Virtual University of Pakistan

Evaluation Sheet for Dissertation

Spring 2010

MKT619: Final Project (Marketing) Credit Hours:3

Evaluation Criteria Result

Student’s Name: Muhammad Inamuddin Proposal
Final Project
Written Work Status
Presentation & Viva Voce
Student’s ID: mc080401378
Final Result
Supervisor: ______________________

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 Final Project

Compare the Pricing Strategies

Of Etisalat(Emirates Telecommunications Co.) in comparison with that
of DU(Emirates Integrated Telecommunications Company).
A REPORT

SUBMITTED TO THE DEPARTMENT OF MANAGEMENT SCIENCES,

VIRTUAL UNIVERSITY OF PAKISTAN

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION

Submitted by:
ID: mc080401378
Muhammad Inamuddin

Department of Management Sciences,

Virtual University of Pakistan

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 Date of submission: 19th July 2010

Dedication

I dedicate this thesis to my parents.

whose prays, love and care made me independent enough, so I can live and study miles
away from them, without their efforts I was unable to reach this stage and complete this
project.

Executive Summary

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The most important part of Masters of Business Administration is the report writing. The
report writing provides a thorough knowledge and practical implementation of studies in
the real world.
Pricing is one of the most important elements of the marketing mix, as it is the only mix,
which generates a turnover for the organization.
In business price is assigned a numerical monitory value of a good. As price is central to
marketing so it is very important for the companies to study the prices strategies of
competitor to set their prices accordingly as customer is very conscious about prices,
Companies are always looking to attract customer and it’s a very attractive tool.
Once one company is reducing prices or gives some offers, the marketer are
always very interested to know the strategy of competitor to act timely to overcome the
price reduction situation as a single unit in reduction in price eats up huge business within
a day. That’s why marketers always identify the needs of specific product and set a
certain price, what factors are involve to set the price markets must know them, and one
of the most important factor is the reference price of the product.
The main objective of study to apply the knowledge of pricing strategies on two
competing telecommunication companies of UAE i.e. Etisalat and du, these are the only
two cellular service providing companies in this region. Etisalat is the pioneer companies
in this region while du launched few years back. In this study customer survey is carried
out to measure the satisfaction, with regards to the pricing, quality of services, the loyalty
of customers with the products, the knowledge of the promotion of the product among the
customer, a comparison between the pricing with related package of both competing firm
to know the different features offered by the organization to get market share.
This study given an in depth view of both organizations reaction due to pricing strategy
alteration.

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TABLE OF CONTENTS

1. INTRODUCTION ........................................................................................... 1
1.1 BACKGROUND................................................................................. 1
1.1.1 DESCRIPTIONS OF THE PROJECT................................... 2
1.2 BACKGROUND.................................................................................. 2
1.3 COMPANY’S INTRODUCTION--------------------------------------------------3
1.4 LIST OF COMPETITORS----------------------------------------------------------
4
1.3 OBJECTIVES...................................................................................... 3
1.4 SIGNIFICANCE: ………...................................................................... 4

2: PROJECT PROCEEDINGS ........................................................................... 5

2.1. MARKETING MIX……........................................................................ 5
2.2MARKET SEGMENTATION STRATERIES…..................................... 5
2.3 TARGET MARKETING STRATEGIES………………………………..5
2.4 PRICING OBJECTIVE OF COMPANY............................................... 5
2.5 PRODUCT MIX PRICIING STRATEGIES........................................... 5
2.6 PRICING ADJUSTMENT STRATEGIES............................................ 5
2.7 PRICE CHANGES.............................................................................. 5
2.8 INFLATING PRICE CHANGES..................................................... 5
2.9 COMPETITORS REACTION TO PRICE CHANGES........................ 5
3.0 COMPETITOR ANALYSIST....................................................................... 5
3.1. MARKETING MIX……........................................................................ 5
3.2MARKET SEGMENTATION STRATERIES…..................................... 5
3.3 TARGET MARKETING STRATEGIES………………………………..5
3.4 PRICING OBJECTIVE OF COMPANY............................................... 5
3.5 PRODUCT MIX PRICIING STRATEGIES........................................... 5
3.6 PRICING ADJUSTMENT STRATEGIES............................................ 5
3.7 PRICE CHANGES.............................................................................. 5
3.8 INFLATING PRICE CHANGES..................................................... 5

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 3.9 COMPETITORS REACTION TO PRICE CHANGES........................ 5

4. METHODOLOGY ....................................................................................6
4.1. DATA COLLECTION SOURCES.............................................. 6
4.2. PRIMARY SOURCES …….......................................... 6
4.3. SECONDRY SROURCE............................................ 7
4.4 DATA PROCESSING TOOLS……....................................... 7
DATA PROCESSING-------------------------------------------------------------------------48

BIBLIOGRAPHY................................................................................... 8

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 Specimen List of Illustrations

Promotion banner or Etisalat for shift to post paid from pre paid package--------12
Promotion banner of Etisalat for 0.99 fils/minutes-------------------------------------13
Package comparison chart of both companies-------------------------------------------22
Figure # 5.1 Customer interest due to Pricing.-------------------------------------------22
Figure # 5.2 Customer interest due to trust.-----------------------------------------------23
Figure # 5.3 Customer’s loyalty-------------------------------------------------------------23
Figure # 5.4 Customers comparison due to products.------------------------------------24
Figure # 5.5 Customer’s perception about the services of companies------------------24
Figure # 5.6 Customer’s perception about the companies image.-----------------------25
Figure # 5.7 Customer’s problem solution--------------------------------------------------26
Figure # 5.8 Customer’s knowledge about the new packages.---------------------------27
Figure # 5.9 Customer’s shifting due to the prices.----------------------------------------28

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1. Introduction of the Project:

1.1Back Ground:

