Micromax Market Mix Essay Example

Micromax Market Mix Essay The mobile phone market in India is worth 130 million handsets annually. While the big boys like Nokia, Samsung, LG, Motorola and Sony Ericsson make up for 70% share, the market has of late seen a slew of domestic firms such as Micromax, Karbonn and Intex making large inroads and new established brands like Videocon and Onida entering the field. Among the domestic firms, one of the most promising brand is Micromax. Micromax is known to be one of the leading Indian Telecom companies that have 23 domestic offices located all over the county along with International offices. With a futuristic vision and an exhaustive RD at its helm, Micromax has successfully generated innovative technologies that have revolutionized the telecom consumer space. Though the company made its humble beginning by introducing Micromax Mobiles in the year 1991 but at present it is giving a tough competition to all its competitors in the field. The company is known to be a leading provider in the country for wireless technology solutions. Latest technological advancements are used by the company to bring landmark solutions for the users in the mobile world and to create a niche for itself. There are many â€Å"first† to the credit list of Micromax. The company’s vision is to develop path-breaking technologies and efficient processes that incubate newer markets, enliven customer aspirations and to make Micromax a trusted market leader amongst people. A Brief History of the Company We will write a custom essay sample on Micromax Market Mix specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Micromax Market Mix specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Micromax Market Mix specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Few years ago, when Vikas Jain’s firm was delivering computer printers and monitors across India, he saw first-hand how pervasive Nokia had become and also observed that When Nokia or Samsung roll out a new model they do so from its global portfolio rather than launching something specifically for India and Despite Nokia’s dominance, the Indian mobile-phone market was far from being saturated. Jain saw his chance, who set up the company in 1990s along with three friends from engineering collegeRahul Sharma, Rajesh Agarwal and Sumeet Kumar, all of whom are in their mid-30s to early 40s. Micromax, started operations in 1991 as an embedded software design firm, but was incorporated as a company in 1998, when it branched out as a distributor of computer peripherals such as printers, monitors, scanners from manufacturers such as LG, Sony Inc. , Dell Corp. Though Micromax made its debut in 1991 but it presence has been felt majorly in few previous years. Serious developments and rise was seen in the year of 2008 when the company entered Indian Cell phone handsets market. Company entered market in March 2008 in which it had a market share of meager 0. 59% average. Though the company made its humble beginning by introducing Micromax Mobiles in the year 1991 but at present it is giving a tough competition to all its competitors in the field. Company overview Micromax is a telecommunications company based in Gurgaon, Haryana, India. It is a manufacturer of wireless telephone handsets. Micromax has 23 domestic offices across the country and international offices in Hong Kong, USA, Dubai and now in Nepal. Micromax is the largest Indian domestic mobile handsets company in terms of units shipped during the quarter ended March 31, 2010 and the third largest mobile handset seller in India as at March 31, 2010 after Nokia and Samsung. Micromax, as they claim on the company’s website, is on a mission to successfully overcome the technological barriers and constantly engender â€Å"life enhancing solutions†. The company’s vision is to develop path-breaking technologies and efficient processes that incubate newer markets, enliven customer aspirations and to make Micromax a trusted market leader amongst people. 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 With young enthusiasts as its anchor, Micromax Informatics Limited has created a niche for itself in the telecommunication industry. Micromax 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. Today Micromax has become a brand which people relate and look up to for realizing their individual device preferences and other out-of- the-box solutions. The Marketing Mix for the company Marketing is one of the most important part in any company’s growth. The growth of Micromax is due to the strong marketing strategy of the company. Micromax Inc. has seen some serious rise in market share in few years. Micromax is the largest Indian domestic mobile handsets company in terms of units shipped during the quarter ended March 31, 2010 and the third largest mobile handset seller in India as at March 31, 2010. On March 31, 2010 the company registered the market share of 6. 24% for that quarter, which grew from 0. 59% in September, 2008. Micromax became the fastest growing mobile brand in India for the fiscal year 2009-10. Handset sales have grown by 123. 48% from 1. 5 million units in the quarter ended June 30, 2009 to 2. 