PROSPECTS OF MICROMAX TELEVISIONS IN RAJASTHAN

Micromax Informatics Limited

O Micromax is an Indian consumer Electronics Company located in Gurgaon, Haryana, India which focuses on the manufacturing of mobile telephones, tablets, data cards and LED televisions.

O It has 23 domestic offices across the country and international offices in Hong Kong and Dubai. Presently, the company has about 1900 employees.

O In 1991, Micromax focused on reselling and distribution of hardware equipments and as an IT software company in the year 2000 working on embedded platforms.

O After being a distributor for hardware equipments, in 2008, it entered mobile handset business.

O By 2010 it became one of the largest Indian domestic mobile handsets company by offering unique affordable innovations.

O The company has a 24% market share in the smartphone segment in India as per the report for April 2013.

O It claims to be the top tablet maker in India, and the 12th largest handset manufacturer in the world.

O Micromax is currently dominating the tablet space in India with 18.4 percentmarket share, followed by Samsung with 13.3 percent for the three months to June, according to CyberMedia Research.

TELEVISION MARKET IN INDIA

O Television is one of the major mass media of India and is a huge industry and has thousands of programs in all the states of India.

O Today India boasts of being the third largest television market in the world.

O Approximately half of all Indian households own a television.

O Further, Price (15%), Personal research (28%) and consumer ratings (14%) are also considered to be the major factors taken into consideration by the consumers while buying the products.

O Among CRT, LCD and other varieties of TVs the clear choice of the Indian consumer is CRT TVs which literally dominate the market with almost 90% of the market share. But with changing tastes and increase in paying capacity there is a constant increase in the share of the LCD televisions which has become the first choice of those who can afford.

O LCD Television market share is around 6.6% of the total CTV market.

O Due to sleeker and better picture quality models in the television market, demand for LEDs (Light Emitting Diode)and LCDs (Liquid Crystal Display) has grown tremendously.

O Also, lesser power consumption and advanced features have been other factors behind the surge in demand for LEDs and LCDs.

O Although the demand for CRT televisions is declining, still it is expected that the demand from lower income groups and the rural areas will drive these market for a next few years.

FOUR SUB-GROUPS OF THE MARKET

O The television market has been divided into four groups namely:

1. The Upgraders

2. The First-time buyers

3. Multiple-set buyers

4. Replacement purchasers

The Upgraders

O Upgraders segment comprise of those buyers who have upgraded from black and white televisions to Colour televisions.

O Primary reason behind upgradation is cable and satellite boom and increasing coverage of major sports and other events.

O This segment shows a distinct preference for multi brand outlets to compare brands and gather unbiased information.

The first-time buyers

O This segment constitutes of buyers who are buying a Colour Television for the first time.

O Brand loyalty is not very high but focus is towards the brand offering the latest and consumer friendly technology.

O Price also plays a major role in decision making.

Multiple-set buyers

O This segment represents people buying more than one set.

O Main consumers are joint families with the need to own personnel television sets.

O Price is the most important purchasing factor combined with lookout for a high tech product.

Replacement purchasers

O This segment usually trades in old CTV’s for new ones.

O It forms around 12% of the market and holds immense potential for the future.

O With increasing disposable incomes and the introduction of new models and declining prices, replacement demand has surged over the years.

COMPETITION IN THE TELEVISION MARKET

O Major players in the overall television market are Samsung, LG, Sony and Videocon.

O Samsung and LG are reported to have the largest share of 25% each followed by Videocon (22%) and Onida (11%).

O But in the context of LEDs and LCDs, Sony has been a tough competitor to both the leaders.

MICROMAX ENTERING TV MARKET

O In October 2012, Micromax entered the television market with the launch of LED TV in nine states like Delhi, Haryana, Maharashtra, Karnataka and Rajasthan across the 24-inch to 55-inch range.

O The price of the televisions stands between Rs. 15,990 and Rs. 1,29,990.

O The company entered the market with the aim of selling 1 lakh units in the first year and 8% share in LED market.

O Also, it is aiming to grow overall revenues to Rs 2,800 crore for year ending March 2013

O Micromax has set up a one-lakh square feet manufacturing facility spread over 5 acres at Rudrapur in Uttrakhand. It has a production capacity of 2,000 LED TV units per day.

Price ComparisonMicromax Samsung Sony

20” LED 9000 - -

24” LED 12000 16000 17200

32” LED 20000 28000 30000

42” LED 40000 60000 60000

ANALYSIS

O According to the industry experts, with the entry of Micromax in the television sector, the sector is likely to become more competitive.

O This is because Micromax has a reputation of flooding the market with devices in each possible budget category.

O Some analysts disapprove the entry of Micromax in the television market because it is believed that the market is at saturation stage.

Why Micromax Will Succeed?

O Prices lower than its competitors.

O Well-established distribution network.

O Ever-growing demand for LEDs.

O Replacement buyers augmenting.

O Good-quality products.

O Brand Image.

O Manufacturing factory situated in India.

CONCLUSION

OMicromax’s foray into the television industry will succeed because it has wide scope of expanding in the market.

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