The United Arab Emirates is not specifically known Agriculture country and the
main source of earning is Oil and gas. The United Arab Emirates (UAE) is a federation of
seven emirates. The capital and second largest city of the United Arab Emirates is Abu
Dhabi.
U.A.E. citizens are only 15-20% of the total population of 4.4 million. The rest
include significant numbers of other Arabs-Palestinians, Egyptians, Jordanians, Yemenis,
Omanease as well as many Indians, Pakistanis, Bangladeshis, Iranians, Afghans,
Filipinos, and west Europeans. As majority of population are expatriates; they are living
and working here far away from their home town. That’s why cellular sector having huge
growth and always received special attention and a considerable source of generating
finance.
The ranked of UAE is 1st, in all the Arab states in the 2009-2010 Networked
Readiness Index (NRI) and 23rd among all 133 countries assessed. The NRI measures the
capacity of an economy to fully leverage Information and communication technology
(ICT) for increased competitiveness and development. The UAE's telecommunication
market has shown tremendous growth recently, mainly propelled by the government
initiatives aimed at the deregulation of the market and introduction of competition.
The TRA (Telecommunication Regulatory Authority) remains at the forefront of
the success of the country's telecom sector. It is continuously considering ways to further
intensify competition in the UAE telecom market. UAE ranked eighth in the world in the
availability of the latest technologies, ahead of Canada and the Netherlands, and was
ranked tenth in the world in terms of laws and legislations related to information
technology, right behind the United States of America which ranked ninth.
All facts and figures shows that UAE having a big potential in telecom sector.

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1.1.1 Descriptions of the project:

Pricing is one of the major components of four marketing mix. It is important

strategic issue because it is directly related to the product positioning, e.g. luxury product
having high price and vise versa.
Comparison of an organization’s pricing strategies with other similar
organizations is a very important topic for marketers of an organization. Price strategies
are made by also bye keeping the competitor price strategies in mind to provide the
consumer competitive price, as price is considered Central to marketing. A marketer
researches the market and the competition and plots possible price points looking for
gaps that indicate opportunities.
In UAE there are only two cellular companies, customer are rapidly switching
towards DU, which having low tariff plan as compare to Etisalat, which is already
penetrated in the market, and also having tariff more than DU, research will find out this
change in price really giving financial loss to Etisalat, how much people are really using
DU, and if they are using so what is the reason behind, is tariff really attracting people?
As up to now these are personal observation that people are using DU services. Research
is needed to find out the impact on Etisalat business by the low tariff offering from DU.
and how Etisalat is managing this low tariff strategy of DU.

1.2 Background:

The main purpose of this project to focus the prices strategies of two leading
cellular companies, one of them is Pioneer Company in this region i.e. “Etisalat” and
second one is Du telecom which started operating few years back.
Both companies having good profile and both are equipped with latest technology.
DU has offered lot of discounted packages and also cost effective as well and consumer
are using DU as a purpose to call economically.
From 2007 to 2010 Etisalat reduced its SIM renewal charges 50% and connection
charges 42%. In 2007 Etisalat use to charge 175AED for new connection of SIM, and
only there was 10AED free talk time, and annual renewal price was 100AED now in
2010, prices reduced 42% of the old price i.e. 75AED with free talk time 25AED and

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SIM annual renewal reduced 50% of the old price i.e. 50AED with free talk time 25AED.
Etisalat has revised the price due to tough competition with DU price reduction.

DU is although is very new company but giving tough time to Etisalat. Etisalat in
absence of DU did monopoly and there was no change in prices but after the launch of
DU, for some period of time Etisalat continued the service package same but by the time
Etisalat revised. Although DU using low price strategy to compete Etisalat but DU
having some service related technical problem and Etisalat is taking advantage of it and
the price reduction graph is not like DU, many news papers and reports shown the study
of both companies.
Many articles written on this topic to discuss the actual situation of both companies, and
still it is very hot topic in the market to discuss the prices strategies of both companies.
“It is there that Etisalat first began to deal with competition and it has fared well. But a
corporation's culture rarely changes until its headquarters taste competition and that didn't
happen until du began providing services in the UAE in February 2007”.

Up to one extent both companies started price war to get the market share.
Price strategies will provide an idea how both companies are trying to capture market
share by offering, and what was strategies has taken by the other company in reaction of
competitor pricing strategies.
My research will focus how Etisalat keeping customers by keeping balance between the
price strategies and quality although there is a big difference in the prices offered by DU.

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2. Company’s introduction
2.1 Companies Profiles

Emirates Integrated telecom company (Etisalat).

Emirates Integrated telecom company or Etisalat is among the largest

telecommunications companies in the world. Etisalat is the leading operator in the Middle
East and Africa, the company headquarter is in Abu Dhabi, the capital of UAE.
Etisalat operates in 18 different countries across Asia, the Middle East and Africa;
Etisalast is providing service to more than 100 million customers out of a total population
of approximately 1.9 billion people.
Etisalat Mission statement
“To extend people’s reach”.
The company is actively developing advanced networks that will enable people to
develop, to learn and to grow.
Vision Statement:
“A world where people reach is not limited by matter or distance”.
The company wants convenience for the people by providing world class service to keep
them in contact the family and friends.
This statement also covers the international marketing of business to find out the global
opportunities where the distance factor is of no value.
Values
Energy
Etisalat value and nurture the energy and dynamism needed to achieve the very best in
business. Company look forward to future challenges and opportunities.
Openness
As a company, Etisalat welcomes, sociable and friendly to customers, suppliers and
employees. Etisalat deal with people in a clear, direct way and are always honest and fair
in business dealings.
Enablement

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Etisalat aim is to open up opportunities and to actively help people reach their goals.
Etisalat always deliver what it says it will.

The Future
Etisalat say’s “A world in which technology extends our reach”.
According to Etisalat now the world is linked together online, physically things are not
much needed like, now we have E-book instead of physical book, before we were using
cassatas and CD for music but now a days every thing is available online. So, advanced
networks will increasingly provide education, healthcare and other services and goods.
For instance, telemedicine already allows patients to seek the best advice from doctors
around the world; now robotic aids are beginning to make remote surgery possible. As
the pace of technological change increases, Etisalat for its customer will strive to extend
its reach into new technologies, services and markets to create opportunities.

