Essence of Marketing Capabilities: The Story of Jio, Reliance Group
- Alisha Kamat
- Nov 10, 2020
- 18 min read
ABSTRACT
Telecommunication industry is one of the most emergent industries which transformed speedily in
the last decade. At the moment, India is the world’s second largest telecommunication market and
continues to grow. Interestingly, this industry has only a few major players, each competing for
the more predominant market share. Companies seem to be cutting edge by adopting essential
marketing strategies to attract the customers. Marketing being an integrative function of business
helps in the more efficient running of the company. In the more recent years, post the introduction
of Reliance Jio, the industry scene changed. Reliance Jio gave a sizeable jolt to the Indian telecom
industry, with schemes like free internet and calling and the 4g network which provided a major
threat to the other players. They helped provide a new and dynamic network making other service
providers face an advanced challenge, furthermore finding it arduous to cope up with new
circumstances. This paper attempts to capture the relevance of marketing capabilities in the
telecom industry by undertaking a case study of Jio, a branch of the Reliance Group.
INTRODUCTION
“Marketing is any contact that your business has with anyone who isn’t a part of your business.
Marketing is also the truth made fascinating. Marketing is the art of getting people to change their
minds. Marketing is an opportunity for you to earn profits with your business, a chance to
cooperate with other businesses in your community or your industry and a process of building
lasting relationships.” — Jay Conrad Levinson. Over the decades the concept of marketing has
undergone several interpretations and definitions. Even at present day, to an average businessman
marketing means promotion. Marketing is an ad. Marketing is a brochure. Marketing is a press
release (Martin, 2014). And more recently, marketing is a Facebook account or a Twitter page.
Marketing, for many entrepreneurs, is simply selling at a larger scale. The reality, is that marketing
sets itself at the intersection of the business and the customer – the great arbiter of the self-interest
of the business and the necessities of the buyer (Brenner, 2019).
Why is it that some commodities do better than others? Some firms can foresee growth from the
very get go? Why out of a range of services a chosen few make it to the consumer’s favorite list?
In the end it all trickle downs to if and how a firm can sell and convince the general public.
Marketing is a form of persuasive communication. It is made up of every process involved in
moving a product or service from your business to the ultimate consumer (Lake, 2019). The
process is circular, it plays a role throughout the lifespan of the business. Marketing should begin
right at the beginning of the business journey, before the brand even takes form. This initial
marketing involves research and gathering more about your customers in order to develop a
product or service that meets their needs (Brenner, 2019). Marketing focused on the creation of
customer demand and how to offer customers a unique value proposition (Nath, Nachiappan, &
Ramanathan, 2010).
It is often miscalculated that marketing comes to an end with the sale of the product, that’s just
sales vertex of business. Marketing starts all the way from consumer behavior analysis, studying
market structures, ideation, sales, advertising, promotions, customer services and distribution
(Krishnan, 2018). Marketing is not about who can convince better, or close the deal better. It is
about the understanding of people’s needs. Steve Jobs had this quality better than almost anyone -
even Henry Ford or Thomas Edison. Every innovation in the history of the world combined an odd
understanding of human wants and the needed vision to deliver it (Livemint, 2019).
Another important aspect of marketing is the marketing mix which has still maintained its footprint
even in the modern day coming all the way from the traditional approach. This constitutes of the
4P’s – Product, Pricing, Place and Promotion (Martin, 2014). Getting the right marketing mix
means being able to align with the wishes and needs of customers, reinforce brand equity and
maximize returns. The concept of the marketing mix was conceived before the internet became
part of everyday life, but the basis for a marketing strategy in the present digital era can be adapted
quite easily (AmyPoh., Saludin, & Mukaidono, 2012).
It is often seen that businesses underestimate the importance of marketing. However, it’s arguably
the fact that every business requires marketing to remain successful. After all, how will one sell
the products and services if nobody’s heard about them? Marketing essential is grasping more
about the customers’ preferences (Fahy, et al., 2010). Marketing strategies will help figure out
exactly who is to be targeted and aligning the business plans to customer needs. This will
contribute not only to happy buyers, but also to profits and ensure that the firm is going in the right
strategic direction for both short-term and long-term growth (Brenner, 2019).
The aim of this study is to analyze the impact and viability of marketing and marketing mix. A
case based study is undertaken to aid the analyzation of the topic. Through the survey of literature,
we can see how the concept of marketing has evolved over time and a few essential concepts
explained. The case is chosen from the fiercely competitive and dynamic Indian telecom sector.
