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CASE STUDY

Failure Story

Of

STRATEGIC MANAGEMENT

Course Code: MGT (4356)

Section: B

Submitted To:

Prof. Abu Saleh Md. Sohel-Uz-Zaman

Professor

School of Business & Economics,

United International University

Submitted By:

Name Id. No.

Jannatul Ferdaous Impa 111 092 081

Md. Shakhawatul Islam 111 093 033

Kazi Tousif Rafi Omar 111 093 070

Riad Chowdhury 111 101 122

Date of Submission:

January 9, 2014

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1. Introduction:

Banlaglink is second largest telecommunication and mobile operator in Bangladesh. As of

June 2013, Banglalink has a subscriber base of 27 million with 25.7% market share. It is a

wholly owned subsidiary of Telecom Ventures Limited of Malta which is owned by Global

Telecom Holding. Banglalink was established in 2004 after purchasing from Bangladesh-

Malaysia Joint Venture Company “Sheba Telecommunication”.

Banglalink had 1.03 million connections until December, 2005. The number of Banglalink

users increased by 257% and stood at 3.64 million at the end of 2006, making it the fastest

growing operator in the world of that year. In August, 2006, Banglalink became the first

company to provide free incoming calls from BTTB for both postpaid and prepaid

connections. On 2008, Banglalink got past the landmark of 10 million subscriber base in

Bangladesh Telecommunication Industry.

Orascom Telecom Bangladesh Limited introduced a premium brand, "Icon" on November 25,

2010. Icon subscribers enjoy solutions to all mobile telephony needs. Icon also adds value to

the lifestyles of its customers by providing various exclusive offers. It service are provided

for Corporate Segment like official personals and high corporate official, SME Segment like

business owners and Enterprise personals.

Their target was beat Grameenphone‟s Business Solution service and take the second mover

advantage as they try to take advantages Banglalink toke over Sheba and become second

largest company in Bangladesh. They tried to create market share for premium product

services.

Icon subscribers also enjoy some of the same benefits that are enjoyed by Postpaid Unlimited

subscribers, such as:

•Supplementary connections facility.

• Loyalty discount.

• Special discounts at various restaurants, hotels, shops etc.

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2. Product:

In here, Icon have offered that people will always be in touch be it locally or internationally,

with our monthly bundle package.

For only Tk. 3000 per month, there are two bundle packages that customers can enjoy those

offers details are given below:

Icon Bundle 1:

3000 minutes to any local operator

1000 SMS to any local operator

300 MB mobile Internet

Tk. 1000 ISD calls to any country

Icon Bundle 2:

3500 minutes to any local operator

1000 SMS to any local operator

Unlimited mobile Internet

Any unused bundle elements will be carried forward to the next bill cycle. After consuming

the bundle elements, the following rates will apply:

- For local calls: Tk. 0.1083/ 10 second to any operator.

- For SMS: Tk. 0.50 + VAT per SMS.

- For Internet in Icon bundle 1: Pay as you go.

- For international calls: standard BTRC approved rates will apply.

All of this call charges are VAT exclusive.

(Icon)

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3. Customers:

Their segmentation of market was based priority base customers those who are spending a lot

of money on personal communication facility and they are holding an organization‟s most top

rank positions. Their target is to create most flexible communication system for corporate &

and most high officials or personals. They almost follow niche marketing but the product

customization is consider under two bundle package that they are providing

Corporate: Here, The Icon have targeted at the corporate used or official purpose use

segment where they will be communicated by special numbers or sequel of numbers

that in corporate world they can be represent very easily. It is only applicable for high

officials so that their numbers can be easy to remember and ironical.

