Profitability Analysis of Campaign and Promotional Offers of Qubee

This report titled “Campaigns and Promotional Offers of Qubee” will mainly focus on the variable costs and revenues generated by several promotional offers given by Qubee.

Origin of the Report:

This report is done as partial requirement of the 3 months internship program for the BBA students of Eastern University of Bangladesh. During my internship period I joined QUBEE. During the organizational attachment period my faculty advisor advised me to report on different promotional offers given by Qubee. The title of the report is “Profitability Analysis of Campaigns and Promotional Offers of Qubee”

 Objectives of the Report:

The primary objective of this report is to follow with the requirement of the Qubee. But the objectives is not limited with in above, behind this study is something broader. Objectives of the study are summarized in the following manner:

 Specific Objective:

  To explore the corporate mission of Qubee.

  To examine the functions of Qubee.

  To measure the criteria of profitable promotional offers.

  Find out the customer expectation and need from the services of Qubee.

 Scope of the Study:

The report will focus on the variable costs and revenues generated by several promotional offers given by Qubee. This report has been prepared on the basis of experience gathered during the period of internship. Most of the data used in the reporting of the study are from primary sources. All the data related to the reporting requirements are not available due to confidential reservation practices for the benefit of the organization.

Analytical Tools:

  Relevant data included in the report are descriptive enough to fulfill report requirement.

  Tables and graphs are prepared for performance analysis.

  All the data represent different areas and particular institution.

  Data are segregated in different dimensions and all the dimensions are discussed one by one.

  Recommendations are given which would help to enhance the profit and minimize the risk.

And lastly the report is prepared under the guidance of my supervisor. I have tried my best to include all possible data for making a complete report. I have also consider carefully all other aspects of a conventional report.

 Methodology:

This study required a systemic procedure from selection of the topic to final report presentation. To perform the study data sources were identified and collected, they were classified, analyzed, interpreted and presented in a systemic manner under the key points.

• Topic Selection: The topic selected for the study was assigned by the Honorable Assistant Professor Mr. Oli Ahad Thakur before assigning the job; it was discussed with me so that I can prepare a well-organized internship report.
• Data Source Identification: Essential data sources both primary and secondary were identified which are needed to complete and workout the study. To meet up the need of data, secondary data are used and the study also includes necessary interviews of the officials and clients.

• Data Collection: Primary data were collected from the following sources
  • Face to face conversation with the management and Staff
  • Practical desk work.

The secondary data were collected from the following sources

• Different Circulars issued by the Head Office

• Classification, analysis, interpretation and presentation of data: To classify, analyze, interpret and presentation of data I used some tables to understand them clearly. Moreover this report includes some trend analysis. Furthermore, a qualitative analysis is performed with the primary data.
• Finding of the study: After scrutinizing the data, problems of the study are pointed out and they are shown under concerned heads. Recommendations are suggested thereafter to overcome the problems.
• Report Preparation: On the basis of the suggestions of our honorable supervisor some deductions and additions are made and final report is prepared thereafter.

Limitations:

The study was not out of limitations. A lot of information could not be obtained from Qubee management. But as an intern it was a great opportunity for me to know the corporate culture. Some constraints are appended bellow:

  The study was limited only to the offers given till October 2011.

  Unavailability of sufficient written documents as required making a comprehensive study.

  Inadequate time

  In many cases, up to date information is not published.

  The office is very busy to serve the customers. So allocation of time for an intern is very much tough for the officers.

  Limited time of internship program. The duration of my internship program was only three months. But this time is not enough for a complete and fruitful study.

  I carried out such a study for the first time, so inexperience is one of the main constrains of the study.

 Organization of the report:

This report is broadly organized into two major parts. The first part includes the company profile and the overview of the study. The second part includes the theoretical study, findings, quantitative and qualitative analysis and the resultant recommendations and conclusion.

 Organizational Overview

Company Overview:

Qubee is a new and exciting WIMAX service provider company from Augere providing fast and reliable broadband internet services to residential and business customers across Bangladesh. It is currently operating in Bangladesh, Pakistan, and Uganda and very soon it will start its operation in India. The company started its operation in Bangladesh in 22.07.09. It believes that everyone should be able to enjoy trouble-free access to the internet and the world of opportunities that it brings. Qubee’s aim is to make a magical internet experience available to everyone, every day, without exception.

Qubee is the creation of a group of global telecoms professionals who saw that a new technology called 4G could really change the internet experience for millions of people worldwide. Qubee is busy in building a network of base stations to offer their brand of internet access right across Bangladesh.

