Reliance Jio
By
19PGDM00B010 Jatin Jindal
19PGDM00B017 Pratik P Dhake
19PGDM00B018 Sangeeth Suresh
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TABLE OF CONTENTS
INTRODUCTION
PORTERS FIVE FORCES
PESTLE ANALYSIS
MARKETING MIX
BCG MATRIX
SWOT ANALYSIS
COMPETITORS ANALYSIS
BRANDING STRATEGY
COMPARISON WITH BRANDING STRATEGY OF COMPETITORS
RECOMMENDATIONS
BIBLIOGRAPHY
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INTRODUTION
In today’s world there is high competition in all the industry across the world. The telecom sector
is not an exception to it. Since Liberalization and Privatization India has witnessed tremendous
growth in the Telecom sector forming one of the largest customer base in the world. In the past
few years the telecom sector witnessed turbulence, Industry disruption, price war and a major role
was played by a firm with name of Reliance Jio. It was a market disrupter; changing the rules of
the game from a voice based tariff to that of a data based tariff. This report tries to throw a light
on this organization, it provides a glimpse on its strengths and weaknesses, PESTLE analysis,
Marketing mix, its competitors analyses with a special focus on branding and recommendations.
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Porters 5 Forces Model
The Porters Five Forces Model gives us the framework for understanding the competitive forces
at work in an industry, and which drive the way economic value is divided among industry
actors. Below picture summarizes the Porters Five Forces Model
Threats of new entrant - LOW
The threat of new entrants for RELIANCE JIO is Low since the industry is dominated by majorly
four to five players. The price was is extremely high and majority of the company is are showing
losses. The cost of exit is extremely high as specified instruments like mobile towers need to be
installed in this business. The cost of initial investment is very high as 4G towers need to be
installed. The profit margin too is very low. All these factors make the threat of new entry very
low.
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Bargaining Power of Buyers - HIGH
Due to the price war the customers have benefitted the most. They are having many alternative
options for calling such as skype call, Facebook video calling. Buyers are having options. Both the
commercial and non-commercial buyers play a significant role in the pricing of product.
Threats of Substitute Products - LOW
The threat of substitute products is quite low, as everyone today has a mobile and a mobile
number. The only possible substitute can be of skype call and Facebook Video Calling.
Bargaining Power of Suppliers – LOW
The major suppliers are of Telecom Towers and its part, since the price war is high among
telephone companies the supplier power is low. Also, there are majorly four players, most of the
mobile tower companies are owned by the telecom companies itself.
Rivalry - HIGH
The industry is witnessing rapid changes along with exponential growth. The scope of further
growth is limited. Also, rapidly changing technological advances also influences this sector for ex.
The introduction of 5G technology, IoT services etc. Added with this is the continuing price war
which has hampered the profit of prominent telecom companies like Airtel, Vodafone- Idea etc.
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External environmental factors affecting the company (PESTLE
Analysis)
Political
Govt. of India has initiated various policies such as Digital India to facilitate the growth of Digital
services which has led to boost in growth of telecom companies offering data services such as
RELIANCE JIO.
Also with the regulatory approval and simplification of sim card registration with the Adhar card
has helped the telecom companies at large. To provide quick activation services and reduce
unnecessary delay.
Government of India has also started providing services based on the online apps such as UMANG,
to directly reach the common people. This has led to surge of internet users in India
Economic
Indian economy is expected to grow in the coming months. Since, smart phones are available at
cheap rates and is affordable for the below middle class people also. Free services such as no
incoming charges has also help in growth of the telecom industry.
Social
India is a young country with large population of millennials. Also India has witnessed growth in
Data Consumption, and has witnessed the rise of Digital culture. All this factors, have aided the
growth of telecom industry.
Technological
Technological innovations are constantly required for the survival of any industry. In the Telecom
sector new technologies such as the rise of 5G, 6G and introduction of IoT based devices will play
a crucial role in the development of Telecom industry. The Telecom industry need to be constantly
kept upgraded with the latest technology.
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Environment
In the environmental front there is an increasing emphasis on environment protection. Certain
studies have shown that the birds like sparrows are getting extinct due to the harmful radiation
emitting from the mobile tower. Climate change and global warming are becoming increasingly
prominent as various reports are endorsing the same.