Personal: The Icon customers can get service in very cheap call rate service and can

have a large talk time facility. Icon service is basically based person use concern for

VIP persons and high officials. Icon

3.1 Situation

The basic problem they have really faced that they have product will interest lots of peoples

but in term of Bangladesh they couldn‟t find that kind of customer who is really going to pay

for their services. First of all, Icon tried to create different kind of environment that will

prioritize their customer in anywhere they pleased to. While they were thinking that

Grameenphone is dominating telecom industry by providing priority customer service

provider through GP xplore and GP Business Solution, they want put some value add service

so that they could alter GP xplore and GP Business Solution. But for some reasons Icon Icon

was a total failure for Banglalink. The main issues are:

3.2 Customer point of view:

3.2.1 Cost

The cost of Icon monthly bundle is reasonable but for some persons can‟t fully utilize Tk.

3000 package. In these circumstances, they are unwilling to pay the monthly bills and don‟t

want to use it any more. Some of them think that Icon‟s bundle package is too expensive

because whether they fully utilize or not they have to pay monthly TK. 3000. For this reason

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they use for one month and use all the advantages they provide and unwilling to pay the

monthly bills. They disconnect from next month.

3.2.2 Discount

The discount facilities that they offered it doesn‟t interest the customers and doesn‟t create

any kind of drive to any encourage to take Icon services, because Grameenphone‟s business

solution and GP Xplore offer all most same offers. Most of time customers said that

Grameenphone‟s offer is much better because they offer better discount offers with good

network coverage. This sort of situation will create more obstacles for Icons. However, the

Icon can‟t create anything out of box to offer the customers. Icon gives discount offer on

purchasing Smartphone by giving barrier of TK. 20,000/= privilege.

Icon provides discount facility over landscaped hillside in Khadimnagar, Sylhet, Nazimgarh

is a self-contained island of tranquility amidst lush green foliage.

50% concession on deluxe rooms for the first night and 15% concession on

subsequent nights

Complimentary services including breakfast, fruit baskets, access to gym, swimming

pool, snooker tables, and much more!

Moreover, Icon offer 45% discount over Hotel Seagull at Cox‟s Bazar. (Icon)

But all this services are provided by Icon, the user doesn‟t know they have a discount facility

or not. Sometime the discount offer becomes most embarrassing for the users. For example:

Enjoy complimentary meals worth Tk. 1,000 at Nando‟s. Now Icon customers are that kind

of persons who earns money monthly at least TK. 100000/= or above for him or her it is most

embarrassing. They earn a lot in month so for them this amount of discount is very insulting.

3.2.3 Usages

Icon usages are for those who are high officials of an organization or VIP persons. For them

this offer is suitable but in term of Bangladesh some persons can‟t fully utilize these facilities.

The people who are using Icon services they all use it to stay connected with office and with

their superiors. They are providing lot offer and subscription facility. These things made a

user very much confusing. A VIP person can even get angry and doesn‟t have time for this

kind thing. For example: Icon has ISD call facility incoming and outgoing both in bundle 1

package. But if bundle 2 package subscriber want to us ISD services that person have to

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migrate to bundle 1 package. For this reason customers are almost feed up over Icon‟s

product plan. Because according to customer, they are paying for priority service that means

high customization of product, but in term of Icon they are less concern about product

customization rather than high concern about service to the customers. Though the person‟s

the Icon is dealing with they are the well-known corporate personal that might not take any

kind of consideration about the facilities if not served.

3.2.4 Network Coverage

The network coverage of Icon is less convenient Grameenphone. The customers want to be

connected at all the time. So in that case the customer wants maximum level of network

coverage. Icon is a part of Banglalink, their network coverage is in a moderate situation.

Therefore the customers are not willing take or unwilling operate this service.

4. Marketing Myopia

Icon‟s planners are facing marketing myopia. As we all know, marketing myopia consist of

not paying any kind attention over the product rather than giving benefits to the customers. In

this case, Icon have lost their market, because some clients doesn‟t need the extra benefit they

need services and they need how fast you can solve their problems. The Icon have another

most boring thing that customer can‟t choose or customize the services. As we understand

that priority service based products are highly customizable that why this are very costly. The

person who is paying the price he or she, expect the best service from them.

