Market Segmentation and Product Development of Grameen Phone

Background of GrameenPhone Grameen Phone is the leading cellular service provider in Bangladesh for the last few years with high customer satisfaction and demand.

•

November 28, 1996: GrameenPhone was offered a cellular license in Bangladesh by the Ministry of Posts and Telecommunications

•

March 26, 1997: GrameenPhone launched its service on the Independence Day of Bangladesh

•

After eight years of operation, GrameenPhone has more than 4 million subscribers as of August 2005.

•

In November 2005, Grameen Phone crossed the 5 million boundaries of subscribers. However, last 1 million subscribers were added by only 3 months.

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Commencement GP is a joint venture company in Bangladesh.

Bangladesh, Norway and

Japan have made combined investment in the company. As a multinational corporation, GP is going on very effectively and efficiently.

Launching of Grammen Phone: GP launched its service on March 26, 1997. It is the second cellular phone company in Bangladesh. It got a unique advantage from Bangladesh Railway about its networking coverage. The inter-telecommunication system of Bangladesh Railway played a major role in rapid expansion or GP’s networking capacity of Bangladesh Railway agreed against a handsome monitory benefits. GP saved its huge tower establishment cost and achieved a strong confidence about entire country coverage.

The company celebrated its first one million subscribers in June 2000. The total subscribers of GP were 5 million up to August 2005. GP capture 38% of the total telecommunication market of Bangladesh.

GrameenPhone Others 38%

62%

Pie chart-1.1 Condition of GP in total market

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Objectives: Our report is prepared to accomplish some objective. The objective are mentioned below:  To find out the effective market segmentation of Grameen Phone.  To know, what product and services they provide to satisfy their target market and target customers.  To understand how to create market coverage  To know their future plan to their potential customers.

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Limitations: Many factors affected us on our way of making the report. We have many personal limitations for which we failed to prepare a most up-dated report.

Lack of sufficient documents made us unsuccessful in making the report highly informative. Some other factors affected us negatively, for which we could not overcome the limitations. The factors are as follows: 1. Lack of sufficient resources 2. Short time of submission 3. Lack of proper concepts 4. Lack of experience 5. Lack of public co-operation k/Short survey course 7. Sampling inaccuracy 8. Shortage of understanding power etc.

The Purpose: Grameen Phone has a dual purpose:  To receive an economic return on its investments and  To contribute to the economic development of Bangladesh where telecommunications can play a critical role.

This is why GrameenPhone, in collaboration with Grameen Bank, is aiming to place one phone in each village to contribute significantly to the economic uplift of those villages.

The Strategy GrameenPhone’s basic strategy is coverage of both urban and rural areas. In contrast to the “island” strategy followed by some companies, which involves connecting isolated islands of urban coverage through transmission links, 4

GrameenPhone builds continuous coverage, cell after cell. While the intensity of coverage may vary from area to area depending on market conditions, the basic strategy of cell-to-cell coverage is applied throughout GrameenPhone’s network.

The People: The people who are making it happen – the employees – are young, dedicated and energetic. All of them are well educated at home or abroad, with both sexes (genders) and minority groups in Bangladesh being well represented.

They know in their hearts that GrameenPhone is more than just about phones.

This sense of purpose gives them the dedication and the drive, producing – in about three years – the biggest coverage and subscriber-base in the country.

GrameenPhone knows that the talents and energy of its employees are critical to its operation and treats them accordingly.

The Technology: GrameenPhone’s Global System for Mobile or GSM technology is the most widely accepted digital system in the world, currently used by over 300 million people in 150 countries. GSM brings the most advanced developments in cellular technology at a reasonable cost by spurring severe competition among manufacturers and driving down the cost of equipment. Thus consumers get the best for the least.

The Service: GrameenPhone believes in service, a service that leads to good business and good development. Telephony helps people work together, raising their productivity. This gain in productivity is development, which in turn enables them to afford a telephone service, generating a good business. Thus development and business go together.