Legal
Regulations of the regulatory body such as TRAI(Telecom Regulatory Authority of India), has
vital effect on the industry. The recent decision to continue the Interconnect Usage Charge(IUC)
has affected the industry negatively.
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Marketing Mix
The four Ps of marketing are Product, Price, Place and Promotion.
The marketing mix for RELIANCE JIO solar is as discussed below
Product
Jio is in the busines of providing sim card services. It inclucdes calling services along with the
data services. It also has a broad band service with the name of ‘Jio Gigafiber’, though the
company has not commercially launced its broadbad services.
In May, 2016 Jio launched a bundle of multimedia apps on Google play as a part of its upcoming
4G services.
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Jio apps
Price
Jio was known as a market disrupter. It provided free data and calling services for the initial six
months of its launch. After the decision of continuation of IUC charges, Jio had to restructure its
pricing strategy. Below table gives the pricing of Jio Infocomm Ltd as on December, 2019.
Also, no roaming charges were levied, same price is applicable all over India. Jio applications
will provide Internet surfing, music, movies, programs free of cost.
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Comparison of pricing of Different carriers
Above picture shows the comparison of pricing strategy of Jio with other major players.
Promotion:
With every Reliance Jio sim, regardless of the package, the following are absolutely free:
• Free Unlimited voice calling to any other network, any other number (local and STD)
• No applicable roaming charges, same price is applicable all over India
• Jio applications such as JioCinema, JioClouds will provide Internet surfing, music,
movies, programs etc. free of cost.
Also, Jio roped in one of the most famous actors of Bollywood, Shah Rukh Khan for their ads.
The ad campaign was “Jio DHAN DANA DAN” which became very famous and was know to
every other kid. Shah Rukh Khan was the brand ambassador of Jio.
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Place:
Jio has presence across India, both in Rural and Urban centers across the country.
BCG
According to the BCG matrix, the sim card services would be placed in the low cash usage and
high cash generation (CASH COW), since huge customer base has been achieved by Jio since its
launch. Now, it has to bring new schemes to sustain this market share.
As far as app based applications are concerned, it has not resulted in major revenue, so it can be
categorized as DOG, since cash usage is high and revenue is low.
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SWOT ANALYSIS
The company RELIANCE JIO is star player in the telecom industry. The telecom
industry has lot of challenges as well as opportunities. The SWOT analysis is as
below
Strengths
• Strongest Customer Acquisition strategy – Reliance Jio had the best customer acquisition
strategy in the industry. Jio offered their services for free for 3-6 months to all their users
in the initial period. This resulted in millions of users opting for Reliance Jio and resulted
in one of the best customer acquisition strategy in the history of telecom industry.
• Strong support by parent company-Jio is a subsidiary of Reliance Industries Limited (RIL)
which has healthy financial condition and would act as a backup for innovative future
ventures. Reliance is an extremely popular brand with a pan-Indian presence and has
garnered high trust amongst customers.
• Use of latest technology-Jio currently uses the latest 4G LTE technology which is one of the
world’s best technologies for communication. This can be easily scalable and supportive of
5G and 6 G technologies which are expected to sooner.
• Market share-Jio had the first mover advantage in making data cost more affordable. It
forced other operators to slash charges by achieving a huge market share.
• Effective Brand management and advertising strategies : One of the reason for the huge
customer base of Reliance Jio is the brand management strategies that it has adopted. Most
of the advertising campaigns are lively and are targeted at millennials who are tech savvy,
which proved to be a winning strategy.
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Weakness
• Activation Issues-Reliance Jio faced several gestation issues owing to not being able to cater
to the huge volumes of customers it had acquired.
• High dependency on data- Reliance Jio is completely dependent on data charges since call
charges are completely free.
• Pricing Controversies - Reliance Jio was criticised for having lowered its prices beyond
what was ethical to penetrate into the market and this stirred allegations like creation of
monopoly, corruption and money laundering against them.
• High number of freebies-Reliance Jio currently offers many services for free which resulted
in increase in sales. However, the company may not be able to afford and sustain all of
them in the long run which may affect the business negatively.
