Advancement of Technology in Telecom Sector and its Impact on the Business of Calling Cards Industry
International Prepaid Calling Cards were the most popular and cheap mode to make International calls, however, developments in telecom sector has introduced International Prepaid International Prepaid SIM cards. Though calls are a bit costly through the International Prepaid SIM cards as compare to calling cards, but gradually these will decrease as the consumption will increase and some other related factors are settled. As per marketing theory every product has a life cycle, the researcher has tried to assess at what stage of life cycle is this product and what are the major threats for this product. The purpose of this study was to gain a better understanding of the market trend and available products.
A quantitative research approach was used to get a deep understanding of the issue's. A survey of 25 customers and 25 retailers was conducted in the city of London. Discussions were made with the management of Calling Cards Companies and distributors to know their point of view..
This research analyzed the different perceptions and expectations of customers and retailers. It clarifies what are the reasons for selection criteria to pick any of the product and their satisfaction level.
It has been revealed from the findings that customers are not satisfied with service of calling cards though its cheap, further, it's not convenient in use. The students and people from Africa and Caribbean countries still using calling cards though have some reservations.
The market share of International Prepaid International Prepaid SIM cards is increasing day by day which show its popularity and its ability to take place the International Calling cards. Thus Calling card companies have to reposition themselves in accordance to the change happening in the market.
Chapter 1: Introduction
This chapter begins with a brief background of the product. The chapter further details the aim and motivation behind this research. Finally, the limitations of this dissertation are given followed by a brief outline of the following topics.
This chapter begins with the reasons for selection of this topic. This will be followed by the aims and objectives of this research and the limitations. A brief history of the International prepaid calling cards and basic information i.e. how it looks like, prices, distribution channels, major market players, etc will followed.
1.2 Reasons for Selecting this Topic:
United Kingdom is a multi cultural country, where people from every part of the world visit for one or other purposes. Its education system is one of the best in the world and attract students from all over the world. It provides opportunties for the skilled people to immeragte to this country. In addition to its own population, this create a large market for the telecom sector as people need to make long distance calls. The researcher is involved in the distribution of International Prepaid Calling Cards in the city of London, United Kingdom. It has been observed by the researcher that the from last two years the sales of Calling cards is declining. The speed of this decline is accelerating with the passage of time. Though recession can be blamed for one the reason of this decline, however the major cause is introduction of International Prepaid SIM cards which are becoming popular day by day and more companies are entering in this field. Therefore, the researcher finds it appropriate to select this topic for the research so that the future of calling cards industry can be assessed.
1.3 Aim of the Research:
The main theme of this piece of work is to identify the new innovations and change of technology in the telecom sector. Further to ascertain the stage of the product life cycle of International prepaid calling card. An evaluation of the impact of these changes on the international prepaid calling card industry will be made to have a better understanding of the current situation and provide some quality research to the policy and decision makers of telecom companies so that they develop their policies and strategies according to the new developments. In support of this work, researcher set out following objectives:
i. Identification of new products developed due to advancement in technology which can be a major threat to this business.
ii. Evaluate the performance of new product and its market share.
iii. Determine the product life cycle stage of International Prepaid Calling Cards
iv. Make recommendations in the light of the research to enhance the product life cycle of International Calling Cards.
i. The calling cards sector is a huge market which includes both organisations and individuals involved in production, marketing, distribution, retailing, and last but not the least end users. Due to time limitation, the researcher was able to conduct only 50 interviews which covered 25 end users and 25 retailers. The reason to concentrate on end users and retailers is the researcher is involved in the distribution of calling cards, therefore, has a direct link with these two categories. Further the feed back of end users and retailers provide the trend of the market. A discussion was also made with the Mr. Ashu Munesh, General Manager of GC Telecom UK Limited, one of the largest distributors of the calling cards in United Kingdom and with Mr. ________________________ Country Manager of First National a major company of calling card industry..
ii. International Calling Cards industry emerged some ten years back, it has not attracted to the researchers for any serious research. The researcher was unable to find any scholaristic article on this industry. As it is not a highly organized industry, no reports were available on this sector on the internet and the various databases provided by the university.
iii. Due to lack of time and resources the survey population was geographically limited to people living in London.
1.5 A Brief History of prepaid phone cards
SIDA, a vending machine manufacture based in Italy brainstormed prepaid calling cards. The shortage of coin in Italy motivated SIDA to explore alternative means to using to operate pay phones. The idea was materialized in early 1976 and the first phone card was released. Printed on a thin cardboard with a magnetic strip, pay phone users would insert the card into the pay phone and it would start deducting minutes from your card.
This new product became so popular that in just one year it had spread across the continent and by1977 Austria, France, Sweden and The United Kingdom were among the first in Europe to adapt to the new phone card system.
Like any other product, companies worked hard to improve its quality, and in 1984 the first chip-based "smart cards" were introduced in France.
In 1987, almost ten years later this product was introduced to the United States by World Telecom Group. Siemens and General Electric were the main distributor of the cards. They upgraded this product and created a magstripe, which is commonly seen today on the backside of credit cards, the magnetic strip.
The development and practicality of calling cards continued to grow. In 1988 Dr. Steve Hiscocks assembled the first calling card catalog. It was distributed in England to prepaid phone card collectors.
In 1989, AT&T, a major telecom provider of United States joined the prepaid calling card world. They began to mass product phone cards.
In 1990 New York's Regional Bell Operating Company (RBOC) created the first non-magstripe phone card. These newly invented phone cards work similar to phone cards today. They require dialing a toll free access number and using a PIN (Personal Identification Number) to place charges on your account. The new system provides more versatility with phone cards. Allowing use any phone nationwide.
By 1992, new technology was introduced and instead of magstripe, cards completely switched over to an access number and PIN. Major telecommunication companies had started to release their own brand of phone cards.
Like the dot com boom, the phone card market exploded. Industry-wide revenues reached 12 million dollars. While sales for future years were expected to double. Just one year later in 1993 calling card sales reached an unpredicted high of 25 million dollars. Sales continued to grow through the mid 90s reaching 650 million dollars by 1995.
Sales continued to rise exponentially soaring over 3 billion dollars between 1996 and 2000.
Calling cards industry continued to skyrocket due to diverse marketing and unlimited client potential. By 2000 even smaller based telecommunication companies enabled themselves to release their own calling cards. They could be found on the Internet or in the post office, super market, convenience store, gas stations and kiosks.
1.6 How the calling card industry grew so quickly
There was a need of cheap and convenient communications services, calling cards fulfilled the requirement, therefore, phone card industry saw an exponential growth. The traditional phone services i.e. cellular phone, coin, and land lines, offer considerable high long distance rates as compare to Pre-paid phone cards and monthly billed calling cards. Further there are no time boundaries and no matter what time or day the calls are placed, charges remain constant. In United States the large phone companies used traditional channels to market their cards to their customers. Until 1996 the phone companies made no significant effort to sell their cards as they already had a thoroughly established and entrenched profitable market. New products and concepts were also hard to sell to a public who already had a system that worked.