Network Coverage:

Qubee has network in Dhaka, Chittagong and Sylhet (only divisional city area). Network has already spread to Comillah, Feni, Cox’s Bazar, Khulna, Rajshahi, Bogura, Dinajpur, Pabna, Rongpur, and Borishal.

Cost of Bandwidth:

Qubee buys bandwidth mostly from Mango and a negligible amount from BTCL. The company buys near about 1.5Gbps of dedicated bandwidth per month (as per October’s Information).  Below Chart is showing the bandwidth price of MANGO.

Based on the above chart, cost of bandwidth for Qubee according to their regular package is showing below

 Below table is showing the cost of Qubee according to their promotional package.

 Campaigns of Qubee (till October, 2011):

There were no promotional offer when Qubee started it’s business. But after sometimes it started promotional offers to gain more customers. Here I have compiled and analysed the promotional offers from April to October.

 April 2011 Campaign:

New Package: QUBEE 256 kbps_3 GB @ BDT 550 + VAT

15% Vat will be added with each package.

This offer added a new package to Qubee’s portfolio. The package was for low end users.

 Bangla New Year Campaign April’11:

With every new connection taken during promotion Up to Tk.1,000 off on 1^st Month’s fee Or 2 GB Usage (worth Tk. 700) free in Pre Pay.

 No Questions-Asked refund: Pre Pay customers will continue to get refund of their device by turning it within 14 days in two Qubee Customer Center (Flagships only).

Preloaded volume in Pre Pay new connection: Each new Pre Pay connection comes with 100 MB with 30 day validity.

 Speed Bump: 22th April:

Qubee doubled it packages’ speeds with the existing package price.

Previously the packages were

 After the speed bump above chart changed to

 Analysis of 4.1, 4.2 and 4.3: as these campaigns had overlapping time duration so I tried to analyze the April’s packages.

1. 1.      April campaign: Before 256Kbps_3GB package Qubee’s customer was near about 3000. At 14^th of April the number increased to 3331. 235 customers were in 256Kbps_3GB. Not all the new customers taken 256Kbps_3GB, some other package users migrated to this package. At per 14^th April’s information 213 customer newly bought Qubee connection with the new package on that month.
2. 2.      Bangla New Year Campaign and Speed Bump offer: both were hit offers of Qubee. Qubee gains a huge number of customers through this offer. At 1^st may the numbers of customer ware 4057. Because of the two offers Qubee got lots of customer who would like to use up to 512 Kbps speed. For speed bump a large numbers of Banglalion customer shifted to Qubee. Although I think no question ask refund was a great offer but unfortunately it did not hit and the numbers of prepay user still remained low.

 On May Qubee had to recruit some sales persons to manage the huge sale pressure. For the first time it used bill board to advertise. For this campaign Qubee had comparatively less advertising cost as users’ were facing double speed from the beginning of April but the announcement of double speed comes out officially at 22th of April.

April Campaign:

Cost of Bandwidth: 94.81*213 = 20194.53 taka.

Advertising Cost:              news Paper        : 20000 Tk.

Leaflet                  : 15000 Tk.

Total cost:  55194.53 Taka.

Revenue (from the new offer)

550*213 = 117150 Tk.

Profit: 117150–55194.53 = 61955.47 Tk.

 Bangla New Year Campaign and Speed bump:

Cost of Qubee:

Numbers of customer: 726 (newly joined)

512Kbps: 536

6GB:      130, so cost:       130 * 189.63 =    24651.9 tk.

12GB:    360 , so cost:      360 * 379.26 =    136533.6 tk.

Sky:        46 , so cost:         46 * 948.15 =      43614.9 tk.

204800.4 TK

1Mbps:  156

6GB:      29 , so cost:         29 * 189.63 =      5499.27 tk.

12GB:    78 , so cost:         78 * 379.26 =      29582.28 tk.

Sky:        49 , so cost:         49 * 1106.17 =    54202.33 tk.

89283.88 TK

2Mbps: 34

6GB:      15 , so cost:         15 * 189.63 =      2844.45tk.

12GB:    12 , so cost:         12 * 379.26 =      4551.12tk.

Sky:        3 , so cost:           3 * 1264.19 =      3792.57tk.

11188.14 TK

Cost of Advertise:

 Newspaper: 60000

Bill board: 80000

Leaf let: 30000

Total Cost: 60000+80000+30000+11188.14+89283.88+204800.4 = 475272.42 Tk.

Revenue:  512Kbps: Numbers of customer: 536

Numbers of customer in 6GB:    130 , so revenue:             130 * 978 =          127140 tk. ( because of discount no revenue)

Numbers of customer in 12GB:  360 , so revenue:             360 * 93 =            33480 tk.