Etisalat has a record growth as in 2009, Etisalat reported annual Net Revenues of AED
30.831billion 5% up as compare to 2008, and Net Profits of AED 8.836 billion marking a
16% compared to 2008. Etisalat is rated by Moody's as Aa2, i.e. high quality and with
smallest degree of risk, by Standard & Poor's is A +, means commitment to meet its
obligation is very strong and also by Fitch Ratings as A+.
Etisalat is a comprehensive telecommunications provider offering a one-stop shop for
mobile and fixed-line voice and data services to individuals, enterprises and international
telecommunications companies, ISPs, content providers and mobile operators.
Not only mobile service Etisalat is offering a variety of hi-tech complimentary services to
the telecommunications industry including managerial and technical training, SIM card
manufacturing, payment solutions, clearing house services, peering, voice and data
transit, and submarine and land cable services.
As the Etisalat is the first telecommunication company in this region, so it has a
reputation for launching the right service to the right audience at the right market at the
right time.
Etisalat ranked as 12th largest voice carrier of international voice carrier in the world also
largest voice traffic in the middle east and Africa and it is also the major hub in the

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Middle East, for internet, voice, mobile broadband, broadcast, roaming and corporate
data services, with an extensive regional and intercontinental network. Etisalat is the
largest comprehensive provider of carrier and wholesale services in the region with
Points of Presence (PoP) in New York, London, Amsterdam, Frankfurt, Paris and
Singapore providing a truly global reach. Etisalat has 525 roaming agreements
connecting 185 countries enabling BlackBerry, 3G and voice roaming.
Etisalat is a major investor in Thuraya, one of the world’s leading satellite geo-mobile
communication systems covering approximately two thirds of the planet’s surface.
Awards:
Etisalat group received seventeen industry awards and including three for innovation and
three for customer service in 2009. Etisalat also proud as has been named ‘Best Overall
Operator’ in the Middle East six times since 2006 and was named Best International
Carrier at the World Communications Awards in 2008.

International Investment
Following are the international investment of Etisalat.
PTCL, Pakistan
Etihad Etisalat “Mobily” Saudi Arabia
Thuraya
Excelcomindo (XL) Indonesia
Canar, Sudan
Etisalat Nigeria (EMTS)
Etisalat Misr (Egypt)
Zantel, Tanzania
Etisalat Afghanistan
Etisalat Software Services Private Limited (ESSPL) - Technologia
Atlantique Telecom (AT)
Millicom Sri Lanka “TIGO”
Etisalat DB Telecom India PVT LTD.

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List of competitors
The Emirates Integrated Telecommunications Company (EITC) brand name is DU is the
only competitor in the region since 2007. Only two companies are providing services in
this region but new investment from other companies is expected. Both companies
having tough competition, but both majority owned by the government. Until at least
2015, direct foreign investment is prohibited under an exclusion negotiated with the
World trade organization when the UAE joined in 1996.
The non GSM mobile competitors are VOIP services which is far less than GSM
services. Etisalat does not legalize the VOIP service in this reagion.

1.3 Objectives:

• To determent consumer perception about both companies

• Compare the pricing strategies used by both organizations
• To know the exact cause that people are really switching because of less price.
• To determine the factors on prices by one company due to change of prices by
other company.

1.4 Significance of project:

First and far most important benefit of this project will for me as I will be able to
understand the pricing strategies of two leading cellular companies in this region. I will
be able to understand how actively their marketing department working on pricing
decision and how they use to plan keeping competitor’s pricing. As a student of
marketing it is very important for me to know how pricing strategy of one company
affects the competitor and how competitor acts to manage its markets share.
In future as a marketer I must know the pricing strategy of companies to understand the
trend of price and to set or, suggest setting of the product price.
Secondly my study will be useful to aware the marketing firm and companies
which want to know the actual situation of pricing of telecom sector in UAE.

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This comparative analysis will be useful to the cellular companies to know the effect of
one company price strategy because of another company. This project will also cover the
different promotions of both companies so it will give guidelines to other cellular
companies outside this region to capture its market share. It will be useful for the
companies to explain how companies making strategies because of competitor strategy.
This project will also provide the pricing with respect to time in comparison with
competitor to both companies which are under study.
Moreover, this project will be beneficial for those companies who want to invest in the
cellular sector in this region, as the comparative chart will provide the price competition
of two leading companies in this region.
Not only this but this project will provide a guideline for the students of marketing and
especially for those who are interested to study the pricing strategies.

2. Pricing of the Company

2.1 Marketing Mix
2.1.1 Product
Etisalat (Wasel) – Prepaid service
Etisalat (GSM) – Post paid service
2.1.2 Price:
Etisalat offers higher prices as compare to the competitor DU, due to its claim as quality
service provider. Several offers have been announced by etisalat to meet the requirement
of customers.
2.1.3 Promotion
Etisalat spends a considerable amount on its promotion and have coverage over the
media, news papers, radio (FM), Television, bill boards, Point of sale, cinemas consumer
premium (T-shirt, caps glasses, ball, cup etc) concerts, sports events, sign boards, e-
media etc.
2.1.4 Place
Etisalat is fully penetrated in this region and it is available at all malls within UAE,
groceries, mobile service shops and all air ports within UAE. To recharge the connection
cards / vouchers are available at all malls, groceries, petrol pump, tuck shops, etisalat

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offices, etisalat recharging machine, all banks having link to recharge etisalat though
account holder account, credit card option, sms recharge option, cinemas and air ports

2.2 Market segmentation strategies

Etisalat segmented market as follows:
Casual callers
Business callers
Local callers
Office break callers
Expatriates
Late night international callers
Mid night international callers
They offered different plans to cover these market segments, for casual callers they
offered wasel prepaid connection, with straight calling charges, and to mange the voice
traffic load they offered off peak hour timing during the office break, and takes advantage
during the office break network load.
For business callers there is post paid offer to facilitate the business customers.
For local callers etisalat also offers its post paid connection which provides the discount
to the caller depends on its use as much as s/he will call will get the discount.
The major population of UAE is expatriates, Etisalat has designed favorite country plan
to capture major market share. Etisalat offered different tariff for different countries.
To encourage calling late night etisalat offered off peak hours to utilize the network, as
the network load due to office timing is very less so etisalat offered late night calling.

Etisalat also offered mid night calling plan named as super off peak hour, to encourage
the user to call late night, expatriate from different geographical area gets advantage of it,
as it is very late night plan and there is no much network load, so etisalat offered very
cheap calling late night, and the caller takes advantage as in his / her country there might
be morning time, on the other hand etisalat use to charge more on the local calls and sms
if user subscribed for the super peak hour package.