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The Result: By bringing electronic connectivity to rural Bangladesh, GrameenPhone is delivering the digital revolution to the doorsteps of the poor and unconnected. By being able to connect to urban areas or even to foreign countries, a whole new world of opportunity is opening up for the villagers in Bangladesh. Grameen Bank borrowers who provide the services are uplifting themselves economically through a new means of income generation while at the same time providing valuable phone service to their fellow villagers. The telephone is a weapon against poverty.

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ORGANIZATIONAL CHART

Figure : 1.1

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Market Segmentation: Market consists of buyers and buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. Buyers have unique needs and wants; each buyer is potentially a separate market. Ideally, then, a seller might design a separate marketing program for each buyer.

Market segmentation is one of the step that goes into defining and targeting specific markets. Market segmentation means dividing a market into distinct groups or buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes.

Condition for Effective Markets Segmentation: A business must analyze the needs and wants of different market segments before determining their own niche. To be effective in market segmentation keeps the following things in mind: •

Segments or target markets should be accessible to the business

•

Each segmented group must be large enough to provide a solid customer base.

•

Each segmented group requires a separate marketing plan.

Bases for Consumer Market Segmentation: Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Markets can be segmented or targeted using a variety of factor. The bases for segmenting consumer markets include:

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1. Geographic bases: Geographical segmentation calls dividing the market into different geographical units such as nation stage regions, counties, cities or neighborhoods.

2. Demographic bases In demographical segmentation, the market is divided into groups based on demographic variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality or social class.

3. Behavioral bases In behavioral segmentation, buyers are divided into groups based on their knowledge of, attitude toward, use of or response to a product. Many marketers believe that behavioral variables-occasions, benefits, user status, usage rate, loyalty status, buyer-readiness stage, and attitude-are the best starting points for constructing market segments.

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Consumer Market Segmentation according to GP. We can divide the consumer market of GP according to the following three bases:

1. Geographic Bases 2. Demographic Bases 3. Behavioral Bases

Now we broadly discuss these three bases:

Geographic Bases:

Geographic

National

International

Rural

Urban

Figure-2.1

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National : Urban & Rural networking areas are resented in the following map.

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Urban Area : GP at first provide products for their urban subscribers. Some of the products that GP provide for their urban subscribers are : •

GP Regular

•

GP National

•

Anytime 300

•

Anytime 500

•

Easy Gold

•

Easy Pre-paid

Rural : After introducing their product they have concentrated about the country side. One of the important product / service of GP is “Village Phone Programme”. (VPP)

Subscriber 94003

100000 80000 60000

45500

40000 20000

23035 9222

0 2000-2001 2001-2002 2002-2003 2003-2004

Bar Chart : 2.1 Village Phone Subscriber

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Subscriber

International: Now a days GP expanding their services world wide through international roaming, where international roaming (IR) service enables a subscribers to use his/her own mobile number in foreign operators’ networks and to enjoy the same facilities those operators provides to their own subscribers.

Demographic Bases

Demographic

Age

Income

Occupation

Figure : 2.2 Age : Grameen Phone successfully launched dujice an international youth brand In April 2005.

This was the first time in Bangladesh that a brand totally

dedicated to the youth was launched by a mobile phone service provide.

Income : In Bangladesh peoples have different level of income. Considering this, GP provides various offer such as : 

Scratch Card of 50 Tk.



Scratch Card of 150 Tk.



Scratch Card of 300 Tk.

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That’s why people of different level of income can easily use this product.

Occupation: GP also devided their product according to the necessity of people. Such as; GP National, GP Regular, Anytime 300, Easy Gold. These are Post paid &others are pre paid.

Behavioral Bases : GP provides special offers to their subscribers in various festivals such asEid, New year, Pohela Boishak, etc.

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Product Development: A strategy for company growth by offering modified or new products to current market segments. Developing the product concept into a physical product in order to assure that the product idea can be turned into a workable product.

Product Development of Grameen Phone : Grrameenphone launched its service on March 26, 1197 (Independence Day of Bangladesh). After 7 years of their operation, GP introduced a number of new products and services in the market during the year 2004. At the same time a number of premium value added services were launched while GP distribution system around the country was further strengthened.

GP launched two post-paid bundled products named “Anytime450� and Anytime300� in April the first such products to be introduced in the local market in May this year the Anytime 450 product was replaced by the new anytime 500 product with a monthly bundle fee of BDT 1500 and 500 minutes of free talk-time.