It was the advertising industry and some small telecommunications companies first explored the power and "sellability" of the pre-paid card and before the big phone companies wiped the sleep out of their eyes the phone card industry exploded. A totally new advertising medium was created by the pre-paid card's because of their mass product, the ability to produce low denomination cards and relatively low cost. By printing a company name on a card or information commemorating a specific event, innovative telecom companies began marketing the cards as promotional items. Cards were sold as prizes or incentives and tourist souvenirs. They also became collector's items exactly like stamps and baseball cards due to their being run in limited editions.
1.7 How does calling cards looks like
International Calling card is a plastic card similar in size and shape of Credit card ( 1.1 and 1.2). It contains the access numbers from land line, mobile, and phone booth. It contains a unique PIN number which can be explored while you scratch the card. To make the phone calls need to dial the access number, then PIN number and after that country code, city code and the desired land line or mobile number.
These cards are available in the denomination of Pond 1.00, 2.00, 2.50, 3.00, 5.00, 10.00, and 20.00.
1.9 Types of Calling Cards
Calling cards can be divided into two categories. Type-A, which have hidden charges, i.e. daily charges, maintenance charges, etc, Suppose a customer buy a pond 5 card. When he start to use he will hear the amount and minutes available to use. It is interesting that the customer never get the announced minutes due to the hidden charges.
Type-B cards don't have any hidden charges, however their per minute charges are higher than the type-A cards, the customer get the exact minutes as announced.
Tariff vary from country to country as every country has its own telecom policy. The countries with good infrastructure and a free market economy offers low airtime charges i..e India, Pakistan, Europe, etc. The countries which have poor infrastructure because of wars or any other reasons offers very high prices for the airtime i.e. Somalia and Afghanistan. Countries with good infrastructure but tough government control also offer costly airtime i.e. Saudi Arabia, United Arab Emirates, Qatar, Bahrain, etc..
1.11. Generation and Distribution of Airtime
The policy of generation and distribution of air time vary from country to country. A good example is of India. Government of India owns the air time of the calls originate and terminate in India. The large companies called careers buy this air time from Government of India in bulk. These careers sell this bulk air time into pieces and bits to the calling card companies which offer this air time in the shape of calling cards to the end users. Calling cards are just a piece of paper. It is a complex communication system which provides backup to these cards..
1.12 How calling cards can be purchased
These cards can be purchased through various ways, the most popular way is Kiosk, and other sources include Newsagents, Superstores, Post Office, and Online.
1.13 Role of Distribution Channels and Retailers (particularly KIOSK)
Distributors have a significant role in this business. They have particular areas in the city of London as well as United Kingdom. However, some of the companies have their own sales force in addition to use these distribution channels.
Initially this business was carried out on cash on demand basis. Later on some of the companies, and distributors emerged on the scene, launched very attractive products on very low prices, spreaded their products in the market, collected the cash from the market and vanished. Their cards got blocked by the careers and people lost their money. Now days most of the business is carried out on credit basis, therefore, risk level is quit high. Lake of confidence is present between, the companies, distributors, and retailers, The companies hold the power to block the cards in case of non payment.
1.14 Major Market Players
There are lots of companies which are doing business in this field. In addition to this there are many individuals. The companies make __________ cards for these individuals. Following are some of the major market players of this industry:
i. Lycal Tel, the market leader with more than 100 products. According to the company every day 5 million customers enjoy Lyca mobile. This is the company, which has the ability to mold the market according to its desires.
ii. NowTel, this company don't have much products but they believe in quality and brand image, one of their product Talk Home is a popular product and have good demand in the market.
iii. First International, this company has a proven track record, its target market is Asians and Europeans. All other calling card companies rely only on the distributors, however, this is the only company which has its own sales team in addition to the distributors.
iv. Bangla Calling, This company target market is Asians.
v. I Cards, This company has a wide range of calling cards.
vi. Nomi Mobile, This company also has a wide range of calling cards, and has a SIM card as well.
vii. Vectone Mobile, This is one of the pioneering company in this field, however, due to some reasons the company suspended its operation in the market and have returned some two years back in this field. The company deals in calling cards and SIM cards simultaneously.
1.15 Advancement of Technology and other developments
As the advancement in technology is made, in 2006 the idea of international Prepaid SIM card was floated in the market by the company called IDT. IDT launched a very aggressive promotional campaign but at that time the calls rate via SIM were too high and it was a new product, therefore, the idea got flopped. After few months Voda Phone give sub-license to Lebara Mobile to launch International Prepaid SIM cards and simultaneously ________________ to Nomi Mobiles. Both the companies penetrate the market with their aggressive marketing strategies. Lebara Mobile is still in the market and making progress, however, Nomi Mobile did not perform well and struggling hard. In mid of 2007, Lyca Mobile, the sub-licensee of Orange launched its mobile with attractive promotions that this industry crossed a new mile stone. Its promotion was so powerful that Libara Mobile had to follow its foot steps. The company claims that more than 5 million customers enjoy its product every day. Recently the company has terminated its agreement with the Orange due to some financial problems and have launched a new product with the name of Lyca Plus in support of O2.
Vectone Mobile is another company which is the sub-licensee of T-Mobile. The call charges during the week days are almost equal to other companies but the company offer 1Penny per minute to any country from Friday night to Sunday night, terms and conditions applied.
Recently Carphone Warehouse has also entered in this business with the support of O2, and launched its product with the name of Talk Mobile SIM. Carphone Warehouse is offering its product on a very cheap price as compare to the other companies, but the backdrop of this company is non availability of top ups. The customer through away the SIM once used.
Similarly 3G has introduced free Skype service on its contract mobiles, through which free international calls can be made. According to the company the calls from skype through 3G are life time free. The limitation with this facility is that the receiver should have access to the internet either through its mobile or computer to run this application.
In summer 2009, Vodaphone abolished roaming charges for specific customers in particular countries of Europe for a particular time period. That made its customers easy to make International calls on the local rates subject to the SIM holder is in the specified countries.
At the moment Calling Card is the cheapest way to make International Calls while charges through International Prepaid SIM cards are 2-3 and in some cases more than 5 times higher then the International Prepaid Calling Cards. Currently mobile companies have to pay 4.7 Penny Mobile Termination Charges to the British Government. Telecom companies are struggling hard to pursue the Ofcom (British Telecom Regulatory Authority) to reduce the Mobile Termination Rates (MTRs) from 4.7 penny to 1 Penny. In case they succeeded in their efforts it will reduce the cost of mobile charges and the companies would be able to transfer this benefit to their customers.
These are significant developments and need to be studied thoroughly so that the future of calling card business be assessed.
1.16 Overview of Methodology
Research methodology will present the detailed idea about how the research will be conducted. This includes the nature of research whether it is quantitative research or qualitative research, research approach that is based on two types of research either pure research or applied research, research strategy that will be a general plan of how researcher will go and it contains clear objectives obtained from research questions specify the sources from the way of collecting data through sample selection and data collection methods.
Summary of the Chapter
In this chapter a brief history of calling cards in which innovation and growth has been discussed in this chapter. What are the price, how it can be purchased. How does it works, the system which provide back up to this product and major market players of the market has been discussed in detail. Miscellaneous development of technology in telecom sector have also been discussed.
Chapter 2: Literature Review
This chapter describes the academic literature framework used by the researcher. It starts by about brands, consumer behaviour, brand equity and finally ends by describing the various factors involved in building a successful brand.