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Etisalat covered all segments of markets, including lower class, middle class, upper class,
and businesses. Although Etisalat is UAE based company but it focused on majority of
population which are expatriates and belongs to different location for the world, and
introduced cheap calling rates in off peak and super off peak hours.

2.3 Target marketing strategies

Etisalat target whole market, and covered different segments with different plans.
Etisalat always targeted to those market where user required quality of services. Etisalat
managed their plan in such a way that the customer gets cheap calls at off peak hours
with quality of services. By its offering etisalat managed its network load and targeted to
those customer who are looking for economical international calls at off peak hours by its
plan of super off peak hours, which starts late night at 11:00pm to 07:00am. Etisalat also
announces offers for modified off peak hours occasionally.

2.4 Pricing objectives of the Company

Pricing plays very important role to acquire market share where competitors are already
working and keeping eye on each and every moment of the company to get market share
as much as possible.
Etisalat objective to provide its customer a standard price but with good quality of
services, Etisalat proved that its network is capable enough to manage huge voice traffic
at any time. The price of connection of Etisalat is high as compare to the competitor, and
the call rates are also not much changed with time, but it offered several offers to
customer in return to give them discount. Etisalat charges high price at the time of new
connection to bond the customer and to make is product worth full.

2.5 Product mix pricing strategies.

Etisalat always tried to capture the customer by its quality of services and offered bundle
pricing strategy; it offers packages which is suitable to different customers according to
their needs. It offers a bundle of package with reduced price to meet the requirement of
customer. The wasel prepaid package having straight calling rate and offers off peak
hours for both local and international calls, the caller has to pay normal charges for the

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international calls, except at the time of off peak hours i.e. 2:00PM to 4:00PM (office
break timing) and from 11:00PM to 07:00AM, and the remaining calling rate remains
unchanged. The customers who are interested to call mid night hours, etisalat offers them
to join the of super peak hour in the same wasel package, which comes with a basket of
tariff and lowest rate of international call but the caller has to bear the bit higher price for
the local call and sms.
Etisalat offers its cards to recharge its wasel (prepaid) account with following
denominations.
• 500AED
• 200AED
• 100AED
• 50AED
• 25AED
2.6 Price adjustment strategies.
Etisalat tariff is very complex and has a discount, for local calls there is no especial
reduction in the tarrif and the tariff is same from several years. However they have
multiple price strategies for different plans. Etisalat is using allowance and discount,
promotion and segmented pricing strategies and design different plan to suit the customer
need.
Etisalat has promotional and allowance pricing as it offers discounted prices to promote
its products, to promote the post paid connection etisalat reduced the connection charges
from 1200AED to 100AED, majority of the customers are using prepaid connection and
due to high price of post paid connection majority was not taking interest and even most
of the population do not know about the package, to promote the post paid connection
etisalat using promotional pricing, and gives allowance to in form of free balance.

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For its favorite country plan Etisalat is using segmented pricing; for different countries
they have different tariff, on the other hand takes advantage to charge more on local calls
and other international calls.
Etisalat is using promotional and allowance pricing strategy for its wasel renewal and
new connection. To promote its sale, Etisalat reduced the price of new connection
charges for prepaid connection for limited time from 175 to only 75 with 25 AED
balance free, this 25AED balance is expiable with in 3 months if not used. And for
renewal of existing connection reduced the price 50% with additional 25AED balance
which is expiable with in 3 months if not used. These promotions are for limited time
period only.
Etisalat also using segment pricing strategies as well and divided the customers according
to their countries, and having different tariff plan for different countries.

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2.7 Price changes
Etisalat due to market situation cut the prices to maintain its excess capacity, initially
prices were high, than etisalat cut down its price by different offerings.
The main focus of etisalat to maintain the fair price, and save the brand image, although
the competitor offers lesser prices than the etisalat.
The main product price remain the same, as etisalat only reduced the price of the
connection and renewal, and offered pay back option, but the local call rates and sms
charges remains the same. On the other hand etisalat’s new package cuts down the prices
but on the other hand same package comes with higher charges for local call and local
sms.

2.8 Inflating price changes

During the recession like other companies etisalat also adjusted its prices and the most
important feature of balance sharing and call request. balance sharing feature give user
facility to share balance with second party without paying any cost, the minimum balance
sharing is 5AED, the call request facility gives option to the party who is low in balance
to call the other party if approved by the other party call is allowed and the balance
deducted from the other party balance. Etisalat given these kind of option to retain their
customer where the competitor is giving very economical calling rates, the user takes
interest in etisalat to continue as this facility is only available between etisalat users only.
Etisata by considering the low income community launched both features to get the
market share as much as possible.

2.9 Competitors’ reactions to price changes

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competitor response is very important to know about the prices, as competitor always
keeps eye on companies sterategis, and pricing is very important strategies to shift
customers towards their, but at the same time companies do not want to loose their image
in front of customer by reducing the price, on the other hand companies do not want their
customer to loose as the competitor is providing service at the low cost.
Etisalat responded to competitor after a long time by reduction in its initial prices, but did
still maintain its local and sms charges. On the other hand etisalat offered low cost
international call but in the same package increased the local call charges.
The competitor du, also changed its plan and offered tow different plan to economize the
international calls and separate plan for the local calls.
The competitor du, introduced three different plans by keeping the need of cutomer and
introduced “more international” plan in this plan customer gets 30% extra balance but in
this plan all balace can only be used for international calls. Also du introduced “more
credit” and “more time” plans to get the market share. du also given option to the
customer to change the plan at any time at the time of recharging the balance, there is no
extra charges to change the plan in contrast to etisalat.

