Strategy used in dialog broadband

Strategy used in dialog broadband

Executive Summary

Dialog Telekom group is the leading telecommunication service provider in Sri Lanka. Their main goal is to be the best and the largest mobile telecommunication provider in Sri Lanka. Dialog Telekom was established in 1995. This company is one of the largest listed companies in Colombo stock exchange and it’s a subsidiary of Axiata Group Berhad.

To be the leading telecommunication provider in Sri Lanka it’s not easy. They provide their customers with a wide range of services like Dialog TV, Dialog CDMA, Dialog Broadband and Dialog Mobile connection. Specially involve in a competitive industry.

As for they various types of services provided by, Dialog Telecom, they operate as a separate division for Dialog Broadband which is our area of our research project. Dialog Broadband goal is to provide their customers with the best product in the market at a low cost, but not the least cost at a high service rate.

Currently they have proudly achieved this by making sure that they provided their customers with the best service. At this rate it means more customers is equal to more company profit.

Dialog Broadband expands their services into a wider range. Broadband internet, WiMax technology, WIFI technology and the Unlimited mobile broadband.

They targeted the 500,000(approximately) 3g users in the country, dividing the market into two sections, Student and the General mass. Accordingly fixing separate price ranges to the appropriate segment, and a wide range of connection packages to them, and launched the Unlimited mobile broadband connection to them.

In this report i will be discussing how to promote the Unlimited mobile broadband connection in the competitive market with the use of strategic management.

Introduction

Purpose of Report

The purpose of this report is to fulfill the requirements to complete the BIS3324 module.

Topic and company chosen for the research

The company I have selected for the research project was Dialog Broadband, and the topic I have chosen is The use of strategic management for promoting Dialog Mobile Broadband connectivity in the competitive market.

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Introduction to Dialog Broadband.

Dialog Broadband is a Strategic business process unit of the Dialog Telecom Group, providing fixed telephony solutions, data networks, and broadband internet and coverage solutions. Dialog Broadband major products such as Broadband internet, WiMax technology, WiFi technology and the Unlimited mobile broadband.

Ø Broadband internet

Dialog Broadband draws on its far reaching infrastructure to bring the Internet direct to a user’s home or office.

Ø Wimax technology

This world-class technology enables scalable, carrier-class solutions to support thousands of users with a single base station, while providing differentiated service levels. WiMax is fast becoming the standard for the provision of broadband solutions worldwide.

Ø WiFi technology

Wi-Fi allows your business to deploy a network quickly, at lower cost, and with greater flexibility than a wired system. Productivity increases since workers can stay connected longer, and are able to collaborate with their co-workers as and where needed

Ø Unlimited Mobile Broadband

Dialog Mobile Broadband is Internet on your mobile – it’s fast, and affordable. HSPA stands for High Speed Packet Access. This technology literally brings high-speed access to users on the go.

To access the world of streaming video, music, downloads, news and communication, simply get on the HSPA network. All you need is an HSPA modem and a data connection.

Ø Description of Unlimited Mobile Broadband

Dialog Mobile Broadband is Internet on your mobile – it’s fast, and affordable. HSPA stands for High Speed Packet Access. This technology literally brings high-speed access to users on the go.

To access the world of streaming video, music, downloads, news and communication, simply get on the HSPA network. All you need is an HSPA modem and a data connection.

Dialog offers Unlimited Mobile Broadband for a monthly rental of just Rs. 2,990/-. Sign up for 6 months and be eligible to purchase an E220 HSPA modem for Rs 5490/-.

Monthly fee entitles customer to broadband usage of unlimited duration and unlimited data volume (download/upload) however subject to a Fair Usage Policy (FUP) whereby download/upload speeds would be reduced relative to their maximum levels following monthly usage exceeding 5GB. The FUP is designed to ensure that the service received by the vast majority of our customers is not negatively impacted because of extremely heavy usage by a very small minority of customers.

Technology

HSPA stands for High Speed Packet Access. This technology literally brings high-speed access to users on the go.