Numbers of customer in Sky:     46 , so revenue:                46 * 438 =            20148 tk.

Total amount                                                     53628 TK

1Mbps:  Numbers of customer: 156

Numbers of customer in 6GB:    29 , so revenue:                29 * 438 =            12702 tk.

Numbers of customer in 12GB:  78 , so revenue:                78 *668  =            52104 tk.

Numbers of customer in Sky:     49 , so revenue:                49 * 1587  =         77763 tk.

Total amount                                                     142569 TK

2Mbps: Numbers of customer: 34

Numbers of customer in 6GB:    15 , so revenue:                15 * 1587 =          23805 tk.

Numbers of customer in 12GB:  12 , so revenue:                12 * 2163 =          25956 tk.

Numbers of customer in Sky:     3 , so revenue:                  3 *5038 =             15114 tk.

Total amount                                                     64875TK

Total Revenue:  53628 + 142569 + 64875 = 261072 TK.

Profit/Loss of Qubee: 261072 – 475272.42 = -214200.42 TK.

Win Back Campaign: May 2011

At 10^th may the call center of Qubee started calling to the deactivate user and requested to active their accounts and offering them if they active their accounts then they need not to pay their due bills. Below chart is collected from the Churn Management of Qubee. It shows the number of accounts and the numbers of deactivate accounts to provide the offer.

Analysis: as speed bump was already going on so numbers of customer was increasing. On that time this offer seems very lucrative to the deactivate users. 97% (96.95% exactly) of deactivate users’ activate their account.

No new recruitment or advertise was made for this offer.

Cost of Qubee:

Calling cost: as Qubee is using IP Phone to call outbound so the cost of call is very low, better to say negligible, and this facility was not set only based on this offer. Previously this facility was there but engineering department used to use that facility to solve customers’ problem over phone.

 Cost of 512 Kbps_12GB is 379.26Tk.

So, cost of Qubee: 1339* 379.26 = 507829.14 Tk.

Revenue: 1339 * 950 = 1272050 Tk.

Profit: 1272050 – 507829.14 = 764220.86 Tk.

Pre Pay Recharge Campaign: 10-20 May, 2011

Campaign Objective:

1. Reduce Deactivate base from current approximately 45%
2. Increase average number of cards charged per day and hence increase revenue.

 Analysis: total 985 cards were sold during the promotion period. Among those 642 cards were 400 tk. and 343 cards were 700 tk.

Only advertisements on newspaper were given.

Cost of advertise: 80000 taka.

Cost of Bandwidth:

Cost of 1Mbps speed with 2GB usages is: 63.20987654 tk.

Cost of 1Mbps speed with 4GB usages is: 126.4197531 tk.

Total cost of bandwidth is: (63.21 * 642) + (126.42 * 343) = 83942.72 Tk.

Total cost of Qubee: 80000 + 83942.72 = 163942.72 Tk.

Revenue generated from the sales: (642 *400) + (343 * 700) = 496900

Profit: 496900 – 163942.72 = 332957.28 Tk.

 It can be said that it would be more profitable if this amount of card sold without offer, but Qubee would not be able to sell these amount of card without this offer.

QUBEE Laptop Fair, 2011: 10^th-12^th June, 2011

Qubee was the title sponsor of the fair. For this fair Qubee sold its USB modems in a discounted price.

Monthly Package:

USB Device is BDT 1000 and Gigaset is BDT 3000. A new device named Tower introduced in this fair which costs BDT 5000.

Pre Pay: USB Device is BDT 2000 and Gigaset BDT 3000. User is not allowed to get Tower modem.

Package Offer:

Users will get up to BDT 1000 off for monthly packages and 2GB free for Pre Pay packages during the Fair period across all QUBEE channels (Indirect/Corporate/Direct).

Analysis:

To be the title sponsor Qubee has to spend 900000 taka and to let the customer know about the fair it had to advertise.

Advertising cost: only newspaper ads were given. For ads it had to spend 150000 taka and to decorate the stall it spent 100000 taka.

With every ASUS laptop, sold in the fair Qubee provided a free USB modem with prepaid connection. Total 121 laptops sold on those 3 days. From Qubee stall 364 connections sold among which 73 were prepaid and the rest of the connections are postpaid.

 Cost of Qubee:

Free modem + 2 GB with each laptop: (121 * 1000) + (121 * 63.21) = 128648.4 TK.

Connections sold from Qubee stall:

120 connections were 256Kbps_3GB, 76 connections were 512Kbps_6GB, 48 connections were 512Kbps_12GB, 38 were 512Kbps_sky, and 82 were 1Mbps_12GB.

