Pricing Strategies and Programs at Etisalat - Case Study Example

Pricing Strategies and Programs at ETISALAT Name Institution Date Table of Contents Pricing Strategies and Programs at ETISALAT 1 Name 1 Institution 1 Date 1 Table of Contents 2 PRICING STRATEGIES AND PROGRAMS AT ETISALAT 12 2 Ahmad Abdulkarim Julfar (CEO, Etisalat) 3 Marketing in ETISALAT 4 Pricing In the Company 8 Recommendations 10 Summary 10 Conclusion 10 Ahmad Abdulkarim Julfar (CEO, Etisalat) Ahmad Abdulkarim Julfar is the group CEO of the giant telecommunications company ETISALAT. He was appointed in august 2011 in the newly created position as the company sought to improve its expansion efforts, which had been successfully implemented in 18 countries. Mr. Julfar has a degree in civil engineering as well as computer science, both from Gonzaga University in Washington. The CEO also graduated from Mohammed Bin Rashid Program for Leadership Development. Ahmad Abdulkarim Julfar has been working with ETISALAT since1986, where he served in various managerial positions including acting as the general manager of the Dubai region operations (2005) prior to being given the role of chief operations officer (COO) in 2006. Apart from the current duties, the CEO serves on the board of two international subsidiaries belonging to Etisalat Company. In Mobily of Saudi Arabia, he acts as the chairman of the committee involved in risk management (Risk Management Committee), while in the Indonesia-based Excelcomindo, he has membership in the committee dealing with compensation as well as remunerations(Compensation and Remuneration Committee). Since his appointment in the company in 1986, Ahmad Abdulkarim Julfar has significantly contributed to the success of the company, making the company realize tremendous success (Karake-Shalhoub & Al Qasimi, 2006). Marketing in ETISALAT Due to necessity of effective marketing in the utility of the on-coming services, according to Preissl, Curwen & Haucap (2009), the company has realized the need to ensure that the interaction it has with its clients is a regular activity. The company values producer-consumer interaction, while also employing the strategy of custom marketing. This is valued in the company as it assists the company to continuously realize the telecommunication as well as network needs its customers have. The company operations generally entails service provision, however, since services are intangible, service consumption therefore results to no direct ownership in as much as the physical products may actually be attached to the service process. The marketing manager of Etisalat, accordingly, has been very crucial in the realization of success in the service products. Etisalat’s products, though intangible, have been touted as having tangible cues. According to Oxford Business Group (2008), the company targets the whole market, while covering various segments with various suitable plans. The company often targets market where the users are in need of a quality service. As such, the company has managed its plan in that calls are cheaper and still of quality during off-peak hours. By such offerings, the company has been successful in managing the network load. As well, it has successfully targeted the callers seeking international calls mostly at the off-peak time by using the off peak super plan (often starting at 11.00pm-07:00am). The company occasionally announces modifications to the off-peak hours. The impacts of the marketing manager can be further indicated by the effective use of various marketing techniques and the resultant success in the company. The company offers high quality services like mobile services, telephone services, internet services, landline services and television services. It provides various complimentary services that are also high-tech to industries dealing with telecommunications, including managerial training, technical training, manufacturing of SIM card, payment solutions, clearing of the house services, peering, land as well as submarine cable services, voice transit and data transit. Due to the competitive advantage the company has, the pricing of these products have not changed since inception. The prices are also relatively high compared to the prices of many competitors due to high quality provided and which meets customer expectations. Despite the relatively high prices, the company still dominates the market (Karake-Shalhoub & Al Qasimi, 2006). In meeting the demand of its subsidiaries therefore, the company has positioned itself to satisfy the new users, the youth, the businessmen and other companies through efficient, timely and effective services. The company positions its services throughout its subsidiaries as products with stronger tangible cues and high quality portfolio above the competitors. The services are also presented as being offered by a company respected for honouring its promises by delivering the right products to the right people at the right time. Efficient, timely and effective services through addressing the gaps that exist in provision of quality services are some the factors that have been taken into consideration. The company has also positioned itself to fill these gaps by easing the time as well as efforts used by businessmen through provision of high coverage. Businessmen also don’t