micromax mobile for asp
TRANSCRIPT
ASP Assignment
Advertising Strategies Employed By MicroMax Mobiles
By
Akshay Karawal A0102211230
MBA-M&S Class of 2013
Submitted to Ms. Aparna Goyal
at AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA
INTRODUCTION
Micro-Max Mobiles
Company Overview
Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across the
country and international offices in Hong Kong, USA, Dubai and now in Nepal. With a futuristic
vision and an exhaustive R&D at its helm, Micromax has successfully generated innovative
technologies that have revolutionised the telecom consumer space.
Mission
Micromax is on a mission to successfully overcome the technological barriers and constantly
engender “life enhancing solutions”.
Vision
The company’s vision is to develop path-breaking technologies and efficient processes that
incubate newer markets, enliven customer aspirations and continue to make Micromax a trusted
market leader amongst people. The Micromax ideology stems from its rooted belief in
‘Innovation’ and delivering “nothing short of the best”.
Idea Initiation & Success Story
Micromax is a challenger brand in the highly competitive mobile handset market. This Indian
firm is shaking up the market dominated by MNCs. Micromax was founded in 1991 by Rajesh
Agarwal . Micromax in its original avatar was a distributor of computer hardwares. In 1998,
three more people Sumit Arora, Rahul Sharma and Vikas Jain joined Micromax as co-
founders.The company branched out from a mere distributor to a marketer of telecommunication
equipments.
One of the highlight of their distribution strategy was that Micromax managed to make these
dealers pay in advance by offering them more margins. Marketers will vouch that the most
difficult part in managing distribution is the payment collection part. According to the news
report, Micromax managed this hurdle through this strategy of more margins for advance
payment. It is not a new strategy to offer such kind of discounts for advance payments (cash
discounts), but to make a retailer accept such an offer is indeed a remarkable feat (if the Forbes
report is true).
Unlike many challenger brands, Micromax was careful in its product strategy. Although all
Micromax products were towards the lower end of the pricing spectrum, the brand was focusing
on adding more features at a reasonable price . The focus was more on value than price. What I
have noticed while going through their product range was that there was some USP in their
products which offered more value. I think , that value orientation with a clear differentiation
was a significant factor that aided the significant growth of this brand in Indian market.
The company in their website claims to have invested heavily in the product development.
The brand boast of launching many firsts in the market like:-
30 day battery life
Affordable QWERTY phones
Affordable Double Sim etc
Besides the focus on product development, Micromax has invested heavily in brand building.
The brand is one of the big spenders in the current IPL. Micromax has centered much of its
brand building exercise around cricket. It was one of the principal sponsors in many of the
cricket tournaments.
Most of the brand promotion for Macromax is centered around products. I havn't seen a
corporate brand building campaign from Micromax. The ads are for individual products
highlighting the product features and USPs.
Micromax has the tagline " Nothing Like Anything " which initially appeared confusing. Perhaps
the brand wants to convey that every product from Micromax has something unique. It is not just
like any other product.
The brand's promotions , although heavy, is a big hit. Some of the campaigns are good but most
are excellent. Sometimes they are a failure. For example , the Micromax Facebook ad was
outright disgusting. Most of the campaigns like Gravity, MTV , EEZPad was very ordinary basic
ads. There was no brand building theme behind those ads. They talked about the product and that
is it. I feel a visible lack of creativity behind those ads.
In a big marketing move, Micromax roped in the Bollywood Action hero Akshay Kumar as the
brand ambassador. This move is going to boost the brand recall of Micromax to new heights.
Akshay Kumar has strong equity both in urban and rural markets. The association with such a
big star will also have a positive impact on the image of Micromax. The brand can now
overcome the perception of a low price product.
Micromax Mobile-“Nothing Like Anything”
Akshay Kumar is like wine, the older he gets the better he is whether in acrobatics or even in his
histrionics, except I must say in this ad.. This one which makes him laugh like an obtuse idiot
and that too for about 30 seconds in a 45 second commercial is just too much to endure.
Whatever the product is and whatever the new Gamolution thing that they want to sell (like
SKINNOCENCE this is a new ad word GAMOLUTION)
This ad irritates, first by the absolute lack of any bit of creative spirit, second for the stupid laugh
which lurks like the one you get to hear in mad houses and third rate Hindi films and third and
most important, by the sheer senselessness with which this nerve breaker is aired again and again
as if they can bore, irritate and torture people to buy their stuff while people watch IPL 3 in all
peace and excitement.
