Marketing Strategies

An Analysis on
Marketing Strategies of
Reliance Communications

Jinu Joseph (B00573500)

Master of Business Administration – FT
Ulster Business School, University of Ulster

Submitted on 29-Oct-2010
Table of Contents
1. INTRODUCTION.................................................................................................3

2. ABOUT THE COMPANY.....................................................................................3

2.1. RELIANCE COMMUNICATIONS – 2002........................................................................................4

3. MARKETING STRATEGY.....................................................................................5
3.1. NETWORK SUPERIORITY.............................................................................................................5

3.2. BRAND EQUITY...........................................................................................................................6

3.3. CHANNEL STRENGTH..................................................................................................................6

3.4. CUSTOMER SERVICE EXCELLENCE...............................................................................................7

4. COMPARISON....................................................................................................7
4.1. MARKET ANALYSIS......................................................................................................................7

4.2. MARKET SEGMENTATION...........................................................................................................8

4.3. STRATEGIC FOCUS......................................................................................................................8

4.4. MARKET PLANNING....................................................................................................................8

4.5. PRODUCT & PRICING STRATEGY.................................................................................................9

4.6. DISTRIBUTION & SUPPLY STRATEGY...........................................................................................9

4.7. PROMOTIONS.............................................................................................................................9

4.8. SERVICE.....................................................................................................................................10

5. CONCLUSION..................................................................................................10

6. REFERENCES....................................................................................................11

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1. INTRODUCTION

Marketing is a process by which companies creates customer interest in their

products and services. It generates the strategy that underlies sales techniques,
business communication, and business developments. It is an integrated process
through which companies build strong customer relations and creates value for their
customers and for themselves [1].

This paper analyse the ways in which ‘Marketing’ is applied in Reliance

Communication, India’s largest telecom service provider, and how the strategy
matches with the Marketing Orientation described in the books and literature. This
report is based on Secondary Data collection method, where in I have used the
information in Books, Journals, Newspapers and Other Industrial Reports.

The adoption of marketing strategies requires businesses to shift their focus

from production to the perceived needs and wants of their customers as the means
of staying profitable [2].

2. ABOUT THE COMPANY

Reliance Industries was founded by Late Dhirubhai Ambani in 1966 as a polyester
firm. They have later entered into financial services, petroleum refining and
Petrochemicals. After the death of founder the group divided into

Anil Dhirubhai Ambani Group (Reliance ADA Group) lead by Mr. Anil Ambani

And

Reliance Industries, lead by Mr. Mukesh Ambani. [3]

Now both this companies has presence in almost all industrial sectors including
Telecommunication, Mutual Funds, Power sector, Health and welfare, Technology,
Life Insurances, Petroleum, Natural gas, Textile & Garments, Retail store etc.

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Almost 40% of all the businesses has been launched after the partition and now
running profitably [4].

In this report, we are going to analyse the Marketing strategies implemented by

Reliance ADA Group, when they have launched their Reliance Communications in
2002 and what are the strategies the group is following now to continue the success
trend in the Business.

2.1. RELIANCE COMMUNICATIONS – 2002

“A dream came true” was the caption of Reliance Mobile phones (First product of
Reliance communications) when they have entered into the industry. Reliance
Communication (formerly Reliance Infocomm) was founded by Mr Dhirubhai Ambani
in 1999. The ultimate goal of this veteran was to make communication and other
information tools available to public at an affordable cost [5]. However, the company
started their public operations in 2002 and listed in National Stock Exchange (NSE)
and Bombay Stock Exchange (BSE).

Introduction of Reliance Mobile Phones created a digital revolution in mobile

communication throughout India. Mobile phones were not common and were
restricted to only the upper crest of population at that point in time in India [6]. The
major reason why common people were not used to rely on mobile phones were

 High cost of Mobile handset

 High call rates
 Non availability of Coverage at Rural areas
 List of document (proofs) to get a new connection

However, Reliance Communication has followed a completely new Marketing

strategy which was able to attract the common people to use their phones. The
group has adopted a Unique Strategy on Branding, which helped them to promote
the product. The business strategy is concluded to 5 points [7].

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  Network Superiority
 Brand Equity
 Channel Strength
 Customer Service Excellence

3. MARKETING STRATEGY

Reliance Communication is one of the biggest telecommunication providers in India.

Company has more than 20 million customers. The extent of service varies from
Individual customers to big multinationals. The point is clearly indicating that
Reliance has done a proper Market analysis before launching this product to Indian
market. Also there is a good Market Segmentation process in this strategy.