So costs of connections sold from Qubee stall were:

256kbps_3GB: 120 * 94.81 =        11377.78 Tk.

512Kbps_6GB: 76 * 189.63 =        14411.85 Tk.

512Kbps_12GB: 48 * 379.26 =     18204.44 Tk.

512Kbps_sky: 38 * 948.15 =         36029.63 Tk.

1Mbps_12GB: 82 * 379.26 =        31099.26 Tk.

Total cost of bandwidth =             111123 Tk.

Total cost: 900000 + 150000 + 100000 + 128648.4 + 111123 = 1389771.4 Tk.

Total revenue:

512Kbps_12GB: 48 *93 =               4468 Tk.

512Kbps_sky: 38 * 438 =               16644 Tk.

1Mbps_12GB: 82 * 438 =              35916 Tk.

Total revenue:                                  57028 Tk.

Profit/Loss:  57028 – 789771.4 = -1332743.4 Tk.

 Ping Pong: 15 July 2011

Reasons:

• About half of Pre Pay base is inactive (without validity).

• Surveys indicate that if given a choice of speed, 2/3^rd of inactive users would go for less speed but more usage volume.

The Ping Pong offer Matrix

• Currently Pre Pay offers only one speed, three card denominations and fixed usage volume for each denomination. Double P proposes to offer users a choice of three speeds (1 mbps, 512 Kbps and 256 Kbps) and more volume for same card denomination as he chooses a lower speed or higher speed as he chooses less volume.
• Current 1 Mbps speed assigned to Pre Pay will remain as the default speed with which new accounts will be offered for sale. Users can migrate to other speed (and hence enjoy greater volume) by placing migration request to Customer Care interfaces.

Analysis: this was another successful campaign of Qubee. At 15^th July Qubee had 1304 prepaid account among which 672 were inactive, but at 31^st July 2217 prepaid connections were active, where total numbers of prepaid customers were 2430. Although Qubee was introduced this offer to reduce the number of inactive prepaid customer but by the numbers of newly joined customer it can be easily said that the offer was lucrative also to the new customer.

Returned customer: 441

New customer: 1126

Cost of Qubee:

Cost of advertisement is 80000 tk. as ad was published in one day only.

Cost of bandwidth: total 723 cards were sold from 15^th to 31^st July; among those 497 cards were 400 tk. And 226 cards were 700 taka.

Cost of 400 tk. card: 31.60 * 497 = 15705.2 Tk.

Cost of 700 tk. card: 63.21 * 226 = 14285.46 Tk.

Total cost: 80000 + 15705.2 + 14285.46 = 109990.66 Tk.

Revenue:

From 400 tk. card: 400 * 497 = 198800 Tk.

From 700 tk. card: 700 * 226 = 158200 Tk.

Total revenue:                                  357000 Tk.

Profit/Loss: 357000 – 109990.66 = 247009.34 TK.

 QUBEE Surprise Campaign: 18^th August, 2011

During this campaign with every new connection a user will get a confirm surprise gift. For the first month 1000 Tk. off from the monthly package price. Only new monthly package users will be able to participate in this campaign. Customers will be informed through a SMS within the next 72 hours of his/her purchase a QUBEE connection regarding his/her gift. Campaign Duration: 20^th August, 2011- 30^th September, 2011.

Analysis: total 4689 customer joined in Qubee while the campaign was going on. During this time 3 new area was introduced, FENI, COMILLAH and COX’S BAZAR. So it was tough to determine whether this rush is for the new campaign or for the new coverage.

Among 4689 newly joined customer 2468 customers were 256Kbps_3GB, 130 customers were 512Kbps_6GB, 1527 customers were 512Kbps_12GB, 319 customers were 512Kbps_sky, 201 customers were 1Mbps_6GB , 40 customers were 1Mbps_12GB and 4 customers were 2Mbps_12GB.

Advertisements were given 3 days in In 6 national dailies.

Cost of advertisement is: 60000 x 6 x 3 = 1080000 Tk.

Cost of Bandwidth:

256Kbps_3GB:   94.81 * 2468       = 233991.08

512Kbps_6GB:   189.63* 130        = 24650.6

512Kbps_12GB:                379.26 * 1527     = 579130.02

512Kbps_sky:    948.15 * 319       = 302459.85

1Mbps_6GB:      189.63 * 201       = 38115.63

1Mbps_12GB:   379.26 * 40          = 15170.4

2Mbps_12GB:   379.26 * 4            = 1517.04

Total Bandwidth Cost:                       1195034.62

Total Revenue:

512Kbps_12GB:                93 * 1527             = 142011

512Kbps_sky:    438 * 319             = 139722

1Mbps_6GB:      438 * 201             = 88038

1Mbps_12GB:   668 * 40                =26720

2Mbps_12GB:   2163 * 4                = 8652

Total Revenue:                                 405143

Profit: 405143 -1195034.62 = -789891.62 Taka

 It can be said that it would be more profitable if this amount of card sold without offer. Although they are facing loss but it’s increasing their numbers of customer.