have to switch their services while outside some countries. In general therefore, the company offers products that are cheaper, periodically paid and providing numerous offers for the new service subscribers (Ries &Trout, 2005). The competitive techniques used in the promotion of these products have enabled the company to attain a higher competitive edge while also expanding the customer base. Its promotion strategy, where promotion is always conducted throughout the year on the prepaid services as well as services related to this, has been a trend setter. Basically, the competitors have remained to copy the promotion strategy of Etisalat. As Karake-Shalhoub & Al Qasimi (2006) indicate, the promotion strategy of Etisalat Company is a pattern, and involves the use of marketing medias like the media, cinemas, billboards, radio, newspapers, consumer premium (for instance T-shirts) concerts, e-media, sports activities and signboards. However, even though there is strong presence of the company’s services in its market, the existing as well as the potential clients are not fully aware of the products. As such, promotion is often carried out on the services, where each service is promoted at a time and where three promotions can not be conducted for a given service in a single moment. The company has also totally penetrated several regions where it can be found in malls, shops dealing with mobile services, airports, and groceries. According to Gentzoglanis (2010), the recharge cards are available even more in various places including petrol pumps and tuck shops, recharging machines, SMS recharge alternative and Etisalat offices. The company, which targets market where the users are in need of a quality service targets, often targets the individuals, businesses, international telecommunications firms, ISPs, mobile operators as well as service providers, has performed more than its competitors in terms of targeting as well as segmentation. The youths have been easily targeted with products that perfectly fit this group, for instance the Easy clique product. The company highly finds market segmentation quite crucial. The various successes of the company can be attributed to the market segmentation the company has engaged in. The company has geographically segmented its market In accordance with regions where its services are likely to enjoy increased consumption. The company as such notes that the city and its environs create much needed high consumption in comparison to the remote areas as the demand for such services in the city is so high. However, the company also recognizes that individuals staying and working in the remote areas find mobile communication services vital as mobiles communication in some remote areas are the only communication channels (Moore & Pareek, 2009). Behavioral segmentation is also used by the company as most companies employ the use of mobile services in their business mainly for creation of continuous network with the clients. According to Pan (2010), mobile lines are crucial for companies while communicating with clients in remote areas, for instance those employed in oilfield industries. Such work in deserts or the sea and have to communicate with the head office through mobile phones. Therefore business requires providers offering quality service, service continuity with no break down, good price and fast response by mobile companies. Businessmen require quality and good price for local and international calls. The youths, on the other hand, use every aspect offered including voice calls, chatting, logos and ringtones. As such they value variability, ease use and a reasonable price. The company also considers demographic segmentation a necessity as demographics highly matter in mobile industry. Age, especially the youthful stage, is considered as high in many regions, and which also highly uses mobile phone services. Income is also critical here as the amount spent on such services is highly determined by the income level. Very low, low, medium and high income earners’ level of consumption increases respectively. The market is in general segmented as casual callers, business callers, local callers, office-break callers, expatriates, late night international callers and midnight international callers. The company offers various plans to fully cover the given market segments ((Moore & Pareek, 2009). Pricing In the Company Pricing plays a significant role in acquisition of the market share, especially where competitors are vigilant on every step the company makes so as to outwit its marketing strategies and get as large a market share as possible. The objective of Etisalat is to provide its customers with standardized price and good service quality. According to Pan (2010), the company has indicated that its network is able to handle large traffic of voice at any given moment. Its connection price is high compared to other competitors because it aims at making its services worth full while also aiming at a successful bonding with clients. The call rates are also relatively stable and customers are given various offers and discounts to match the effect of this pricing. Etisalat is a company that has often emphasized on capturing customers through service quality, according to Lewis (2005). The company as such uses the strategy