1)Examine the circumstances in which Bharti
launched Airtel and trace the brand’s initial days in
the backdrop of the emerging cellular telephony
market in India. In the light of the ‘leadership’
campaign, analyze why Airtel and other cell phone
brands were seen as premium-end offerings.
Sunil Bharti Mitlal was a New Delhi based Business
man who started small bicycle-parts business in
1970’s first he entered the telecom business by
establishing Bharti Telecom Limited (BTL) that
manufactured Telephonic equipment. Over the years
it entered into other business related to telecom
industry. The main services of the bharti group
included Airtel (cellular), Mantra (Internet Services)
and beetel (telephone instruments).In 1992,Bharti
entered the cellular market launching services in
Delhi.Airtel was launched when 80% of the people
didn’t even heard the term “cellular Services”. That
was only confined to the premium class people. In
the early 2000’s bharti invested heavily in the
acquisitions and the alliances to expand its cellular
market in India. As a part of this, Bharti acquired IT
Mobile (AP & Karnataka), skycell (Chennai) and
Spice Cell (Kokata).It also collaborated with BPL to
gain seamless access in Mumbai, Maharastra,
Chennai, Delhi, Kerala, Tamil Nadu ,AP and
Karnataka. Bharti launched Airtel as a postpaid
cellular service in Delhi in November 1995. The
company redefined the way cellular service were
being marketed in the country. Airtel was the first
cellular operator to set up cellular showrooms. It
opened its first showroom “Airtel Connect” in Delhi,
in late 1995. Bharti was also the first cellular
company to install a second mobile switching center.
The company was first to provide roaming cellular
services and other value added services such as smart
mail, fax, call hold, cal waiting and information
services. It was also the first company to launch an
online e-commerce portal that enabled customers to
make online payments.
The tariff rates charged by the
government were quite high. Air time charges were
as high as Rs16 per minute as against Rs.1.20 for
land line communication.
Thus, all players targeted the premium sector, which
could afford the rates. Airtel was also positioned for
the elite class. Airtel launched the ‘Leadership
Services’ campaign which featured successful men
and women with their deluxe cars, carrying laptops
and using cell phones. So people started thinking that
Airtel was an aspirational brand, which was meant
for leaders and celebrities. People began associating
three core benefits with the Airtel brand –leadership,
performance and dynamism. Other supportive values
associated with the brand included courtsy, politness
and efficiency. So Airtel and other brands were
treated as premium-class brands.
2)Explain the reasons behind the ‘leadership’
campaign being replaced by the ‘Touch Tomorrow’
campaign. Also critically comment on the campaigns
decision to replace ‘Touch Tomorrow’ with ‘live
every moment’.
Though
the
‘Leadership’
services
campaign was successful and resettled in a marginal
improvement in Airtel performance, it failed to
attract more customers as it failed to add an
emotional dimension to the brand. Analysis perceived
the brand to be distant, effective and cold. The
surveys also revealed that the concept of leadership
was itself undergoing a transformation. The public
perceived the campaign as leaders are people who
worked with a team to achieve common objectives
rather than those who dictated terms to their
subordinates. The surveys also indicated that 50% of
the new subscribers adopted a cellular service from
the advice of their close one’s. So Airtel realized the
fact that customer-relationship was of great
importance and lacking an emotional or humanized
touch was a major weakness. So in August 2000,
bharti launched its new ‘Touch Tomorrow’ which
aimed at strengthening its relationship with
customers. The new campaign and the positioning
was designed to highlight the relationship angle and
make the brand softer and more sensitive previously
Airtel was perceived as a premium brand ,now the
new positioning is intended to add warmth to these
attributes. The new commercial developed for this
campaign reflected human, aspirational, family –
centric and software brand values while promising
easy reach. The campaign look’s into the needs of the
tomorrow customer. The new branding initiative
takes into cognizance the findings that consumers
consider Airtel as a brand of the successful people
and a preferred address. In early 2002, Airtel changed
its logo and tagline from ‘Touch Tomorrow” to “live
every moment” to give Airtel a younger look. The
new logo symbolized innovation, energy and
friendliness. The company reportedly allocated Rs.1
billion for media coverage and other brand building
activities.Airtels brand identity and campaign will
now have a new younger and international look and
feel that builded on the earlier positioning of “Touch
Tomorrow”, injected with renewed energy and
heightened optimism. The shif to “live every
moment” from touch tomorrow had nevertheless,
proved that Bharti is consistently on the lookout for
best marketing strategies for Airtel.