To access the world of streaming video, music, downloads, news and communication, simply get on the HSPA network. All you need is an HSPA modem and a data connection.

Evolution

2g (sms) >> GPRS >> Edge >> 3g >> HSPA

The evolution defines the connection level provided to the user, this depends on the number of users connected to a particular tower in a given area. The more the users connect to the tower, it shrinks the connection speed, but it does mean the customer will not get any connectivity, but the user will get a connection of a GPRS speed.

3G – the Third Generation of wireless communication technology that allows you to enjoy a more seamless and magical…

General Packet Radio Service (GPRS) enabled networks offer ‘always-on’, higher capacity, Internet-based content…

Enhanced Data Rates for GSM Evolution (EDGE) is an extension to GPRS, EDGE allows faster data speeds enabling faster…

Wireless Application Protocol (WAP) is a world wide standard in the mobile telecommunication industry that lets you access…

Mobile Messaging is evolving beyond SMS text messaging with the introduction of MMS (Multimedia Messaging Service)…

Short Message Service available on digital GSM networks allowing text messages of up to 160 characters…

User policy and Product Service

The customer will experience 7.2Mbps download and 2Mbps Upload speed up to usage of 5GB. Once usage passes ahead of 5GB, the quality of service will be downgraded to download a speed of 384kbps and upload a speed of 64kbps and will continue for the next 1GB usage.

Beyond 6GB the quality of service will be downgraded to download a speed of 64kbps and upload a speed of 16kbps.

Online Research

I have found the details from Dialog official website.

• Sales report
• Product description
• What are the strategies they are using?
• Strategy information – Roger’s Diffusion , Ansoffs Matrix
• Price comparison between Dialog and Mobitel.

Strategies used in Dialog Broadband to promote the product

Strategy – Rogers Diffusion Curve

Rogers Diffusion is defined as the communication process by which a new idea or new product is accepted by the market, while the rate of diffusion is defined as the speed that the new idea spreads from one consumer to the next. Adoption, which is similar to diffusion, also deals with the psychological decision making processes of the individual, rather than those of an aggregate market.

“Rogers showed that a diffusion process in a social system follows an S-Curve in which the adoption of a technology begins with slow change, is followed by rapid change and ends in slow change as the product matures or new technologies emerge. He also held that people adopt new technological innovations at different times and at different rates. He then used the varying rates of adoption to distinguish different phases in the diffusion process allowing practitioners to assess such things as the life of a new product or service and the application of the correct set of marketing activities at the appropriate time”.

This process tracked through the diffusion curve is a decision-making process where an individual passes from the initial knowledge of an innovation to forming an attitude toward the innovation, to a decision to accept or reject it, then it implements the use of the new idea, and finally to confirmation of this decision.

The increasing number of adopters follows the above mentioned S-shaped curve. The number of newly ‘converted’ adopters plotted as a frequency histogram against time follows a bell-shaped Gaussian curve where the number of new adopters rises until halfway the S-curve after which their numbers decrease, To make the model actionable, Rogers introduced ‘innovativeness’ – the degree to which an individual is relatively earlier in adopting new ideas than other members in a social system.

Rogers Distinguished Adopters

1. INNOVATORS

Innovator first 2.5% of adopters are brave and educated. They have several sources of information and show greater tendency to take risks. They will be thankful for technology for its own sake and are motivated by the idea of being a change agent in their reference group, they are willing to accept initial problems that may accompany new products or services and are willing to make shift solutions to such problems.

2. EARLY ADOPTERS

The next 13.5% of adopters are “Early Adopters”. They are the social leaders, popular and educated. They are the visionaries in their market and are looking to accept and use new technology to achieve an innovative breakthrough that will achieve competitive advantage in their industries. They are attracted by high-risk, high-reward projects and are not that expensive because they imagine great gains in competitive advantage from adopting a new technology. They usually demand personalized solutions and quick-response, highly qualified sales and support.

