Research Report

On
Sales and Advertising Strategy of Ufone

COMPANY PROFILE
BRIEF HISTORY OF UFONE
PTML is a subsidiary of PTCL (Pakistan Telecom Company Limited), the largest
operator in Pakistan.PTML was established to operate cellular telephony. The
company commenced its operations, under the brand name of Ufone from
Islamabad on January 29’ 2001.Since Ethicality took over PTCL in 2006, during
the year as a consequence of Patel’s privatization, 26% of its shares were
acquired by Emirates Telecommunication Corporation (Ethicality). Being part of
PTCL, the management of Ufone has also been handed over to Ethicality.
In September 2006, Ufone selected Hawaii to deploy the nationwide GSM
network at a contract value of above USD550 million. Ufone adopted Hawaii’s
new-generation GSM solution, including All-IP core network and BTS, to
construct a GSM network covering 1,500 cities and towns of Pakistan.

MISSION OF UFONE
“Our mission is to provide best services with best coverage that would
eventually generate profit for the company and its stakeholders”
　
OPERATING PERFORMANCE
Ufone’s operational performance has been very encouraging. Despite the stiff
competition in Pakistan telecom market which has led to reduction of prices to
bare minimum level, due to its aggressive policies and exercising strict control
over expenses the Company managed to improve its revenue and after-tax profit
by 87% and 54% respectively, as compared to last year.
GROWTH RATE
As mobile users in the country have reached over 28 million at a very rapid pace,
Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a
subscriber base of around 6.5 million and a market share of nearly 25%. Ufone
has seen a subscriber growth rate of over 200% in the last year, and since the
start of 2005 Ufone added nearly 5 million subscribers onto its network. A
remarkable achievement indeed, especially considering the fact that two new
international players also entered into the market in 2005. Subsequently the
growth in subscriber base caused a healthy trend in revenues which have
doubled.
TECHNOLOGY
After Mobilink, Ufone is the second cellular service provider company that is
based on GSM technology. Basically they are using GSM 900 technology with
version 2001. Apart from this they are very strong in technological developments
especially they have a well-established research and development department
that is working on new technological developments in their products. Like they
are the first company in Pakistan that is offering GPRS facility to their subscribers
　
STRUCTURE OF THE ORGANIZATION
In Ufone the hierarchy is very lean, in general the whole setup is centralized, all
the matters are to be reported to the main company and all the policies and
targets are approved at the higher level. But at the department level the structure
is decentralized.
► UFONE has following functional departments:-
Technical
Customer operations
Finance
Administration & Procurement
Human Resource
Co-ordination (Govt. relations)
Marketing
　
►Current CEO (Chief Executive Officer) & President of UFONE is Mr.Mubashir
Naqvi
►Ufone’s Head Offices is in Islamabad
　
　
MARKETING DEPARTMENT
Marketing department handles all the marketing activities concerning all Ufone
packages and brands. A recent marketing survey conducted by a prominent
marketing research company showed that Ufone has considerably increased its
brand visibility and image through its vibrant marketing strategies.
►Marketing department’s hierarchy is as follows:-
CMO
ASSISTANT MANAGERS
HEAD OF DEPARTMENTS///
MANAGEMENT TRAINEES
SENIOR EXECUTIVES
INTERNEES
(Head Office : Islamabad)
(Head Office : Islamabad)
(Regional)
(Regional)
(Regional)
(Regional)
　
Sub Departments of Marketing Department:-

Brand Activation
Value Added Services
International Roaming
Media Planning (Marketing Strategies)
Marketing Finance
Marketing Operations

BUSINESS PORTFOLIO

BRANDS:
BRANDS TARGET MARKET REASON FOR TARGETTING

High usage for business & working

PostPay Corporate class
people

Life Youth Night dwellers

PACKAGES:
PACKAGES TARGET MARKET REASON FOR TARGETTING

Public
Lower class/Rural youth High usage
Demand

Lower/socio economic
UWON High usage
class

Ladies’ intention of 5 min chat

5 ka 15 Ladies usually exceeds to 15 min or
more

Working class/ business

Walkie talkie Call conferencing
class
　
　
　SERVICES
Both Post-Paid and Pre-Paid Ufone subscribers can enjoy any/all Ufone services
including GPRS based services (MMS, Ufone Internet, Pocket Stocks), Global
SMS, etc
Ufone is proving these all services to its consumers:-
• Internal Excess
• Online Billing Payment
• Power SIM
• WAP
• International Roaming
• Voice Mail
• Call Management
• Messaging
　
MOBILE PRODUCTS
Ufone is offering the following Mobile Products:-
Utalk
Missed Call Notification
Phonebook Saver
Trivia Quiz
Ushare
Uloan
Voice Bucket
Utunes
Awaz SMS
Uchat
Ugames
Call Block
Self Service Kiosk
U kisaan
U health
Ufone prize bond
Ubazar
Hajj Guide

