Brandstand Airtel Vs Vodafone
Mobile telephony providers are still commodities not brands
By Pranesh Misra
AS NEW markets open up, there usually is a gold rush. Competitors jostle to plant their flags and claim geographic territories. The focus is on activation and speed to market, rather than brand differentiation. All brands talk more or less the same benefits that are category generic and seek out similar consumer groups.
One such ‘gold-rush’ category is mobile telephony — one of the fastest growing categories during the past decade. With its high voltage advertising, one would have expected to find a few differentiated brands by now.
Unfortunately this is far from the truth. Mobile telephony services are still being sold as commodities — rather than brands. Most brands offer the same “any-time-any-place ability to stay connected through a telecom network that has high sound clarity and great coverage”. Then they fall over each other to innovate on the best pricing or discounting model — only to be replicated by competition few days — sometimes hours — later.
So, what does the consumer do? Choose based on price and deals, and switch brands when the value equation is unsatisfactory. High churn and unwillingness to pay a premium indicate that proper branding has not yet taken shape in this category. Brand choice is typically driven by deals, and when the pricing is more or less same, by the overall halo effect of the brand’s perceived strength.
When branding works, consumers display brand loyalty and are willing to pay a premium for one brand over the others. Another sign of good branding is sharpness of consumer segmentation. Strong brands carve out their segment of consumers and strive to meet the needs of these consumers in a differentiated manner.
So, if branding works, one would expect substantial differences between the user profiles of competing brands. For example, one would expect Nirma consumers to be more middle-class than Surf Excel or Ariel. In automobile category, we would not expect a mid level executive to be driving a Mercedes.
With the gold rush in mobile telephony almost over, it is about time to focus on brand building
To evaluate whether segmentation is working in mobile telephony, we reviewed user profile data of two large mobile telephony brands (Airtel and Vodafone). The irs data base was used for this analysis.
Airtel and Vodafone have similar consumers.
There is little or no difference in the consumer profile of the two brands. Both brands have similar consumer profiles in terms of all demographic parameters like Socio Economic Class, Gender, Occupation and Education. This is bound to happen when the brands are talking and appealing with similar messages to similar people across the country. So, they are attracting similar types of consumers. Branding in this case does no more than provide a label — it does not provide any distinct source of differentiation.
The only difference we observed was in the geographic dispersion of the two brands. Airtel was stronger in some telecommunication circles (Andhra Pradesh, Bihar, Karnataka & Madhya Pradesh), while it was relatively weaker in some others (Gujarat, Mumbai, Maharashtra & Goa, West Bengal and Uttar Pradesh). These geographic differences can be attributed more to ground level activation efforts than to brand success.
Now that the gold rush in mobile telephony is nearing its finish line, it is about time for these brands to focus on brand building to build loyalty and revenue realisation. Brands would learn to carve out their respective segments and find better ways to connect with the needs of those segments. Some of the mobile telephony brands are attempting to move from purely functional offers to a bundle of emotional and affiliation offering. This is the first step to effective branding, and I am sure we will see a lot more of this attempt for differentiation in the coming year.
The author is Chairperson and Managing director of Brandscapes Worldwide. The views expressed here are his own.