The primary objective of this research is to assess the future of Prepaid International Calling Cards. The base of this research is developed on the theory of product life cycle and management of change and innovation. In this literature review different point of view of the authors will be provided.
2.1. Different Authors prespective on Innovation/change and Product Life Cycle
Change is a continues process, with the passage of time new ideas, new technology, new products are introduced,
There are three types of changes which are structure, technology and people. The major technological changes usually involve the introduction of new equipment, tools, or work methods, automation, or computerization. He says that there are two forces that can create the need for changes, internal forces and external forces. Market place affects the firms to adapt to changing consumer desires. Governmental laws and regulations are frequent imputes for changes. Economic changes affect the organizations i.e. recession. Technology is key forces of changes i.e CDs and iPod has taken place of cassette recorder. Similarly internal forces can also stimulate the need for change, Robins (2002).
Jones (2003) seconded Robins (2002) opinion he define technology is the skills, know-how, experience, body of scientific knowledge, tools, machines, computers, and equipment used in the design production, and distribution of goods and services. The rapid change in technology is a major factor of organizational innovation. He divide the technological changes into incremental and quantum changes. The changes which refines and gradually improves into existing technology is incremental. The fundamental change in the technology is called quantum change. Technological change is an opportunity for some one and a threat for other one. Technological change demands the managers to react quickly and adopt and apply new technologies to innovate products. The speed of technological change in an industry and the product life cycle decides the importance of innovation.
Griffin (2002) further adds into by saying that the final element of organizational change is innovation. In his words ‘Innovation is the managed effort of an organization to develop new products or services or new uses for existing products or services'. Innovation is important for the organizations because without new products or services organizations can not compete.
Ettlie (2006) explore another expect of change in his opinion normally people don't like change for various reasons; they are reluctant to take risk and interested to keep status quo. They resist change because the process of change causes uncertainty for the time being. He is of the opinion that innovation process has six stages, (a) Development in which organizations evaluates, modifies, and improve on a creative idea. (b) Application, when developed idea in design, manufacturing, or delivery of new products, services, or process. (c) Launch, when new products or services are launched to the marketplace. (d) Growth, when demand for new products or services grows. (e) Maturity, when other competing organizations have access to the idea and finally (f) Decline, when demand decreases and substitute innovation are developed and applied.
Jones (2002) says it is product life cycle which helps the manager to understand that the time for change is arrived. Product life cycle has four stages. Embryonic stage is where product is developed and launched and has yet to get widespread acceptance. In Growth stage customer is familiarized with the product therefore, demand start to increase gradually. Maturity is the stage when market demand is at its hieghest level. Decline is the stage when the products demand falls it occurs because product become technologically obsolescent and superced by a more advanced product.
Product Life Cycle Curve
Product Life Cycle Curve
Willmshurst (2002) identify another aspect of illustrate the organization has to decide how many products, of what type, at what price, and for what market it will provide. Four main product market strategies have been identified. Market Penetration, Market development, Product development and Diversification.
Though the least risky strategy is market penetration, however, with the passage of time product may become obsolete. This required the organization either to develop new product or search a new market for the existing product.
Following are the reasons for change in customers needs:
a. Rising income and expectations
b. Increasing education and sophistication
c. Changes in social habits and customs
f. World wide change
g. Business factors
He endorsed the views of Jones (2002) that every product have a limited life. This fact is commonly expressed in the form of the product life cycle. He divides the product life cycle into five stages:
a. Development phase
b. Growth phase
He is of the opinion that no product will go on earning profit indefinitely, therefore, succession plan is required. He identify three concepts through which the negative effects of product life cycle can counter balanced.
a. Product elimination
From the product life cycle concept, it follows that all products must be kept under review to assess their present and likely future contribution to profits. A common mistake of marketing management is to keep in the range products that have little or no prospect of contributing to profits.
b. Product portfolio matrix
Product portfolio matrix was developed by Boston Consulting Group. It is based on relative market share that is the sales of a product relative to the market leader. The other axis is market growth. This positions products into four categories, with start products being those with a big relative share of a high growth market. Problem children are those new launches that are in growing markets yet have a low relative market share.
c. Product modification
The basic product life cycle concept supposes a need for a planned succession of products. Often, howver, a better alternative is to modify the product in such a way as to extend its profitable life. Technology based products such as computers can achieve this by new microchips to deliver additional functions or add-ones such as extra memory capacity.
Kotler (2008) agree with the concept of product life cycle, however he further add that not all products follow this product life cycle. Some of the products are introduced but do not progress and die quickly, others stay in a mature stage for quit a long period. Some enter the decline stage and are then cycled back into the growth stage through strong promotion or repositioning. It is observed that a well managed brand could live forever, i.e. Coca-Cola, Reuters, HSBC, etc.
Klepper (1996) shows a broader prospect of product life cycle. In a new industry lot of firms offer different versions of the industry's product, in this phase rate of product innovation is high and market share change rapidly. Upon maturity of the industry exit overtake entries. A decline in rate of product innovation and diversity of competing versions happens. Increasing effort is devoted to improve the production process and market share stabilize, this evolutionary pattern has come to be known as Product Life Cycle. Design engineering, process engineering, product marketing, and production have been recurring elements in each stage of the product life cycle. In addition, end-of-life (EOL) issues must be addressed when the product approaches obsolescence. These elements vary in importance as the product or service moves through its life, thus creating waves of activity. The fact that they change in importance and magnitude requires that they be closely managed.
According to (Soumala, 2004), the traditional marketing view of four phases of product life cycles, i.e. development, growth, maturity and decline, focusing mainly on the sales volume, is only a narrow one. In other words he is of the opinion that the product life cycles can be more appropriately defined as the period of time that begins when a system is conceived and ends when the system is no longer available for use. Analogously, the life cycle of an individual product begins with the acquisition of raw materials and includes processing of bulk materials, production of engineering materials, manufacture, use, retirement, disassembly, and disposal of residuals that might have resulted in each stage of the life cycle. He includes the point of view of the supplier as well, because the supplier demands that the life cycle should not be confined the life cycle of an individual product, but some other issues such as after sales impacts, product upgrades, and an assessment of their perceived potential should also be considered.
2.2 Product Life Cycle Planning
The first two stages
1. The introduction stage is the time when intense marketing effort is created to establish a lucid identity as it promotes awareness. Many trial or impulse purchases will occur at this stage. The following stage will bring about consumer interest during the growth stage and the entry of competitors. Another characteristic of the growth stage is maintaining marketing plans and repeat customers.
The last two stages
2. The maturity stage is clear when competitors remove their products from the market, increases in sales become flat. Customer loyalty is vital at this time. The steady decline in sales precedes the decline stage. The effects of competition, difficult economic situations, new trends, etc, tend to explain the reason for the decline in sales.
How to implement them into marketing campaigns
Advertise according to the stage the product is in. Getting the word out is important in the introduction stage. However, it should not be in the same manner as the maturity stage. Maintaining customer relations will be more important at this stage.