MARKETING STRATEGIES

MARKET SEGMENTATION
Cellular service market is a diverse set of people. Ufone as well as other cellular
service companies segment their market on four bases: - economy, age, gender
& occupation.
I. ECONOMY : Upper class, Middle class, socio-economic class, lower class
II. AGE : Teenagers, youngsters, middle age, aged people
III. GENDER : Male & Female
IV. OCCUPATION : corporate class, Business class, working class etc
　
TARGET MARKETS
Cellular phones are the technology of new era, the 21st century. These cellular
phones are the main focus of our youngsters. All the cellular companies are
targeting The Youth one way or other. Ufone is no longer a follower in this race.
Its main focus is “THE YOUTH” of Pakistan which is its Target Market.
Target marketing strategy
Ufone has always been targeting Youth Market by using young brand endorsers
or ambassadors. It always brings such packages and offers that precisely meet
the needs of our young people. No doubt it has also launched packages, brands
and offers for working people, business class, ladies and aged ones. Ufone seeks
to target masses in the long run.
　
POSITIONING
Positioning is the process of creating an image of company’s brand in the mind of
market. Companies position themselves emotionally, functionally or on the basis
of brand quality. Ufone is still a market challenger in comparison to market leader
MOBILINK. It is still to reach to the top most position of cellular companies. So
Ufone positions itself on the basis of its services.
Ufone’s former Positioning Statement:
“Everybody Loves to Ufone Prepay “
Ufone’s new Positioning Statement:
“Ufone tum hi toh ho! “
Or
“It’s All About U”
Ufone’s positioning strategy:
Ufone changed the image of mobile phones from a luxury only affordable by the
elite, to a necessity affordable by the common man. Since its inception, Ufone
has positioned its brand for “MASSES” on the basis of services it is providing and
its lowest call rates. It makes them believe that it satisfies the needs of everyone
(viz all classes, age & genders). It tells them that Ufone is there when anybody
needs it. The brand name UFONE itself is a positioning statement.

DIFFERENTIATION
In these days of intense competition marketers find it hard to differentiate their
services from those of competitors. Now customer care about only price. An
unsatisfied customer will immediately go for brand switching. Thus leaving a
customer unsatisfied and not meeting his/her demands is out of question for
marketers.
Differentiation Strategy :
Ufone has always strategized in satisfying the demands of its customers. In doing
so it has been successful in differentiating itself in terms of:-
Price
Quality service
Technology
　
CUSTOMER RELATIONSHIP
With 28 million mobile users in Pakistan, Ufone is having a subscriber base of
around 7 million. Ufone is showing a remarkable growth rate. It is maintaining a
healthy customer relationship through its “customer service centers” and “call
centers”. Its department of “Customer Operations” is specially designed for
maintaining Customer Relationships.
Customer Relationship Strategy:
Ufone strategize to build and maintain strong customer relationships in order to
build long-term customer loyalty and to capture customer lifetime value. In this
context Ufone has been training its internees and permanent employees in the
Ufone art of interacting with customers. It is also strategizing to offer gifts &
rewards for its long-term customers in its PostPay to match the wonderful
customer relationship strategy of INDIGO.
　
TOTAL MARKET ORIENTATION
Total Market Orientation is about understanding and meeting customer’s
expressed and latent needs.
Strategy :
Ufone has always considered the ever growing needs of low call rates and quality
service. It has provided its customers their needed packages and has introduced
such brands & packages that meet customer’s latent needs as well. For example
5 ka 15 is result of a latent need of women of our society. They plan to make a
short call but it becomes a long one unintentionally due to gossips and chit chats
　
COMPETITORS
There is a hard core competition among the cellular service providers in Pakistan.
Ufone is a market challenger in its competitive position, where MOBILINK is the
market leader. Warid, Telenor and newly introduced ZONG are also strong
contenders in market challenger category. Ufone has the following four direct
competitors:-
Mobilink
Telenor
Warid

Ufone also considers the following as its competitors:-

ZONG (former PAKTEL)
PTCL WIRELESS
Wateen
WorldCall

Competitive strategy: Ufone’s competitive strategies are Customer

intimacy and Differentiation. Ufone aims at fore passing Mobilink in its competitive
race.
 MARKETING MIX