Let us analyse in detail about the reasons which made Reliance Communication as
the favourite Mobile Service Provider in India. Also, we could match the same with
the Marketing Principles

3.1. NETWORK SUPERIORITY

When Reliance introduced their Mobile Communication, there are two things which
attracted common people more.
Price and Call Rates. The cost of a Mobile Phone handset with a SIM card in
2002 was around 7000 Rupees (~£100.00) apart from monthly rental charges.
However, Reliance has introduced new phones with CDMA technology at a monthly
rent of 599 rupees, which includes free minutes. Another factor which keeps way
from mobile phones was high call rates (Rupees 8/Minute). Reliance came up with a
solution for this also, with free minutes and reduced call rates.
“There is only one definition for business purpose: to create customer. Therefore any
business entering has two basic functions – Marketing & Innovation” [8]. If you are
going by these words Reliance Communication was able to meet and exceed the
business purpose, as they have seen an overwhelming response from the public.

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Marketing is a process in which a firm creates value for its chosen customers [9]. By
introducing Mobile phones with lower call rates and lower handset prices, Reliance
has created benefits for the customers.
Also, Reliance provided a superior network even in remote access rural places also –
Both in terms of Coverage and sales network. The group has introduced area specific
“Reliance Web World” to promote sales and marketing, customer service, Bill
collections & payments. This was the first initiative from a Mobile Service provider to
have its own stores in all the cities in India.

3.2. BRAND EQUITY

Brand equity was another important factor which helped them to market the
product easily. The product is coming from “Reliance”, the biggest business group in
India. And this created a positive wave throughout the public. As per Aaker, David
(Managing Brand Equity, 1991) the most important assets of any business are
intangible: its company name, symbols, slogans, quality, customer base and their
underlying associations.
The sales team of company has played vital role by explaining to customers about
advantages of using a mobile phone. Reliance was able to meet all the above
mentioned assets and thus became the most successful mobile service provider in
India in 2002-2003. Today Reliance Communication revolving the way India
communicates.

3.3. CHANNEL STRENGTH

Reliance Mobiles have a very strong distribution system which enabled them to
market the products easily compared to other service providers. Group had a huge
customer base and this lead to tie ups with mobile phone handset makers (Samsung,
LG, Nokia, Sony) which enabled them to sell the handset with connections at a lower
price. Introduction of “Reliance Web World” in all cities in India has changed the
marketing scenario. The current network expansion done by Reliance was “the

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largest wireless network expansion undertaken by any operator across the world”
(The Week, 2007 March).

3.4. CUSTOMER SERVICE EXCELLENCE

Reliance has provided excellent and quality service to all its customers. Some of the
benefits which customers experienced were Mobile internet at a nominal rate (The
first provider to provide mobile internet facility), 24 hour operating customer Service
centres, Online support and other Value added services. Company has invested more
than 60 million dollars to improve the coverage in rural areas. Now Reliance
communication is providing a complete telecom services – mobile phones, fixed
landlines, broadband and international long distance services. All this initiatives
made Anil Ambani, the group chairman as Telecom Person of the Year 2007.

“We will offer unparalleled value to create customer delight and enhance business
productivity” (Anil Ambani, Business Hours, 2008).

4. COMPARISON
Now we need to analyse the Marketing Strategies adopted by Reliance, in terms of
the strategies in literature.

Many people think of Marketing only as advertising and selling. The aim of the
marketing is to make selling uneasy. Marketing is the homework that managers
undertake to assess needs, measure their extent and intensity and determine
whether a profitable opportunity exists[1].

4.1. MARKET ANALYSIS

Marketing is about ensuring that company makes what customer wants to buy [10].

By analysing the strategy followed by Reliance, we could see that they were
absolutely meeting the above statement as they were able to understand, what
customers required. The factor which kept away customers from using mobile

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phones was high call rates, and Reliance was able to come up with a solution for
that. Company has a clear cut idea about the market place and customer needs.

4.2. MARKET SEGMENTATION

In a Market there will be different individuals with different needs and requirements.
Market Segmentation is the process of identifying the different groups of users
within a market who could possibly be targeted with separate products [11]. Market
segmentation is critical for the success of most firms. Reliance has done a good
market segmentation and was able to came up with different product ranges include
mobiles, landline, broadband services etc. In mobile phones itself, they have
segmented the market as Students, professionals and retail (prepaid) customers.

4.3. STRATEGIC FOCUS

Market analysis and segmentation can generate a great deal of data and information
for Marketing planning. However, the management needs to strategically structure
the same to define a final market planning. This synthesis of information is critical in
developing competitive advantages and strategic focus of marketing plan. SWOT
(Strength, Weakness, Opportunity and Threats) analysis is of the most common tool
used for this analysis. This analysis encompasses both the external and internal
environments of the firm [12]. SWOT analysis can lead to new innovations and new
products. Reliance has developed a completely new product for the Indian market, a
CDMA technology mobile phone. This has originally derived from the SWOT analysis
performed years before introducing the product to the market [7].