2.1 Life Cycle and the Organizations
It is not only the products but it's the organizaiotns as well which have life cycle. A good example is of McDonald's Corporation, the company innovated fast food industry. Initially McDonals's offered hamburgers and French fries in a drive-in setting--which was a new concept. A tremendous growth was observed in the early expansion phaseofitslifecycle. When the company realized that the growth rateofsales for their basic hamburger began to slacken, it introduced newproducts, such as the Big Mac and the Egg McMuffin to enhance their growth. Later on upon maturity of life cycle of each new product, McDonald's continued to grow by adding newproductsand entering new markets. When the markets in the U.S. became saturated and competition started increasing, the company extended its operation to new overseas markets. Today, McDonald's has about 16,000 fast food restaurants throughout the world. It is in the late-expansion phaseofthelifecycle. (Gup, 1996)
2.2 Limitations of Product Life Cycle
Bovee (1992) further add that the Product Life Cycle model has some limitations, “it tends to apply more accurately to product categories than to indificudal products.” According to him PRODUCT LIFE CYCLE is unable to explain why individual products flourish or whiter. There are products which never reach to decline phase if managed well.
2.3 Validity of the “Product Life Cycle”
Although the “Product Life Cycle” concept has been widely discussed but has not been systematically tested as it model of sales behavior. This might be the result of a tendency no to take the concept of the model very seriously—a tendency which would be consistent with its known degree of validity. However, a lot of the authors have this concept as a basis for recommendation about the content of marketing programs at different stage of life cycle. Some of these writers have recommended about the level of advertising weight, nature of distribution, pricing strategy, and so forth, rest on the assumption that the product life cycle is largely independent of the firm's marketing activities.
2.3 Product Diffusion and the Life Cycle Concept
Bovee (1992) says that product diffusion starts when customers known as innovators, use a new product. The early adopters use it when the innovators show the product is viable. Once is product is used by early adaptors the majority of market come forward. The majority is divided into early majority and the late majority and finally laggards jump on the bandwagon.
Research on the product life cycle (PLC) has focused primarily on the role of diffusion. This study takes a broader theoretical perspective on the PLC by incorporating informational cascade and developing and testing many new hypothesis based on this theory. On average across 30 product categories, the author find that :
1. New consumer durables have a typical pattern of rapid growth of 45% per year over 8 years.
2. This period of growth is followed by a slowdown when sales decline by 15% and stay below those of the previous peak for 5 years.
3. Slow down occure at 34% population penetration and about 50% off ultimate market penetration.
4. Products with large sales increases at take off tend to have largest sales decline at slowdown.
5. leisure-enhancing products tend to have highly growth rates and shorter growth stages than nor leisure-enhancing products. Time-saving prodcts tend to have more growth rates and longer growth stages than non time saving products.
6. Lower probability of slowdown is associated with steeper price reductions, lowere penetration, and high economic growth.
7. A hazard model can provide reasonable predictions of the slowdown as early as the takeoff.
The Product life cycle (PLC) is a vitally important phenomena in Marketing for at least three reasons.
1. Pressure on Managers varies dramatically before and after the turning points in the life cycle. During the introduction (prior to take off) permission a bounce and managers are under increasing pressure to pull the plug on new product. During the growth stage (prior to slowdown) optimism a bounce and managers are eager to meet apparently in stable demand with fresh capacity and expended marketing. Predicting the turning points of takeoff and slowdown are essential to avoid premature withdrawal or excessive investments.
2. The level and growth of sales vary dramatically across stages of the life cycle. Managers need to know these changes to appropriately plan the corresponding levels of production inventory, sales staff, distribution, marketing and advertising.
3. Cost and Prices declined substantially over the life cycle especially during the early stages. In contrast, Consumers sensitivity to price increases over the stages of the life cycle. Managers must understand the sales patterns and change their strategy accordingly. Because of its critical impact on marketing strategy, the PLC has become a central enduring framework in marketing. Its intuitive appeal has separate to other disciplines where the concept is used routinely.
A Second stream exploratory research has sought to as certain the generalized ability of the PLC across different industries( e.g. Polli and Cook 1969, Tellis and Crawford 1981). While this research has identify some patterns of the PLC (e.g Tellis and Forenell 1988), It has neither explored all the queries for these patterns nor described characteristics.
2.4 The Product Life Cycle Analysis and Application Issues:
The concept of Product Life Cycle has an On one hand, the concept is attracts to the markets because of the intuitive logic of the product birth, growth, maturity, and decline sequence based on a biological analogy. It has the weightage when used as a systematic frame work for explaining market dynamics.
However, Product Life Cycle concept is vulnerable to critisim because of its simplicity, as it is used as a predictive model for anticipating when changes will occur and one stage will succeed another. George (1981) identify following five basic issues that must be addressed in any meaningful application of the concept.
* “How should the product-market be defined for the purpose of the life cycle analysis?
* What are the factors that determine the progress of the product through the stages of the life cycle?
* Can the present life cycle position of the product be unambiguously established?
* What is the potential for forecasting the key parameters, including the magnitude of sales, the duration of the stages, and the shape of the curve?
* What role should the product life cycle concept plan in the formulation of competitive strategy?”
2.4 Criticism on Product Life Cycle
Critics of Product Life Cycles are of the opinion that the concept of the Product Life Cycle is theoretically and practically based on the assertion that the PRODUCT LIFE CYCLE has broad explanatory power and is the ultimate tool for strategy building (Grantham, 1997).
Moon (2005) does not agree with the concept that the product life cycle--the idea that after introduction, products inevitably follow a course of growth, maturity, and decline. He is of the opinion that companies by repositioning the product become able to change customers mentality to categorize them. In doing so, they can shift products lodged in the maturity phase back--and catapult new products forward--into the growth phase.
He identified three positioning strategies that marketers use to shift consumers' thinking. Reverse positioning strips away "sacred" product attributes while adding new ones (JetBlue, for example, withheld the expected first-class seating and in-flight meals on its planes while offering surprising perks like leather seats and extra legroom). Breakaway positioning associates the product with a radically different category (Swatch chose not to associate itself with fine jewellery and instead entered the fashion accessory category). And stealth positioning acclimates leery consumers to a new offering by cloaking the product's true nature (Sony positioned its less-than-perfect household robot as a quirky pet). Clayton Christensen described how new, simple technologies can upend a market. In an analogous way, these positioning strategies can exploit the vulnerability of established categories to new positioning. A company can use these techniques to go on the offensive and transform a category by demolishing its traditional boundaries. Companies that disrupt a category through positioning create a lucrative place to ply their wares--and can leave category incumbents scrambling.
Lancaster (2002) has written that the “student of marketing should now be aware, management should not be constrained by dogmatic adherence to a theoretical course of events.” According to him PRODUCT LIFE CYCLE only provide a framework for planning rather than a rigid curve that must be followed. In his opinion the PRODUCT LIFE CYCLE can be extended and re-extended by finding new users.
Kotler (2009) says that PRODUCT LIFE CYCLE focuses on whats' happening to a particular product or brand rather than on what's happening to the overall market. “it yields a product-oriented picture rather than a market-oriented picture.” In his opinion firms should also take into account the development in markets, i.e. new needs, competitors, technology, and channels and must reposition the product accordingly.
