You are on page 1of 19

Marketing Strategies of Ufone

Marketing Essay
PTML is a subsidiary of PTCL (Pakistan Telecom Company Limited), the largest operator in
Pakistan. PTML was established to operate cellular telephonyThe company commenced its
operations under the brand name of Ufone from Islamabad on January 29 2001. During the year, as
a consequence of PTCL's privatization, 26% of its shares were acquired by Emirates
Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also
been handed over to Etisalat.
Since its inception, Ufone has focused on the people of Pakistan, empowering them with the most
relevant communication modes and services that enable them to do a lot more than just talk, at a
price that suits them the most. "http://www.ufone.com/about.aspx"
UFONE came in the market when it was mainly captured by Mobilink and InstaOne. It was a difficult
task to become a part of such a market in a country like Pakistan where people were not aware
about mobile phones and it was a status symbol at that time. Ufone changed the whole scenario and
as soon as it came in the market it provided with very cheap mobile connection and calling rates
which were offered neither by MOBILINK nor by InstaOne.
Along with the claim of lowest call rates, clear sound and best network, Ufone offered its customers
simplified tariffs with no hidden charges. With a strong and uniquely humorous communication
direction that has now become Ufone's signature across all advertising media, Ufone gives its
customers many reasons to smile.
During the year July 2005 to June 2006, further expanded its coverage and has added new cities
and highways. Ufone has network coverage in more than 750 cities, towns and across all major
highways of the country. This customer focus and best offering has allowed Ufone to build a
subscriber base of over 20 million in less than a decade. Ufone has network coverage in 10,000
locations and across all major highways of Pakistan. Ufone expanded its coverage and has added
new cities and highways to its coverage network. The company has also been awarded a new
License for providing cellular services in Azad and Jammu Kashmir and in northern areas.
Ufone currently caters for International Roaming to more than 260 live operators in more than 150
countries including Saudi Arabia , United kingdom, UAE, Singapore, Portugal, Kuwait and others
with lowest rates, featuring no security deposit and activation charges. Ufone also offers Pakistan's
largest GPRS & BlackBerry Roaming coverage available with more than 150 Live Operators across
105 countries. More recently, Ufone has become a focused and intensive leader in VAS, constantly
introducing innovative services, which have been the first of their kind in the Pakistani cellular
industry.

Brand
Ufone mainly comprises of two brands i.e. the Prepaid and the Postpaid. While keeping its tradition
of being the trend setter in the industry, 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.
In keeping with the upcoming competition and market dynamics, Ufone increased its focus on the
youth segment (which comprises 50% of the population), with the Prepay brand. By designing
market focused products, Ufone's brand team launched aggressive campaigns, which further
increased the brand equity. The new brand image gained huge popularity amongst the targeted
market.
Ufone's Brand success has been rewarded in many ways, including increased number of customers,
revenue and market share. Apart from these rewards Ufone's nomination for Telecom World Awards
Middle East as the Best Brand of the Year 2009. What makes this even more special is that Ufone is
the only Pakistani telecom company to be amongst the finalists for these awards from nominations
of over 30 operators from the Middle East.

http://commsxpress.com/india/ufonepakistan-best-brand-award-2009/3905/
UFONE SIGNS AGREEMENT WITH JAFFER
BROTHERS:
Karachi-Pak Telecom Mobile Limited (Ufone) and Jaffer Brothers (Pvt.) Limited (JBL) have signed an
agreement for I.T Storage Consolidation and Replication Project. Under the agreement, JBL will
implement and deploy Enterprise Storage Consolidation & Replication Solution to enable Ufone
strengthening its storage and correlated systems. The agreement was signed by Abdul Aziz Khan,
CEO & President, Ufone and Nasser N. Jaffer, CEO Jaffer Brothers (Pvt.)
Limited.http://netxpress.com.pk/2009/05/ufone-signs-agreement-with-jaffer-brothers/

UFONE MOBILE BANKING ACCESS:


Mobile Banking refers the availability of banking and financial services with the help of mobile
handset. The scope of offered services are broadly categorized into Transaction Based (Bill Payment
e.g., Ufone's ULoad & Postpaid Mobile Bill Payments, Utility Bill Payments etc.) and NonTransaction based (Bank Account Mini Statement, balance Inquiry, Pin Change etc.) services.