4.4. MARKET PLANNING

Once companies have analysed the customer requirement and segmented the
customer group, they need to plan on how to market the products to the market.
Marketing is one of the most important types of business activity that must be
planned [12]. The Marketing plan defines the nature of business and what the
organisation will do to satisfy its customers’ needs in the market place [13].

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Considering Reliance Communication, they had a very strong market plan for Indian
market. They understood customers’ requirement and made products to satisfy the
needs. This integrated concept of customer oriented marketing was the fundamental
marketing concept, guiding and coordinating the operations of the entire
organisation.

4.5. PRODUCT & PRICING STRATEGY

Of all the plans to be made in the Marketing Strategy, the design, development,
branding, price and positioning of the products are perhaps the most critical. At the
heart of every organization lie one or more product that defines what organisation
does and why it exists [12]. As we have already seen, Reliance communication came
with a strong branding. The price of the product was very much affordable by the
common man in India. Designing has been done by giants like Nokia, Samsung, LG
and Sony and was able to satisfy the customers. Engineers have developed a new
technology for the product and all this things helped Reliance to be the number one
telecommunication service provider in India.

4.6. DISTRIBUTION & SUPPLY STRATEGY

One of the most important factors in Marketing is distribution and supply of products
to customers. Reliance has a dedicated sales and distribution channel, which has
presence even in rural areas. This means, they are not stopping their marketing
strategies with Product, price and promotion. There is a well developed marketing
channel team which is supporting the above three.

4.7. PROMOTIONS
Selection of media for advertisement is an important factor in promotional activities
[15]. In India, TV is the best media for advertisement. Company started their
marketing with limited advertisements. The main promotional activity was
advertisements in different channels in different regional languages. Product got
good mouth publicity from the existing users.

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4.8. SERVICE
Backbone of existence of any company in any market is customer service and after
sales service. This includes understanding the requirements of the customers on a
day to day basis and satisfying them [14]. Reliance was very successful in providing
customer service through a 24 hour operating customer service team. Also, they
have collected feedbacks from customers and improved the service quality and
introduced new products which are competitive in the market.

5. CONCLUSION
This paper has analysed different stages in marketing strategies adopted by Reliance
Communication, India’s leading telecom service provider. And we have further
analysed on how the company has followed the Marketing Strategies described in
different literatures. The observation from this analysis is that, company was
following the strategies mentioned in different literatures. There might be some
differences in implementing the strategies; however, the company was able to meet
customer expectation in terms of Product, Pricing, Distribution and Customer service.
Thus they become the most successful telecom service provider in India.

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6. REFERENCES

1. Kotler, Philip & Armstrong, Gary (2009). Marketing Defined

2. Mercer, David (1996), Marketing
3. Economic Times, (2008), Reliance an Overview
4. Outlook Money, (2010), Success Stories of Reliance
5. Business Week, (2003), Reliance Industries
6. Financial Chronicle, (2009), Telecommunication - India
7. Transcript of Earnings Conference Call, (2009), Reliance Communication
8. Drucker, Peter, (1985), Practise of Management
9. Silk, Alvin, (2006), What is Marketing
10. Fifield, Paul, (2007), Marketing Strategy: The difference between Market and
Marketing
11. Croft, Michael, (1994), Market Segmentation; a step by step guide to
profitable new business
12. O.C Ferrell, Michael, (2005), Marketing Strategy
13. Steven, Robert & Loudon, David, (2005), Marketing Planning Guide

14. Bangs, David, (2002), The Market Planning guide

15. Gray, Tony, (2000), Marketing.

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 ULSTER BUSINESS SCHOOL
DEPARTMENT OF MARKETING, ENTREPRENEURSHIP AND STRATEGY
University Date Stamp

COURSEWORK SUBMISSION SHEET

This sheet must be completed in full and attached to the front of each item of assessment before
bringing to the Department Office (Room 1B11A):

Student Name: - Jinu Joseph....................................................................................................

Registration No: - B00573500...................................................................................................

Course Title: MBA

Module Code/Title: MKT714J1/A

Assignment Topic: MARKETING ORIENTATION

Lecturer: Professor Mark Durkin

Date Due: Friday 26th October 2010 (NB: Latest hand-in time is noon)

Submitted work is subject to the following assessment policies:

1. Coursework must be submitted by dates as specified by the Course Committee.

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I declare that this is all my own work and does not contain unreferenced material copied from any other source. If it is
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DEPARTMENT OF MARKETING, ENTREPRENEURSHIP AND STRATEGY

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Student Name: - Jinu Joseph...............................................................................................

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