Proctor (2000) says that the problem with PRODUCT LIFE CYCLE concept as a management tool is “that many products do not appear to perform in the market place as it suggests. They seem to bypass some stages while getting stuck at other stages. Moreover, they may even come into vogue again after a period of going out of fashion. These observations have brought about criticisms of the product life cycle as a useful planning tool.”
(Yuspeh 1976) describe that Product Life Cycle can be a description rather than predictor, therefore the marketer should have firm control over it. In his opinion "...clearly, the PRODUCT LIFE CYCLE is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand's life cycle."
Shortcomings of Product Life Cycle
The traditional product life cycle framework has little to say about the competitive processes that as accompany the evolution of a market. The major shortcomings of the product life cycle. This analysis is used to establish the requirements for a more comprehensive model that that incorporate both demand and supply side factor. How concepts from population ecology theory can be adapted to satisfy these requirements. With this dynamic theory, specific propositions can be made about changes in competitive structure and performance as the market evolves.
Few management concepts have been widely accepted or thoroughly criticized as the product life cycle. As criticisms of the conceptual deficiencies and strategic shortcomings mount, the basic notions of life cycles may be so eroded that little of value will remain. However, out of the criticism has come a clearer picture of the limitations of product life cycles and directions for needed improvement.
In addressing the shortcomings of the product life cycle (PLC). We first spell out the requirements for a comprehensive framework for understanding market evolution. This frame work is used to identify the area most in need of further development finally, we examine the potential of population ecology models of organizations for new insights into evolutionary processes in competitive product-markets.
A Framework for understanding Product-Market Evolution
The first requirement in building a framework for understanding market evolution is to specify the unit of analysis. Several candidates have been suggested industries (Porter 1980), product classes (Day 1981 Harrell and Taylor 1981), product forms and brands (Enis, La Garce, and Prell 1977, Rink and Swah 1979) – but each has its problems. Industries have been ruled out because they generally embrace several classes of noncompetitive products, each with its own pattern of evolution. For example, the major home appliance industry includes stoves, refrigerators, and dishwashers. At he other end of the spectrum , product forms or other brands are not appropriate because they tend to be close substitute for one another-such as front loading washing machine replacing top loading washing machines – reflecting competitive developments within life cycles rather than overall life cycle patterns.
To capture an overall life cycle pattern, the product class seems the most appropriate unit analysis. Thus level reflects the aggregate effects of interbrand rivalry and of extensions brought about through the emergence of new or improved product forms. The product class also corresponds most closely to the business unit level where competition between firms occurs most directly.
The next requirement for understanding market evolution is to incorporate the factors that influence the pattern of product class sales over the life cycle.
2.5 Characteristics of Product Life Cycle
As the product becomes obsolete because the introduction of new and improved products market potential start to decrease which is the most important characteristic of the product life cycle (Chi and Liu, 2001)
Another most important characteristic ofmost product life cycles is that - to all PRACTICAL intents and purposes - they do not exist! In most markets the majority of the leading (dominant) brands have held their position for at least two decades. The dominant product life cycle, that of the brand leaders which almost monopolise many markets, is therefore one of continuity (Yuspeh 1976).
2.6 Product Life Cycle and barriers to entry
As noted in the results section, in general, the industry and PRODUCT LIFE CYCLE stages both have influences on the importance of barriers to entry for deterring entry of new competition. When one considers industry as proxy for the PRODUCT LIFE CYCLE, the argument that the height of barriers may indeed differs in different stages of the PRODUCT LIFE CYCLE becomes stronger. The influence of barriers to entry, however, is not as strong for each industry and PRODUCT LIFE CYCLE stage as expected. In fact, for some barriers, the influence is weak or non-existent. The first factor, incumbent structural advantage as barriers to entry does not vary by industry or by PRODUCT LIFE CYCLE stages meaning that this factor is not likely to influence market entrants differently in different stages of the product life cycle or in the four different industries selected in this research. Some of the barriers that differ among the industries and among four stages of the PRODUCT LIFE CYCLE are somewhat unique to industry and PRODUCT LIFE CYCLE stages. This finding which is consistent with previous research indicates that both industry and PRODUCT LIFE CYCLE stages should be utilized as contingency factors in market entry strategy formulation, including the mode and timing of entry (see Kerin, Varadarajan and Peterson, 1992). Two barriers, the capital requirement to enter a market and the amount of sunk costs involved in entering a market have the highest ratings in terms of importance for deterring market entry. These two barriers are parts of the third factor, market entrant financial investment. The factor itself also has the highest rating (mean53.71) compared to the second factor (mean53.38), incumbent market strength, and the first factor (mean52.91), incumbent structural advantage. This higher rating for market entrant financial investment is also consistent with earlier research that capital investment is a major barrier to entry and exit (Karakaya, 2000). It is also clear that finances required for capital expenditures and competitiveness are important determinants of market entry decisions for potential market entrants.
2.7 Product Life Cycle Management
In the past decade, product development systems have significantly changed due to globalization and technological innovation. Companies are now increasingly focusing on business globalization and collaboration with technology partners across the product lifecycle . As the people, departments, and partners involved in product development tend to be geographically dispersed, there are increasing demands to globally corporate during the design phase and outsource manufacturing processes . In a significant change from 20 years ago when design and manufacturing automation (e.g. computer-aided design (CAD) and computer-aided manufacturing (CAM)) was the major driver to improve product development processes, nowadays, information management and integration throughout a product lifecycle are the key issues that need to be addressed if companies are to succeed. Product lifecycle management (PLM) is the most important systematic strategy and enabling technique to realize this emerging paradigm shift in the manufacturing industry. PLM is a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across an extended enterprise. The approach is applied from concept to the end of life and it integrates people, processes, business systems, and information . It takes a system perspective to facilitate the efficient use, dissemination, creation, and change of product- related information through representations that efficiently capture ‘product semantics' to optimize business processes and system integrations spanning multiple phases of the product lifecycle (Zheng, 2008).
Different point of view of authors on change and innovation, and Product Life Cycle has been discussed in this chapter.
There is a section of marketers who have argued that like humans there is a Product Life Cycle consist of four stages Development, Growth, Maturity, and Decline.
Another group of authors further add that this Product Life Cycle doesn't end at decline but can be extended by modification in product.
The characteristics, limitations, and criticism on Product Life Cycle has also been discussed in this chapter.
Some of the authors do not agree that there Product Life Cycle exist. The researcher agree with the second type of authors, that the Product Life Cycle exist and can be extended through modification in product in some cases.
Chapter 3: Research Methodology
The chapter begins by stating the research approach and the research philosophy followed by the researcher. It then goes on to describe the data collection methodology used for the purpose of this dissertation.
3.1 Research Philosophy:
The research philosophy relates to the nature and development of knowledge. The research philosophy followed impacts important assumptions which form the base of the research strategy and hence reflect the researcher's views of the world. The researcher's ideas on the relationship between knowledge and the procedure by which it is enhanced are regulated by the philosophy adopted. The research process can be described from three perspectives: positivism, realism and interpretivism (Saunders et al., 2007).