3) Do u think Bharti has not been giving enough time
for one positioning plank to prove effective before
moving on the next? What are the merits and
demerits of frequently changing a brands
positioning?
Bharti has been giving enough time
for one positioning before shifting to the other one.
Now the technology is growing so fast that the needs
and behavior of people is changing so rapidly. What
people think today is not what they thought
yesterday. Their views and opinions keep changing
quite frequently. Today, anything is reaching the
consumers very fastly. So the time lapse between two
different positioning of Airtel is quite enough for a
positioning to prove effective. That time is enough
for that positioning to show impact on the people
before they get bored. The advantages are quite high
compared to the disadvantages.
MERITS:
1. Gives a new look to the brand.
2. Changes the impact that is created.
3. Changes the way that it is perceived.
4. If the old campaign has no good response, then
the new logo may get good response.
5. This helps in rectifying the mistakes that were
done for the old campaign.
6. Can be changed according to changing trends
and needs.
7. Different campaigns may reach different
segments of people thus reaching all the people.
DEMERITS:
1. Frequent changing may cause negative impact
on people. People may not associate themselves
with any single campaign.
2. Frequent changing may create an impact of
instability.
3. Sum times the new campaign may get
introduced before the old one reaches the
people.
COFFEE PARLOURS IN INDIAHOTTING UP
1) Differentiation and the cost leadership are
the two generic strategies that a company
can adopt to create a competitive advantage
in a market. What are the strategies that
Barista, CCD and Qwiky’s have adopted?
Which strategy do you think is suitable for
the Indian market? Give to justify your
answer.
Strategies adopted by Barista:Barista established in 2000 in New Delhi was
the largest and fastest growing coffee chain in
India. Barista positioned itself as a lifestyle
brand with Italian neighborhood. Barista was
the leader in espresso coffees. Barista was
made with top grand Arabica beans and brew
masters from Italy were invited to create
blends. Alliance with Tata coffee would
supply food items like baguettes, croissants,
cookies, sandwiches, pastries and desserts.
Every month it introduced and focused on a
particular type of coffee. The idea was to
change customer’s occasional indulgence and
make it a habit and educate them about the
original coffees. It also developed store-instore concept by focusing on themes that
compliment coffee, such as music, books and
art. Barista entered into marketing tie-ups
with planet M, crossword and Ebony to set up
it Espresso’s at the corner. It also wanted to
enter into co-branded marketing tie-ups with
several banks for credit cards. The company
also entered branded merchandising with
caps, coasters, co’s and cups. Barista entered
home brew segment with freshly grounded
coffee. The company extended its product
portfolio from roasted coffee range to single
origin coffee. Barista’s single origin coffee
powder has a status symbol. It was planning
to enter the international market. Barista
planned to tie-up with ABN amro for opening
“Banlafes”. This concept helps to ‘bank at
leisure” enabling customers to visit the bank
after banking hours on any day in an informal
and friendly environment. It even tied up with
BPCL to open coffee kiosks.