2.10 Company's responses to price changes

Du, the competitor of etisalat have reduced tariff and many offers only to get the market
share as etisalat is already penetrated in the market and having major market share due to
its quality and the trust of customer on etisalat. Etisalat also knows that customer
normally do not tires to change the number or do not want to change the service due to
the customer identification because of number.
To change the customer mind du is striving at its level best to get market share of etisalat
and offered economical calls by introducing low rate connection with balance back
facility. Etisalat after the launch of low tariff of du, initially did not changed its pricing
strategies and did through study but with the passage of time many of the customer
shifted towards du, than etisalat handled this situation by reduction of its connection
charges and promotions on renewal and also start offering balance back facility. In all
these price reduction time etisalat maintained the quality of its services, and improved
customer service. Still etisalat did not reduced its prices for the normal local and normal

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international calls to maintain the brand image, and always provided consistent quality of
services.
Chapter 3: Competitor Analysis
3.1 Introduction of the competitor firm(s)

Emirates integrated Telecommunication Company (DU)

Emirates integrated Telecommunication Company brand name du is a bundle of telecom
service provider, it is also based in the UAE, providing customers the best in choice,
quality, innovation and pricing, proudly contributing to the positive transformation of the
UAE region. At the end of the 2009 Du reported 3.5 million active users, Du come up
with the idea of “operator of choice” for the majority of new subscribers in the UAE
market, Du has introduced variety of new packages for the convenience of users, and
targeted all the market segments.
du offers wide range of services for individual homes and business also offers carrier
service for business these services includes fixed line and mobile telephony, broadband
connectivity and IPTV services. du claims that they, offers value, deploying state-of-the
art technology to continue enhancing the service experienced by our customers.
du is a new but rapidly-growing enterprise, it has approximately 2,000 staff, in more than
60 countries, working to enhance and expand our range of service offerings. This wide
variety of personnel allows us to mirror the rich cultural diversity of our nation, while
being able to serve our customers in a number of different languages.
du to motivate the educated local community, employed 20% workforce and 35% senior
management level from local community, after successful Emiratisation program. And it
has plan to further increase the work force from local community.

Vision: “Offering the best in class telecommunication service”

Mission: “To be a leading player in the region’s telecom industry makes it a very
exciting company and I look forward to contributing towards build a strong future for the
new operator.”
Values
Friendly: Relating to other in human way, approachable respectful and compassionate.

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Confident: taking responsibility and having the coverage to trust your judgment.
Honest: The basis of any successful relationship is trust- and that start with simple and
straight fwd truth.
Surprising: new different and better way of doing things no matter how small.
Confident: Tanking responsibility and having the coverage, to trust your judgment.
Slogan of company: du, add life to life.
du at the mid of 2009 made 2.9 million active user, and the strategy behind is that
they offered customer with choice and by the improved quality, innovation, and pricing
the huge trend of customer towards proved that du is really is customer of choice service
provider.
In 2009 du achieved record revenues of AED5.3 billion and profits of AED528 million.
Du achieved target market share reaching 32% within third year of its operation and
added more than one million active subscribers, in the total of 3.5 million at the end of
2009. By considering huge subscriber du in the same year, invested AED2.4 billion on
network and infrastructure development to enhance capacity and coverage.
Du objective is to continued to provide innovation, value for money and performance to
all its customers and to be well positioned to achieve long term growth and sustainable
profitability.
The company listed on the Dubai Financial Market (DFM) under the ticker code: du
As per 31st December 2009 Net profit was AED528millian and per share earning is 0.066
AED.
Share holders of Emirates integrated company
Emirates Investment Authority (39.5%)
Mubadala Development Company (19.75%)
Emirates Communications & Technology Company LLC (19.5%)
Public shareholders (21.25%)
Awards
du’s got the prestigious Comms MEA ‘2009 Lifetime Achievement Award’ in December
2009. the company work was recognized amongst a field of top tier international
competitors.

16
du won two prestigious awards at UAE Web Awards 2008. du e-shop portal won the best
strategic online portal award in the e-commerce category and du media club website won
the bronze award in the media and press category.
du was presented with an award for Best Middle Eastern Local Currency Deal 2008 by
the UK’s Euroweek
du corporate brand launch campaign awarded a Cristal MENA award in 2008.

3.2 Marketing mix

3.2.1 Product:
E-lit plan - prepaid plan
Pay as you go- prepaid plan
Visitor mobile line- prepaid plan for visitors

3.2.2Price:
Du has planned several different plans for the convenience of user; Du has covered all
segments of market and always focus to provide customer a economical prices and
always offered very competitive prices.
3.2.3 Promotion:
Du has promoted its product, on every occasion, organized programs and promoted the
product features. They publishes ads in news papers, bill board, air shows, FM radio, TV,
cinemas, magazines, call centers, customer feed back survey, and having very unique
website the web site won three awards due to its unique design and features.

3.2.4 Place:
Du is available every where in UAE, from mega mall to shopping centers, super market,
groceries, tuck shop, bank sites, petrol pump, service centers, payment machine etc.

3.3 Market segmentation strategies

Du segmented market in following different ways.
Casual callers
Frequent callers

17
Rare dialers
Expatriates and International callers
Business callers
Office break callers
Visitors
Late night international callers
For every segment du has a different plan to suit the caller, for casual caller they have
their simple “pay as you go plan” which is simple and fit for a casual need.
For its “Pay as you go” plan du have also niche marketing plan which focus to those who
are rare caller and those who are frequent callers, i.e. “more time” and “more credit”
respectively. In the same plan du has another offer for the expatriates and international
caller, who are just interested in international calls, du has its “more international” call
plan which is only for international call and does not support the local calls. Considering
the convenience of user du kept the flexibility in changing the plan, the user can change
plan at the time of recharging the balance, but the instruction given instruction.
For business callers du has its Elite plan which suits to the business user there is initial
fee and rental charges and it comes with balance back facility, than it motivates the caller
to call more as the caller gets more discount when calls more.
Du also offers off peak timing calls, during the office beak from 2:00PM to 4:00PM there
low rate calls for both international and local numbers.
UAE, is a tourist place thousands of tourist comes every week here, and du especially
focused the need of tourist and introduced a visitor plan as normally maximum limit of
visit visa is three months so by considering this fact du has kept the validity of the
connection 3 months with the joining fee of 49AED, and 20AED balance back facility.
Further there is a grace period 275 days, out of 275 days in 30 days the user can only
receive calls and sms but unable to dial. After 30days the account hangs and no incoming
and out going calls are there, so the user if wish can renew or discontinue the package.
To encourage late night caller du has late night off peak hours timing which starts from
9:00PM to 7:00AM.