According to Bryman & bell (2003), “Positivism is an epistemological position that advocates the application of the methods of the natural sciences to the study of social reality and beyond”. That is, the researcher adopts the existing theory of a natural scientist to develop hypotheses. The assumption underlying this method is that: the subject of the research is neither affected by, nor affects the researcher, who is hence independent. (Remenyi et al. as cited in Saunders et al., 2007)
Interpretivism is the contrasting philosophical theory to positivism. The interpretivism epistemology involves the researcher immersing in the subjects' social environment to view and understand their perspective. Interpretivism thus has a more subjective view and necessitates the understanding of the differences between people in various social roles (Chisnell, 1992). The research is thus conducted amongst the people rather than objects. It can be argued that the interpretivist epistemology involving the researcher understanding the subjects' point of view is a highly appropriate technique in management and business research, particularly in organisational behaviour, marketing and human resource management.
The third epistemological position is realism: it pertains to scientific enquiry and like positivism; it takes an objective external view in a social framework (Saunders et al., 2007). This philosophy talks about reality as inferred by the senses: it is thus objective and therefore talks about the objects as existing independently of the people (human mind).
According to Saunders et al., 2007, deductive approach is affected to a greater extent by positivistic philosophy. This dissertation is thus based on a predominantly positivistic research philosophy with traces of interpretivism. Thus even though the research was independent of me yet unlike positivism, I was neither affecting nor was affected by the research. Through personal interview based surveys, observations were made regarding the awareness of Fellowes brand and the consumers' buying behaviour with respect to office cleaning products. However, the survey format is such (personal interviews format: which involves the researcher framing the questions to ask and interpreting the respondents' answers); that it is difficult to ascertain that all responses will be interpreted by the researcher with machine-like consistency.
3.2. Research classification
Research can be classified from three perspectives
1. Application of the research study.
2. Objectives in the undertaking the research.
3. Inquiry mode employed.
These three classifications are not mutually exclusive that is, a research study classified from the view point of ‘application can also be classified from the perspectives of ‘Objectives and ‘inquiry mode employed'. For example a research project may be classified as pure or applied research (from the perspective of application) as descriptive co relational, clarifying or examining (from the perspective of objectives) and as qualitative or quantitative (from the perspective of the inquiry mode employed).
3.2. My Research Approach
If you examine a research endeavor from the perspective of its application there are two broad categories
a. Pure Research
b. Applied Research
As far as my research is concerned I am conducting an applied research as most of the research in the social sciences is applied. In other words the research techniques, procedures and methods that form the body of research methodology are applied to the collection of information about various aspects of a situation, issue, problem or phenomenon like product life cycle of International Prepaid Calling cards so that information gathered can be used in other ways such as for policy, formulation, administration and the enhancement of understanding of a phenomenon.
My study classified as descriptive research attempts to describe systematically a situation, problem, phenomenon, service or program, in this case the product life cycle of International prepaid calling cards and the introduction of International pay as you go International Prepaid SIM cards. Descriptive research may attempt to evaluate that is the International prepaid calling cards are at the decline stage of the product life cycle and how much market share would the International pay as you go International Prepaid SIM cards will capture. The main purpose of such studies is to describe what is prevalent with respect to the issue / problem under study.
(C) Inquiry Mode
The third perspective in our typology of research concerns the process adopted to find answers your research questions. Broadly, there are two approaches to inquiry
a) The Structured approach (Quantitative Approach)
b) The Unstructured approach (Qualitative Approach)
The Structured approach to inquiry is usually classified as quantitative research and unstructured as qualitative research. In the Structured approach everything that forms the research process objectives, design, sample and the questions that you plan to ask of respondents is predetermined. The unstructured approach, by contrast, allows flexibility in all these aspects of the process. The unstructured approach is more appropriate to determine the extent of a problem, issue or phenomenon; the unstructured, to explore its nature. Both approaches have their place in research. This research is at the structured end of continuum.
3.3. Nature of Research
There are two types of research approaches available for a researcher and these are:
3.3.1 The Quantitative Approach
3.3.2 The Qualitative Approach (Denzin & Lincoln, 1994)
Both approaches have their own strengths and weaknesses and neither one of the approaches can be proved better than the other one. Therefore, the best research method to use for a study mainly depends on that study's purpose and accompanying research questions (Yin, 1994).
3.3.1 Quantitative Research Approach
Quantitative research approach is based on the development of testable hypotheses and theory which can be generalized across settings. Quantitative investigations tend to measure “how often” or “how much”. This approach allows generalization of conclusions and flexibility in the treatment of data, in terms of comparative analysis, statistical analyses and repeatability of data collection in order to verify reliability (Amaratunga et Al., 2002). Furthermore, quantitative approach is one in which the investigator primarily uses post positivist claims for developing knowledge employs strategies of inquiry such as experiments and surveys, and collects data on predetermined instruments that yield statistical data (Creswell 2003). Subjects included in the study are selected at random as it is desirable to reduce error and to cancel bias.
The sample of subject is drawn to reflect the population (Newman & Benz, 1998). These procedures are deductive in nature, contributing to the scientific knowledge base by theory testing. This is the nature of quantitative methodology because true experimental designs require tightly controlled conditions; the richness and depth of meaning for participant may be sacrificed. As a validity concern, this may be a limitation of quantitative designs (Newman & Benz, 1998). Hence, quantitative research places emphasis on methodology, procedure and statistical measures of validity (Denzin & Lincoln, 1994).
3.3.2 Qualitative Research Approach
Qualitative approach is one in which the inquirer often makes knowledge claims based primarily on constructive perspective, or advocacy/participatory perspective, or both Qualitative research designs are typically not intended to prove or test a theory, and it is more likely that the theory will emerge once the data are approach (an inductive approach rather than a traditional deductive approach) It uses strategies of inquiry such as narratives, phenomenology, grounded theory, or case studies. The researcher collects open-ended, emerging data with the primary intent of developing themes from the data (Creswell, 2003). Qualitative research requires strong contact with real situation, which is usually reflecting the everyday life of individuals, societies, groups or organizations (Miles & Huberman, 1994).
According to Amaratunga et al., (2002), this type of research has few favourable features: this type of studies allows revealing of what the “real life” is by studying events occurring in natural settings; the information gathered through qualitative research is complete and rich and has potential to reveal complexity and finally this type of studies are quite flexible in nature. Furthermore, qualitative approach is found appropriate for discovery, exploring a new area, developing hypotheses and qualitative data are useful when “one needs to supplement, validate, explain, illuminate or reinterpret quantitative data gathered from the same setting” (ibid). As a result, qualitative research methods are associated with “face-to-face” contact with people in the research setting, together with verbal data and observations. Qualitative data can be collected in a number of forms such as the collection of evidence through interviews, which may be recorded and later transcribed. Another source where data can be sourced from is through filed notes, which describe observed events (Bryman, 1993). From the above discussions, qualitative research approach is found to be appropriate for this study. Qualitative approach will gives a deeper and detailed understanding of this research study as well.
In this research key research technique was used
1. Survey using questionnaire
Survey method will be employed for this research which is based upon the use of structured questionnaires given to a sample of customer. The sampling technique chooses is non random/non probability sampling designs because this is used when the number of elements in a population is either unknown or cannot be individually identified. In such situations the selection is dependent upon other considerations.