I even know of people who said that if IPL 3 so far has any irritant so far, it is this laughing ad.
The mobile handset market already has players such as Nokia, Motorola, Samsung and Sony
Ericsson, and these players already enjoy great allegiance and loyalty among consumers..
Unquestionably that is….. It would have been a big challenge for any new player (this guys are
new in this market) to shift this loyalty to them.. a lot of work should have gone in …..A dual
GSM-dual standby QWERTY keypad phone at less than Rs 5000, and such stuff that Micromax
offers are definitely a thing that could have changed the game had they got into the right game….
If their advertising is any indication, it seems quite unlikely… Some of their ads are good
enough to sit and watch (done then by Draft FCB) but the Akshay one is for sure a de-seller and
the game seems to be lost even before it has begun …
Big brands, big budgets… Niching seemed to be the only option and guess they were into it but
with an advertising budget of Rs 50 crore plus as per industry sources, the blitzkrieg is to
continue and even aggravate through other media as well.. I hope they don’t carpet bomb me
from the likes of Facebook and twitter…
A big thumbs down to Lowe (the agency) for the creative impotency, and sub-primary school
level imagination and a ‘shame on you’ to the media planner (who cares the name) for this
nothingness which proclaims ‘nothing like anything’ as its tag line.. How true… !!!
Types of Advertisements-Micro Max
1) Print Advertising - Newspapers, Magazines, Brochures, Fliers
Print media has always been a popular advertising option. Advertising products via
newspapers or magazines is a common practice. In addition to this, the print media also
offers options like promotional brochures and fliers for advertising purposes. Often,
newspapers and magazines sell the advertising space according to the area occupied by
the advertisement, the position of the advertisement in the publication (front page/middle
page, above/below the fold), as well as the readership of the publications.
2_) Outdoor Advertising - Billboards, Kiosks, Trade-shows and Events
It makes use of several tools and techniques to attract the customers outdoors. The most
common examples of outdoor advertising are billboards, kiosks, and also events and
trade-shows organized by the company. Billboard advertising is very popular.
3) Broadcast Advertising - Television, Radio and the Internet
Broadcast advertising is a very popular advertising medium that constitutes several
branches like television, radio or the Internet. Television advertisements have been very
popular ever since they were introduced. The cost of television advertising often depends
on the duration of the advertisement, the time of broadcast (prime time/lull time),
sometimes the show on which it will be broadcast, and of course, the popularity of the
television channel itself. The radio might have lost its charm owing to new age media.
Scope of Micromax Mobile Into Rural Markets
According to reports of the Telecom Regulatory Authority of India (TRAI) there are
approximately 500 hundred million people in India who are yet to have a mobile phone.
While the wireless tele-density in the urban areas have crossed the 100% limit and reached a
level of 150%, the corresponding figure for the rural areas is merely 33%. The Government
of India has plans of increasing this level of rural tele-density to 60% by the year 2017 and
finally to 100% by the year 2020. Although it might seem to be a difficult target with most
of the rural population living under poverty levels, it is not an impossible target to achieve.
MICROMAX RURAL INITIATIVE
It was in 2008 that Micromax ventured into the mobile handset market. The brand wanted to
create a base before taking on the large players . Hence as a go-to- market strategy,
Micromax concentrated on the rural market first. It was a different move altogether since
most of the marketers tend to concentrate on the urban markets then move to the rural
markets.
Micromax launched its first phone in the rural market with a very unique USP- 30 days
battery standby time. The brand was launched from a consumer insight that most of the rural
households do not get enough electricity to recharge phones on a daily basis . Hence a phone
with a 30 day battery standby would be a worthwhile differentiation. The first product was a
big success. The first product Micromax X1i priced at Rs 2150 was lapped up by rural
market.
The success of X1i enthused the company to go aggressively into the market. But tapping
the rural market is not an easy task. There is severe logistics pressure in servicing these
markets. One of the first things that Micromax did was to establish the distribution network .
According to a report in Forbes India ( March 5,2010), Micromax created a distribution
network comprising of 34 super distributors, 450 distributors and around 55,000 retailers.
The brand could also take advantage of the inroads made by other brands into advantage.