1 - PRODUCT/SERVICES
Ufone is a service providing company. Service is any intangible product that
consists of activities, benefits or satisfactions offered for sale.
Strategy:
Ufone makes strategies to provide a better cellular telephonic service which
excels its competitors at all levels. When Ufone launches a new package in a
market, it actually makes it a complete package of core benefit, design, features,
brand name, quality, and after sale service.
　
　
2 - PRICE
Cellular service providers are facing intense price competition in contemporary
market. Customers perceive pricing as the heart of brand selection. Price has
always been the core differentiation of Ufone. Ufone is the one who is offering
least call rates off-network.
Strategy :
Ufone strategize to capture the existing pricing needs of its customers and use it
well on occasional or timely basis. For example Ufone offered very good call
rates on international calls in Eid days. It offered hourly call rates in Ramadan
when people were least likely to avail the offer that much that it might prove
unprofitable for Ufone. It was a fantastic strategy to beautify the brand image in
term of pricing in customer’s minds as well as remain profitable in doing so.
Ufone follows market penetration pricing strategy and dynamic pricing strategy to
meet the customer needs and ever changing price competition.
　
3 – PLACE
Place plays a very important part in the distribution and promotion of services.
Competitors of Ufone are seeking to penetrate into places where others haven’t
reached. Cellular service providers are drastically widening their network &
coverage in every area of Pakistan. Mobilink has this edge in place excellence
because it is the pioneer in cellular telephonic field.
Strategy :
Ufone strategize to widen its coverage to all places in Pakistan in order to meet
the requirements of its increasing customer base. Now Ufone is heading from
cities to remote northern areas in expanding its network. Ufone has intensive
promotion in cities, but it is also considering improving its promotion in rural areas
as well.
　
4 - PROMOTION
Ufone believes in Integrated Marketing Communication which is a carefully
blended mix of promotion tools. Ufone employ different marketing activities and
channels to communicate and deliver value to customer. These activities are
coordinated to provide maximum communication output. These communication
channels includes:-
Advertising, sales promotion, public relations, direct marketing & personal selling.
Strategy :
Advertising
Sales Promotion
Public Relations : Ufone is less conscious of developing its general public
relations. But recently it has launched its “Hajj Guide” service on Ufone. It avoids
getting in news stories and controversies but sometimes it proves inevitable.
Direct Marketing : Ufone employ on-road umbrella franchises where the directly
market and sell their connections and Sims.
Personal Selling : Ufone administer personal selling facility to sell their PostPay
connections targeting well to do people and businessmen
It won’t be an exaggeration to say that Ufone has placed itself where it is now
through brilliant promotions.
　
SALES PROMOTION & ADVERTISING
“SALES PROMOTION”
“Sales promotions are short term incentives to encourage the purchase or sale of
a product or service”
Ufone utilizes sales promotion activities to boost its sales. It follows all four of the
promotion budgeting methods viz affordable method, percentage of sales
method, competitive parity method and objective & task method.
ufone uses following sales promotion tools

Contests:
Ufone carried out contest for cricket talent hunt in the year 200. Our renowned
Pakistani cricketer Shoaib Akhtar was used as patron for this contest. However
this contest didn’t do much good to Ufone’s image or sales. But Ufone holds
future plans to carry out such activities in more effective and profitable ways.
Games:
Ufone is currently running its game show on ATV prime time. This game show
rewards the winning participants. Ufone updates its customers every now and
then to participate in this game show. The problem we see in this activity is that
Ufone is not properly advertising it.
Premiums:
All the cellular services are now offering premiums for their customers. This
premium is offered, when a customer don’t use his/her sim for more than 3-6
months, in the form of extra credit balance delivered to their numbers for free

Free Tickets:
Ufone recently offered free trip to Dubai. It was Ufone’s first Eid offer. Every time
you make any international call of 5 minutes or longer than 5 minutes, you enter
the lucky draw to win a return ticket to Dubai. The more calls you make, more is
your chance to win.
　
　
Promotional Products:
“Phone bhi Ufone bhi”. It was a promotional offer By Ufone where it offered a
mobile phone, free air time, Ufone connection and Rs.100 airtime all for
Rs.999.And now Ufone also offers Blackberry mobile sets with PostPay
connection.
Another recent promotional offer by Ufone is that with your HBL Credit Card; get
a free handset of your choice, a Ufone PostPay connection and airtime. Existing
as well as new HBL Credit Card customers may avail this offer.
　
　
SALES PROMOTION STRATEGY:
Ufone strategize to take aid of sales promotion whenever it sees a minor drop in
its usage by its customers. They mostly go for pull strategy in promotion i.e. they
spend a lot on advertising and consumer promotion to induce final customers to
avail their services. Ufone applies sales promotion schemes continually in order
to keep its customers loyal and happy.
　
ADVERTISING (& DEVELOPING AD COMPAIGNS)
“Any paid form of non personal presentation and promotion of ideas, goods, or
services by an identified sponsor”