According to (Malhotra, 2005) Quota sampling is one of non probability sampling method where by the selection of sampling units is dependent on the judgment of researcher and not on the application of probability theory. In addition to convenience, it provides some guidelines by some visible characteristics such as Gender, Age (Kumar, 2005). It is the two stage judgment sampling method, the first stage consists of developing quotas of population and in the second stage the sampling elements are selected based on judgment. (Malhotra, (2005).
3.5. Sample Design
An important part of any research project is to collect the existing sources of information for information and associated research to enhance yours research. According to Ticehurst & Veal (2003) new information collected as part of a research project is called primary data and which is obtained in an uncontrolled situation by asking questions or making observations, and experimental data, which is obtained in a controlled situation by making experiments (Hussey. Hussey, 1997).
My survey in this research will comprise of approximately 50 questionnaires survey for the end users of International Prepaid Calling cards and International pay as you go SIM cards in the city of London. The reason behind the selection of particular city is London is multicultural city, where people of different ethnicity, culture, age group and living standard make international calls.
A fully structured questionnaire will be used to collect information, both prompted and unprompted. In order to measure how many people use International Prepaid Calling Cards, how many of them are satisfied with its service,
In this chapter different research philosopies, i.e. Realisim, Positivism, Interpretivism have been discussed. The researcher's approach of research has been given in detail. Objective has been set and different approaches i.e. Quantative and Qualitative research has been discussed. The researcher has selected quantative approach and the reason has been argued for the selection. The key research technique used in this research is survey using questionnaire, and sample design is also been discussed.
Chapter 4: Data Analysis
In this chapter, the responses collected from the survey are calculated and analyzed by the researcher.
As the dissertation aimed to evaluate the impact of new advancement of technology in telecom sector, the researcher has identified prepaid International SIM cards as the main threat for the business of international prepaid calling cards. A survey based on two questioners, A for the customers and B for retailers was carried out in order to look into the market and get first hand information on their choice, reasons, and to determine the life cycle stage of International Prepaid Calling Cards...
In the subsequent discussion the responses to each question was analyzed and interpreted individually. A sample size of 25 potential consumers was polled for Questionnaire-A and 25 retailers for Questionnaire-B. For every question, each response-category's percentage occurrence was calculated by counting the number of such responses. The responses were interpreted thus.
The outcome of first questionnaire is as under
Q.1. What is your age?
60-69 or above
44% of the users belong to the age group of 18-29 while only 4% are 60-69. This is very interesting, it shows that the young age people are frequent users of the under discussion mode of communications.
Q.2. What is your gender
This question will provide the gender description of the customers. There is a hypothesis that female talk more than man, however, the survey revealed that more than half of the customers are of male gender.
Q.3 What do you do?
This will help to understand to the different spending groups prefer which type of products. Most of the long distance callers are either employed or students, the proportion of other categories is visibly low.
Q.4 Which purpose you make the International Calls?
Majority of the users of either SIM or International Prepaid Calling Cards make the calls either for social or other purposes, only 20% customers use it for business purpose
Q.5 What is your cultural background?
This is an important question which will help to understand the cultural background of the customers and their preferences. This will give a better understanding to the policy makers to identify the target markets. 44% of the callers are the Asian community and the second largest users are Europeans.
Q-6 How do you make your International phone calls?
International Prepaid Calling Cards
This question was asked to know that which mode of communications is popular. It should be observed that though International Prepaid SIM cards were launched some 2 years ago but in this short span of time its users are equal to the users of International Prepaid Calling Cards. This indicates the popularity of this new product
Q.7 Rank below that described the satisfaction level of the International Prepaid Calling Cards?
The most important question which shows that 68% of the users of International Prepaid Calling Cards are either very unsatisfied of unsatisfied. Such a high percentage of unsatisfied users will lead them to use other modes of communications and ultimately the demand of International Prepaid Calling Cards will fall.
Q.8 If you are unsatisfied with International Prepaid Calling Cards why?
Cards get blocked
An overwhelming majority of customers are unsatisfied with the International Prepaid Calling Cards due to the deduction of minutes. i.e. a card announce 500 minutes the users hardly able to get 100-150 minutes because of hidden daily charges, maintenance charges, etc. There are few cards which provides pure minutes, however, they are not that much attractive.
Q.9 Do you prefer SIM on International Prepaid Calling Cards?
Majority of the customers preferring International Prepaid SIM cards on the International Prepaid Calling Cards the reasons are discussed in Question No.9.
Q.10 Why you prefer SIM on International Prepaid Calling Cards?
28% people use SIM as its convenient, you just put it in the mobile and start making calls any where in the world, however, for International Prepaid Calling Cards you need to dial a pin no and then the required destination number. 14% use it because of good reception or connectivity while 12% use it due to its good quality voice.
Q.11 How much you spend on telecommunication per month?
₤1 to ₤5
₤6 to ₤10
₤11 to ₤15
₤16 to ₤20 or above
48% of the customers spend in between 11-15 and 32% from 16-20 both of them make the calls through other mode of communications except International Prepaid Calling Cards.
12. Which mobile service provider would you like to use?
Lyca mobile is the most favorite company to make international calls followed by Libara mobile. Third popular company is 3G, the main reason of its popularity is it offers free international calls through skype for its contract customers.
13. Rank below that describes the satisfaction level of the mobile service provider you currently using?
Q.14 How would you like to buy your SIM top-up vouchers. From:
52% of the customers buy the products from Kiosk, which shows that the Kiosk have an important role in the sales of telecom products. Second priority is Newsagents. It is surprising that in this age of technology only 4% of the customers buy these products through only. This area needs further research to evaluate the reasons.
Survey-B for Retailers
The second survey was conducted among the retailers to understand the sales growth of both the products.
Q.1. Do you do business through?
The purpose of this question is to understand that which type of business have kind of views and opinions on the telecom products.
Q.2 Do you use pay pal or any other similar sources?
Pay pal and similar kind of companies are trying to establish their network in replacement of conventional distribution channels.
Q.3 Is the sales of International Prepaid Calling Cards increasing/decreasing
68% of the retailers have replied that the sale of International Prepaid Calling Cards is decreasing which is a significant and alarming situation for the calling card companies. Only 4% of the retailers said that their sales is increasing, however they recently had started the business so it was not because of International Prepaid Calling Cards popularity but they are establishing their business.
Q.4 Is the sale of International Prepaid SIM cards increasing/decreasing?
88% retailers replied that the sale of International Prepaid SIM cards is increasing.
Q.5 Which of the following offer good margin of profit?
International Prepaid Calling Cards
Majority of the retailers replied that there is a good margin of profit in the International Prepaid SIM cards as compare to the International Prepaid Calling Cards.
Q.6 Which of the following you receives more complaints?
International Prepaid Calling Cards
International Prepaid SIM cards
92% of the retailers received complain in International Prepaid Calling Cards and only 8% receive from International Prepaid SIM cards.
Q.7 Do the calling card companies entertain complaints?
58% of the complaints are being entertained occasionally while only 20% are entertained properly
Q.8 Do the calling card companies give you credit?
100% International Prepaid Calling Cards companies provide credit to the retailers to do business which is the only plus point.
Q.9 Do the Mobile companies give you credit?
96% retailers do not receive any credit from the mobile companies. Only 4% get the credit which is provided by the middle man not the mobile companies.