MICROMAX MOBILE AD FOR RURAL MARKETS
Micromax X259 solar phone launches in India at Rs. 2,499
Micromax has launched its first 'green phone', called X259. Priced at Rs. 2,499, the
Micromax X259 comes with a solar panel that allows users to charge battery using solar
energy. The company says its solar-powered mobile phone will be highly useful in rural
areas of the country where power cuts are high.
Back in April, Micromax had revealed its plans of launching a phone with built-in solar
charger. The Micromax X259 is a dual-SIM phone, featuring a 2.4-inch display with
240x320p resolution and 118mm X 50mm X 16mm dimensions. It has a 0.3MP camera.
Micromax's X259 multimedia features include audio and video player and FM radio with
recording. The device supports GPRS and Bluetooth. The X259 comes with a 1,000mAh
battery, which is rated to deliver 4.5 hours of talktime and 200 hours of standby time.
Specifications of the Micromax solar phone are apparently nowhere close to the
smartphones we have in the market currently. But then solar phones is quite an innovative
concept, especially for countries like India grappling with acute electricity shortage.
Hopefully, manufacturers come up with solar-powered smartphones in India in near future.
It's notable that Micromax's X259 isn't the first solar phone in India. In 2010, Vodafone had
launched a solar powered mobile phone called VF 247. The Vodafone device, however, cost
much cheaper at Rs. 1,500. Samsung India had also introduced a solar phone in 2010 called
Solar Guru E1107 with a price tag of Rs. 2,799.
Innovation and Initiations of Micromax Mobile
Micromax has a lot of interesting and thoughtful products to its credit on their versatile
product portfolio. It was the first to introduce:
1. Handsets with 30 days battery backup
2. Handsets with Dual SIM / Dual Standby
3. Handsets Switching Networks (GSM - CDMA) using gravity sensors
4. Aspirational Qwerty Keypad Handsets
5. Operator Branded 3G Handsets
6. OMH CDMA Handsets, etc.
With a 360 degree advertising and marketing strategy sketched out, the company has an
optimistic outlook for the telecom consumer space. Currently present in more than 40,000
stores across the country, the company plans to have an aggressive market incursion to reach
out to its customers through 70,000 operational stores in the coming year. One of the major
aspects that contribute towards the substantial monthly growth of Micromax is its 80% sales
in the rural areas. After building a strong presence in the rural market, where the prominence
of both subscribers and operators is rapidly increasing, Micromax is now progressively
moving towards establishing its foothold in the competitive urban towns as well. Micromax
recently ventured into the telecommunication industry with an end-to-end solution of Fixed
Wireless Devices and Wireless Data Cards. In the year 2008, after delivering upon the
technology of fixed wireless-powering desired products, the company forayed into one of
the most predominant genres of telecommunication – Mobile handsets. Since then
Micromax has received commendable response for its unique and interesting handsets.
Innovation, Cost-Effective, Credible and an Insightful R&D are given high emphasis at
Micromax in the telecom vertical. Micromax as a ‘Brand’ in the Media Posted: Monday,
February 8, 2010. 10:45 PM IST on livemint.com (website of the famous B- newspaper):
“Micromax challenges Samsung, LG in mobile phone stakes”. The news further elaborates
that Citigroup Global Markets Inc. has confirmed Jain’s assertion in a 3 February report,
which said Micromax had a 10% market share, putting it at No. 3 behind Nokia and
Samsung, which had 12-13%. The success of Micromax prompted US private equity group
TA Associates to buy “less than 20%” of the firm for around $45 million (Rs210 crore
today) in December, valuing it above $225 million and indicating confidence in its growth
potential. Jain estimated that the firm will close the fiscal with sales at around Rs1,500
crore.The Brand Micromax has now started gaining acceptability not only with the
consumers but also with the images, which now has started portraying it with a positive
image. Whereas increased consumer sales support the acceptance among the consumes,
following quoted are some extracts from the news reports that show that media is also
looking up to this brand.
Micromax seems to have taken a breath of fresh air and totally remade their presence. From
their previously drab website, they’ve moved into a much more vibrant state and there’s
clearly a significant difference in their mobiles as well, at least cosmetically(model X360).
Micromax has also tied up some pretty big brands like Yamaha for enhancing their audio
experiences and the X360 comes with an MTV branding and Micromax spent heavily on
branding during the recent India exclusive content.
