Reliance Jio Differentiation Strategy
India’s telecom world has seen many service providers over the years. Some stayed on. Some bid goodbye after a few years. But all these telecom operators maintained a status quo in the sector. But things got really really exciting with the entry of Reliance Jio in 2015–16. The telecom industry changed permanently, the unspoken rules were broken, the status quo was destroyed. Just one company made it possible.
This article will identify why the name of Reliance Jio is taken separately when it comes to analysing the Indian telecom industry. It seems the telecom industry is now divided into two groups. One group is made by the Vodafone-Idea-Airtel group and the other group has only Reliance Jio.
Why is Reliance Jio different? What differentiation strategies has it implemented ?
Reliance Jio Differentiation Strategy
Jio came to the market with 4G spectrum alone. At that time, the Indian market was still dominated by 2G and 3G networks. There was no 4G ecosystem, yet Jio took a leap of faith and differentiated itself from the incumbents right from the start. See the next point to see how this differentiation strategy of Reliance Jio is connected to the other.
Jio knew that in order to lure people into buying new 4G phones, it has to bring out new 4G smartphones and sell them at an extremely affordable price. One of the entry level 4G phones — Lyf Flame 2 — having 1 GB RAM was priced at INR 3500. It was impossible to believe at that time that 4G can be so affordable.
Later Jio Brought out Jio phone for the masses. It was a feature phone but it had 4G. You might be thinking, how can this be a differentiation strategy? Vodafone, Airtel and Tata CDMA — all brought out phones at some point of time. But they were not heavily subsidised. Neither were they any different from the phones that were already in the market.
Reliance JIo knew very well that India is a price sensitive market. People would not be buying new phones just to get a little bit more speed than 3G. So Ambani came up with the differentiation strategy that is exactly the opposite of the differentiation strategy of Apple. The company announced that the new JIO SIM would provide unlimited data for at least 3 months. ( Turned out that the free data scheme continued for more than 3 Months). At the same time, JIO SIM was being given away for free, Infact, if people wanted 1 JIO SIM, the salesperson would give one more with it. To give you a perspective, at that time, the cost of 1GB data for 1 month was Rs. 251 !
Even after Jio started charging, the methodology was different. This was a big differentiation strategy implemented by Jio. It announced that it would not charge for voice calls. Voice calls would be free anywhere in India. At that time, people would pay Rs 303 and enjoy three months worth of 1GB Data. Today, although Jio has increased its price, its differentiation strategy on the pricing front is still prominent.
The prevailing commission given to the recharge retailers before Jio came into the market was just 2.5%. Jio changed the scenario and now retailers get 6.5% commission on the sale of recharge packs. So retailers pushed for Jio strongly. They were tired of getting peanuts from the big corporates.
When Jio first came into the market, the agents — the foot soldiers were the ones who made Jio’s foot-hold strong. They worked day and night. The field agent of my distributor ( yes I am a retailer too) too goes to the market at 9 am and returns home at 9 or 10 PM.
If the sales people were the foot soldiers, Jio Centres were the war rooms. They coordinated the works of the sales people and helped Jio expand in an organised, well thought out way. These Jio Centres were scattered all around the country and still are. People from the Jio Centres regularly visit the shops to enquire about the sales. These JC, as they are called, created regional Whatsapp groups through which they remained connected with the shop owners constantly.
Another differentiation strategy of Jio is that it understands the psychology of the customers. Although Jio is a big corporate house, the regional marketing strategy of Jio is quite down to earth. The language that the marketers use, the posters that they bring out, the way they speak to the customers — they know very well how to entice them. In fact, once they came to my shop and recommended me to keep the Jio phones on the customer’s right hand side — customer’s tend to look at the right side when they enter a shop.
Jio implemented a clever way of differentiating itself. It subtly established the notion in the subconscious of the customers that Vodafone Airtel or Idea exist only to loot the customers while Jio is a customer-centric company. Both the customers as well as the retailers were hypnotized by this notion. This is the reason that Jio is not a member of COAI. And this is the reason why all the arguments that Jio had with the incumbents were publicized heavily.
Before Jio, the telecom service providers did not focus on providing anything else other than their core services — calls, internet and SMS. True they had their WAP Stores from which you could download videos, images and ringtones, but you had to shell out as high as INR 50 for downloading just one image. And those platforms were quite juvenile.
Jio drastically changed the scenario. It not only gave out free SIM card, free data but it also offered Live TV, movie streaming, music streaming, news portal, antivirus, cloud storage — all for free. And these platforms were all state of the art. The Jio Tv app featured each and every Indian channels, the music app was better than Gaana or Saavn. Till to this date the Jio Tv and Jio Saavn remains free to use for the Jio customers. Building an ecosystem around Jio is perhaps the smartest differentiation strategy that Jio implemented.
Conclusion
Jio has always tried to be different from its competitors. Even when there was no existence of Jio decades ago when Mukesh Ambani first entered the telecom sector, he tried to be different. He brought out Reliance CDMA when other players were leveraging on GSM technology. It was but natural that Mr.Ambani would like to differentiate his new venture — Jio. And he is quite successful at that. We take the names of Airtel, Vodafone and Idea in one breath, but we — the laymen — do not use the name Jio along with these players. It is now to be seen how the incumbants respond to the awesome differentiation strategy of Jio.
Originally published at https://www.immortal-ideas.com on September 19, 2020.