This research studies the impact of marketing strategies on the somewhat rapid rise of Reliance
Jio to success. It hopes to explain a positive relation between implementing marketing strategies
and impact on revenues and profits of Jio.
THEORETICAL BACKGROUND
With increasing globalization, companies find themselves having to compete with large players
by targeting niche markets. To excel and proliferate as a market leader in an ultramodern time
period and globalized economies, organizations must strive to harvest from its marketing
strategies, benchmarking and company quality policy (AmyPoh., Saludin, & Mukaidono, 2012).
The relative importance of marketing capability in driving performance is a significant issue in
light of the concerns expressed about the role of marketing in building firm value (Krasnikov &
Jayachandran, 2008).
Despite significant amounts of research on the marketing-to-performance relationship, the
significance of the results associated with this relationship still varies considerably. The most
central point of prior research is that quality is positively associated with advertising capabilities.
Nonetheless, several studies have indicated that the marketing value can become essential rigid
and might even have a cynical impact on some aspects of firm performance (Martin, 2014).
Marketing is, in figurative words, the task responsible for fulfilling customer needs. Marketing is
therefore the organizational capability that supports demand sensing and the connecting and
targeting of customers. As such, marketing capacity extends processes built within organizations
to decode the path of consumer needs by efficiently collecting, managing and using data. In
addition, marketing involves the processes that enable a firm in building sustainable relationships
with customers (Krasnikov & Jayachandran, 2008).
The capacity to market is based on market awareness of consumer preferences and past experience
in predicting and meeting these criteria. Business understanding typically evolves through research
and experimentation over time (Nath, Nachiappan, & Ramanathan, 2010). Because of its socially
complex nature, a significant part of market knowledge is difficult to systematize, suggesting that
market trends are dispersed across multiple groups and persons (Tsai & Shih, 2004). Business
awareness's theories of experiential education and social complexity indicate that advertising is
highly dependent on information that is tacitly kept and hard to duplicate for rivals. Even when
business knowledge is codified and can be interpreted, as in measurement systems for consumer
contentment, knowledge is retained closely, leading to imperfect mobility. Overall, marketing
abilities are likely to be immune to competitive imitation and acquisition because of the distributed,
tacit, and private nature of underlying knowledge (Villanueva, Yoo, & Hanssens, 2007).
Business design is often focused on benchmarked and well-defined processes. Of example, most
companies have implemented initiatives to increase quality and efficiency through total quality
management and international standards organization. (Tsai & Shih, 2004). Likewise, business
process reengineering has been employed by many firms to redesign business systems and
workflow and to use information technology to substantiate efficiency. The activities to be chosen
by organizations following complete quality management and international standards organization
programs are codified and certified as well as supported by global benchmarks (Iyer, 2019).
Since marketplaces are constantly changing, rather than just diversity in the asset endowments of
the business, it is the abilities by which the assets of the businesses are obtained and deployed in
ways that suit the market scenario of the company which elucidates the inter-company
performance over time (Morhan, Vorhies, & Mason, 2009). The disparity between the increasing
complexity of markets and the capability of most marketing organizations is widening (Day, 2011).
These capabilities involve complex coordinated skills and knowledge patterns that are embedded
as organizational routines over time and are distinguished from other organizational processes by
performing well in relation to rivals. Capacity is flexible when it allows the company to implement
new approaches to match changing market dynamics through combination and transformation of
available resources in new and different ways (Morhan, Vorhies, & Mason, 2009).
The common features of the marketing mix formulation are nearly completely unchanged.
Therefore, the new product development potential includes new products that maximize
investment in research and development but do not seek new ways of delivering customer value
or entering the market through new channels (Day, 2011).
This broad view of marketing as a general management obligation encompasses customer service
distribution management capabilities, customer order fulfillment, product alignment, and consu
mer and brand asset capitalization (Fahy, et al., 2010). The familiar saying, “Necessity is the
mother of invention” holds valuable wisdom. For marketers of all stripes, there is the pressing
necessity to respond to the accelerating difficulties of their markets, which stresses their
organizations and potentially places them at a competitive disadvantage (Day, 2011).
Marketing is considered to be an integrative process, in which a company utilizes its tangible and
intangible assets to understand compound consumer dominant needs, achieve product
differentiation correlative to competition, and realize superior brand value (Nath, Nachiappan, &
Ramanathan, 2010). It is explicit that functional proficiency which includes marketing and
operations functions and variegation strategies have a vital impact on the company's monetary
performance. Earlier, literature defined that the impact of marketing on a company's operations
varied in accordance to a firm's own attributes (Fahy, et al., 2010). Moderating the role of a firm's
plan of action makes a positive impact of marketing abilities on financial performance of firms
which can maintain consumer loyalty through their distinctive marketing connections. This has
more influence on fiscal performance for companies which invest in better assets to innovate in an
ever changing business domain (Cartan-Quinn & Carson, 2003).
