Market Segmentation Of Nepal Telecom

Communication is simply connecting people. Today world is considered as single market. Technology has reached to the peak and still going on, it cannot be ignored that the technology is supported by the telecom company. However, the telecom industry of Nepal is reaching to its maximum by providing the customer satisfaction with cost effective product and services. Nepal Telecom (NT) previously known as Nepal Telecommunication Corporation (NTC) was only a state owned telecommunication company until 2003 that had a monopoly market all over Nepal. For the development and to meet the demand of the changing world, the former king transformed the company to the public limited company on 2004. Now it is named as Nepal Doorsanchar Company Limited. Soon after the transformation of the telecom three other telecom company established in Nepalese market as UTL (United Telecom Limited.), SPNL (Spice Nepal Pvt. Ltd.) and STM Telecom Sanchar. Nepal Doorsanchar Company Limited is a company registered under the companies Act 1997. However the company is known to the general public by the brand name Nepal Telecom as registered trademark. Nepal telecom’s core business is communication service which includes PSTN services, CDMA service, GSM mobile, internet, telex, 3G service (latest development), wireless broadband services and many more. Nepal telecom is investing more and more in its product and services to reach each and every person and corner of the country. They are segmenting the market as per the geographical, financial and by educational aspect. Segmentation is an essential part of the Nepal telecom, day to day new market research is done to meet the customer demand and to satisfy them. (ntc.net.np, 2010)

Market segmentation of Nepal Telecom

Market segmentation is the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs. We may also define market segmentation as a subdivision of large homogeneous market into a clearly identifiable segment having similar needs and demand characteristics. The main objective behind segmentation is to design a marketing mix that precisely matches the expectations of customers in targeted segment. For the Nepal telecom segmentation is the very difficult task to overcome with. As Nepal has poor infrastructure, it is mostly covered by hills and mountains, it is very difficult to reach to all district of the country. But still the company, facing lots of difficulty it is reaching to its target customer by its alternative product and services. Nepal telecom has segmenting its product and services by the following ways (ntc.net.np; nepalsharemarket.com, 2010)

PSTN TELEPHONE – PSTN (Public Switched Telephone Network). It is a landline telephone service with national and international call along with internet service. As per the data total line installed is 742007 among which 570196 lines is distributed to the public all over the 75 district. The target customers are every single family with minimum income, mostly the official, industrial, businessman and the government bodies.(annual report, ntc.net, 2010)

CDMA SERVICE – CDMA (code division multiple access) is the fastest growing wireless technology for mobile and internet. The target market of this service is mainly on the cities and the town of the nation. It is also distributed to the densely populated rural are of the nation. Total CDMA lines distributed to the people are 788451 which includes both post-paid and prepaid mobile. Mostly the cities like Kathmandu, Biratnagar, Itahari, Pokhra, Hetuada, Butwal, Nepalgunj, Chitwan are facilitated with the CDMA services. It has reached to maximum number of people and is expanding day by day. It is more beneficial in the hilly and mountain area.

GSM SERVICE – GSM (global system for mobile communication) is the digital communication technology which is famous all over the world and is the developing market in Nepal. GSM service has changed the life of each and every individual all over the nation. The total GSM mobile subscriber all over Nepal is 3557571; GSM market penetration is 12.91% which is the highest penetration. The target customer is each and every single person of the country.(unescap.gov, 2010)

INTERNET SERVICE – this is also the fastest growing service with effective improvement in the technology. The target customer of the internet user are the business man, students, organization, banking sector, government bodies, and for private use. These services are provided in almost all big and small city and town of the country.

Marketing Mix of Nepal Telecom

Generally marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. Marketing mix includes product, price, place and promotion which are called as 4 P’s of marketing. This marketing mix can be controlled by the marketing manager and are both internal and external to the marketing environment. (articles.castelarhost.com, 2010)

http://thelucrativeinvestor.com/images/postimages/marketingmix.JPG

PRODUCT

Product is something goods and service offered to the customer. Product decision includes variety, features, brand name, quality, design, packaging and so on. Nepal telecom provides customer with the different product or services like: Broadband service with fastest internet, SIM card with excellent GSM network. Cable for TV program with channel from all over the world. Telephone service with domestic, STD and ISD calls. Broadband service for the bank to run the ATM machine.

Nepal telecom has its own GSM network with brand name ‘NAMESTAY’, offering NRS 500 initial balance with validity of 6 month. No other company offers such amount in mobile network. Namaste NT provides caller id, voice mail, CRBT, mobile internet service, national and international roaming in mobile (GSM) network. It is also providing telephone service (PSTN) all over the nation with special features and service. They offer 175 free minutes in all local telephone. More over by the help of telephone lines internet and TV program can be used with special package. Recently Nepal has launched third generation (3G) mobile service in capital city which can prove that Nepal being poor country has the challenging telecommunication company.