3.4 Target marketing strategies

18
Du always focused to the market where user is looking for low cost calls, it introduced
several different offers who always provided very compatible rates. As compare to its
competitor etisalat, du having very appealing low cost packages. The low cost is one of
the major factors of diversion of customer from etisalat to du.

3.5 Pricing objectives of the Competitor

The main objective of du is to get maximum market share by provide customer most
economical services by targeting the appropriate segment. The multiple plan of du has
distinctive feature that it is very specific and if used for the specifically very economical
as compare to the main competitor etisalat. Etisalat do facing a challenging time as
customers are always conscious about the prices. The giant etisalt is always a very
reputable name in the telecom sector, etisalat always focused on the quality of its
services, and giving out standing services but with the higher prices as compare to du.
The user of etisalat are still in the market although prices are more than du. Etisalt
maintained its market reputation and did not drop down the price in competition with du,
although etisalat offered several offers but the main tariff for calls is still the same.

3.6 Product mix pricing strategies

Du is using bundle pricing strategies for its different packages, the post paid package
“Elite plan” is a complete package in which the customer as to pay additional amount at
the time of new connection but this plan gives the bonus amount and the bonus credit
amount goes up as much as the caller uses more balance. Same for its and prepaid plan
visitor plan which comes with the initial fee of 49AED, and bonus amount is 20AED, the
validity remains for 3 months with the grace period of 275 days, out of 275 days for 30
days user can receive calls and sms, but unable to make calls and the connection become
idle after 30 days of grace period, until the renew the connection.
Same pricing strategy applies to the “Pay as you go” plan, which come with three
recharging option, “more credit”, “more time” and “more international”, in more credit
plan user gets 15% extra credit by charging with 20AED but, the validity to use the credit
remains only one month. In more time package user gets exact amount from which s/he
recharges the connection but with non expiry period of credit.

19
In more international package the user gets 30% extra credit, with one month validity and
the whole amount can only be use to call international calls.
Du takes advantage of bundle pricing as at one side there is one offer but on the other
side it puts the condition, if the user gets more time he need to finish it within a specified
period of time, if there is not extra amount then the user is free from the time limit to use
the credit.
Du offers the recharging facility for the prepaid connection in following denominations
• 200AED
• 10AED
• 50AED
• 20AED

3.7 Price adjustment strategies

Du has set the multiple price adjustment strategies. Du very smartly using discount and
allowance pricing for its all packages. The bonus credit which comes with almost all the
package provides handsome allowance to the customers, more the customer uses the
balance more s/he gets the allowance in form of free credit. The one good example of
allowance is the “more international” recharging mode in its “Pay as you go” plan which
gives 30% extra amount, similar offer is there for the “more credit” credit mode, and the
more time recharging mode gets allowance in form of more time in expiry of the balance.
Same features are there in its “Elite plan” and “Visitor Plan”. The second price
adjustment strategy is the psychological pricing, which du has initiated since du launched
is products in market is the per second billing, the unique feature of du is that it has kept
the billing scale with second, as many second user will talk has to pay the equal amount
with respect to the second. Customer gets satisfied that s/he is paying what s/he is using,
unlike etislat which charges the call on the basis of minutes. Du also uses geographical
pricing; it has different charges for different regions of the world.

3.8 Price changes

Du from the first day of its launch offered the least prices, but to get more market share,
du modified its offer and offered lesser prices to the customers.

20
Recently du modified its “monthly plan” to “Elite Plan” to provide more economical
tariff to the customers. The bonus balance also improved by du to motivate the customer
to recharge its balance more frequently.
3.9 Inflating price changes
du considering the inflation in the market changed their pricing strategies and offered
immediate cash back facility at the time of recharge by its offer “more credit” and “more
international”. The higher the amount customer will use to recharge, higher the bonus
amount one for international and one for general purpose, with the limitation of validity
of two month. By considering the very low income and non dialers du offered one more
recharging mode i.e. “more time” which come with unlimited validity and same balance
as the face value of recharging amount.
3.10 Company's responses to price changes
Due to different offering of du, etisalat initially did not reacted and monitored well the
objectives of du, du want to penetrate in the market and also want the whole market to cut
down the prices, etisalat maintain its image and the quality still has no cut in prices, but
offered different offers to attract customers, etisalt especially emphasized on the
connection to be active and given allowances and discounts at the new connection
purchase and the connection annual renewal. Etisalat given bonus amount of 50% on
renewal of connection, and 33% allowance on new connection purchase. Not only this
but, etisalat reduced the renewal fee 50% and new connection fee 55%, but this reduction
is on the promotional basis. The main calling tariff still the same, but to handle the
situation of market etisalat instead of reduction of tariff offered new packages, which
includes favorite country plan and super off peak hour rates for international calls, but
these packages having increased prices for local calls.

Chapter 4: Methodology
4.1 Data collection sources
Data gathered through company’s magazines, advertisements, newspapers and other
magazines and from company’s websites customer and employees of the company under
study.
4.1.1 Primary sources

21
Data collected by customers and the employee of the organizations under study.
4.1.2 Secondary sources
Websites of Company under study, stock market site, magazines, UAE business sites.
4.2 Data collection tools
Data collected by customers of both mobile services by asking questions.
The customers are the one who are paying and using the services of the company. Their
experience with the company services; provided a clear picture how the customer
perceives about the product and their level of satisfaction with the brand.
Self observation were useful in which situation where question with employees were not
comfortable to ask, e.g. employee is not giving the answer of indirect question may be
due to company confidentiality.
4.3 Sampling
Data collected from all class of user, including worker class, students, professionals and
executive class. Sample frame for data was those who using mobile service more than
two years.
4.3.1 Sample size
Random sampling collected from the population of 110.
4.3.2 Sampling technique
Random sampling technique used to know the behavior of customer. Sampling at
different location is representing the average perception of Dubai population.
A survey carried out to collect data from customers of the companies under study. Survey
continued for 3 days to cover three zones of Dubai which are most crowded, i.e. Bur
Dubai, Daira Dubai and Jebel Ali.
To assure the quality of data, question only asked by concern respondent, e.g. customers,
which are using both services and the employees of the companies which is under study.