Moreover the friend and family option for regular users and a pre-paid product with a reduced tariff from the third minute owned was also introduced last years. The any time option for pre-paid customs with reduced tiff in specific time slots was also introduced in August.

Premium SMS products like ring tone and logo download was also introduced for the first time in the country. The SMS to e-mail and the e-mail to SMS service was launched in september while the inter operator SMS service with city cell, Aktel and Banglalink was also started.

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The GP distribution network was further enhanced last year further increasing the number of points of sales and scratch card retail outlets around the country.

GP divided their products into two ways:

GP’s product

Post paid Service

GP Regular

GP National

Anytime 500

Prepaid Service

Anytime 300

Easy Pre-paid

Easy Gold

Djuice

Figure -3.1 Post Paid: These four products are included in this post-paid service.

GP Regular This is a post-paid product that allows both way BTTB (local, NWD, ISD, ISD) connectivity the Friends & Family Feature allows the subscribers to call at a reduced rate to three pre-selected GP numbers during any time of the day.

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Tariffs of GP Regular Outgoing Monthly Mobile to Mobile Mobile to BTTB Fee Pea Off- Super Peak Off-Peak Super k Pea offoff-peak k peak 8a m- 8pm 8p -11 llpm m pm -Sam

8am8pm

Tk. Tk. 350

Tk. Tk. 3 Tk.2 4

8pm pm

-11 llpm -Sam

Tk.

Incoming From

Mobil From BTTB e

Tk.

4/min, + 3/min. + 2/min. + BTTB BTTB BTTB Free Local/ Local/ Local/ NWD/ NWD/ NWD/ ISD ISD ISD charge charge charge

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Friends & Family [24 Hrs.)

1st 5 min. free & Tk. 1/min. from 6th min. onwards

Tk. 1.5/min. for 3 GP nos.

GP National : This is a post-paid product with mobile to mobile connectivity. The “Friends & Family� feature allows the subscribers to all at a reduced rate to three preselected GP number during any time of the day.

Tariffs of GP National Outgoing

Incoming Friends & Family (24 Hrs.)

GP - Any mobile Monthly Fee

Peak

8am8pm

Tk. 150

Tk. 4/min.

OffPeak

Super offpeak

From mobiles 8pm -11 pm

llpm -

Tk. 3/min.

Tk. 2/min.

From BTTB

Sam

Free

1st 5 min. free &Tk. 1/min. from 6th min. onwards

Tk. 1.5/min to 3 GP nos.

Anytime 500: This is a post-paid monthly airtime bundled product having both way BTTB product having BTTB (local NWD, ISD) connectivity with the first 500 minute of talk time free.

Tariffs of Anytime 500 Monthly

Tk 1500

Outgoing GP to any within 1st mobile after 500 mins first 500 min Tk 3/Min Tk. 0/ min + BTTB local NWD/ISD charge

st

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after 1 500

from Mobile

Tk. min BTTB Local/ISD charge

Free

Incoming From BTTB

1st 5. min free & Tk 1 min from 6th min onwards

Anytime 300: This is a post paid monthly airtime bundled product with mobile to mobile connectivity with the first 300 minute of talk time free.

Tariffs of Anytime 300 Monthly Bundle Fee Tk 10000

Peak 8am11pm Tk 0/mim

Outgoing off peak peak 11pm8am8am 11pm

off-Peak 11pm8am

Tk 0/min

Tk. 3/min

Tk 4/min

Incoming from Mobiles Free

Incoming from BTTD Tk. 2/Min from the 2nd minute

Prepaid : GP provide this three products such as :

Easy Prepaid : This is pre-paid product with mobile to mobile connectivity. Moreover the “My time” feature also allows subscribers to make calls to any GP number at a reduced rate during a pre-selected time slot of the day. The pre-paid customers can also chose different rate plan by activating “My choice” feature.

Tariffs of Easy Prepaid Outgoing Peak 6 am-12 am GP to GP Tk 4.40

GP to other mobiles Tk. 4.80

easy hour 12-am-6am

income

My easy (24 hrs.)

my time 6 am-9 am or 1 pm.