3. EARLY MAJORITY

After Early adopter the next is 34% of adopters are formed by the “Early Majority”. They are deliberate and have many informal social contacts. Slightly looking for revolutionary changes to gain productivity enhancements in their firms and they are motivated by evolutionary changes. They have three principles in adopting of new technology they are:

1. When it is time to move, let’s move all together: – This means when adoption increases so rapidly in the diffusion process and causes a landslide in demand.
2. When we pick a vendor it will lead us to the new model, let us all pick the same one: – This means which firm will become the market leader.
3. Once the transition starts, the earlier we get it over with, the better: – This shows why the transition stage occurs rapidly.

4. LATE MAJORITY

Then 34% of adopters are the “Late Majority”. They are doubtful, traditional and low socio-economic status. They are aware of price and require completely preassembled, bulletproof solutions. They are encouraged to buy technology just to stay even with the competition and often rely on a single, trusted adviser to help them make sense of technology.

5. LAGGARDS

Finally the 16% of the adopters consist of “Laggards”. Laggards are technology doubters who want only to maintain the status. They tend not to consider that technology can enhance productivity and are likely to block new technology purchases.

Roger’s model has found wide appeal and application such as marketing and management science. The most important aspect about this model is the Bass Diffusion Model where new innovations are created by the interaction of current and potential users is described mathematically.

Roger’s diffusion Curve with the Dialog Product (HSPA)

Talking about Rogers Diffusion curve with the dialog product, at the early stage before the product release, Dialog selected the Colombo Metropolitan area as their main target for the product launch, with the help of their Information’s systems they were able to identify Five hundred thousand Dialog 3g users in this area.

This identified target consists of two major segments The General Mass and the University Students. Referring to figure 1.0 shows the state of this process. This selected set of two is guaranteed to take the risk of using the new technology, which defines the “Innovators” curve in the diagram. Theses adopters are a portion of 2.5%. They are ready to face all the limitations that may accompany new products or services and to make shift solutions to such limitations.

The next move along the curve will be towards the “Early Adopters” stage, which defines the product moving is moving towards the society. The society at this stage will be willing to adopt the new technology; this is the current position in which Dialog Broadband is standing now. It is in a much more competitive position than their competitors. This stage the company is offering their customers attractive rewards and very sensitive prices to gain competitive advantage. They look at the solutions to overcome the problems so that they won’t face any difficulties in the future. They will even have better marketing strategy such as improved customer services, pricing and high turnover.

As for time to come Dialog Broadband will encounter the stage “Early Majority” , when they move their sales to the outskirts of Colombo, people will have a evolutionary change with the enhancements in productivity and Technology.

Figure 2.0 shows the state when the product is spread through society, the early adopters selects the technology first, followed by the majority, until a technology or innovation is common amongst the people.

Dialog Broadband will have to keep improving the product to remain in the S-Curve. If not they will shift to the “Late Majority” stage, where the people with less social status who are price concerned, they buy the product only when it’s cheap.

And finally going into the “LAGGARDS” stage, which be when people will be using the HSPA just to maintain their status quo.

Strategy – Ansoff’s Matrix

The Ansoff Product-Market Growth Matrix is a marketing tool which helps the business to make a decision and to work on their product and market stratigy. This will help the marketers to improve and will help the organizations to know what sort of actions should be taken to their business in the present or future markets. There are four types of strategies in this matrix. They are:

* Market penetration (existing markets, existing products): This takes place when a company enters a market with current products. To achieve this there are so many ways such as by gaining competitors’ customers, attracting the customers who are not using your product or service, informing the current customers to use more of your product or service and you can advertise or do promotions about your product or services. When a company is growing understanding the market is the low risk which is involved in that. There are four objectives market presentation should be looked in to. They are,

• Secure area and expansion market
• Increase usage by existing customers
• Maintain and increase the share of the current market
• Restructure of growing up competitors and send them out.