Mobile financial transaction platforms are rapidly emerging around the world; such platforms harness
the intrinsically lower costs of mobile banking platforms compared to traditional banks and exploit the
increasingly wide diffusion of mobile telephones across all socioeconomic groups and geographical
areas.

VALUE ADDED SERVICES


Ufone welcomes to indulge in the true essence of the term on the go. They believe in providing
customers with as much convenience as they believe perfect. With Ufone easy to use Value Added
Services, customers can pack there entire external environment right in there cell phone.
Ufone always says "It's all about U!" giving priority to its customers and giving them the Experience
of complete convenience with Virtual Private Network, Call Management, Missed Call Notification,
Phonebook Saver and a host of Infotainment and Entertainment services right On the cell phone.
On a flight? Can't afford to miss out on calls? With Ufone's Missed Call Notification, customer's
never loose track of there missed calls. Customers should Stop worrying about cell phone getting
lost. Backup of all contacts is now possible with Ufone's Phonebook Saver and regaining any lost
information directly from there server is very easy.
Creating an account on Ufone website (www.ufone.com), getting access to a host of personalized
online services like Address Book, Calendar & Planner, POP3 Alerts, Email Address as well as
Infotainment Services allows customers to subscribe with daily horoscope, quotes, jokes and much
more. Along with all these services, Ufone also offers GPRS, MMS and WAP access to enhance
mobile internet experience.

http://www.ufone.com/mobile_products.asp
x
INFORMATION GATHERING
Information gathering was the most essential part of the whole activity. To acquire relevant material,
various sources of information were used. Due to the extensive amount of quality information
available online, most of the information gathering was done from the internet but other sources
such as mentioned below also helped to analyze the strategies of Ufone.

LIST OF SOURCES OF INFORMATION


GATHERING:
INTERNET
UFONE SERVICE CENTRE
BOOKS
NEWS PAPERS
TELEVISION

INTERNET
In today's world what ever information you want, it is all easily available on the internet. For my
project it was a difficult task Because of the extensive information available to me, i had to go
through an entire selection process in which I had to filter all the information and squeeze out the
important points to include in my project as per the requirement of the project.

GOOGLE:
On the internet I searched www.google.com which is one of the biggest search webs. From here I
got good information about Ufone marketing strategies through different links which helped me
significantly to know and understand the marketing strategies of Ufone in a better way. It helped to
get access to different websites such as www.propakistani.com from where I was able to get
information about the number of customers of telecommunication industry

UFONE WEBSITE:
TO learn about Ufone, its website (www.ufone.com) was a fine source available. It was a good
source of information for me to know about what Ufone was and provided information about its
brand, services and different value added services for its customers. Ufone's website also gives an
idea about its marketing strategy. As it is very colorful and all the rates, services and new offers are
prominently shown on the main page, it gives an idea about its marketing strategies.

PTA WEBSITE:
PAKISTAN TELECOMMUNICATION AUTHORITY web site (www.pta.gov.pk) was another source of
information as it provided with rates of other mobile networks. Those rates were used in comparing
with Ufone rates during the analysis done.

UFONE SERVICE CENTRE:


A UFONE service centre located near my residence was a good source of information. I got all the
information related to brands of Ufone. It mainly consists of pre-paid, post-paid, blackberry and
GPRS. It was a good source to know about all the packages that Ufone provides to its customers
using different brands. For pre-paid and postpaid there were a wide variety of packages offered.
There were different packages for local and international calling and there were also many packages
offered for short message service (SMS). All these tariffs were a good source of information.

