Kalpana Heliya
Par 100 posts (V.I.P)
Casting The Celebrity Magic
In 2002, the leading Indian telecommunications company, Bharti Cellular Limited (Bharti) signed the famous cricket player Saurav Ganguly and leading movie stars, Madhavan and Kareena Kapoor as endorsers for its brand, Airtel Magic (pre-paid cellular card). Its objective was to create the highest recall for Magic in the pre-paid cellular telephony segment by cashing in on the two biggest passions of India - movies and cricket. Bharti also changed the tagline for Magic from 'You Can Do Magic' to 'Magic Hai To Mumkin Hai' (If there is Magic, it's possible). The move attracted considerable media attention, as it was unusual for a company to spend so lavishly to promote a single brand.
In October 2002, Bharti launched a television commercial (TVC), featuring Shah Rukh Khan (leading actor, already endorsing Magic since a couple of years) and Kareena Kapoor. The TVC, developed by one of India's leading advertising agencies, Percept Advertising, was the first of the series of four TVCs for Magic's new campaign.
According to Bharti, the TVCs aimed at attracting young adults in SEC B and C categories of the Indian market1.
Commenting on the new developments, Hemant Sachdev (Hemant), Director, Marketing and Corporate Communications, Bharti Enterprises, said, "The aim is to be relevant to the masses and make all their dreams, hopes and desires come true instantly, at Rs 3002 per month."
However, industry observers felt that these actions were necessiated by the intensifying competition in the pre-paid cellular card segment in India in the early 21st century (Refer Exhibit I for a note on cellular telephony).
Many new players (national as well as international) had entered the segment and the competition had become quite severe. Besides Magic, the major players in the pre-paid card segment in 2002 included Idea (Tata, AT&T and Birla Group), Speed (Essar), Hutch (Hutchison), Wings (RPG), Cellsuvidha (Fascel) and Yes (Usha Martin). In October 2002, Magic led the market, with 30% of the market share. Bharti claimed that its strategies were one of the most ambitious experiments ever in the Indian pre-paid cellular telephony market. However, given the increasing competitive pressure, doubts were being expressed regarding the ability of Bharti's marketing initiatives to help Magic retain its 'Magic' in the future.
Background Note
Cellular telephony was introduced in India during the early 1990s. At that time, there were only two major private players, Bharti (Airtel) and Essar (Essar) and both these companies offered only post-paid services. Initially, the cellular services market registered limited growth.
This was primarily due to the high tariff rates charged by the companies (about Rs 16 per minute for outgoing calls). Indians who were used to paying much lesser amounts (Rs 1.20 for 3 minutes) for landline telephone calls found these to be very expensive.
However, as there were only two players, a monopoly regime prevailed. The tariff rates as well as the prices of cellular phone handsets (instrument) available in that period continued to remain high. Hence, cellular phone services during that period were regarded as a luxury and companies mostly targeted the elite segment of the society. Moreover, these services were mostly restricted to the metros.
Other factors such as lack of awareness among people, lack of infrastructural facilities, low standard of living, and government regulations were also responsible for the slow growth of cellular phone services in India...
All Set to Create Magic
In early 2002, Magic decided to revamp its marketing strategies. There were plans to launch the service in newer areas and bring about changes in pricing, positioning and advertising. The company also planned to make new value additions by providing better services.
As a first step in this direction, Magic was brought under Bharti's umbrella brand, Airtel, and was renamed Airtel Magic. Company sources said that the move was aimed at banking on the strengths of Airtel as a brand.
While the earlier brand strategy aimed at customers interested in using mobile services, the new strategy was aimed at attracting even non-interested customers by appealing to their needs and requirements (offering them a value they did not perceive earlier).
In line with this strategy, Magic was positioned as a friendly, mass-market brand...