Opportunities
• Future driven technology - Jio employs VoLTE 4G network which is scalable to
accommodate 5G and 6G technologies also. This offers numerous growth avenues to Jio for
future expansion.
• Apps- Reliance Jio has VoLTE which has a lot of scope with respect to band- width. Thus
they can offer various services through apps to customers which are chargeable or even
free initially and pay as per usage later.
• Highly Competitive Pricing Strategies-Reliance Jio takes pride in itself on being a low- cost
Internet service provider and mobile operator. This can be used for positioning to target
more markets and expand their market share.
• Expansion to foreign countries - Currently Reliance Jio is operational only in India. There
is, however, a lot of scope for expansion to Asian countries as well as other countries.
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Threats
• Risk of loss of customer base - Customers prefer Jio primarily because of the low end prices
that they offer. At a stage when the company would increase its price there may be a
possibility of loss of customers. Customer loyalty is a long term challenge.
• Removal of free services - Preference to Jio was due to lot of freebies. Once these services
are terminated, the company may witness a loss in sales
• Mergers and collaborations among competitors - The biggest telecom merger took place
between Vodafone India and Idea Cellular, which happened after the launch of Jio. Airtel
and Vodafone-Idea are most likely to collaborate in the optical fiber space.
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COMPETITOR ANALYSIS
Reliance Jio is one of the major players in the Indian telecom industry. The main competitors of
Reliance Jio include Airtel, Vodafone – Idea and BSNL.
Vodafone Idea is a pan-India operator offering 2G, 3G and 4G VoLTE services under two
brands - Vodafone and Idea. Airtel India is a provider of mobile telephony,
broadband & subscription television services. BSNL is a state-
owned telecommunications company, provides mobile voice and internet services – largest
provider of Fixed telephony.
With the launch of Reliance Jio and its market shattering plans, the competition was taken to
another level. Bharti Airtel lost 23.8 lakh users in September 2019 to take its total user base to
32.55 crore, Vodafone Idea lost 25.7 lakh users in the same month to take its total user base to
37.24 crore, while Reliance Jio added 69.83 lakh users in September, taking its total user base to
35.52 crore.
The competitors had to face their biggest loss in the recent times. Airtel swung to a ₹23,045 crore
loss in the quarter ended 30 Sept 2019. Vodafone-Idea reported a record loss of Rs 50,921 crore
for the September quarter 2019. Jio's quarterly profit increased to Rs 990 crore Q1FY20 from
Rs 681 crore a year ago.
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Jio was the top revenue earner from telecom services at Rs 10,900 crore in the quarter ending
June 2019. Bharti Airtel and Vodafone Idea recorded adjusted gross revenue (AGR), earned
from the sale of telecom services, of Rs 10,701.5 crore and Rs 9,808.92 crore, respectively.
As per forecasts made by OUTLOOK, JIO is targeted to reach a market share of as much as
45% by fiscal year 2022 meanwhile, AIRTEL and Vodafone idea will probably see a market
drop to between 25% and 27%, according to the outlook.
BRANDING STRATEGIES
A Brand can be defined as a name, term, symbol or design or a combination of any or all of
them, which is intended to signify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors. The different branding strategies available are:
v Product branding
v Line branding
v Range Branding
v Umbrella Branding
v Source/Double Branding
v Endorsement Branding
On introduction, Jio followed Source/double branding strategy – Combines the firm’s name with
the product brand name: Reliance Jio. They introduced Jio as a sub brand of Reliance.
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The brand Slogan was – Digital Life. After launch, Jio was established as a single standalone
brand and started to follow umbrella branding strategy - different apps and products under the
Jio brand.
Jio also follows line branding strategy - starts with a product and later extends to the
complementary products. Jio offers complimentary services to its users under the same brand
name - JioTv, Jio-Saavn, JioCloud, JioMoney, JioFiber, etc.
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Comparison with Branding strategies of competitors
Reliance Jio Infocomm Ltd is known as just “Jio”. We can say that it is the mix of Double
Branding and Product Banding strategy which is being followed by Reliance. Reliance Jio is
having following offerings and corresponding branding strategies.
• Mobile Network
• Its mobile network is known as not other than “JIO”. Hence it can be classified under
Umbrella branding strategy.