BOOKS:
Related to the marketing strategies I consulted my different ACCA books that helped me in revising
all the techniques and models used in formulating marketing strategies of an organization and
analyzing its market share. It became a little easier after generally over going the books of FTC and
PBP to understand, analyze and examine the marketing strategies of Ufone. The books that I used
are as follows
P3 BUSINESS ANALYSIS PBP
P3 BUSINESS ANALYSIS FTC

NEWSPAPERS:
Ufone advertisements in news papers helped me in the analysis. Its advertisements in different news
papers helped in identifying its strategies its tactics and its marketing policies.
Apart from Ufone, even its competitors advertisements were seen in the leading news papers of
PAKISTAN such as DAWN, THE NATION, JUNG(news paper in Urdu language) etc.
Mostly news papers are used by telecommunication company to inform about there new packages
and rates as a large number of PAKISTAN population reads news paper daily.

TELEVISION:

On television, mostly during cricket matches showed by GEO SUPER, the first sports channel in
PAKISTAN, a lot of Ufone advertisements are seen. Another fact about these advertisements is that
three to four different commercial made by Ufone are been run which covers all types of consumers.
A brief idea of Ufone monthly expenditure of its advertisements on television will be found in the
research part of this report.

LIMITATIONS IN GATHERING
INFORMATION:
As the topic is related to marketing strategies of a company, it is well known that no company
suggests or publishes its marketing insights to public available domains i.e. on websites or in news
papers as most of the marketing information are a highly confidential part and should be kept as a
secret.
The situation gets worst in this case especially because in PAKISTAN, telecommunication is a highly
competitive market so Ufone being a part of such a market is very careful that none of its confidential
information is leaked to the competitors, because in such a market every competitor is looking to
grab opportunities to beat the other company, increase its market share and be the best.

ETHICAL LIMITATIONS:
None of the information used in this report is copied or used without the permission of the owner.
Relevant and real references are provided under every information in the report.

AIMS AND OBJECTIVES:


The objective of this research and analysis project is to analyze the marketing strategies of UFONE.
I aim to do this by using different models which can be used to formulate asses and evaluate
different marketing strategies of any organization. As to give a clearer picture of the company's
marketing strategies, I will also incorporate in the project a comparative analysis of the marketing
strategies of some other companies in the telecommunication industry of PAKISTAN. The main
models that I will be using in this report are as follows:
1) MARKETING MIX
2) SWOT ANALYSIS
3) PORTER FIVE FORCES
Marketing mix includes 7P'S of marketing which is used to analyze both internal and external
information of an organization. It includes PEOPLE, PHYSICAL ENVIRONMENT, PROCESS,
PRODUCTS, PRICING, PROMOTION and PLACE. It covers major areas to analyze the strategies
of an organization.

SWOT analysis are the internal (strengths and weaknesses) and external (opportunities and threats)
analysis of an organization. With the help of SWOT analysis an organization can discern its
strengths, eradicate weaknesses, work on opportunities and try to minimize and remove threats.
PORTER FIVE FORCES are the main external analysis which will help me in identifying all the
external circumstances for Ufone. PORTER FIVE FORCES includes BARGAINING POWER OF
SUPPLIER, BARGAINING POWER OF BUYER, THREATS OF A NEW ENTRANT, THREATS OF A
SUBSTITUTE AND COMPETITION/RIVALRY. Through Porter forces all the external tribulations,
advantages and disadvantages faced by Ufone can be identified.
A comparative analysis of marketing strategies of Ufone with its competitor's strategies such as
Mobilink Telenor Warid and Zong will also be provided. I would try to analyze and differentiate the
different strategies that are used by all these telecommunication companies in PAKISTAN
I will also highlight different segments of market targeted by Ufone which have helped it in gaining
higher market share than its competitors. Some negatives in the marketing strategy of Ufone will
also be underlined and how an all-round psychoanalysis of what they were, how they progressed
and where they aim to reach will be analyzed in this report.