Strategies adopted by CCD:CCD offered an informal ambience with
bright and eye-catching interiors. Visitors could
sip coffee, browse the internet, conduct
business meetings or just while away time with
friends. CCD was well looked as a cool-
hangout for college crowed and teenagers. This
promoted young artists and displayed their
paintings on their walls. In 2001, a new logo
was chosen leaving the old one which was bit
old fashioned. The interior were redesigned and
new menu was also introduced along with the
new crockery. The baseline also changed to “A
lot can happen over coffee”. Musical events
were organized to attract youth. “Café jockey”
was introduced which selected children above
15yrs and gave them 1 week training. In
addition to the commercial and residential
clusters in metros, CCD’s also targeted other
locations like corporate houses, airport,
hospitals and shopping malls. CCD priced its
products 20% lower than its competitors. CCD
positioned itself as a mass market brand, minimetros were also added to its list.
Qwiky’s Strategies:Qwiky’s strategy was that to make their
customers make them feel comfortable and
have fun. The staff at Qwiky’s was trained to
understand body language. They were very
frankly with the customers. Qwiky’s objective
was to target the “young at heart” that were
looking for fun and relaxatation. They offered
different varieties of coffee. Customers were
given a choice of drinks that were not common
in India. It had a separate vending area for
chocolate products. Qwiky’s coffee pubs were
located at strategic points which were
frequented by youth. Qwiky’s pubs were
located at intersection of roads in a corner were
two side of café were made of glasses and faced
the road. It even had coffee making machines
for sale and also a trainer to teach how to make
perfect espresso. It also planned to launch ready
to drink coffee sachets. Their prices were based
on the real-estate prices in that particular area.
The strategy adopted
by Barista would suit the Indian market. Barista
came up with uniqueness in its interior with
Indian neighborhood. It also offered several
services along with serving coffee. Several
international varieties of coffees are served in
Barista. The ambience was great. The perfect
Italian varieties of coffees were served with
brew masters from Italy. They came up with
single origin coffees and attracted with the
niche set of consumers. Many varieties of
coffees are served in Barista people feel very
comfortable. It also serves food items like
pastries, sandwiches. People started thinking
that Barista has become a status symbol. So
they wanted to associate themselves with
Barista. It’s planning to go international into
many countries. It’s even planning to co brand
with several banks for credit cards. People of
India always wanted something new and
different. So Barista’s strategy perfectly suits
the Indian market.
2) Barista, CCD and Qwiky’s target different
segments. What is the segmentation
strategy adopted by the three players? Also
comment on the potential of each segment.
Barista’s adopted a strategy on
which it segmented itself to the elite class. This
class has high potential because these people
associate with anything that is of status symbol.
They spend very high. So Barista choose this
segment contains people with big designations
like MD’s, Doctors, CEO’s and people
belonging to elite class. They like to be in a
place which is classy and luxurious like Barista.
This segment has high potential.
CCD positioned itself in the mass
market. It targeted the middle class, upper
middle class, house wives and students. The
prices are less compared to the other two. This
segment has high potential and great buying
power and has great market share. Qwiky’s
positioned itself as a place were people can
come for fun and relaxatation it targeted people
who having fun and young at heart. People who
were quite interactive and friendly were
appointed as staff to make their customers feel
comfortable and while away their time. It was a
place to hangout.
3) star bucks is planning to enter the Indian
coffee retailing market. Of the three players
discussed in the case, who do u think is
competitively better placed to face the
competition from star bucks and maintain
their growth
Barista is competitively
better placed to face the competition from star
bucks. Barista is the leader in the coffee
retailing business. The value added services and
ambience offered in Barista helps it, maintain
its growth. Star bucks are an international
player and it may give tough competition to the
local players. But Barista with its ambience and
services would maintain its growth.
4) Do u think that the intense competition in
the coffee retailing business is likely to
cause consolidation? Explain with reasons.
The coffee retailing
business in India is highly growing. It may
cause intense competition between the
players. Generally we see two nearby
competitors merging to become market leader
and capture great market share. This may
even happen in coffee retailing business in
India. Consolidation may take place to create
their strong presence in the Indian market and
expand their chain globally and become an
international player. Many international
players are lining up big expansion plans in
India. So to give the international players a
tough competition, local players may merge
to create their impact.