of bundle pricing. The packages the company offers are bundled and are tailored to be suitable to various clients based on their needs. These bundles, which are also offered in reduced prices, are meant to satisfy the market. An instance is the wasel prepaid bundle which has flat rates of calling while also offering the off peak time for the local calls as well as the international calls. The customers pay the normal charges while making international calls, with the exception of the off-peak time, also associated with office break-time and free time (2:00PM-4:00PM and 11:00PM to 07:00AM). The calling rates that remain, however, is not changed. The clients who are interested in midnight calls also receive offers of joining super-peak hours within wasel package. This comes along with tariffs and lowest international calling rates. However, the customers involved here pay higher on local calls as well as sms. There are various denominations of Etisalat recharge cards that are used in wasel (prepaid) including 500 AED, 200AED, 100AED, 50AED and 25AED. The tariffs of Etisalat are highly complex and with a discount. They also lack tariff reductions which are often same over the year. As such, the company has several strategies for several plans. The company employs the use of allowances, promotions, segmented pricing, and design of various plans to fulfill the requirements of the customers. The promotional as well as the allowance pricing offers discounted pricing. In promoting post-paid connections, the company reduces the connection charges. It also uses promotional pricing while giving allowance in the form of a free balance. During recession, the company adjusted the prices, hence creating balance sharing as well as call requests for low income earners and people without credit (Baker, 2006). Proper response to competitors in the face of price change is as such quite crucial for the company, as pricing is a key component in shifting customers to the company. However, the company would also not wish to loose its image in the face of the customers by lowering prices. As well, the company would not want to loose the customers to its competitors due to lower prices offered by competitors. Due to all these factors, the company often introduces price changes after a longer time mainly through a reduction in the initial prices while still maintaining the local calls as well as sms charges. The company also offers reduced rates on international calls while also increasing the charges on local calls in the same package (Baker et al, 2010). Recommendations Despite the tremendous success, Etisalat still has the task of improving its marketing to deepen the subscriber base. While doing this, the company should emphasize on aspects of its pricing. It should have a higher focus on its allowance strategies. The company should also consider adding charges on call diverting to restrict callers from using the competitor services. The company should also take advantage of the service quality while also introducing the allowance (Monroe, 2003). Summary Etisalat is a company that has enjoyed a higher competitive edge in its markets as compared to its competitors. This is due to the emphasis on high quality and better marketing strategies. Pricing in the company is also reasonable in relation to the quality of services provided, is relatively stable, and is supplemented by promotions, segmented pricing, and discounts. The company uses the traditional marketing mix, and has managed to maintain success due to innovative marketing strategies involving use of various suitable packages for customers. Conclusion Etisalat is a good provider of quality service. The company has been able to maintain its market share despite its relatively high price and strict competition due to various factors, including the high quality provided. In the face of price changes by the competitors, however, this company does not immediately react to this, but if it does then promotional strategies become handy. In general it is important to note that the company has played a great role in the provision of quality goods and services. It acts as a good example to be emulated by other competing companies. Reference Ries, A. & Trout, J. (2005). Marketing Warfare. Sydney: McGraw-Hill Professional Moore, K. & Pareek, N. (2009). Marketing: the basics. New York: Taylor & Francis Pan, H. (2010). 2.5-4G Monthly Newsletter November 2010. New York: Information Gatekeepers Inc. Baker, R. (2006). Pricing on purpose: Creating and capturing value. London: John Wiley and Sons Monroe, K. (2003). Pricing: Making Profitable Decisions. Sydney: McGraw-Hill/Irwin Oxford Business Group. (2008). The Report: Dubai 2008. Oxford Business Group. Karake-Shalhoub, Z. & Al Qasimi, L. (2006). The diffusion of e-commerce in developing economies: a resource-based approach. New York: Edward Elgar Publishing. Baker, W., Marn, M. & Zawada, C. (2010). The Price Advantage. London: John Wiley and Sons. Preissl, B., Curwen, P. & Haucap, J. (2009). Telecommunication markets: drivers and impediments. New York: Springer Lewis, R. (2005). Pricing and revenue optimization. New York: Stanford University Press. Gentzoglanis, A. (2010). Regulation and the Evolution of the Global Telecommunications Industry. New York: Edward Elgar Publishing Read More