RESEARCH MARKETING
Marketing strategy is used by an organization for focusing on organization's energy and its use of
resources on a set plan leading towards increase in sales and dominance in the market. A marketing
strategy combines promotion, pricing, distribution, product development, relationship management
and other elements; identifying and explaining firm's marketing goals and also explains ways to
achieve it within a stated timeframe. Marketing strategy determines the choice of target market
segments, positioning, marketing mix, and allocation of resources. A key component of marketing
strategy is often to keep marketing in line with a company's overarching mission statement.

IMPORTANCE OF MARKETING
STRATEGIES FOR UFONE:
In the recent times, the competition level in PAKISTAN in the telecommunication industry has raised
a lot. Therefore to survive in the market it is not just important for Ufone but also for all other telecom
companies to have strong marketing and advertisements in order to grow there market share in this
progressing and growing market

MODELS USED TO EVALUATE MARKETING


STRATEGIES OF UFONE:
The first model that I have used to analyze the marketing strategies of Ufone will be Marketing mix.

Marketing mix:
It comprises of 7P'S of marketing. They are as follows

PEOPLE:
In this part of the strategy, different segments and class of people will be discussed. From a
telecommunication point of view, the following will be normally being large segments of people to
target.
Corporate Class
Entrepreneurs (Business class)
Working class
Youth (ageing between 15 & 22)
Government organizations
These are mainly 5 segments in which mobile users could be divided. As for Ufone, at first it tried to
focus on the common man such as the labor class to give an idea and concept that mobile phone is
affordable for all but after some time it took a strategic shift and now it mainly focuses on the youth
of Pakistan. Through its advertisements it tries to attract youngsters, school going and college going
crowd.
On the other hand, it does not have a lot to offer people from professional field and it never spends
heavily on its advertisements for corporate class or business class.
The main competitors of Ufone in this regard are Telenor and Zong which is a china mobile
subsidiary in PAKISTAN. The advertisements of Telenor are also very colorful and attractive for the
youth and Zong from the very beginning came with the idea of attracting youth of the country.

2 - PRICE
Customers see pricing as the heart of selecting a brand. Cellular service providers
are facing intense price competition in present-day market.
Price has always been the core differentiation of Ufone. Ufone is the one who around
a year back offered the cheapest rates on-network and off-network. Now it's a
strong fight between Zong and Ufone and new rates keep on publishing every
month and at times every week.
Ufone strategizes 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 day's thus compelling people to use Ufone for
international calling.

It also offered hourly call rates in Ramadan when people were least likely to avail
the offer that much that it might prove unprofitable for Ufone as in Ramadan people
in PAKISTAN mostly fast and mostly people won't talk for hours during their fasting
but UFONE made people talk with its extremely special offers and packages.
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. Ufone also provides with the best SMS
rates. They are as follows:
PACKAGE 1
165SMS
RS 25+TAX/MONTH
PACKAGE 2
500SMS
RS 50+TAX/MONTH
PACKAGE 3
1000SMS
RS 75+TAX/MONTH
PACKAGE 4
8000SMS
RS 80+TAX/MONTH
PACKAGE 5
UNLIMITED SMS
RS 3+TAX/DAY
Ufone provides the cheapest messages rates in Pakistan. The other company that is
close to Ufone is Telenor. Its brand djuice provides its customers with the following
packages:
PACKAGE 1
1000SMS
RS 8.76+TAX/WEEK
PACKAGE 2
3500SMS
RS 29+TAX/WEEK