Tk. 3.00

Free

Tk. 3 Min to 1 GP no.

Tk 3 min to any GP no.

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Easy Gold : This is a pre-paid product that allows both way BTTB (local NWD ISD) connectivity. The “My time feature allows subscribers to make call to any GP number at a reduced rate during pre selected time slot of the day. The “My easy” feature also allows the subscribers to call at a reduced rate to one preselected GP numbers during any time of the day.

djuice : This is a Pre-paid product with mobile to mobile connectivity mobile to mobile connectivity this product is designed for the youth segment of market.

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Other Products and Services: GrameenPhone : Insta-Bill Insta-bill is the e-mail based auto reply service for GP's Post Paid subscribers.

Operative 24 hours a day, 365 days in a year. Subscribers can avail information on account status, current balance, last bill, unbilled usage, total amount due, last payment, security deposit, credit limit etc. by sending an email under this service. GP do it for helping businesspersons.

Value Added Services:  Voice SMS  SMS Push-Pull Service: With Push-Pull service, user can enjoy more than 160 contents. Example: Usage info, payment status of last bill, Sports news, Emergency number, Restaurants, Airline, Railway timing, Travel info etc.

For example: to know the contact numbers of taxi cab companies: 

Go to the message option



Write ‘taxi’



Send the SMS to 2000



Then user will get the list of taxi cab numbers in return.

Voice Mail Service ( VMS ): VMS work like an answering machine. When users are not available or outside the coverage area or simply busy, the caller can leave a message in user’s voice mail box, which users may listen later.

Fax and Data: This service enables a GP subscriber to send/receive fax and data through their handsets by connecting to a PC /Laptop. Currently this service is offered to corporate clients only.

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FlexiLoad With FlexiLoad reload your pre-paid account with any amount starting from Tk.50 to Tk.10, 000.

How to reload To reload your pre-paid account go to any of the nearest GrameenPhone authorized scratch card retail outlets or points of sale displaying the FlexiLoad sign. Choose any amount between Tk.50 to Tk.10, 000; make the payment to the retailer, and the retailer will instantly reload your account from his mobile

handset. After a successful reload, you will receive instant

confirmation on your mobile handset through SMS.

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Reload amount and validity Choose from a wide range of reload amounts and validity for reloading your pre-paid account.

Reload amount Tk 50-99 Tk 100-149 Tk 150-199 Tk 200-249 Tk 250-299 Tk 300-399 Tk 400-499 Tk 500-599 Tk 600-699 Tk 700-799 Tk 800-899 Tk 900-999 Tk 1000-1499 Tk 1500-4999

Validity 3 days 10 days 15 days 20 days 25 days 31 days (1 month) 40 days 50 days 62 days (2 months) 70 days 90 days (3 months) 150 days (5 months) 180 days (6 months) 180 days (6 months)

Extra incoming None None None None None 7 days T7 days 7 days 7 days 7 days 7 days 7 days None None

Network Capacity Expands For Quality Improvement The GrameenPhone network expanded at a record pace last year. The radio, transmission and switching network, in terms of number of Base Stations, connecting transmission lines, MSCs etc. was more than doubled in 2004 compared to total network built since inception of the company in 1997.

Six new switches were added to the network to further expand its capacity.

Another 720 base stations: were put on air during the year, bringing the total to 1400 base stations operating around the country.

In addition, GP swapped low capacity BTSs with high capacity ones and 'EDGE/GPRS' enabled BTSs. Other activities included processor up-gradation of switches, software and hardware up-gradation of nodes, capacity increment in inter-operator routes,. Optical Fiber up-gradation, IN network up-gradation etc. A total of 250 km of new fiber optic cable : was laid to enhance capacity and to ensure higher redundancy. At the end of the year 23

network was made able to carry 109 per cent more traffic compared to beginning of the year.

As a result of this expansion, network congestion reduced by 60 per cent even after adding 1.4 million new subscribers.

Achieving network quality target A number of steps were taken to further improve the quality of the network.

