010, pp. 110-123). Competitive rivalry: the level of rivalry is extremely high in India. This is mainly due to the presence of many rival players such as Vodafone, BSNL, Airtel, Idea, Aircel etc. Other than this, each and every telecom service provider is trying to offer varied types of inventive services to its customers so as to enhance its dominance and market share as compared to others. Therefore, in order to maintain its position and ranking, the organization need to offer high concentration over product development strategy as compared to others. Threat of substitute products: the threat of substitute products is extremely high in the market of India for the organizations operating in telecom segment. This is because; all the contenders are offering high concentration over research and development department in order to develop new service plan or offers. This is done in order to amplify the customer base and profitability of the organization in the market among other rival players (Grant, 2010, pp. 667-678). Threat of new entrants: the threat of new entrants is also extremely high in this segment as numerous new players are trying hard to penetrate Indian market. The prime reason behind it is that, it is the fastest growing segment as compared to others. And so, maximum players try to penetrate it in order to amplify its portfolio and brand image (Grant, 2010, pp. 110-123). Thus, it might be clearly revealed from the above mentioned points that the market environment of India is extremely competitive and so the organization of Du or EITC need to present new services in order to position itself. Economic Environment of India regarding telecom services After reduction of the style of bureaucratic government, the economy India became successful in enhancing its economic reforms. As a result of which, due to extensive efforts in industry, agriculture, handicrafts and modern crafts, the country became successful in amplifying its gross domestic product rate as compared to many other neighbouring states. As a result of which, the per capita income of the citizens also enhanced that encouraged the customers to get attracted towards mobile technology. Due to which, the growth and market share of the organizations operating under the umbrella of telecommunication enhanced its profit margin significantly. Such an economic status might prove extremely effective for Du or EICT at the time positioning its services among others (Guillén & García-Canal, 2012, pp. 567-578). Consumer behaviour of Indian Consumers The citizens of India are extremely attracted towards advanced technology and competitive plans or offers. Therefore, in order to position itself, the organization of Du or EITC needs to offer high attention over pricing and promotion so as to increase the awareness level of the customers. Only then, the organization of Du or EITC might enhance its market share and customer bases in the market of India as compared to others. Market Share of the existing competitors The market share of the existing rival players in the market of India is presented below, so as to analyse the marketing strategy that may prove effective for Du or EITC to improve its dominance and reputation. Country Opportunities regarding telecom sector The opportunities that the telecom service providers might attain are described below: Huge customer base: the range of customers in Indian market is extremely huge. This is one of the most important advantages for the organizations operating in telecom segment. As a result of which, the market share and profitability of the organizations might get enhanced to a significant extent as compared to others (ESOMAR. 2010, pp. 551-567). High per capita income: the per capita income of the customers in Indian market is also quite high and so it might prove extremely effective for the organization of Du or EICT as compared to other international markets. High craze for competitive plans: the customers of India always desire to attain extremely economical or competitive plans so as to enhance usage rates. Thus, the above mentioned points clearly specifies the decision of entry in the market of India by the organization of Du or EITC would surely prove worthy in long run. Market entry strategies of Du The organization of Du or EITC might enter the market of India as a wholly owned subsidiary rather than through strategic alliance. This is because; in this strategy, the organization might be wholly responsible for development and implementation of its marketing and sales strategies (ESOMAR. 2010, pp. 441-454). However, in case of strategic alliance, the parent company is responsible for all strategic moves of the organization and so it may not present its own policies such as high attention over promotion and advertising strategies in order to attract a wide range of customers. Other than this, by entering the market as a wholly owned subsidiary, the organization of Du or EITC might easily get engaged in varied types of international strategic coordination that may amplify its portfolio and brand value in the market among other competitors. In addition, the risk of sharing the ideas and suggestions of marketing and product development might also remain within the organization in case of wholly owned subsidiary as compared to strategic alliance with other brand. Moreover, the strategies of marketing mix might also be extremely as per the instructions of the CEO of the organization of Du rather than that of parental company (Du, 2014). In addition to this, franchising entry method is also not effective for the organization of Du or EITC as