* Product development (existing markets, new products): This means when a organization introduces its new product into present market. For example, KFC is always within the fast-food industry, but very often it markets new products such as Twister, Double down chicken sandwich. When a firm introduces new products into the market, it can gain new customers for these products. Therefore new product development can be a key business development strategy for a company to stay competitive in the market.

* Market development (new markets, existing products): A recognized product in the market can be changed or targeted to a different type of customers, as a strategy to earn more income for the organization. A very good example is, in the beginning Lucozade marketed for sick children and then rebranded to target the people who are involved in sports as energy drink.

* Diversification (new markets, new products): Diversification is an organization which introduces new product in a new market. For example, Virgin Group which is in UK introduced Virgin Cola, Virgin Megastores, Virgin Airlines, and Virgin Telecommunications, to leverage the Virgin brand. This company entered new market which was not in the market previously. This strategy is a risk for the company because it is entering the market which doesn’t have any experience.

The matrix show, when the risk increases more the strategy goes up from the known quantity in the present product or service and market. Therefore higher risk will be involved in product development and new market other than present and future product and market. In his original work, Ansoff didn’t use the matrix form, Igor Ansoff said that the diversification (future product and future market) strategy was apart from the other three.

While the latter are usually followed with the same technical, financial, and merchandising resources which are used for the original product line, diversification usually requires new skills, new techniques, and new facilities. As a result it almost invariably leads to physical and organizational changes in the structure of the business which represent a distinct break with past business experience.

For this reason, most marketing activity revolves around penetration; and the Ansoff Matrix, despite its fame, is usually of limited value – although it does always offer a useful reminder of the options which are open.

Ansoff’s Matrix with the Dialog product

When talking about the product Dialog broadband released 2 months ago, the HSPA device, it is the second product to enter into the market of wireless internet connection. First to launch was their main competitor Mobitel with a similar type of product. Dialog broadband waited eight months after their competitor launched the product to release their product.

For a company like dialog that has a very high market for its current products, focused on their new product the HSPA, to cater to the current market, they came up with the HSPA as new product into the market which was created by their competitor by improving the product itself in terms of technology with much more connectivity and broadband facilities to their customers.

Whenever new products are released it tends to it can gain new customers for these products.

This stage they entered into the market was the stage of Market development in the Ansoff’s Matrix, they are competing with their rivals giving more facilities to their target sector of customer. Setting more reasonable price according to the catered segment.

In order to compete with their competitors Dialog broadband must provide better pricing schemes, promotion offers, and target a specific group of customers.

If a company needs to stay competitive in the competitive market it should use product development as their business development strategy.

How Competition is done

Company’s Environment is supported to market the Mobile HSPA

Dialog Telekom has grown to become Sri Lanka’s flagship telecommunications company. Operating in an oligopolistic market (mobile telecommunications in Sri Lanka), the company operates Dialog GSM, the country’s largest mobile phone network. Dialog was the first to introduce the concept of GSM in to Sri Lanka and has thereafter reinforced itself with technologies such as GPRS and 3G. Dialog has also managed to invest sufficiently into its network in order to grid a majority of the populated areas in Sri Lanka. Due to this significant investment in its base stations, Dialog Telekom provides the widest cellular coverage in the country. The company boasts 6 switching centers and 625 base stations covering 85% of all habited areas in the island. The Company’s subscribed base account for (approximately) 60% of the country’s mobile sector and 40% of total telecommunication subscribers.