The Industry Strikes Back
Bharti's aggressive marketing, advertising and promotional efforts led other players to focus on their marketing efforts as well (Refer Exhibit IV for competition details). Companies resorted to price reductions, new service additions, value additions and focused advertising and promotional campaigns... The Future - Far From Magical
While the players in the cellular market in India were focussing heavily on the pre-paid card segment due to its high potential, some analysts expressed doubts about the profitability of this segment in the long run. They said that low profit margins from the pre-paid segment (on account of low tariff and high advertising, promotional and customer service costs) could lead to losses in the long run. As the fierce competition would make price-cuts and heavy investments in advertising and promotions inevitable, this seemed quite possible...
source: icmrindia.org
In 2002, the leading Indian telecommunications company, Bharti Cellular Limited (Bharti) signed the famous cricket player Saurav Ganguly and leading movie stars, Madhavan and Kareena Kapoor as endorsers for its brand, Airtel Magic (pre-paid cellular card). Its objective was to create the highest recall for Magic in the pre-paid cellular telephony segment by cashing in on the two biggest passions of India - movies and cricket. Bharti also changed the tagline for Magic from 'You Can Do Magic' to 'Magic Hai To Mumkin Hai' (If there is Magic, it's possible). The move attracted considerable media attention, as it was unusual for a company to spend so lavishly to promote a single brand.
In October 2002, Bharti launched a television commercial (TVC), featuring Shah Rukh Khan (leading actor, already endorsing Magic since a couple of years) and Kareena Kapoor. The TVC, developed by one of India's leading advertising agencies, Percept Advertising, was the first of the series of four TVCs for Magic's new campaign.
According to Bharti, the TVCs aimed at attracting young adults in SEC B and C categories of the Indian market1.
Commenting on the new developments, Hemant Sachdev (Hemant), Director, Marketing and Corporate Communications, Bharti Enterprises, said, "The aim is to be relevant to the masses and make all their dreams, hopes and desires come true instantly, at Rs 3002 per month."
However, industry observers felt that these actions were necessiated by the intensifying competition in the pre-paid cellular card segment in India in the early 21st century (Refer Exhibit I for a note on cellular telephony).
Many new players (national as well as international) had entered the segment and the competition had become quite severe. Besides Magic, the major players in the pre-paid card segment in 2002 included Idea (Tata, AT&T and Birla Group), Speed (Essar), Hutch (Hutchison), Wings (RPG), Cellsuvidha (Fascel) and Yes (Usha Martin). In October 2002, Magic led the market, with 30% of the market share. Bharti claimed that its strategies were one of the most ambitious experiments ever in the Indian pre-paid cellular telephony market. However, given the increasing competitive pressure, doubts were being expressed regarding the ability of Bharti's marketing initiatives to help Magic retain its 'Magic' in the future.
Background Note
Cellular telephony was introduced in India during the early 1990s. At that time, there were only two major private players, Bharti (Airtel) and Essar (Essar) and both these companies offered only post-paid services. Initially, the cellular services market registered limited growth.
This was primarily due to the high tariff rates charged by the companies (about Rs 16 per minute for outgoing calls). Indians who were used to paying much lesser amounts (Rs 1.20 for 3 minutes) for landline telephone calls found these to be very expensive.
However, as there were only two players, a monopoly regime prevailed. The tariff rates as well as the prices of cellular phone handsets (instrument) available in that period continued to remain high. Hence, cellular phone services during that period were regarded as a luxury and companies mostly targeted the elite segment of the society. Moreover, these services were mostly restricted to the metros.
Other factors such as lack of awareness among people, lack of infrastructural facilities, low standard of living, and government regulations were also responsible for the slow growth of cellular phone services in India...
All Set to Create Magic
In early 2002, Magic decided to revamp its marketing strategies. There were plans to launch the service in newer areas and bring about changes in pricing, positioning and advertising. The company also planned to make new value additions by providing better services.
As a first step in this direction, Magic was brought under Bharti's umbrella brand, Airtel, and was renamed Airtel Magic. Company sources said that the move was aimed at banking on the strengths of Airtel as a brand.
While the earlier brand strategy aimed at customers interested in using mobile services, the new strategy was aimed at attracting even non-interested customers by appealing to their needs and requirements (offering them a value they did not perceive earlier).
In line with this strategy, Magic was positioned as a friendly, mass-market brand...
The Industry Strikes Back
Bharti's aggressive marketing, advertising and promotional efforts led other players to focus on their marketing efforts as well (Refer Exhibit IV for competition details). Companies resorted to price reductions, new service additions, value additions and focused advertising and promotional campaigns... The Future - Far From Magical
While the players in the cellular market in India were focussing heavily on the pre-paid card segment due to its high potential, some analysts expressed doubts about the profitability of this segment in the long run. They said that low profit margins from the pre-paid segment (on account of low tariff and high advertising, promotional and customer service costs) could lead to losses in the long run. As the fierce competition would make price-cuts and heavy investments in advertising and promotions inevitable, this seemed quite possible...
source: icmrindia.org