in this policy; quality control is not at all possible. Moreover, in franchising, a significant amount of right needs to be presented to its brand name that may limit its market value and share. Thus, due to these following reasons, the organization of Du or EITC might follow the strategy of wholly owned subsidiary as compared to strategic alliance or franchising, at the time of penetrating the Indian market (Du, 2014). Analysis STP strategy of Du in Indian market Segmentation: the organization of Du or EITC need to segment the Indian market on the basis of demographic, geographic and behavioural aspects. The organization of Du or EITC might offer high concentration over the requirements and demands of rural India so as to amplify its market share and position. Along with this, the organization might develop products as per the demographic or income ranges. So that it might prove effective for the customers of low and middle income groups thereby amplifying the brand image and reputation of the organization of Du or EITC. Moreover, analysing the psychographic and behavioural aspects such as high usage rates, students or professionals etc, the organization of Du or EITC might develop its services prior penetrating the market of India (Drummond & Ensor, 2006, pp. 331-345). Targeting: The organization under consideration may target the customers residing in small towns of India with low and middle incomes in order to position the company within the market. Only then, it might amplify its dominance and reputation among others. However, in order to do so, the services such as Talk and Surf or Talk, Surf and Watch need to be promoted vigorously so as to make the customer aware about its benefits (Drummond & Ensor, 2006, pp. 256-267). Positioning: the organization of Du or EITC may easily position itself through its service, ‘Du Live’, that advertises its live telecast through a slogan, ‘bringing the best performance in live entertainment’. This service of DU or EITC might prove effective for the organization in attracting the youths as well as young and energetic professionals towards it (Bradley, 2012, pp. 223-234). Thus, the above mentioned STP strategy is extremely essential to analyze the target market for Du or EITC after penetrating it. This is because; on the basis of the demands of the target customers, the services might be developed. Development of the market of India with the existing services of Du The organization of Du or EITC might develop the newly entered market of India with the help of its existing services such as Du Live, Talk and Surf and Talk, Surf and Watch. In case of Du Live, the customers might access various live concerts and entertainment events so as to reduce their tensions and loneliness. Other than this, the low and middle income group customers of Indian market might easily take advantage of talking and surfing in mobile phones by recharging a card of Talk and Surf. Along with this, the customers might easily take advantage of talking, watching and surfing by recharging the card of Talk, Surf and Watch. By presenting these recharge service cards, the organization of Du or EITC might position itself in the market of India as compared to many other rival players such as BSNL, Airtel, Vodafone etc (Du, 2014). Findings Offering high attention over promotional strategies to position itself The organization of Du or EITC might try to offer concentration over advertising, sales promotion and public relations. Only then, the level of awareness of the services of Du or EITC might get enhanced in the new market region of India as compared to other rival players. As a result, the profit margin and productivity of the services of Du or EITC might get enhanced resulting in amplification of its market share in Indian market. However, it might be effective only if, it enters as a wholly owned subsidiary rather than franchising or joint venture (Beall, 2010, pp. 123-134). Conclusion Conclusively, it might be stated that the organization of Du or EITC might enhance its profitability and operations by entering in the market region of India. This is because; the customer base of India is extremely high and comprises of both low and middle income groups. Moreover, as the customers of Indian market also include high utilisation of internet or mobile phones so the services of talk and surf or Talk, watch and surf might prove extremely effective for these customers. Apart from these, the organization needs to offer high concentration over promotion so as to increase the rate of awareness of the customers of rural India significantly. Only then, it might become successful in amplifying its position and reliability in the market of India among other rival players. References Beall, A, E. 2010. Strategic Market Research: A Guide to Conducting Research to solve problems. Boston: Harvard Business School Press. Bradley, N. 2012. Marketing Research: Tools & Techniques. New York: McGraw-Hill. Drummond, G. & Ensor, J. 2006. Introduction to Marketing Concepts. New York: Cengage Learning. Du, 2014. About Du telecom. [Online] Available at: www.du.ae [Accessed on 28th May, 2014] ESOMAR. 2010. Market Research Handbook. London: Sage. Guillén, M. F. & García-Canal, E. 2012. Execution as Strategy. Harvard Business Review Vol. 90(10). Grant, R, M. 2010. Contemporary Strategy Analysis. London: Sage. Nextbigwhat.com, 2014. Indian telecom industry CDMA subscriber base reaches to 50 million. [Online] Available at: http://www.nextbigwhat.com/indian-telecom-industry-cdma-subscriber-base-in-india-reaches-50-million-mark-297/ [Accessed on 28th May, 2014]. Read More