The advertising industry will always seek to improve its game as it moves beyond static marketing
to responsive marketing activities that fit the current business reality. This will draw on lessons
from business experience, suggest the need to reconsider traditional business models, and open up
network partners to the company. Researcher are confident that the internet era will bring about a
new generation of insights into how markets work and how organizations can anticipate and
respond to fast-moving market signals (Day, 2011).
METHOD
The author will be adopting a secondary research method, a case-based research study wherein the
theory of marketing strategies is being tested through a case study of Reliance Jio, an Indian
telecommunications services company wholly owned by Reliance Industries. This particular case
study has been chosen to examine the influence of marketing strategies and techniques to the
Indian telecommunications industry as a whole and to check whether it is pertinent to this dynamic
industry. The case of Jio is distinct because of its rise to prominence in a comparatively short
period of time. Various research papers and well established website have referred to throughout
the course of the research study.
CASE STUDY
Jio’s rapid rise to prominence
On September 5, 2016, Reliance Jio, Mukesh Ambani's 4 G telecom network, began commercial
operations in India. The business has revolutionized India's way of accessing information and co
mmunicating with fellow Indians since the service went online (Krishnan, 2018). The Indian
mobile industry is one of the speediest growing industries across the globe. In the world, India is
the second biggest market for mobile service providers and it is a profitable avenue for network
providers from aboriginal and external entrepreneurs (Satyanarayana, Rao, & Naidu, 2017). The
commercialization of Jio has wheeled India into a data absorbing and exhaustive country. Jio took
the lead after analyzing and looking at the market scenario and crossed a hundred million
subscribers end of February 2017. This has been the most accelerated ramp-up by any mobile
network operator anywhere across the sphere. Jio owns the spectrum in eight hundred MHz and
eighteen hundred MHz bands in ten and six circles, respectively, of the total twenty-two circles in
the country, and also owns pan-India licensed twenty-three hundred MHz spectrum
(Satyanarayana, Rao, & Naidu, 2017). Throughout the world, the telecom sector is one of the
prominent sectors. Study shows that India would be a speedily escalating axis for internet buyers,
with market expected to be nine billion dollars by the year 2020. Jio rose up in the Indian market
with an idea to make high earnings by providing quality service at a considerably cheaper rate
(Singh, 2017).
Jio has evolved from a telecom service provider to a 4G feature phone manufacturer to a broadband
and service provider since its launch. In reality, the company sees it as a starting point and is
determined to continue expanding with new customers entering the network almost every other
half (Krishnan, 2018). In response to the inauguration, the Cellular Operations Association of India
(COAI), congratulated Jio on their launch and for their innovation which they promised to
inculcate into the country. A solid, stable, predictable, long term, and a well ordered growth of the
industry is necessary for a fully connected and digitally empowered India. Reliance Jio has
partnered with several smartphones brands where Jio Preview Offer is available for ninety days
(Mhabde & Thakkar, 2018).
The Indian telecom market operates similar to the oligopoly market type. There are three major
players competing in this market, each with its own competitive prices, marketing strategies and
range of services – Vodafone Group India, Bharti Airtel and Reliance Jio Infocomm Limited. Why
we say major players because the other service providers, for example BSNL or MTNL, no longer
continue to be people’s choice for broadband services, one can say they are slowly becoming
extinct (Singh, 2017). The once-crowded telecom space now has only three large private players,
and the state-run services are hardly seen in market contention anyway. The latest data put out by
the Telecom Regulatory Authority of India shows Jio has about three hundred twenty three million
subscribers, as of 31 May, ahead of Airtel’s three hundred twenty million and behind Vodafone
Idea’s three hundred eighty seven million users (Livemint, 2019).
Jio’s entry into the Indian telecom market generated a euphoria, never seen before. Most market
entrants adopt the conventional route –initializing of as a small entity and attempting to grow its
business. The Ambani Group followed a different ideology, they enveloped the entire nation with
their network before the launch, making it the most colossal 4G network at the launching phase
(Iyer, 2019). The consumers wanted to continue to use their current network provider but at the
same time also use Jio because of its incentivizing services of cheaper call rates and free (Mhabde
& Thakkar, 2018). Reliance's Jio had come out with introducing free to low subscription; it would
attract more customers and create a strong and loyal customer base. The satisfied Jio customer
would act as the advertising tool for the company without any additional cost (Boobalan &
Jayaraman, 2017).