ADVERTISING OBJECTIVES:
Ufone use advertisements when…
It has to inform the customers about new or available services
It seeks to persuade people to purchase their service or switch to their connection
from any other connection
ADVERTISING BUDGET
Ufone is a heavy spender on advertising in electronic media as well as other
media. Recently Ufone invested a huge amount on mass advertising. It was
definitely a risk to take such decision. They are developing and playing new
advertisements on electronic media not even with a month’s gap or so.
A single Ufone advertisement played 15-20 times per day on a TV channel costs
millions varying with the time of day when it is played. Ufone spends 20% of its
profit on advertising and sales promotion.

ADVERTISING STRATEGIES
Advertising strategy consists of two major elements: Advertising Message &
Advertising Media. Ufone has the following strategies regarding the Message and
Media of advertising:-

ADVERTISING MESSAGE:
Message Content --»The very first content of Ufone’s advertising message was
humor, and then in its blooming stage it shifted its message content to youthful
excitement. Recently Ufone has again adopted humorous theme for its message
content. This time Ufone is winning the hearts of people through humor and it has
increased RPI of Ufone. Ufone has already generated much revenue through it.
Message Format --»The format of Ufone’s advertisements has always been very
colorful and eye catching. The shocking Orange & Green colours used by Ufone
have always attracted people. These colors look beautiful on wall printing of
Ufone.
Message Source --»The very first Ufone advertisements had Faisal Qureshi as
its message source. Afterwards Ufone hired non-celebrity young models for its
youthful message theme. Ufone also hired three lollywood queens i.e. Meera, Jia
Ali and Veena Malik with Mikaal in an advertisement of “Baat Ban Jaye”. This
advertisement created a big controversy regarding the erotic and sexually
attracting acts by the three female models. Due to negative response by people
Ufone had to vacate its billboards and eradicate its banners, posters etc
overnight, as directed by CEO and CMO of Ufone.
　
　
But now Ufone has again hired a comedian trio featuring Faisal Qureshi, Mikaal &
Hammad. The strategy behind hiring this trio is that they are economical and are
personal favorites of people. Ufone always hire endorsers in group
Mr.Waqas Anjum (Senior Marketing Executive-Multan) is of view that you must
bring changes in marketing to attract customers. For this purpose Ufone is re-
launching itself under the name of one single brand called “UFONE”. This brand
would have Orange & Black as its corporate color instead of conventional Orange
& Green color.

ADVERTISING MEDIA:
To increase the reach and frequency of advertisement Ufone is using repetitive
strategy for its advertisements. And the humorous theme always makes the ads
more appealing and engaging the minds of customers. Ufone advertise in the
following media types:-
Print Media --»Ufone tries and print ads in all leading newspapers including The
Dawn, Jung, Nawa-i-Waqt, Khabrain and local Sindhi newspapers as well. Ufone
place its ads in all leading magazines as well i.e. Sunday magazine, akhabr-e-
jahan, Libas, Mag etc
Broadcast Media --» It is the prior choice for Ufone. It includes the electronic
media television and radio. Ufone is advertising in all Pakistani channels including
GEO, Hum, ARY, Indus, TV one, HBO, Cartoon Network etc (except MTV
Pakistan). Ufone also plays its ads on local channels like WASEB and Punjab TV.
Display Media --»
This type of media is the second choice of Ufone where it carries out its most of
sales promotion and advertising. Ufone advertise using billboards, hoardings,
signs (on Shop boards etc), posters, wall paintings etc. SME Multan has used a
new and innovative vehicle in display media i.e. Ufone’s painted rickshaws
Online Media --» Internet is the online media. Ufone places flashing ads on
famous portals like coolbuddy.com, pakfellows.com etc. But Ufone is not carrying
out direct mail or direct e-mail advertising

Events --»
Ufone has sponsored many events in the past and holds future plans concerning
it. The famous event sponsored by Ufone in 2006 was a series of musical
concerts did all over Pakistan, featuring Mikaal Hassan and Junoon, it named
UROCK