Following are some of the important ones: a)

To avoid radio interference from external sources, GP was able to shift

the lower part of its 900 MHz spectrum following extensive coordination with different mobile operators and regulatory authority. GP also used huge number of band pass filters in the base stations to secure its network from external interference. b) GP was awarded a new frequency band in the 1800 MHz spectrum.

GrameenPhone has already started building Base Stations using this new frequency band which is also helping to improve the network quality and capacity. c) GP re-planned the frequencies of its base stations many times during the year and implemented new features like DBPC (Dynamic BTS Power Control) which have improved the network quality further. d) GP has also placed special attention on in-building coverage and capacity solutions in later part of 2004. Coverage in big shopping complexes like 'Bashundhara City' and other important high-rise buildings are being gradually improved under this initiative.

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Successful launch of new product djuice : GrameenPhone successfully launched djuice an international youth brand, in April 2005.

This was the first time in Bangladesh that a brand totally dedicated to the youth was launched by a mobile phone service provider. The youth segment of Bangladesh has special needs and aspirations - they are more adventurous, more ambitious and would like to see the world around them through their own eyes Seeing this dynamism of the market, GrameenPhone as the pioneer of this sector, brought a brand that would talk the language of youth and a brand that would personify youth. djuice is a Telenor brand currently being marketed in Norway, Ukraine, Sweden and Hungary. Bangladesh is the first country outside Europe where this unique brand has been launched.

GrameenPhone had felt the need to provide a unique experience for the: youth segment of this country and always believed that the youth of Bangladesh deserved better service at a reasonable price.Thus came in djuice the brand especially tailored to meet the needs and desires of young people.The brand would help the youth of Bangladesh to not only use the mobile phone as a communication device but also as something that they could proudly associate with. djuice was launched on the first day of the Bengali New Year in the presence of youth celebrities and the media.The launch program and press-conference took place at Pizza Hut with a presentation of all the benefits that djuice would bring to its valued subscribers. Black, the popular youth band in Bangladesh which is also the official celebrity spokesperson of djuice. attended the launch ceremony along with cricketers of the Bangladesh National Cricket Team.

A series of hugely successful concerts were also held after the launch event with local bands Black and Miles along with Indian Idol stars.

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Amit Sana and Rahul Saxena enthralling the huge number of audiences of Dhaka and Chittagong. The entry for the concerts was made free by GrameenPhone, with tickets for the concert being freely distributed amongst the youth of the two lucky cities. GrameenPhone plans to continue providing the subscribers with such offers in the future.

The djuice package is a whole bundle of values for its subscribers.The special 32k djuice SIM allows the users to store additional 200 friends' and family entries with three numbers against each entry. It has a larger mail-box storage capacity and SMS chat facilities. From information on film and music-charts to beauty tips and dictionary, the djuice connection offers more than just a means of communication.

With pulse rates as low as 20 seconds from the first minute (for the first time for any pre-paid connection) and tariffs as low as Tk. 1.66 and 0.66 per pulse off-peak), it was an instant success. But GrameenPhone wanted to give more than just lower tariffs and lower pulse rates because it believes in providing more value to the customer, djuice wanted to give its subscribers a sense of belonging to an exclusive djuice-dub. The djuice XTRA card was therefore given with the connection.This unique card, given with every new subscription, opened a totally new era in value addition to the customer.

The XTRA card provides the subscribers with discounts at popular food outlets, fashion outlets, music stores and sports shops.The number of outlets providing these benefits to the subscribers of djuice is being increased gradually to provide more benefits to the valued subscribers. The djuice XTRA card also acts as a pass to popular concerts and programs exclusively arranged for the djuice subscribers. Some of the tactical partners of djuice who would be providing the holders of djuice XTRA card with discounts are: food places like Arabian Fast Food, Boomers, Ninfas ,A&W, Dahlia's, SweetMax, Copper Chimney, Silver Spoon etc. Sports World, Thunderbolt, Woodland, 26

Reebok, Kay Kraft, DBC, Piano, Fahim's Music, BBC are some other places XTRA card holders would receive discounts.

GrameenPhone has already signed up with a number of companies to provide life-style benefits co the djuice users. Pizza Hut is providing every djuice subscriber ordering a menu from the outlet with special benefits. GSeries, the leading record label of Bangladesh, is also planning to bring new and popular music at the fingertips of djuice subscribers.