• Apps
• It offers apps like JioCinema , JioMusic, JioTV & JioSecurity as complementary apps to
their network services. Hence they can be classified under Line Branding Strategy.
• Device
• It offers wifi hotspot devices such as JioFi. It carries the name not other than “Jio”. Hence
it can be classified under Umbrella Branding Strategy.
• Lyf
• Lyf is the premium Smartphone brand. It comes from the house of Reliance but it carries
individual Brand image. But its website reveals that it is from Reliance Industries Limited.
Hence it can be classified under Endorsement Branding Strategy.
• JioFiber
It offers high speed internet service and comes under the brand Jio. Since it is the product
from the area expertise of Jio, it can be classified under Range Branding Strategy.
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In current times Jio is having 2 major competitors-
1. Airtel
2. Idea
Bharti Airtel is often known as Airtel. It is having following products and corresponding
branding strategies.
• Mobile Network
• Its mobile network is known as not other than “Airtel”. Hence it can be classified under
Umbrella Branding Strategy.
• Direct to Home Dish Services
• It is known as Airtel DTH. It is just the extension of services from telecom to television. It
can be said that it is following Range Branding Strategy because it is related to area of
expertise for Airtel.
• Airtel Xstream
• It is the device offered by Airtel that provides functionalities such as Android, Games, TV,
and Movies & Netflix etc. It can be put under Double Branding Strategy by its name and
considering the fact that logo on the Product that have the name of the “Xtreme” visible
more than Airtel.
• Broadband
• Broadband services can be seen as one of the areas of expertise of Airtel. Hence Airtel
Broadband services can be classified under Range Branding Strategy.
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• Wynk Music
• It is the platform and app to listen and download songs. It is not carrying the name of
Parent organization which is Airtel. It is being branded as the separate product. Hence it
can be classified under the Product Branding strategy.
Another major competitor of Jio is Idea. It comes under Vodafone Idea Limited (formerly Idea
Cellular Limited). It can be said to be following Product Branding Strategy as Idea as its brand.
Its offerings with corresponding branding strategies are-
1. Mobile Network Services
Its network services are known as not other than “Idea”. ”. Hence it can be classified
under Umbrella Branding Strategy under the Brand Idea which is in turn under
parent brand i.e. Vodafone Idea Limited.
2. Movies & TV
It is the platform on which the services like movies and television are offered across various
regions and languages. It is called not other than “Idea Movies and TV”. Hence it can
be classified under Umbrella Branding Strategy under Brand -Idea.
Comparison
Jio vs. Airtel
Both are having similar products and their branding strategies. Both of them mostly use
Umbrella Branding and Range Branding.
Airtel is using Double Branding Strategy for one of its product but Jio does not use Double
Branding Strategy.
Jio vs. Idea
Idea have lesser range of products and uses only Umbrella Branding Strategy unlike Jio.
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Recommendations
• Jio should now carry its individual image separated from Reliance as Jio has now become
a big name in telecom sector. Jio should now be communicated as individual Brand i.e.
shifting towards Product Branding Strategy. This can shield the Reliance Brand in case Jio
faces any adversity in future. It will also help Reliance to explore any unrelated product
category faster.
• Branding Strategy for apps should be shifted to Endorsement and then to Product. Doing
this will not will not only improve chances of other network users to install the app but also
to shift to Jio. This strategy is already being followed by Airtel through Wynk Music.
New Product Development
• Jio University
Jio reports to foray in education through Jio University which expected to offer courses
from 2021 in Artificial Intelligence, Data Sciences, digital media & integrated marketing
communication for undergraduates. University name associated it with Brand Jio instead
of Reliance thus creating shield for Reliance. It may be the good area to explore as it will
also serve as R & D center for Jio.
• Electric Vehicle Battery
Reliance Jio can tap into the field of Lithium ion batteries which are going to boom in few
coming years. It already has the Smartphone Brand Lyf which is the consumer of Lithium
Ion batteries. People in India have goodwill for Jio and entering this market early may lead
Jio to monopolize even the business of battery. People in India associate Jio as an affordable
and quality brand. This brand image should be leveraged.
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Bibliography
• www.jio.com
• www.researchgate.net
• www.outlook.com
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