AD SHOOTS:
The ads of Ufone are shot mostly within Pakistan. But the PostPay ads are shot
in foreign locations. Recently Ufone shot in the picturesque locations of northern
areas of Pakistan in its advertisement of UWON “sabse sasti call”
　
　
　
SWOT ANALYSIS
SWOT analysis is an overall evaluation of the company’s
Strengths (S)
Weaknesses (W)
Opportunities (O)
Threats (T)
　
STRENGTHS
Strengths include internal capabilities, resources, and positive situational factors
that may help the company to serve its customers and achieve its objectives.
The strengths of Ufone are as follows:-
Ufone’s differentiation is its biggest strength. Ufone offers lowest off-net call rates
that differentiate it from its competitors
Ufone is offering more and better Value Added Services (VAS) than its
competitors i.e .Ufone’s Walkietalkie,
Ufone is enjoying the second largest cellular network in Pakistan
Ufone has the most promising and attractive ATL (Above The Line) activities
Ufone has great management within the organization (internally & externally)
　
WEAKNESSES
Weaknesses include internal limitations and negative situational factors that may
interfere with the company’s performance.
The weaknesses of Ufone are as follows:-
Ufone has less professionalism within the organizational members
As Ufone is a subsidiary of PTCL, which was formerly under government
management, Ufone still has a shadow of a government organization
Ufone still has room for the betterment of its network coverage in comparison to
The Market Giant “MOBILINK”
Ufone has pathetic billing system for postpaid connections. This faulty system
creates a negative vibe among its customers
　

OPPORTUNITIES
Opportunities are favorable factors or trends in the external environment that the
company may be able to exploit to its advantage.
Ufone has following opportunities in its way:-
Ufone’s biggest opportunity lying ahead in near future is the phase of conversion
of their GSM technology Into 3G (satellite based) technology
Ufone has the opportunity of growing its customer base due to increasing trend of
using mobile phones
Ufone has the opportunity to win the customers of its competitors by providing
them superior services on lower price
Ufone has the opportunity that it is pioneer in southern Punjab where it can
promote itself and become market leader on the basis of this very fact
　
THREATS
Threats are unfavorable external factors or trends that may present challenges to
performance.
Ufone is facing/about to face the following threats:-
Ufone’s biggest opportunity is its biggest threat as well. The phase of its
conversion of GSM technology to 3G technology can be a threat for it if not
carried out properly
The boosting customer base of Warid and Zong is also a big threat for Ufone
The decreasing economy rate and instability of Pakistan is a big threat for all
businesses in Pakistan including Ufone

COMPETITIVE ADVANTAGES
It’s an advantage over competitors gained by offering consumers greater value
than competitor’s offer. Ufone strategizes to gain more and more competitive
advantages. It also uses these competitive advantages well enough for its
promotion. Currently Ufone is enjoying the following competitive advantages:-
Lowest overall call rates
Value added Services (VAS)
Call block service
Corporate color
CONCLUSION

The mobile industry has seen phenomenal growth over the year, showing growth
rate of more than 80%. This growth is not new to the industry, as previous years
have shown substantial growth as well. This growth is a direct result of the
increased competition in the mobile industry, resulting into better services at
reduced rate. Furthermore, this has favorably affected our economy as a whole,
generating revenues for the government, through direct and indirect taxation and
creating employment opportunities for the people. The mobile industry of
Pakistan is considered by a majority of prospective employees as the best
industry for a job.

By keenly analyzing the marketing of Ufone, we group member agree that Ufone
is not a safe player in the market. It is penetrating its market by taking risks and
aggressively promoting & advertising itself. It holds second largest market share
and is seeking to become the market leader anyway possible. We came through
very unconventional strategies and ad campaigns while working on this report.
We believe that mobile services are the toughest market to enter and survive.
And in this tough market Ufone isn’t only surviving but growing at an exceptional
rate.
Ufone is using humorous theme in its ads which has become its benchmark.
People enjoy watching, discussing and following Ufone ads the most. And it is the
biggest achievement of Ufone in recent times.

Mobilink has been in operation since 1994, and since then has become the
market leader by providing its customers with the state of the art products and
services. Mobilink has for years enjoyed a good market share of the total
industry; its current market share is 36%1.
Even though Mobilink has been a market leader, for so many years, providing the
most technological advanced products and services, it has for a number of years
been facing strong competition from Ufone, which has resulted in a decrease of
its market share. This has led Mobilink to a policy of diversification, by introducing
products like Mobilink PCO and WIMAX services. Although Mobilink has
diversified, it still is providing competitive products and services for its core
products-Jazz and Indigo.