Along with 50 free SMS and Tk. 50 free talk-time and the other benefits, djuice has already established itself in a unique position in the mobile market, djuice also boasts its own website: www.djuice.com.bd and will act as a communication means for the youth and a source of information that may interest the youth population of this country. djuice promises to provide more value to its subscribers and aims to deliver the promises with innovative products and value-added-services that would make djuice the only brand that youth of Bangladesh would relate to.

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CONCLUSION

The total subscribers of Grameem Phone (GP) is five million upto August 2005, which is the largest portion of telecommunication sector. GP reaches in this position for their better customer service and expanded network system.

The International Roaming (IR) facility is another useful service provided by GP. If GP wants to retain their current position, they should provide better product and services for their actual and potential customers.

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RECOMMENDATION We like to make recommendation for GrameenPhone (GP) that it should continue its prevailing quality and maintain official transparency through which they could have a successive relationship with their subscribers and a strong market position.

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QUESTIONNAIRE 1. What do you think about Grameen Phone (GP) service ? a) Excellent b) Well c) Medium d) Bad 2. Why do you think so ? a) Networking coverage b) Customer Service c) Attractive advertisement d) Administrative activities 3. How much are you satisfied with GP’s network ? a) Highly satisfied b) Normally satisfies c) Not satisfied d) Dissatisfied 4. Is GP’s network always available/clear a) Yes b) No

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5. What is your opinion GP’s customer service ? a) Nice b) Moderate c) Not good d) Bad 6. Do you think that you get any special facility from GP which is not provided by other companies? a) Yes b) No 7. What do you think abut administration ? a) Very transparent b) transparent c) Puzzling Moderate transparent d) Not 8. How much are you satisfied with GP’s administrative transparency? a) Highly satisfied b) Moderately c) Not satisfied d) Dissatisfied 9. Do you think the advertisement of GP is effective and sufficient? a) Yes b) No 10. Does GP’s advertisement contribute to increase its subscribers what do you think. a) Highly contributes b) Moderately contributes

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c) Slightly contributes d) Does not contribute 11. What things of GP made you to buy it ? a) Varieties of facilities b) Networking coverage c) Attractive advertisements d) Social activities 12. Do you think that GP is a social responsible company? a) Yes b) No 13. Do GPs social activities play any role to increase its sales volume. a) Yes b) No 14. What do you think of GPs

contribution in the economic

development of Bangladesh. a) Handsome contribution b) Average contribution c) Not good contribution d) No contribution 15. What reason do you find behind GP’s high sale ? a) Coverage of network b) Better customer service c) Attractive advertisement d) Social responsible activities.

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TABLES Table 1: Subscriber's comment on overall GP service

Excellent Well Medium Bad Total

Frequency Percent

Valid Percent

20 21 7 2 50

40 42 14 4 100

40 42 14 4 100

Cumulati ve Percent 40 82 96 100

Table 2: Contribution of GP advertisement on its sales Frequency Percent Highly Moderately Slightly Not contribute Total

19 17 7 7 50

38 34 14 14 100

Valid Percent 38 34 14 14 100

Cumulati ve Percent 38 72 86 100

Table 3: Contribution of GP's social activities on its sales Frequency Percent Yes No Total

33 17 50

66 34 100

Valid Percent 66 34

Cumulati ve Percent 66 100

Table 4: Opinion of subscribers on GPs high sale

Network coverage Customer service Total

Frequenc Percent y 44 88

Valid Cumulati Percent ve Percent 88 88

6

12

12

50

100 33

100

PICTURES Picture1 : Grameen Phone’s sponsorship on the development of sports

Picture2 : Health & Environmental Program

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BIBLIOGRAPHY 1.

Principals of Marketing-Philip Kotler.

2.

Marketing Management Philop Kolter.

3.

Business Communication : Theory & Application-Lesiker Petti.

4.

Grameen Phone Annual Report, 2004

5.

Grameen Phone News Letter, August, 2003

6.

Grameen Phone New Letter, December, 2004

7.

www.grameenphone.com

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