A way to branding success
Mobile telecom brands of Bangladesh are passing complex and critical situations. Besides traditional competition from competing brands, they are facing the outcome of consumers' dominance, and freedom resulted from the availability of brands at a low price, similarity in services, lack of differentiations, and low switching cost. Consumers are disrespectful to brands and showing lack of trust, commitment, and attachment. Overall, the brand relationship status with consumers is very vulnerable in this industry.
The branding problem is one of the major issues in mobile telecom industry of Bangladesh since the market monopoly had been broken down allowing private and foreign companies in the market. Branding failures let the companies out of the competitions and finally out of the market. Strong financial support of the companies does not ensure strong existence of brands in the market. This truth reverberated in the case of brands Warid and Aktel. Warid came from the giant Abu Dhabi Group with significant investment which is operating in Pakistan, Congo and Uganda. Similarly, Aktel was also backed by another big company Telecom Malaysia which has been operating in Malaysia. Warid came with creating a buzz in the market that caused high brand awareness and could generate high consumers' expectations. Initially they also offered spectacular promotions to consumers. Likewise, brand Aktel had the second position market in terms of market share. Similarly, the first mobile brand of the country, Citycell, who had monopoly, had to stop operation very recently though it is owned by one of the largest mobile telecom service providers of the world Singtel. Considering this phenomenon, few loopholes have been identified that are attributed to the challenges for the current brands of mobile telecom industry of Bangladesh.
Source: http://www.btrc.gov.bd/telco/mobile, January-2016.
First, customer switching is a common tendency as customers switch if they find best possible options. It is said that five to ten percent customers switch every year and it is the tolerable limit. However, this switching rate is very high for the among the brand users of this industries. The statistics show that the total number of brand users of different companies is 131.956 million whereas, according to GMS Intelligence data, fifty percent of the total population of the country has the access to mobile phone. In a simple calculation, thirty percent consumers are the multiple brand users though the actual figure may be higher than this. This switching tendency is very high among the young consumer segment. On average they use three brands (SIM). They switch to a different brand when companies get promotional offers. Instead of being passionate to use a particular brand, they become passionate to switch to different brands frequently. Brands fail to build up an intimate and a passionate relationship with their customers. They are showing very poor level of commitment and trust and overall maintaining worst relationship status with brands.
Second, negative buzz or unwanted whisper is one of the strongest threats for the brands. Marketing Bible preaches a dissatisfied customer tells ten-to-eleven customer. However, this figure now reaches to hundred to thousand or even more due to the availability and accessibility of social media. Creating buzz is very easy nowadays and a single aggrieved customer can create significant damage to the brand equity. For example, recently an aggrieved customer of leading telecom brand of the country posted her reaction on YouTube showing her resentment regarding their services. Likes, comments, reactions, and sharing have made it viral throughout social media. Today, only on YouTube, I have found around five thousand viewers have watched her video. Due to lack of attachment and dedication to brands, every day thousands of sharing, videos, and status have been uploaded in social media by consumers where marketers have no control. Instead of positive word-of-mouth consumers are now busy with creating negative buzz even if they find a bit hole. Consumers are showing less tolerance because brands fail to build strong bonds and attachment and achieve their commitment to brands. A single consumer is deteriorating millions of dollar brand equity due to weak brand relationship.
The third challenge is the less diversity of the loyalty programs designed by the marketers. In order to maintain the consumers and make them loyal, marketers have to develop loyalty programs for consumers. Their loyalty programs also fail to bring the desired outcome. In a study conducted in the USA revealed that only ten out of twenty customers actively participated in the loyalty programs. The same tendency is seen in Bangladesh. The loyalty programs are mainly based on transactional perspective to increase traffic or to increase purchase frequency. They fairly overlook relational perspective to make bond with customers.
Fourth, product differentiations gradually become minimal in technology-oriented products. For example, once strong network coverage was the competitive advantage of Grameen Phone which has gradually been achieved by all the brands. Similarly, the same phenomenon is true for 3G network. Product or service differentiations are gradually narrowing down for mobile telecom brands. In such situation, differentiation can be created from relational perspective where the brands of this industry are severely lacking. They fail to achieve consumers' trust, commitment, intimacy and passion.
However, telecom brands are very successful in attracting customers from competitors' brands by providing various promotional offers. In addition, brands are bearing initial SIM tax on consumer purchase imposed by government that raises the customer acquisition cost. It is well established in marketing literature that attracting a new customer is more costly than retaining a current customer. The customer acquisition cost of telecom brands of Bangladesh, therefore, is very high that causes lowest average revenue per customer in the world.
To overcome this complex competitive situation, sound, and effective brand strategies are essentials. Having a large churn of profitable who are less sensitive to competitors' brand, and loyal customers are the determinant of branding success which can be created through building strong customer relationship. Strong brand relationship with consumers increases consumers' tolerance in sudden breach brand promise and negative word-of-mouth, pursue consumers talk favourably about the brand, and make consumers less sensitive to competitor price discount and promotional offerings. Like an interpersonal relationship, strong brand relationship increases consumers' tolerance and patience, create strong attachment and bond with the brand they use.
Marketers, therefore, should find the way that will establish strong consumer brand relationship. Brand personality, brand image, brand experiences, brand identifications and others strategies are applicable, but marketers have to find the most effective strategies suitable for Bangladeshi consumers. One of the best possible ways for marketers is customer relationship management (CRM). It is now possible to track a customer all the time by CRM technologies. It enables marketers to let the consumers design their product or service, response to consumers' problems instantly, collect recommendations and feedback from consumers. Therefore, it may be an effective consumer brand relationship building tools for marketers.
Md Kashedul Wahab Tuhin is Assistant Professor, Department of Marketing, Jahangirnagar University