QUBEE Green Market Campaign: 23-30 September, 2011

Fair offer: USB Modem @ 1000 BDT (Shuttle only. Gigaset Modem @ 3000 BDT. Only applicable for the monthly packages.

Up to BDT 1000 off in 1^st month bill

Only advertisement on newspaper was given and in old Dhaka a fair was arranged by the company.

Analysis: Cost of arranging the fair and advertisement was 500000 taka and the advertisement on newspaper costs 165000 TK. Total 3216 connections were sold all around the country. Among those 1785 connections were 256Kbps_3GB, 348 connections were 512Kbps_6GB, 482 connections were 512Kbps_12GB, 122 connections were 1Mbps_6GB, 324 connections were 1Mbps_12GB and 155 connections were 2Mbps_12GB.

 From the above table it can easily be said that without offer Qubee would be able to profit more.

 EID-Ul-Azha Campaign: 24^th October 2011 to before EID.

• Monthly Price is VAT inclusive
• BDT 1,000 discount over three months: BDT 300 discount in point of purchase, then BDT 300 in December and BDT 400 in January 2012 bill invoice.

350 Kbps_7GB

Low entry barrier will ensure incremental sales. (BDT 1,400 for a device and Up to 350 Kbps package)

750 Kbps_10GB

It will help to attract those who need a better speed and more volume.

Analysis: Qubee has introduced new discount giving system from this offer as they were facing problem with their previous discount system which I will discuss in the findings part. The company introduced two new promotional packages for limited time. Both packages were hit as the bill is lower than other package and speed is quite good. Within this time Qubee acquired a huge amount of customer. The number of customers who bought Qubee connection within this time is 20975. Among those new connections 8762 connections were 350Kbps_7GB and 10853 connections were 750Kbps_10GB, except these promotional packages some regular packages were also sold during this period, which were 256Kbps_3GB: 326 customers, 1Mbps_6GB: 220 customers, 1Mbps_12GB: 478 customers, 2Mbps_sky: 336 customers.

Costs were incurred for newspaper ads, leaflet and billboard. Total advertisement cost was 450000 tk.

Findings:

1.      256Kbps_3GB package was a big hit product of Qubee as it was the most selling package. At the very first time when Qubee introduced this package, it was not very popular. But soon customers found a loop-hole in Qubee’s rules and regulations and the sale of this low cost package increased. The loophole was Qubee’s package migration policy. Qubee had a policy based on which customer can change the package just after 3 days from buying without any extra payment and the new package charge would reflect in next month’s bill. So if a customer buys 256Kbps_3GB for 1000 tk. (as there was a discount of up to tk. 1000 on 1^st month’s bill) he will be able to migrate to any package just after 3 days. Normally after 3 days these customer migrated to 2Mbps_sky, which price is tk. 6037.5 including VAT and after one month they buy a new 256Kbps_3GB.
2.      Most of the customers’ normally choice high usages volume package, as in every speed segment high usages volume packages compared to the package price sold the most.
3.      User wants high speed and usages volume at the same time, that’s why 350Kbps_7GB and 750Kbps_10GB became popular.
4.      Users are always looking for something new, as a result of the new package became hit.
5.      Customer prefers postpaid more than prepaid in case of internet connection.
Other Findings:

1. Near about 20% of the total number of customers are using Qubee mainly for online gaming.
2. More than 50% of the total users use Qubee for voice and video chat.
3. More than 70% of the total numbers of customers are home user.
4. Many potential customers are waiting for Qubee to spread.
5. One of the reason for low number of prepaid customer is the recharge procedure is not simple.

Recommendation:

1.      Network coverage should be increased
2.      New packages should be introduced.
3.      350Kbps_3GB and 750Kbps_10GB should include as regular package.
4.      Qubee can set up a gaming server.
5.      Qubee can introduce small web browser device like touch screen mobile phone which will have a headphone with microphone.

Conclusion:                               

       Qubee introduced several promotional packages to increase its number of active customer. Not all the packages were hit to the customers’ but some of those packages were really lucrative, like 750Kbps_10GB. If the company wants to do good business it must have to increase its coverage and provide some lucra.