Identifying the level of customer service satisfaction, it can be concluded that the customers of
Reliance Jio are pleased with the services provided by the company. Customers are seen as the
company's focal points in today's competitive business. Like any other company aspect, customer
service is an ability that takes time and effort to master. (Boobalan & Jayaraman, 2017).
Not only Indian network providers but also exogenous providers occupy and earn a notable market
share in the Indian mobile industry. The free data boom of Reliance Jio produces some detailed
and unforeseen shifts in illustrating the habits of the customer and also the tactics of the competitor.
The effect of these new entries affects the mobile industry's market equilibrium and unfortifies
rivals to explore mergers and acquisitions within Indian mobile network providers.
(Satyanarayana, Rao, & Naidu, 2017).
Diversification is often known as a company's entrance into new business lines through internal
business growth or acquisition. Strategic literature on management has dealt extensively with why
a business diversifies, the cost of diversification, when diversification can boost firm efficiency,
and when it is counterproductive (Cartan-Quinn & Carson, 2003). Reliance Jio's entry into the
telecommunications market was also a form of diversification. The key diversification priorities
are perceived opportunities associated with increased target market, untapped production capacity
utilization, risk reduction in terms of varied business portfolio, and capacity building (Chimhanzi,
2004). Diversification should have an incremental effect on firm results as it allows businesses
achieve economies of scale, greater reach, and exploit their expertise in other fields. Empirical
studies, however, show that diversification has the performance of a company giving a different
outcome. Diversification also raises operating costs, creates conflict with greater administrative
and departmental complexities, and prevents companies from reacting to significant external
changes (Krasnikov & Jayachandran, 2008).
Reliance Jio has a whole range of products to offer than its 4G network.
Jio Apps: Jio had launched a number of multimedia apps available on google play store which
required the Jio SIM card to function like JioTV, Jio Cinema, Jio Music and much more.
JioPhone: Jio recently announced a free of cost mobile phone with 4G connectivity named as Jio
phone. The Company had also started the 4G broadband service in September 2016.
Jio Wi-Fi: Jio also offered a portable Wi-Fi hotspot device through which one can access fast speed
internet on 2G and 3G devices by connecting devices to it.
Figure 1: Mobile broadband subscriber base growth
Source: Business Standard 2018
The Jio Effect- shows the upward growth trajectory of Jio in the telecom market. The Reliance
Group was through with their marketing strategies and capabilities, even though the telecom sector
was a new avenue for them, they managed to secure a stable position very early on (Reliance Jio's
Marketing Stratergy and Case Study, 2017). Jio kept in touch with their market development by
adapting to the needs of the customers as and when needed. The company had already captured
the market even before entering it. Heavy advertising and incentivizing of the Indian population
played to their gain. Their consumer base had grown to such an extent they were able to recover
all of their investments and come out profitable in the end (Padmaja & Antony, 2013).
ANALYSIS AND DISCUSSION
Mukesh Ambani is said to be a man of great vision. He single-handedly managed to revolutionize
the telecommunications industry, one among many others. Reliance Jio, had entered into the
market at a time when the playing ground was fiercely competitive and technology at its prime.
Wish strong set of marketing strategies, advertising campaigns, and efficient pricing points helped
them put themselves in the front runner position (Thayyib, 2018).
Analysis of Jio’s success with correlation to its adoption of marketing strategies can be discussed
in lieu with the Marketing Mix Model. Marketing mix is the amalgamation of all elements and
aspects associated with marketing for a firm, which includes – product, price, place, promotion,
people, process and physical evidence (Brenner, 2019).
Product
Reliance Jio is India's largest telecom service provider that has changed the dynamics of the Indian
market with its products and services. Jio has introduced a number of user-friendly deals on the
market, including the introduction of internet services to facilitate internet penetration and
digitalization (Mehta, 2018). JioPhone is one of Jio’s most popular service, where Reliance
launched its first affordable 4G phone. The 4G internet services that Jio provides along with the
various data and voice over services offer additional features such as texting and music. Reliance
Jio, before its launch of 4G services in the nation, also started giving free hotspots of Wi-Fi in a
number of cities within India (Mishra, 2018).
Price
At the start, Jio launched the initiative to provide free SIM cards to any customer against their
Aadhar number and unique mobile number identity to try to promote internet use in the country
and make internet available to all people. It was reported that within the first few days of its release,
Jio was successful in selling up to fourteen lakh SIM cards to customers. Following the act of
giving out services free of cost for their users, they kept reasonable pricing plans wherein
customers would be charged reasonably for the data consumption that they would undertake
(Mehta, 2018).