57 million units in the quarter ended March 31, 2010. Micromax also sells data cards to service providers in India which includes Indias leading operators like AirTel and BSNL. Recently Micromax has launched their first Android mobile Micromax Andro A60 in India for a cheaper price tag than the competing models. The major m arketing management decisions can be classified in one of the following four categories: †¢ Product, †¢ Price, †¢ Place (distribution), †¢ Promotion. These variables are known as the marketing mix or the 4 Ps of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market and the firm attempted to generate a positive response in the target market by blending these four marketing mix variables in an optimal manner Product The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc. 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. Micromax has currently around 75 mobile sets in the market. The focus was more on value than price, 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 boasts of launching many firsts in the market like †¢ Handsets with 30 days battery backup †¢ Handsets with Dual SIM / Dual Standby Handsets Switching Networks (GSM CDMA) using gravity sensors †¢ Aspiration Qwerty Keypad Handsets †¢ Operator Branded 3G Handsets †¢ OMH CDMA Handsets, etc. 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 te chnology 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 RD are given high emphasis at Micromax in the telecom vertical. Price The product and price go hand in hand for any company, that mean if there is a product there must be price and vice versa. Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing. All Micromax products were towards the lower end of the pricing spectrum . These mobile phones generally good features in an affordable price that mean value for price. Some of the mobile sets are noted below. The new Micromax X414 is a large 2. 8-inch Touch Screen mobile phone 2. 0 MP Camera FM Radio/Recorder/Scheduler Multi Format Audio and video Player Expandable Memory (upto 4GB) Bluetooth with A2DP Theft Tracker GPRS/WAP/MMS Price: The new Micromax X414 touch screen mobile phone price in India us Rs. 5, 500 Micromax X117 key features: †¢ Dual SIM GSM (GSM+GSM) †¢ FM Radio †¢ Up to 15 hours talk-time †¢ Up to 30 days standby time †¢ expandable memory up to 8GB †¢ Color TFT display screen The new Micromax X117 mobile phone is available in India at price of Rs. ,490 Price of Micromax Q1 mobile is Rs. 2550/- Price of Micromax C112 mobile is Rs. 1,600/- Micromax H360 The price in India of the new Micromax H360 3G mobile phone is Rs. 5, 500 . It will only be available with the MTNL connection. Micromax x800. †¢ 2. 8-inch Touch-Screen †¢ 8MP Camera(Auto Focus) †¢ Xenon Flash †¢ Smile Detect †¢ 262 K Colors †¢ GPRS/WAP/MMS †¢ MP3 Player †¢ Theft Tracker †¢ Bluetooth with A2DP †¢ Expandable Memory †¢ Pict-Bridge †¢ PHB Import/Export †¢ TV Out †¢ Price and availability: The new Micromax X800 mobile phone is available in India at price of around Rs. 3,000. From the above data it is clear that Micromax is clearly providing value for money. All its products are having high feature in a comparatively low and affordable price. How did Micromax, which started off barely three years ago, grow to be the third-largest handset maker? Analysts say Indian firms have benefited from the price sensitivity of the market. Most Micromax models cost less than Rs 5,000. â€Å"Lower price points with similar features as that of a Nokia or a Samsung are driving Micromax’s growth,† says Anubhuti Belgaonkar, telecom managing analyst at Ovum India. Place (distribution) Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service. 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. One of the major aspects that contribute towards the substantial monthly growth of Micromax is its 80% sales in the rural areas. 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 encouraged 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. 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. One of The distribution strategies for long-term dominance adopted by the company is expansion into international markets. In fact, Micromax has already set up shops in Nepal, Sri Lanka and Bangladesh, and is looking forward to launch operations in the Middle-East in August 2010. As company officials say, Africa and Latin America will then follow. Many are aware that Micromax entered the handset market only two years back, but many dont know that it had already ventured into the distribution business six years before it even thought of betting big on handsets. They already had a B2B business in place, which gave them an automatic exposure to market truths and psychology of the consumers. This helped them understand what the market would desire in their handset. Developing an edge on the distribution front is also what the top honchos at Micromax worked on to succeed in India. The prime reason for this was to reach out to the non-connected rural and smaller locations, which were still untouched by rivals. The company also paid great attention to keep their channel partners pleased, up and running. With the system in place, it was not long when the company entered in the urban market through phones like the Q2, which marked Micromaxs entry into the QWERTY category. With an attractive price tag of just Rs. 4,000, it became a runaway hit (as at that time Nokia’s QWERTY range started at a price point of Rs. 12,000). By changing the rules of the game, Micromax has indeed developed a short term sustainable competitive advantage. In January, TA Associates, a mid-market private equity firm, invested $45 million (Rs 208 crore) to buy a minority stake in the firm. â€Å"As a fast-growing, profitable company in a growth industry, Micromax fits TA’s investment profile,† says Naveen Wadhera, director at TA Associates. Jain and Sharma plan to use this fund as a war chest to beat off competition as Micromax grows. The company is already present in Nepal, Bangladesh and Sri Lanka, and it plans to have footprints in Nigeria by the end of April, and in Brazil by the second week of May. 