Impact of Sales Promotion in the Telecom Sector

Group 2 Team 1
Niladri Banerjee G006
Chirag Maheshwari G032
Mohd. Adib Mustafa G042
Namrata Nandakumar G044
John Vithayathil G065
Krishnendu Sarkar I046
 Introduction
Market share of mobile telecom companies in India

Sales promotion techniques used in Telecom industry

• Telephone subscriber base growing at a
• Free samples • Scratch and win CAGR of 19.16 %
• Bonus Offers • Exchange schemes • Second largest subscriber base in the
• Coupons • Cashback Offers world
Literature Review
Paper 1 : Impact of Advertising and Sales Promotion Expenses on the Sales Performance of Indian
Telecommunication Companies - Indian Journal of Science and Technology
Objective: To investigate the relationship between two marketing communication activities mainly advertising and
sales promotion on the sales performance of telecom companies
Methods/Statistical Analysis: Data related to Advertising and Sales promotions expenses of 3 telecom companies for
the past 10 years was collected from their annual reports. Multiple regression analysis is used for modelling the
relationship between the dependent variable i.e. Net sales and the independent variables of Advertising and Sales
promotion activities.
Conclusion: The study revealed that there is a significant predictive relationship between the advertising spends and of
sales promotion spends with sales performance of telecom companies. This will also help marketing managers to
decide an optimal marketing communication mix which will result in better sales performance and thereby increase
revenues for the company.

Paper 2 : Sales Promotion in Telecommunication Industry in India – BEST Journals

Objective: To provide insights about the consumer behaviour towards the different sales promotion activities of the
telecom companies
Methods/Statistical Analysis: Sample data was collected from top telecom companies like Airtel, Vodafone, Reliance,
BSNL & Idea etc. and analyzed further to establish the relationship between sales promotion and consumer behaviour
Conclusion: Usage of sales promotion activities has a direct impact on behaviour as it motivates a consumer to buy
now rather than in future, enhances value of an offer temporarily till the promotion period, encourages switching,
reinforce or reward loyalty etc.
The Era of Promotions
Hypothesis Formulation
H0a: Sales Promotion has an impact on customer retention
H1a: Sales Promotion does not have an impact on customer retention

With the advent of dual SIM phones consumers often maintain separate SIMs and use
them for the offerings for which they standout.

Hence partial switch in this case means a consumer switches to another connection for
data/call/maybe both while still maintaining the existing connection

H0b: Sales Promotion leads to a partial switch in consumer preference

H1b: Sales Promotion does not result in a partial switch in consumer preference
Research Design
We identified the following scenarios:

a) Single SIM users – Those who have used a single SIM throughout and may or may
not have switched to another service provider

b) Single SIM to Dual SIM – Consumers who have added a SIM to their existing SIM for
either Data/Call; can be considered as partial switch

c) Dual SIM to Dual SIM – Consumers who had been using 2 SIMs but switched one of
their service providers and opted for another player; falls under partial switch

Independent variables constitute a mix of different sales promotion parameters such as

price, better data/call offers, value added services and some others such as network
coverage , call drop rate.
Research Methodology
1. Secondary Research
Promotional offers/services run by incumbent players

2. Primary Research:

Responses were collected via survey through questionnaire taking all the above mentioned scenarios under
consideration.
We tried to capture data from different telecom circles, of varying age and profession and segregated respondents
based on complete switch (Single SIM) or partial switch( Multiple SIM)

Post data collection we have carried out a Linear Regression Test on SPSS to validate our hypotheses
Age

Consumer Demographics
Based on Survey

Profession

Total Respondents: 199

Single SIM Users: 43.7%
Dual SIM Users: 53.3%
Change of Service Provider (87
respondents)
For Single SIM Users

Telcos that have

gained through a
switch
For Dual SIM Users
Preferred service provider for making Calls

Consumers
already using 2
SIMs and have
switched
Preferred Service provider for Data
Preferred service provider for making Calls

Consumers having 1
SIM and have
purchased a new
SIM

Preferred Service provider for Data

 SPSS Results – Linear Regression

Descriptive Statistics
Mean Std. Deviation N
Switch? .69 .465 87
Sales Promotion(Complete Switch) .44 .499 87

Model Summaryb
Model R R Square Adjusted R Square Std. Error of the
Estimate Durbin-Watson
1 .190a .036 .025 .460 1.871
a. Predictors: (Constant), Sales Promotion(Complete Switch)

b. Dependent Variable: Switch?

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression .672 1 .672 3.184 .078a
Residual 17.948 85 .211
Total18.621 86

a. Predictors: (Constant), Sales Promotion(Complete Switch)

b. Dependent Variable: Switch?
 Limitations
 Sample under study is mostly from metro and tier I cities which might have an
effect on the results

 Most respondents are under 30 years of age and might have a slightly different
behaviour compared to higher age groups
 Way Ahead
• We aim to study the impact on various other incumbents after Jio’s entry in the
market (in lieu of current market scenario)

• We also aim to study what should the incumbent Network Providers do in order to
retain their customers and prevent the switch