PACKAGE 3
7500SMS
RS 69+TAX/WEEK
PACKAGE 4
300SMS
RS 3.71+TAX/WEEK
Mobilink brand JAZZ provides many different packages such as JAZZ BUDGET, JAZZ
EASY, JAZZ OCTANE etc. Jazz Octane provides the cheapest sms rated that is just RS
0.20+TAX/SMS and daily charges of RS 1.00
Still new in market the brand of ZONG launched by CHINA MOBILE even comes to be
a tough competitor as it offers services keeping different types of users in mind.
ZONG has the package best suited for customer requirements while keeping the
affordability in check.
Daily SMS PACKAGES
500 SMS & 100 MMS for whole day only for Rs. 3.99
On exceeding 500 SMS, additional SMS to be charged as per tariff plan
This bundle would be valid for 1 day only * In order to re-subscribe your number
should be active and you must have sufficient balance available
Weekly Bundle
1000 SMS for whole week only for Rs. 10
On exceeding 1000 SMS, additional SMS to be charged as per tariff plan
This bundle would be valid for 7 days only
In order to re-subscribe your number should be active and you must have sufficient
balance available
Fortnightly Bundle
500 SMS / day for 15 days for only Rs. 50
On exceeding 500 SMS a day, additional SMS to be charged as per tariff plan
This offer would be valid for 15 days only
In order to re-subscribe your number should be active and you must have sufficient
balance available
Monthly Bundle
500 SMS / day for 30 days for only Rs 80
On exceeding 500 SMS a day, additional SMS to be charged as per tariff plan

This offer would be valid for 30 days only

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. All cellular
service provider companies in Pakistan are trying there best to drastically widen their network &
coverage in every area. Mobilink has this edge in place excellence because it is the pioneer in
cellular telephonic field.
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.

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.
Ufone strategizes to carry out promotion in order to increase its market share.
Advertising:It if often noticed that Ufone mainly makes new ads when it has to inform the customers about new
services. Apart from that it heavily promotes its brands and products through its advertisements on
television, radio and news papers seeking to persuade people to purchase their service or switch to
their connection from other mobile network. It mainly advertises for pre-paid customers but
occasionally it also advertises its other brands such as post-paid, blackberry and GPRS.
Advertising Budget:Ufone is a heavy spender on advertising in electronic media as well as other media. 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.
From a special source in Jung Group which owns one of the leading news channels in PAKISTAN it
came to my knowledge that Ufone spends a monthly amount of 20 million on advertisements. This
amount is what Ufone pays to Geo channel alone. There are also channels such as ARY, INDUS,
EXPRESS etc on which Ufone advertisements are shown day and night.
Sales Promotion:-

Sales promotions are short term incentives to encourage the purchase or sale of a product or
service.
Ufone carries out activities to boost its sales. It follows all four of the promotion budgeting methods
via affordable method, percentage of sales method, competitive parity method and objective & task
method.
Ufone carried out contest for cricket talent hunt in the year 2002. A 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.
All the cellular services are now offering premiums for their customers. Similarly this premium is also
offered by Ufone when a customer doesn't use his/her mobile connection for up to 3-6 months.
Premium is given in the form of extra credit balance delivered to customer's numbers for free
Ufone also offered free trip to Dubai. It was Ufone's first Eid offer. Every time a user makes any
international call of 5 minutes or longer than 5 minutes, it enters the lucky draw to win a return ticket
to Dubai. The more calls made by users, the more chance they had to win.
Public Relations:Ufone has always tried to maintain its public relations. It tries to keep all its customers happy by
sending greeting messages on all occasions such as Ramzan, Eid and other holy and important
days in the country. It has also launched its "Hajj Guide" service.
Direct Marketing:Ufone employ on-road umbrella franchises where they directly market and sell their connections and
Sims. Apart from that in many different cities of PAKISTAN, Ufone has also made it posters on auto
rickshaws which are a unique way of direct marketing.
Ufone has intensive promotion in cities, but it is now improving upon its promotion in rural areas as
well.