5. Communication

Icon has done major mistake and that communication failure with the target customers. The

advertisement or TVC they have made it doesn‟t express what its purpose and what are they

offering. In some sort they have used mystery marketing concept, but in Bangladesh people

have less interest if you don‟t tell them what it is for. Most of country person doesn‟t know

what it is, some of the people thought that it might be new design fragment or product of “Fit

Elegance”. For these they have lost most of the customer‟s attention and made disaster in

market.

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5.1 Internal Problems

o Segmented customers are not found properly

o Selection of usage pattern are not also an a proper way

o They don‟t matched the market current size with users

o They use the same channel for both sales and services

o They recruited inexperience and fresh work forces for sales channel

o Bundles packages with commitments of usages are not matched.

o Commitment failure and not user friendly

o Their promotional activities are as lower that they failed to attract the customers.

o They invests a huge capital without proper planning

They don‟t take any proper planned to recruits a huge manpower.

6. Solution or Fact Finding:

The major problems that I have identified that Icon have marketing myopia and weak

advertisement or communication lack. For this reason Icon is a fail project in

telecommunication industry. There are some issues that Icon has to recover if they want to

stay in the business. They are:

Think out of the box in offer services to the customers.

Provide maximum customization of product and services.

Diversify sales channel and service channel.

Communicate with the customers very frequently.

Solve problems in minimum time.

Use product development.

Strengthen network coverage.

Develop some facility of discount that client doesn‟t have to carry extra card.

Develop CSR not business but for social responsibility.

Arrange idea generate completion for fresher.

All of this is primary things that we have identified that if Icon can develop things they can

turn around in the market. As far their top level management have said they are current is in

growth stage. But, the reality is they are in problem child or decline stage. Some of the

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former officials they have expressed that Icon was the first product that can fully mean a

priority service based telecom service, it have the total essence of it. Although they have fall

back because of they have only two bundle packages and those were overcharged. The

customers were unwilling to pay the bills. For that reason, Icon has lots credits in the market.

If Icon doesn‟t change their strategy, it‟s a matter of time Banglalink have to shut down Icon.

7. Current Situation:

The telecom regulator has directed the cellphone operator Banglalink to stop its premium

telecom brand „icon‟, saying the service was being provided illegally, said a top official.

The regulator—Bangladesh Telecommunication Regulatory Commission (BTRC) - has taken

the move, as the explanation on the icon provided by the Banglalink did not seem logical

before it (regulator), he added.

Recently, the regulator asked for explanation from the operator for providing the icon service

to customer without taking approval from it.

“Every kind of telecom service has to be offered to the customer by taking approval from the

BTRC as per the telecommunication act,” chairman of the regulatory body Major General

(retd.) Zia Ahmed told BSS yesterday.

He said the commission is going to take necessary steps for ensuring customer interest.

According to the telecommunication act, the operator has to take approval from the BTRC for

setting any kind of service value. But, Banglalink did not take approval from the regulator for

operating icon brand. So, the commission in last month directed the operator to stop the icon

service immediately. Otherwise, it (regulator) will take legal action against Banglalink.

In response to the regulator‟s directive, Banglalink gave explanation to the regulator about

their icon services. But, the explanation has failed to satisfy the regulator.

Talking to BSS, Shehjad Hossain, head of communication of Banglalink, said that they are

discussing the icon service to meet the regulator‟s criteria.

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“We are hopeful to resolve the issue immediately as application has been submitted to the

regulator for fresh approval,” he said.

Officials said different kinds of bundle offers including air ticket, handset made by the icon

brand are totally illegal, as those are not complying with the telecom act.

(www.muthofon.com)

8. Bibliography

Icon. (n.d.). Icon- Feel Special. Retrieved from http://www.icongsm.com.bd/

www.muthofon.com. (n.d.). Retrieved from www.muthofon.com:

http://www.muthofon.com/news_details/banglalink-asked-to-shutdown-icon-service-151.php

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9. Courtesy

1. Khodokar Mosabber Hussain

Corporate Account Manager Sales

2. Yeamin Hossain

Icon Manager