When you consider the environment, the Dialog has competition like any other company. Main competitor is Mobitel. Mobitel is providing the HSPA Broadband Connection but the price and the customer base of mobitel they cannot compete with dialog

Dialog takes a new step into the market, every time with a strategy that is very tactful. For the past 12 years Dialog has been leading the Sri Lankan Mobile Telecommunication market. Their main strategies are focused on,

1. Captured Customer share
2. Market Competition
3. Increasing Market Share
4. Locking Competition

1. Captured Customer Share

Dialog GSM for the past decade has been valuing the customers as the King. Dialog also well known for showing Customer Satisfaction has been banking on it. ‘Dialog Sathkaraya’ a new banner under which Dialog markets on Customers Relationship. This is in keeping with their Vision that

“To lead in the provision of technology enabled connectivity touching multiple human sensors and faculties, through committed adherence to customer driven, responsive and flexible business processes, and through the delivery of quality service and leading edge technology unparalleled by any other, spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to work as one towards a common goal in the truest sense of team spirit.” (Dialog Telekom)

2. Market Competition

Having 7million mobile users in the country, Dialog Telecom is maintaining a customer base of 4million users, and 500,000 3g uses in the country, with 50,000 in the Colombo Metropolitan. Their competitor contains 2million users and a small amount of 3g users, at this rate Dialog is having a heavy customer base which gives them an advantage when selling the product to them.

3. Increasing Market Share

It is expected that the Dialog will be in a position to sustain their market share which is about 60% of the countries mobile sector market. The Dialog has already brought in a substantial reduction in their rates and services with a view to attract more customers as their competitor launched it 8months before them. This strategy would definitely show tangible results towards expanding their market share.

4. Locking Competition

The Dialog has been the leader in providing mobile telecommunication services in Sri Lanka, having a market share of 60%. So, the balance 40% is being shared by three operators namely, Mobitel, Tigo and Hutch. These three operators are not in a position to compete with Dialog for the simple reason that the Dialog has advanced very much technologically with a higher turnover and producing the services at a very low cost. So, competing with Dialog is not an easy task for these three competitors. But when Airtel comes into the market with attractive packages it is expected that Airtel might penetrate into the market and capture the market occupied by the three operators to a greater extend. But the Dialog will remain still competitive and will be able to sustain their position.

Apita computer naha Concept

Few days after launching the product the company realized that they needed to cater its products furthermore; it’s then when they came up with this idea of “Apita computer naha”, which caters the market of people who don’t have computers.

This concept contains a coupled offer of DELL laptop with the HPS device, this make a lot of sense when catering to that set of people. This was given out at the most reasonable price of Rs 83,000/-, on a monthly installment basis of Rs 6977/- with Windows Vista or Rs 6477/- with Ubuntu.

Dialog broadband main target in this marketing campaign was the university students and the users in the outer range of Colombo.

Price wars

Dialog Telekom is the leading telecommunication service provider amoung other telecommunication service providers in Sri Lanka. Their main goal is to provide the service to the cheapest rate not the very cheapest but up to some extend with a quality of service.

When considering the 3G wireless internet the main compititor for dialog telicom is mobitel. They are providing the same service as Dialog. But when considering the prices of both service providers dialog gives away the service for the lowest rate.

Eg: Dilaog provide E220 HSPA modem only for Rs 5490/-. But mobitel provides the same devise for Rs 19500/-. So thers big price gap between both dialog and mobitel. For my concern customers will attarct towards dialog because of their cheapest rates and the best quality of the service. However dialog has become the market leader in the telecommunication industry because customers are really happy with their service. They treat their customers really well. They believe that the company will get profits only if they able satisfy their loyal exsisting customers as well as thire new customers.

Below u can see the price rangers of both dialog and mobitel packages and devises.

Dialog offers Unlimited Mobile Internet for a monthly rental of just Rs. 2,990/-. Sign up for 6 months and be eligible to purchase an E220 HSPA modem for Rs 5490/-.But this is for General usage. They have introduced a promotion for university students. That is for the monthly rental of Rs. 1500/- sign up for 6 months and be eligible to purchase an E220 HSPA modem for Rs 5400/-. For my concern it’s a very valuable deal.

Monthly fee entitles customer to internet usage of unlimited duration and unlimited data volume (download/upload) however subject to a Fair Usage Policy (FUP) whereby download/upload speeds would be reduced relative to their maximum levels following monthly usage exceeding 5GB. The FUP is designed to ensure that the customers receive the best service because minimum customer’s usage is high.