PRICE

Nepal telecom provides different services to their customer with comparatively in cheaper price than other competitors like SPNL. NT provides a NAMESTY mobile sim card for NRS 1135(incl VAT) which includes NRS 500 balance with validity of 6 month. Whereas SPNL provides the mobile sim card for NRS 500 which have balance of NRS 100 and validity of 3 months. Customers can make a call for 0.75 paisa per minutes in same network in case of pre-paid mobile. In case of post-paid mobile NT offers NRS 1000 credit limit. SMS within Nepal is 0.50 paisa. But SPNL price for 1 minutes of call is NRS 1 (incl vat). Thus NT provides the cheapest call in both mobile and land line than it competitor. However NT can provide cheaper price to the customer to gain the market share and it will not influence too much on their profit. Not only in mobile, they provided the cheapest broad band internet than other like UTL. It provides internet for NRS 250 per month and differ as per the time and duration of the internet surfing and the terms of contract. The rate for calls differs as per the time (off hour and peak hour). The charge for landline is NRS 1 for per 2 minutes call. There are lots of other charges as per the services.(ntc.net.np, 2010)

PLACE

The place mix for Nepal telecom has largely influenced to the customer. The main place to get the services is at the different branch of NT. Customer have to submit the form with required document in advance for the services. NT has branches all over the nation with each and every facility. Now to reach the customer easily they have started to provide the sim card to the business dealer in each and every market area. And the customer can top up their mobile balance easily from the shop, registered agent, local PCO. However due to the poor infrastructure NT is not able to provide the internet service and good mobile service in the hilly and mountain area. They need some more advance technology and cost effective service to reach in that area. Some time they organize trade fare for the selling of the services like sim card and internet. In same way the competitor SPNL uses its dealer to sell their sim card, they also offer other company to sell their product offering the package deal on it.

PROMOTION

Nepal telecom is using wide variety of promotion tool to reach to the custom in each and every possible way. The mission on Nepal Telecom is to reach every corner of nation. For that they are investing a huge amount on promotion. The promotion tools of NT are:

Advertising is the most effective means of promotion for NT. They use TV and radio with good commercial advertisement. Broachers, magazines, newspaper are other best media of promotion. They even use display board in the main location and other sales agent to reach the customer easily.

NT is the market leader and a biggest profitable company in Nepal; they sponsor most of the national and international sports and cultural programme. Thus sponsorship also has become a good means of promotion for Nepal Telecom.

They are also organizing trade fair and exhibition centre for the new customer and existing customer to introduce their product to them.

During the time of the festival like ‘Dashain and Tihar’ they offer discount on the purchase of the services and also offer other package with reduced rat e than before. They uses sales promotion tool to encourage the customer to purchase the product of Nepal Telecom.

Suggestions and Recommendations

If I were the marketing manager of Nepal Telecom I will go for better improvement in marketing segmentation. Recently the market segmentation is mostly focused on city and town area. This segmentation should be enlarged to other part of the country so that the customer can easily meet the service. Internet facility is very poor in most of the places. Thus to get more market share I will come up with good strategy for market segmentation so that every single customer can get the service in most easy way. Few part of Nepal is still lacking each and every service of Nepal Telecom due to the infrastructure and lack of good technology and budget. Thus that area should be given more priority in coming future. I would also introduce satellite telephone in the hilly and mountain area.

Moreover, if I were marketing manager I will improve the pricing mix of marketing. The recent pricing strategy is more profit oriented then to serving the customer. As being the market leader and to meet the competition the company should provide the cheap call rate to the customer. If the recent market penetration is 4% and lots of customer are still waiting to get the service of NT. So if I were the marketing manager I would reduce the price to some extent so that I can collect more customers in coming future.

REFRENCES

http://www.ntc.net.np/utilities/nt_brief.php

http://www.ntc.net.np/publication/annualreport/ntc_annualreport_065_66_eng.pdf

http://www.nepalsharemarket.com/NepalShareMarket/Nepse/Analysis/QuoteAnalysis.aspx?id=COM-000192

http://www.unescap.org/idd/events/2007_Info-Society-Stats-Workshop/Nepal.pdf

http://articles.castelarhost.com/google_four_ps_marketing_mix_introduction.htm

http://books.google.co.uk/books?id=vFpZccnZG0C&printsec=frontcover&dq=market+segmentation&source=gbs_similarbooks_s&cad=1#v=onepage&q&f=false

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