Place
Thanks to the well-developed infrastructure that the company offers, Reliance Jio has a major role
in the Indian subcontinent. The network is available across all of India's twenty-two telecom
sectors, including each district. The network covers all states and major cities, it has a reach in
about eighteen thousand cities and across approximately two lakh villages in India (Mehta, 2018).
Promotion
Jio has partnered with several organizations and agencies to promote its campaign for advertising.
In September 2016, Jio has signed a partnership agreement with BSNL to provide intra-circle
roaming services. Jio has joined Samsung in a collaboration to launch 5 G in the country (Padmaja
& Antony, 2013). Reliance Jio was responsible for releasing Pokemon Go, the already popular
online game that fascinated the youth and changed the way games were thought of. Jio actively
promotes through promotions on television, social media, print media and outdoor media
publishing. The brand ambassadors for the brand promotion are the most iconic stars of the
Bollywood film industry: Shahrukh Khan and Amitabh Bachchan (Mehta, 2018).
People
Jio abides the system of providing its employees and customers a complete ecosystem which lets
them experience the digital life to the maximum. A majority of employees working at Reliance Jio
come from socio-economic backgrounds that are diverse. Workers are treated with respect and
given enough autonomy to lead processes (Mehta, 2018).
Process
Jio provides various mobile applications available for free download from the Play Store, which
requires the existence of a Jio SIM that the user should own, while free to download. Jio apps
include JioTV, JioCinema, JioChat Messenger, JioMusic, and JioMags among the most common
examples. Jio-Fi was also launched in certain parts of the countries that have Wi-Fi enabled in Jio
(Singh, 2017).
Physical Evidence
Reliance Jio is pushing the Jio Digital Life initiative to draw the nation's young demographic with
the larger dream that the nation's leadership has of digitizing the Indian economy. The business
appeals primarily to the younger generation, who actively seek internet service affordability
(Reliance Jio's Marketing Stratergy and Case Study, 2017).
SOLUTIONS AND RECOMMENDATIONS
This paper leave plenty of undone work, which can be completed in the future with adoption of
differing approaches. The paper has only been able to cover the impact of marketing and the
marketing mix on the telecommunications industry through a single company and on a qualitative
basis. There is room for a good deal of opportunities for quantitative analysis where the annual
statement of the company can be compared with respect to its pre-and post-phase of adoption of
the definitive marketing strategies currently undertaken. Marketing is a tool that companies use to
reach out to the masses, to stand out and to differentiate from one another. Further, it is suggested
that the scope of this study be extended to other industries as marketing is an essential element to
the advantage of every industry and business out there and plays a crucial role in the development
of any product or service. Also, this paper having a qualitative approach, does not take into account
the marketing expenditure, so we investigate only the value-creation stage of the customer
acquisition process. In today’s world and dynamic economic structure where the competition
within and outside industries have reached a saturation marketing is needed to give that cutting
edge to a firm, it should be embedded in the organizational structure of companies.
CONCLUSION
This paper quintessentially tries to capture the impact marketing has on a business. The existing
literature describes how the concept has changed and evolved over the years, to its current
description and how over time it has come to gain the significance. And finally it comes to examine
its magnitude through a case study of a relevant industry, the telecommunications industry,
particularly taking the example of Reliance Jio, a leading service provider company in the Indian
market. The author discussed how marketing has almost become essential or crucial for a company
to remain profitable in any dynamic industry.
The launch of Jio did transform the Indian telecom industry and at the same time put pressure on
multiple fronts on the current telecom players and service providers. The Reliance group took a
percipient and economical decision in constructing its marketing mix. The elements they adopted
played to their advantage in the process. The company had studied the consumer perception,
behavior and trends and accordingly developed a market capture plan. Reliance Jio’s free
introducing offers created a lot of radical and unexpected changes in consumer’s behavior. The
impact of this new entrant shifted the market equilibrium and made the existing players vulnerable.
Since the exit barriers are present in the industry, the firms couldn’t even leave the market and
then had to resort to mergers and acquisitions. The only option to become stronger to compete with
Jio is to make strategic alliances with other competitors (Satyanarayana, Rao, & Naidu, 2017).
Ever since the beginning of industries and companies, marketing had always been an integral part
of it. The only factor that differs if the intensity of its application in practical and real life scenarios.
There have been several situations where the importance of marketing is rightly justified. The
concept is closely linked to science at times and demands creativity and observational abilities. At
the end, it is to be understood that, Marketing builds business; Marketing generates consumer
satisfaction.
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