5 - PRODUCTS
Ufone offers a variety of products and services to its customers. In each product it offers a variety of
different packages for its different segment of users. The following are the different products of
Ufone:Post paid
Pre-paid
Blackberry
GPRS

The most widely used Ufone brand is the Pre-paid brand through which it targets its main segment
customers that is the youth of PAKISTAN. It offers a variety of services for its pre paid users such
as:Internal Excess
Online Billing Payment
Power SIM
WAP
International Roaming
Voice Mail
Call Management
Messaging
(All information taken from Ufone customer service center)
On the other hand it also provides a lot of different packages for calls and short message service.
These are as follows:Tension Free Package
Ufone hourly Package
Super hourly Package
5 ka 15
Public Demand
Life Plus
U Circle Life Plus
INFORMATION REGARDING SOME PACKAGES:-

6 - PHYSICAL EVIDENCE:It is a very important aspect of marketing. In this part the most important thing is customer service.
One of the examples of physical evidence of customer service that we get is billing. Ufone has a
very effective and easy process of billing for its post-paid customers. It can be done through credit
cards, by using a scratch card, or by physically going to the outlets of Ufone which are now in big
numbers.
For pre-paid customers it is extremely easy to get there recharge done. It can be done by
purchasing cards with sealed numbers of Rs.100, 500 and 1000 or easy load of any amount of more
than Rs.10 is possible from many outlets of Ufone and even other small shops.

It also has a customer service call centre where customers can call 24hours to gain any information
about Ufone packages or to report any problem that they are going through.

7 - PROCESS
For any organization it is extremely important to know what segment of customers they want to
target, what are there aim and objective and what they want to achieve. In order to achieve what
they desire they will than make a process to attract people from that particular segment of market.
Each organization has a different way and thinking with which they formulate a process to market
their product. In case of Ufone it is very evident that through there customer gathering process they
are trying to achieve high market share amongst youth of PAKISTAN. This is currently the most
growing market segment in telecommunication as all the youngsters as described above are
privileged to use low rate offers to talk for hours and message as much as they want.
Apart from normal advertisements and marketing strategies, Ufone also advertises on the internet
through www.facebook.com (a website on internet used mostly by teen agers to enhance there
friends circle and share there personal information with others), news papers, magazines etc and try
to gather as much market share as they can through these processes. It also puts up its stalls in big
carnivals, tries a lot of other processes to market its product and to create awareness of its products
every where.

SWOT ANALYSIS:STRENGTHS
Strengths include internal capabilities, resources, and optimistic situational factors that may help the
company to provide its customers and achieve its goals and 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 represents PTCL name as it is the subsidiary of PTCL.
Ufone packages for youth are its major strength and a big source of income.
Ufone is offering more and better Value Added Services (VAS) than its competitors i.e. Ufone's
Walkie talkie.
Ufone has the most promising and attractive ATL (Above the Line) activities.

WEAKNESSES

Weaknesses include internal limitations and negative situational factors that may interfere with the
company's performance.
The weaknesses of Ufone are as follows:As Ufone is a subsidiary of PTCL, which was previously under government management, Ufone still
has a shadow of a government organization. It is also highly dependable on PTCL.
It has a weak marketing strategy to attract post-paid clientele and they are more dependent on prepaid customers in spite of the fact that Ufone major revenue arises from its Post-paid customers.
They often get carried away with there aggressive marketing strategies.

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 in to 3G (satellite based) technology
It can further target the corporate segment in PAKISTAN.
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.
Ufone can astonish its customers by introducing "UFONE KIOSK". These will be machines like ATM
and through this service Ufone customers will be facilitated to load balance in there mobile just like
people take out money from ATM.
Ufone still has room for the improvement of its network coverage in comparison to The Market Giant
"MOBILINK"

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.

Another threat to Ufone is it aggressive marketing strategy which some times hits back on it.
The boosting customer base of Warid and Zong is also a big threat for Ufone as Telenor has already
surpassed Ufone in terms of capturing market share.
The decreasing economy rates, instability in Pakistan and world wide recession are a big threat for
all businesses in Pakistan including Ufone.