Micromax was recently in the news for its alliance with BSNL. State-owned Bharat Sanchar
Nigam Ltd. entered into an agreement with Micromax for sale and distribution of 3G data
card to its subscribers. As per the agreement, Micromax would sell and distribute 3G data
cards in the form of USB to the BSNL subscriber in various cities. In another venture,
Micromax launched the India’s first operator branded 3G mobile phone H360, in association
with MTNL. The H360, pre-loaded with applications to enable video calls, mobile TV,
social networking, wireless business solutions through web browsing and other Internet-
based services. Product Differentiation So, as listed Micromax has been quite effective in
the marking a difference with almost every product that it launched. The range that they
have covered varies quite a large variety. Right from the handsets with 30 days battery
backup, dual SIM, handsets switching networks (GSM - CDMA) using gravity sensors,
aspirational QWERTY keypad handsets to operator branded 3G handsets to the most
exciting OMH CDMA Handsets, etc. Every product of Micromax had the potential to grab
the attention of media as well as the consumers.
Image Differentiation & Threat to Competitor
From Rural to the Urban grounds Micromax specialized in entry-level and mid-segment
handsets priced between Rs1,800 and Rs2,400 when it started selling the devices in 2008,
confining itself to small towns and rural areas in the first 12-18 months. Encouraged by its
success, the firm expanded to larger cities and now has a distribution network of 55,000
retailers, which it plans to scale up to 70,000 by the end of March as part of its strategy to
raise sales to 1.5 million handsets a month. The journey is also now spans through the wide
range that Micromax plans to offer to its consumers in the coming period. Micromax is
planning to expand its range in keeping with new market demands. It is readying several
high-end handsets, including phones that will run on Google’s Android and Microsoft’s
Windows Mobile operating systems.
It has launched Fun-Book which is an Android phone, and is a great competitor to other
Samsung Galaxy Phones.
Channel Differentiation Micromax has invested Rs100 crore to set up a plant in Baddi in
Himachal Pradesh as it feels outsourcing manufacturing completely leaves the door open for
supply-side uncertainties. Production will be scaled up from an initial 50,000 per month if
everything goes right, by the third phase in March 2013, the Baddi plant will be making
about 500,000 handsets. If the plant isn’t able to cope with the numbers, the fallback plan is
to acquire a facility in South Korea, Taiwan or China, he added. Nokia has a plant in
Chennai, established in 2006 at a cost of around $150 million, from where it also exports.
Summary Till very recently, Micromax was seen as a second grade brand with hardly any
brand value. But with the recent reports listing the figures in the company’s favour as well
as the huge branding done by the company itself along with the interesting product portfolio
has taken the brand to a respect position. And the position is still is very promising for the
future. For a company which still has not been listed on any exchange, a turnover of about
1500 Cr. can be termed as huge. Certainly the company has the potential to be a threat to the
foreign giant as it has been successful in studying the Indian mindset better.
The success of Micromax prompted US private equity group TA Associates to buy
less than 20% of the firm for around $45 million (Rs210 crore today) in December,
valuing it above $225 million and indicating confidence in its growth potential.
MARKETING MIX:4 P’S
1. Product
Micromax has been effective in creating a splash with most of the products launched. The
range that they have covered varies quite a large variety. Right from the handsets with 30
days battery backup, dual SIM, handsets switching networks (GSM -CDMA) using gravity
sensors, aspirational QWERTY keypad handsets to operator branded 3G handsets to the
most exciting OMH CDMA Handsets, etc.
Micromax in fact has the ability to catch the attention of consumers in a market where there
is a new set almost every month
2. Price
Micromax specialized in entry-level and mid-segment handsets priced between Rs1,800 and
Rs2,400 when it started selling the devices in 2008, confining itself to small towns and rural
areas in the first 12-18 months. Encouraged by its success, the firm expanded to larger cities
and now has a distribution network of 55,000 retailers, which it plans to scale up to 70,000
by the end of March as part of its strategy to raise sales to 1.5 million handsets a month.
3. Place
Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across
the country and international offices in Hong Kong, USA, Dubai and now in Nepal.
Micromax has invested Rs100 crore to set up a plant in Baddi in Himachal Pradesh as it
feels outsourcing manufacturing completely leaves the door open for supply-side
uncertainties. Production will be scaled up from an initial 50,000 per month.
4. Promotion
Having gained traction, Micromax is also working on a strategy to create awareness in the
metros, which includes tying up with MTV for co-branded phones.
Micromax has also tied up with a Bollywood celebrity – Akshay Kumar as brand
ambassador.