Summary of Data Analysis Questionnaire-A
It is very interesting that most of the long distance callers who made calls either through International Prepaid Calling Cards or International Prepaid SIM cards are of age group of 18-29, more than half of the callers make the calls for social purposes, which means that the business community prefer to use some other modes of communication rather then these two. An overwhelming proportion of the customers are either employed or students, either of any other ethnic group except Caucasians, which shows that the target markets are of foreign students or immigrants who make the calls frequently. The users of International Prepaid Calling Cards and International Prepaid SIM cards are right now equal, but it should be noted that SIM was introduced in two years. Almost all the customers are unsatisfied at different level on one pretext or other, which the companies often do not entertain. Majority of the customers was of the opinion that they preface SIM on International Prepaid Calling Cards. The customers using International Prepaid SIM cards are mostly satisfied with the service.
Summary of survey of Questionnaire-B
The focus of this survey was retailers either shop keepers or kiosk owners. It revealed that though PayPal and other online resources are availed but they are not popular and still the traditional destitution channels are intact. Majority of the retailers responded that the sale of International Prepaid Calling Cards is declining sharply and the sale of International Prepaid SIM cards is increasing day by day. The profit margin is quit attractive in International Prepaid SIM cards in comparison to International Prepaid Calling Cards. Retailers hardly receive any complaints from the customers of International Prepaid SIM cards, while International Prepaid Calling Cards customers complains a lot which are passed on to the companies, unfortunately these companies pay no heat to these complaints. The only attractive in International Prepaid Calling Cards for retailers is the credit policy of these companies.
Chapter 5- Conclusion and Learning
This chapter concludes the dissertation by giving a summary of the recommendations and the personal learning learnt by the researcher during the project.
After analyzing the data it can thus be concluded that the International Prepaid Calling Cards are at the decline stage of their product life cycle. The base of this conclusion is sharp decline in the sales of International Calling Cards and fast growth in the sales of International Prepaid International Prepaid SIM cards. The reasons of being decline are as follows:
4. The product has become obsolete as other mode of communications are now available though they are right now a little bit costly but with the passage of time as the usage of the new products will increase their prices will obviously go down. Further free international calls are available through Skype via 3G network but as soon as the telecom companies move to 3G technology from 2G technology rest of the companies will be able to offer similar facilities.
5. Calling cards are a bit hazardous to use, customer either need a contract mobile or a land line to make the calls. Though calls can be make via public phone booths but the charges are 5 times more than the normal charges.
6. Calling cards have some hidden charges due to which customers do not get the minutes as announced and described by the companies in their promotional material.
7. Because this business is 100% on credit basis, due to non payment from either retailers, distributors, or companies cards get blocked, which normally do not get replaced by the sellers.
8. Retailers have good margin of profit on the International Prepaid International Prepaid SIM cards as compare to Calling cards which attract them to promote International Prepaid International Prepaid SIM cards.
Reasons of growth in International Prepaid International Prepaid SIM cards
A rapid growth in the sales of International Prepaid SIM cards have been observed as per the survey carried out. The reasons behind this trend are as follows?
1. SIM is easy to use, just put in a mobile phone and its ready to make International calls which is much easier compare to International Calling cards.
2. Calls are free through Skype via 3G, however, it is necessary that the recipient of the calls should have internet facility either on their mobile phone or the computer.
3. There are no hidden charges, so the customer know that he will get the exact minutes as announced.
To increase its product life cycle the companies required to modify this product keeping in mind the above grievances of the customers. Some new features may also been introduced which will increase its product life cycle:
1. Dual connectivity which means that calls can be made either from country-A to country-B or country-|B to country-A will make a positive impact on the users of the calling cards. This will enable the customers to send the PIN no to the native country from where calls can be made at the local rate. This strategy was successfully adopted by a company which is no more in the business due to some other reasons.
2. At the moment customers have to pay 5-7 times higher than the normal rates if they use calling cards from the public telephone booths. Decrease in these rates will attract the customers to use this product as it will become attractive for those customers who don't have land line or mobile phones.
3. Companies can extend their operations into the regions where the International Calls are still very expensive due to monopoly or tough government regulations i.e. Middle East countries.
5.3 Personal Learning:
This project has taught me a lot of things:
1) First and the foremost, this project has increased my knowledge about brands, branding and consumer behaviour.
2) It has taught me how to analyse a situation and suggest remedies.
3) The projects immense scope necessitated the viewing of the problem from a number of perspectives hence ensuring my comprehensive understanding of all facets of management studies.
4) Additionally, I enjoyed the numerous opportunities to interact with the top management of the firm. Through these interactive sessions, apart from seeing the top level view taken by the management; I also enhanced my confidence and the ability to ask the right questions: skills that are indispensable in marketing, which I am planning to pursue as my future career choice.
5) My research experience in this product helped me better understand the methodology adopted and provided me with insights on possible constraints, problems that could occur and devising ways to overcome them.
6) This project helped me in knowing the various factors which should be kept in mind during the journey of making a product from ‘a brand' to ‘the brand'.
7) Brand management has always been my top career interest. The extensive reading on the subject of brand management has developed my knowledge and skills about this interested topic and has increased my confidence. I now believe that I shall be able to manage brands more effectively.
This research endeavour and consequently the MBA programme have thus provided me with the necessary knowledge, confidence and skills to embark on the career of my choice.
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Questionnaire FOR CUSTOMERS
This questionnaire is developed in order to find out that which mode of international calls is popular and why.
What is Your age?
60-69 or above
What is your gender?
What do you do?
Which purpose you make International Calling Calls?
What is your cultural background?
How do you make your International phone calls?
Rank below that describes the satisfaction level of the Calling Cards?
If you are unsatisfied with Calling Cards why?
Cards get blocked
Do you prefer SIM on Calling Cards
Why you prefere SIM on Calling Cards?
How much you spend on telecommunication per month?
e.g. on local and international phone using your mobile.
₤1 to ₤5
₤6 to ₤10
₤11 to ₤15
₤16 to ₤20 or above
Which mobile service provider would you like to use?
Rank below that describes the satisfaction level of the mobile service provider you currently using?
14* How would you like to buy your SIM top-up vouchers. From:
High Street Stall
Questionnaire FOR RETAILERS
This questionnaire is developed in order to find out that which mode of international calls is popular and why.
1. Do you do business through
a. Shop b. Kiosk
2. Do you use Pay pal or any other similar source
a. Yes b. No
3. Is the sales of calling cards increasing/decreasing
a. Increasing b. Decreasing c. Stable
4. Is the sales of International Prepaid SIM cards increasing/decreasing
a. Increasing b. Decreasing c. Stable.
5. Which of the following offer good margin of profit?
a. Calling Cards b. International Prepaid SIM cards
6. Which of the following you receives more complains?
a. Calling Cards b. International Prepaid SIM cards
7. Does the Calling Card companies entertain complains?
a. Yes b. No c. Occasionally
8. Do the Calling Cards companies give you credit?
a. Yes b. No
9. Do the Mobile companies give you credit?
a. Yes b. No
10. Do you think that you had good sales and made good money when there was only Calling cards were available?
a. Yes b. No
11. What improvement in calling cards should be made to increase its sales?