MICHAEL PORTER'S FIVE FORCES:Porter describes five forces as to where an organization stands in the market and what problems are
it going to face from its customers and suppliers. How much behind is it from its competitors, what
substitutes are available in the market and is there a possibility of new entrant in the market.

BARGAINING POWER OF CUSTOMER:As far as telecommunication industry is concerned, this is one area where customers have a lot of
power. In all growing and progressing countries, there are a number of different telecommunication
service providers available.
Similarly in PAKISTAN apart from Ufone, there is Mobilink, Telenor, Warid and Zong. With such a
wide range of different telecommunications services available, customers have a good reason to get
the best out of the companies that is the best products, best services which also include after sales
service. Talking about my experience I was a user of Warid but just because of one small customer
service issue and strong Ufone advertisement, I was convinced to switch to Ufone.
Recently a new service, Mobile Network Portability (MNP) has been started by Ufone and its
competitors. According to this service the user of any other mobile network without changing his/her
number can switch on to any other mobile network. Ufone offers free minutes messages to attract
consumers towards changing there mobile network through MNP but similarly its competitors
specially Telenor and Zong are also up to the task and are giving similar offers.
One more thing favorable for customers is that the cost of switching is very less which gives them a
power to switch from one network to another if they are not satisfied or pleased with the services.
There fore it shows that customers in Pakistan have high bargaining power when it comes to
telecommunication industry. This is some thing of advantage to Ufone because it gives it a chance to
get customers from four other mobile network services. On the other hand it should make sure that it
keeps it customers retained and the best way to do that is by keeping them satisfied and happy.

BARGAINING POWER OF SUPPLIER:The suppliers to telecommunication companies in PAKISTAN are Pakistan Telecommunication
Authority (PTA). As mentioned above that Ufone is a subsidiary of PTA, it gives Ufone an edge over

its competitors as PTA would charge Ufone the least possible rates to give it an advantage over
other competitors.
Hence bargaining power of supplier in this case is very low and Ufone should use this strength to
over come its competitors.

COMPETITION/RIVALRY:The next in porter five forces is the force of competitors. Ufone has a lot of competitors in the
industry such as the Mobilink, Telenor, Warid and Zong. Some data has been gathered to show how
strong the competition has been between these companies in the recent times:As per December 2009 stats, in absolute terms Telenor came on top with new 3.1 million
subscribers, followed by Mobilink 2.3 million and Warid 2 million. Overall, mobile phone operators
fared well in 2009, with total addition of 7.7 million subscribers pushing telecommunication density to
59.6 per cent. As far as the market share is concerned, Mobilink was on top with 32 per cent while
Telenor closed in the gap with 23 per cent. Warid and Ufone followed with market share of 19.3 per
cent and 19 per cent respectively. Interestingly, China Mobile enhanced its share to 7.1 per cent, 22
months after its launch.
In 2010 the trend has significantly changed and there has been a decline in the telecommunication
industry. Cellular phone subscribers' base has witnessed a significant contraction by 2.22 percent in
January as the result of ongoing data correction process. The Pakistan Telecommunication
Authority's (PTA) latest statistics show a decline of 2.17 million users in the overall sector, which
reduced the number of users by 1.4 percent to 58.20 percent by the end of January 2010.
Warid remained the worst effected operator as it lost 2.65 million customers in total in January,
taking it back to 4th slot in terms of subscribers.
The number of total subscribers in Pakistan now stands at 95.4 million after reducing from 97.57
million in a month.
The current Feb. 2010 analysis shows that Mobilink holds 33 percent followed by Telenor 24
percent, Ufone 19 percent, and Warid and Zong with17 percent 7 percent respectively.