22
Chapter 5: Data processing, analysis & interpretation
The different prepaid packages comparison of both companies is as follows.
Options Etisalat Remarks Du Remarks
Registration Charges 165 One time 55 One time
Bonus Amount 10 One time 100 4month recharge 20times
Renewal Charges 50 Yearly 0 4month recharge 20times
local call charges 0.3 /min 0.3 60 seconds
local call second minute charges 0.3 /min 0.3 60 seconds
International call charges 2.4 /min 2.4 60 seconds
International call Off peak 1.89 1400-16:00, 21:00-07:00 1.89 1400-16:00, 09:00-07:00
Off Peak local call 0.24 1400-16:00, 00:00-07:00 0.3 same
Local sms 0.18 /sms 0.18 /sms
International SMS 0.6 /sms 0.6 /sms
MMS local 0.45 /mms 0.45 /mms
MMS International 1.8 /mms 1.8 /mms
DATA access 0.1 /KB 0.1 /KB
Favorite country plan More credit- unlimited validity
local call charges 0.33 /min 0.3 60 seconds
Bonus Amount 0 30% One month validity
local call second minute charges 0.33 /min 0.3 60 seconds
International call charges -30% 30% less 2.4 60 seconds
International call Off peak -30% 30% less 1.89 60 seconds
Off Peak local call 0.264 /min 0.3 same
Local sms 0.3 /sms 0.18 /sms
International SMS 0.6 /sms 0.6 /sms
Country modification charges 10 per number 0 Not applicable
Global friend and family More time- 60days validity
Monthly charges 20 / month 0 Not applicable
Bonus Amount 0 30% max
International call charges 1.92 any thee number 2.4 60 seconds
International call charges off peak 1.51 1400-16:00, 21:00-07:00 1.89 60 seconds
local call charges 0.3 0.3 60 seconds
local call charges off peak 0.24 1400-16:00, 00:00-07:00 0.3 same
SMS charges 0.18 0.6 same
Super off peak plan More International -60 days validity
Not
local call charges 0.36 allowed call not allowed
Bonus Amount 0 60% max
Not
local call second minute charges 0.36 allowed call not allowed
International call charges 1.23 1400-16:00, 21:00-07:00 2.4 60 seconds
International call Off peak 0.76 00:00-07:00 1.89 60 seconds
Not
Off Peak local call 0.36 allowed
Not
Local sms 0.3 allowed
International SMS 0.6 0.6 same

23
Following is the graphical presentation of customer survey.
Following graphs presents the customer interest due to economical price

Customer intrust due to price

100 du
90
80
70
60
50
40
30
20 both
Etisalat
10
0

* Both indicate that customers have same opinion for both products.
Fig. 5.1
During the survey customer trust noted by questions the trust is on the price basis.

Customer trust

41
du
40
39
38
37
36
Etisalat do not know
35
34
33
32

*do not know includes both customer who do not care about the prices and those who are
not satisfied with both services.
Fig. 5.2

Customer loyalty presented by following graph on the basis that if they get offer with
15% discount will they shift to other service?

24
 Customer loyalty

45 do not know
40 du

35
Etisalat
30
25
20
15
10
5
0

* Do not know includes both customer who want to shift due to offer and those who want
are not interest due to any offer.
Fig. 5.3

Following graph represent the customer of individual service and both service.

Customers of product

70
Etisalat
60

50
both
40

30

20
du
10

* Both represents, that customer who carries both services at once.

Fig. 5.4

Over all perception represented by following graph.

25
 Customer perception about service

90
Etisalat
80
70
60
50
40
30 du
20
both
10
0

* Both represents, to those customers who are not satisfied with bother services.
Fig. 5.5

Following graph represents the perception of customers for the over all image of
companies.

Customer perception about companies

60
Etisalat
50
du
40

30
both
20

10

* Both represents, equal perception of companies.

Fig. 5.6

Solution of customer’s needs and problems presented by the following graph.

26
 Solution of their problem

45
Etisalat both
40
35
du
30
25
20
15
10
5
0

* Both represents customers are not satisfied with both companies.

Fig. 5.7
Figure 5.8 presents the customer’s knowledge about the packages and offering announced
by the companies.

Customer knowledge about new packages

60
du
50

40
Etisalat do not know
30

20

10

* Do not know indicates that the customer both the customer do not know and the
customer do not have interest to explore the package.
Fig. 5.8

27
Following graphical presentations describes the customer movement due to favorable
price.

Customer shift due to price

100 du
90
80
70
60
50
40
30
20 do not know
Etisalat
10
0

* do not know includes both customer who do not know about the price and those who
due to inconvenience do not want to shift.
Fig. 5.9

28
Summary
The study carried out in order to analyze and to do in depth study on the pricing
strategies and relating with the customer perception about the products of two giant
telecommunication companies in this region.
Etisalat the most famous and the pioneer company in this region provider of many
integrated telecommunication services, already penetrated in the UAE market not due to
the mobile telephony with also many other services.
The data collected from the electronic, hard copies as well as from the customers through
questioner, through the market survey. Random samples have been drawn from the
population of 110 users. The sample frame was the user of cellular service for last three
years. the survey continued for three days of different areas of Bur Dubai, Daira Dubai
and Jebel Ali Dubai.
Data also collected from the employee of the organization under study though call center
and through the customer service departments.
All data processed through Microsoft Excel and presented in graphical form for better
understanding of the reader.
Etisalat vs du pricing uncovered many questions about both companies, etisalat is using
allowance and discount, promotion and segmented pricing strategies, etisalat has
designed several plans according to customer needs and the main focus of etisalat
remains to provide the customer the quality of services and with the different suitable
packages, prices of etisalat is higher than the competitor du.
Instead reduction in the pricing etisalat introduces the promotions to move and to give
customer a difference in quality of services. The customers of etisalat are still in majority
and from the survey it is clear that the those customer are using du, also using etisalat still
the user of etisalat are using etisalat independently. Etisalat post paid packages sub
devided into three more packages to facilitate the user i.e. favorite country plan, friends
and family and super peak hours plan. Which designed to the use of customer and in
response of the competitor du.
Du the second giant in the UAE market and the only competitor of etisalat
penetrated fully in presence of the pioneer and developed a big market du In 2009 du
achieved record revenues of AED5.3 billion and profits of AED528 million.

