Xl Marketing Strategy - Telecommunication Industry in Indonesia

Telecommunication industry in Indonesia can be considered as the toughest competitive market. The companies must spent big investment for assets to support broader network coverage, operation and marketing. However, we are talking about huge market here. It is said that Indonesia is the third largest wireless market in Asia after China and India. Think about the number of population of Indonesia, about 250 million. By the end of 2010, it was estimated about 235 million of wireless subscribers. Total revenue growth of the industry both in voice and data is about 7.4% in 2010.

Indosat spent almost 1 trillion Rupiah for marketing expense in 2010. XL spent 1.3 trillion Rupiah and Telkom leads with 2.5 trillion Rupiah. Now, let's divide marketing effort in telecommunication industry in Indonesia into two types, above the line and below the line. For above the line, the most expensive marketing campaign is spent on media for brand activation, such as TV and radio commercials, billboards, also paper based media such as newspaper. Advertising must be recalled in higher frequency to increase brand awareness and improving brand loyalty. There is a head to head competition even for the ads. Some of them are even countering and bickering each other. Branding, nice slogan, funny and engaging commercials are made. The now booming social media is also used for media of promotions to have larger customer based and promos can be informed and quizzes can be made through this media. From this social media, companies can also get to know their customers better, also from the complaints and suggestions that they made. For below the line marketing, industry players are creating total user experience to be closer to customers. They have excellent support and service, they sponsored events, for example Mudik Bareng or providing contents that helps people on their way back to their hometown. Opening booth in trade fairs/exhibitions and even in malls with pretty SPGs handing out leaflets of attractive price they provide are also done by these players.

The objective of both above and below the line strategy is to create brand awareness and relevance to the customers. But the bottom line of these marketing is the price. Indonesia is a very price sensitive market. XL is the pioneer that starts the price war in the market. Others must follow in order not to lose its market share. Also as an additional point, the industry players are innovating and improving their value added service (VAS) that they could offer to customer. This VAS includes service of ring back tone, mobile banking, etc.

In this assignment, I pick XL as the company that I would like to discuss and put as example, because this company has been able showing an increase of market share and proving to be a serious contender in the competition, next to Telkomsel as the market leader. Furthermore, since telco industry is a very fierce competition, what one industry player do will be copied