THREATS OF A SUBSTITUTE:In today's modern, advanced and technological world, this threat exists not just for Ufone but all
other telecommunication companies as well. This is one reason why it is always important to stay
update with the industry's market, have advanced technology, skilled workers and technically
available staff.
The popularity of the recently launched Evo technology has escalated, which is evident from the
increasing subscribers, which have jumped to 38,000 as of Nov 09. 2009 proved to be an impressive
year despite the difficult economic environment. The reason why people would choose Evo are as
follows:-

For something like Evo to work in Pakistan would require a lot of time and awareness amongst
people as till date, internet calling is not something about which people are aware. Hence it can not
be completely taken as a substitute for mobile networks until internet calling services are provided at
cheaper rates and people are made aware about it.
PTA expects broadband users to rise to 4.35 million by 2013 (currently at approximately 1.2 million)
this is one substitute coming in way of Ufone and its competitors.
But still threat of substitutes is low as these are all advanced technology equipments which the
common public in PAKISTAN may find difficult and above all expensive. On the other hand, if some
product in a simplified form focused on costs is launched in the market than it could be a big threat
for all telecommunication companies.

THREATS OF NEW ENTRANTS:Telecommunication industry is not a very easy industry to enter as it has a high cost to enter the
market. The cost includes acquiring license which in Pakistan is issued by PTA and as Ufone is a
subsidiary of PTA so it is one big advantage for them.
Apart from this, a company also needs to advertise heavily and set up its towers in different areas
which is a huge cost for a company starting a new business
There fore it is not an easy industry to enter and threats of new entrants are generally low from local
investor point of view but in the past few years first Telenor than Warid and now Zong have all come
in PAKISTAN market and got a lot of success along with Mobilink and Ufone which may attract and
entice other telecommunication companies around the world.

CONCLUSION:By keenly analyzing the marketing strategies of Ufone, I concluded that Ufone is slowly and
gradually penetrating into the telecommunication market. It can be noticed that it is following the
ANSOFF matrix where market penetration strategy is used if both product and market are existing. It
is doing so by taking risks and aggressively promoting and advertising its brands, packages, tariffs
and products. Ufone provides the lowest calling rates through out the country and it has no hidden
charges. Through its marketing strategies, Ufone tries to remain a potent force in the cellular
industry.
During the analysis I came through many unconventional strategies and ad campaigns. Ufone
signed three Pakistani divas in one of its ad. This was something never done before by any other
telecommunication industry.
It is always well known and believed that telecommunication industry is one of the toughest markets
to enter and expand. Ufone is just not surviving but is also maintaining its market share. At one time
Ufone exceeded 20 million customers but than it came down to 19 million and on to the 4th position,
but with time it got back in action and although the latest graph shows that it lost some part of its

consumers, it is back to number 3 in the telecommunication companies in Pakistan. To further


proceed in the telecom sector I hereby recommend the following:-

RECOMMENDATIONS: During the analysis that I carried out I found out that there were some reasons for Ufone loosing its
customers and market share.
The first thing that UFONE should do is that it should make a formal strategy and try to capture more
of the corporate world such as the leading multinationals Co. It can do so by providing them with
good tariffs or packages which are lower than other companies. It can also provide them with better
quality services by extending its range of coverage.
Secondly Ufone should focus more on its own advertisements rather than leg pulling of its
customers. In its war of advertisements with Zong it spent a lot of money on its ad's but it offended
many customers. So Ufone in its ad's should concentrate on its own brands and products.
Thirdly Ufone some times goes too far to attract customers which may be unacceptable to the local
culture. It should stick with its own theme of advertisements that is the humorous theme rather than
going towards the unconventional ad campaign as the culture in Pakistan would not accept anything
that is cheap or offensive.
The last but not the least, Ufone should be aware of its competitor moves and there value added
activities. It should keep a close eye on all its competitors mainly Mobilink and Telenor as they are
the two companies currently positioned above Ufone. Ufone can also benchmark its competitor such
as Mobilink in order to improve in departments where it is lacking and where the competitor is better
of.

Read more: http://www.ukessays.com/essays/marketing/marketing-strategies-of-ufone-marketingessay.php#ixzz3nmlMc1iD

You might also like