29
Du achieved target market share reaching 32% within third year of its operation and
added more than one million active subscribers, in the total of 3.5 million at the end of
2009. By considering huge subscriber du in the same year, invested AED2.4 billion on
network and infrastructure development to enhance capacity and coverage
Du due to its remarkable services got many awards and mainly foucused to
provide the economical services to the customer. Like etisalat, du also offers bundle and
allowance and discount pricing strategies. The most popular plan of du, “Pay as you go”
same like etisalat having three recharging option “more credit” “more time” and “more
International” all packages designed as per the user convenience. The main feature of du
in du packages is the allowance, each plan except the “more time” come with the bonus
point, as much as the user charges more amount s/he gets. This motivational feature
makes du customers immediate pay back offer.
The unique feature of du, is the per second balance deduction, unlike etisalat du
charges to its customer on the basis of seconds, and the user gets more saving on each
seconds. These features made du popular among the mobile user, the only thing which
noted during the market survey was the quality fo du, which can needs improvement.
Du also provided the recharging through the voucher with the denomination of
20, 50, 100 and 200 AED, in contrast to etisalat i.e. 25, 50, 100, 200 and 500 AED. This
offers of cards provides the du customer a recharge on lesser expenditure. But etisalat to
over come this situation and to provide the lesser recharging given user a top up option
with minimum of 5 AED. And to further facilitate also given option of call back feature
in this feature the caller in case of low in balance may request the second party to receive
his / her call on the condition that the balance will deduct from the second party. In this
case both parties must required etisalat connection only.
For the local calls du has its very simple and straight tariff, but for the
international calls du, having features of off peak hours and friends and family plan.
While etisalat gives option for both local and international plan, and both local and
international calls feature of off peak hours applies. Most migratory of etisalat is because
of low prices of du, the main reason is per second billing and bonus amount on every
recharge, and the flexibility of changing the recharge mode any time at the time of
loading the balance. Customer trust is also shown by du in term of price. The loyalty of

30
user is not that much with etisalat but the customer behavior shown that both services
required improvement to make them more loyal.

Chapter 6: Conclusion, recommendations and limitations:

6.1 Conclusion
Etisalat
Etislat is good quality service provider.
Etisalat packages are more complex and a normal user can not understand easily
Etisalat packages are bit tricky for a normal customer.
Etisalat uses promotional strategies rater than reducing the prices.
Etisalat services proved that they are the need of customers.
Etisalat over all packages are far more expensive as du.
Du
Du is average quality service provider.
Du proved that it is economical service provider.
Du packages are less tricky
Du uses allowance strategies for most of its packages.
Du promotions are not that much as etisalat.
Customer are not fully depends on du due to its quality of service.

31
6.2 Recommendations
Etisalat:
Etisalat need to build lost trust on customers by clear and self explainatry packages.
Etisalat need to focus on the allowance strategies further.
Still etsalat customers are interested in etisalat it need to increase the loyalty in customers
buy providing the straight and clear offers and packages.
Etisalat need to take advantage of its quality of services and need to introduce the
allowance and need to make addict the customers of its services.
Etisalat need to add charges on call diverting services to restrict the caller to use the du at
the expense of etisalat.

Du
Du need to improve the quality of services, as du become secondly connection in the
market.
The user of du, mostly uses etisatat as well to be in touch with the world.
Du required to make its own identity despite the low call provider.

32
6.3 Limitations
During the study due to many limitations the report could not completed the scope.
If these limitation can be managed than we can have a complete and very detailed
research on the pricing strategies of two gaint companies of this region where there is a
huge potential is there to invest in the telecom sector.
Following were the limitations during the research.
• Respondent behavior issues due to different nationalities.
• Due to privacy of companies understudy, information collection issues.
• Timescale
• Reluctance or hesitation of participants to participate in the study.
• Scope of study
• Hot and humid climate during the data market research.
• Quick package changing issues of companies, during the studies companies
launched three packages.

33
Part II
a) Introduction of the student

• Name : Muhammad Inamuddin

• Last Degree Obtained: M.Sc. Food Science And Technology
• Organization’s Name: Al Ghurair Foods LLC.
• Designation: Food Technologist
• Experience (Years) Eight Years

34
b) Appendixes
Appendix A – Questionnaire form
Appendix B – Pricing comparing table
Appendix C – Calculation for yearly costing
Appendix D – Graphs table

c) Bibliography

35
Virtual University (2009). Hand out of Principal of Marketing, virtual university of
Pakistan
How Du made etisalat great. (2009, August 29). Gulf news, p. 8.
Virtual University (2009). Hand out of Marketing management, virtual university of
Pakistan
[Online] Available:http://gulfnews.com/opinions/columnists/how-du-made-etisalat-great-1.537347
[Online] Available www.etisalat.ae
[Online] Available http://esm.sca.ae/English/securities/Pages/financialReport.aspx?cosym=etisalat
[Online] Available http://gulfnews.com/opinions/columnists/how-du-made-etisalat-great-1.537347
[Online] Available www.khaleejtimes.com
[Online] Available http://www.du.ae/en/default
[Online] Available http://esm.sca.ae/English/securities/Pages/financialReport.aspx?cosym=DU
[Online] Available http://www.gulfbase.com/site/interface/CompanyProfileSummary.aspx?c=604
[Online] Available http://www.state.gov/r/pa/ei
[Online] Available http://www.uae.gov.ae/Government/telecomm.htm
[Online] Available http://www.economy.ae
[Online] Available http://www.tra.gov.ae/
[Online] Available http://www.telecomreview.net/Issue.aspx?IssueID=30
[Online] Available http://www.telecomsinsight.com/file/70183/du-doing-harm-to-etisalats-market-share.html
[Online] Available http://www.telegeography.com/cu/article.php?article_id=17502
[Online]Available http://www.etisalat.ae/index.jsp?
lang=en&type=content&currentid=91cd0df50ae7b010VgnVCM1000000c24a8c0____&contentid=7dc598e9d4504210VgnVCM1000
000c24a8c0RCRD&parentid=91cd0df50ae7b010VgnVCM1000000c24a8c0____

36