Mobitel has introduced wide range of packages as well a devises for wireless internet facility for users.

Mobitel has introduced wide range of packages for wireless internet facility for users.

SWOT Analysis

SWOT is a strategic method which the organizations use to know what are the Strength, Weakness, Opportunity and Threats involved in the business. Strength and Weakness are organizations internal issues. Opportunity and Threats are organization external issues.

SWOT Analysis of Dialog

Strength

• First GSM service provider in Sri Lanka
• Wide product range
• Skilled and dedicated Management team
• Island wide network coverage
• Strong customer base and public relations
• Cooperate business knowledge is high
• Reasonable price rage

Weakness

• Front office employee turnover is high
• Comparing with competitors price should be improved
• Confusion and less motivation amongst the employees
• Less towers to get proper coverage

Opportunity

• Reduce the price of the fixed lines
• Using advanced technology
• Introducing more value added services (VAS)
• Introducing new packages and other services.
• Having more towers to get better signal or coverage

Threats

• Competition amongst other GSM service providers in Sri Lanka.
• Terrorism in Sri Lanka
• Changes in social, political, economic inside the country
• Changes in technology
• Changes in customers’ needs

Research Methodologies

A research was done with the Head of Corporate of Dialog Broadband Mr. Ravi Sivasithamparam, to get an overall idea on the product, the Strategies used by the company to market the product and the key to gain competitive advantage.

v Research methods

• Questioners
• Interviews
• Online research

Identified strategies after the interview

v Strategies

• Rogers Diffusion Curve
• Ansoffs model

Research Methods

Questioners

I contacted Mr. Ravi Sivasithamparam the Head of Corporate Service of Dialog Broadband on an informal conversation via telephone to grasp an idea on the related topic. He was very humble in explaining the Strategy used by the company, and how the product is marketed, the market segmentation, the marketing strategy, and services provided by them to the existing customers.

Questioners

Ø What is Dialog 3G High Speed Internet?

Dialog 3G High Speed Internet is a high speed data connectivity service which will enable you to download and upload large files at very high speeds no matter where you are provided that you are within the 3G coverage. 3G High Speed Internet is powered by HSPA-one of the latest evolutions in wireless data transfer technology

Ø What is HSPA?

HSPA (High Speed Packet Access) combines the features of HSDPA (High-Speed Downlink Packet Access) and HSUPA (High Speed Uplink Packet Access) enabling you to access data at speeds up to 7.2 Mbps Downlink and up to 1.98 Mbps Uplink, on devices supporting HSPA.

Ø When talking about the competitive advantage what is the main advantage over your competitor?

When talking about competition our main plus point is the price that we have set to our customers, we have located them into two sections, the General mass and the University students. We provide them with a different range of packages according to their budget, which our competitor has not come up with until now.

Ø How has IS helped your organization with launching the product?

This has also played a key part when we were to launch the product, with the help of IS we were able to track the 500,000 3g users in the country. And 50,000 regular 3g users from the Colombo Metropolitan. This was the key reason we first target our product launch to the Colombo Metropolitan. IS has also helped us in setting the price for our users, according to their sector

Ø What are the startegies used in Dialog?

Mainly the Rogers difussion Curve and the ansoff model.This is a new product to a current market.

Ø What is Rogers Diffusion Curve?

Everett Rogers defines diffusion as the process by which an innovation is communicated through certain channels over time among the members of a social system. Rogers’ definition contains four elements that are present in the diffusion of innovation process.

The four main elements are:

1. Innovation – An idea, practices, or objects that is perceived as knew by an individual or other unit of adoption.
2. Communication channels – The means by which messages get from one individual to another.
3. Time – The three time factors are:

4. (A) Innovation-decision process

   (B) Relative time with which an innovation is adopted by an individual or group.

   (C) Innovation’s rate of adoption.

5. Social system – A set of interrelated units that are engaged in joint problem solving to accomplish a common goal.

Ø Mobitel also providing the same service, What

 

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