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 and the company also plans to open around 100 exclusive stores in coming years. Promotion Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break- even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc Advertising is the one of the biggest tool to development of integrated marketing communication. So the Micromax uses IMC tools to promote the product and build the strong image of the brand in the consumers mind. Integrated Marketing Communication ( IMC) is the practice of unifying all marketing communication tools so the send a consist, persuasive massage promoting company goals. The following tools of IMC are being used by Micromax: Events and experiences For marketing of its products the company is riding on two enduring Indian obsessions–sports and films–to build its brand. Following up on its association with the popular Twenty20 cricket Indian Premier League (IPL), Micromax, a brand that is less than three years old, has become the title sponsor of almost all tournaments and series of which India is a p art, including the recently concluded Asia Cup. The objective behind the cricket â€Å"roadblock†, as such behavior is termed in advertising, is to drive brand awareness and recall. The company believes that while cricket may boost a brand instantly, viewers may still not remember the brand after the match or the tournament. Even if consumers remember a series, they may not remember the advertisers. That’s when they thought of a roadblock and decided to sponsor all cricketing properties post IPL. It was one of the principal sponsors of the South Africa VS India ODI series in 2010. According to a survey the company has shown a makeable growth in its business after sponsoring the recent India and southafrica match (refer the fig) Bollywood is also a major platform for the brand, which is targeting consumers between 18 and 27 years. Bollywood’s most bankable star Akshay Kumar was signed on as the brand ambassador six months ago. More recently, his wife Twinkle Khanna was engaged to promote Micromax’s bling phone that comes with Swarovski crystals and a vanity mirror. To push its association with films, the firm also sponsored the IIFA (International Indian Film Academy) Awards held in Sri Lanka, where Micromax recently launched its phones. The brand is now ready to enter Bangladesh and West Asia. Advertising Broadcast media Micromax use television to broadcast their advertisements. Apart from using cricket, films, celebrity Micromax also advertise through news papers. They also utilize hoarding and bill boards to advertise their products. Prime site recently kicked off a month-long campaign for Micromax mobile phones in Delhi, executed mostly through hoardings. Going further, this promotion will be extended to the other regions of northern India as well. The city of launch was Delhi to start with, and post which they did the launch in Patna and Jaipur. Indore is next in line. There are more cities where the campaign will be launched in the near future for which we would be briefed accordingly. All the Medias used by Micromax are very carefully selected as to reach its target audience and through each medium the innovative aspect of the product is portrayed. Besides the focus on product development, Micromax has invested heavily in brand building. The following table shows the companies spending in media for FY. 09-10 Handset Companies: Media Spends (Apr 09- Mar’10) | |Handset marquees | |Spends Rs Cr | | | | | |TV | |Radio | |Print | |Total | | | |  Ã‚  Nokia Corporation | |266 |10 | |126 | |401 | | | |  Ã‚  Samsung India Electronics Ltd | |162 | |0 | |50 | |212 | | | |  Ã‚  LG Electronics India Ltd | |74 | |4 | |28 | |106 | | | |  Ã‚  Spice Mobiles Ltd | |63 | |1 | |37 | |101 | | | |  Ã‚  Micromax Informatics Ltd | |35 | |1 | |12 | |48 | | |   Ã‚  Karbonn Mobiles | |16 | |0 | |25 | |40 | | | |  Ã‚  Videocon Industries Ltd | |21 | |0 | |14 | |34 | | | |  Ã‚  Sony Ericsson (India) | |13 | |2 | |15 | |30 | | | |  Ã‚  Lava International Ltd | |20 | |1 | |7 | |28 | | | |  Ã‚  Maxx Mobile Communications | |13 | |0 | |14 | |27 | | | |Total handsets category | |766 | |22 | |402 | |1190 | | | | | Source http://www. draftfcbulkacomstrat. com/about_comstrat2010. html Most of the brand promotion for Micromax is centered on products. The ads are for individual products highlighting the product features and USPs. With a 360 degree advertising and marketing strategy sketched out, the company has an optimistic outlook for the telecom consumer space. Micromax is currently the third-largest GSM vendor in the Indian market, with a share of 8. 1%, perhaps just a few notches behind Samsung who at the second position has 10. 4% control, as per market reports. [Nokia with 52. 7% share is the number 1 vendor]. Micromax has been selling anywhere around a million handsets every month, for the past year, and as company officials state, it has earned about Rs. 15 billion in revenues during the past year. So here’s something to digest – going by the numbers, the Indian handset market is estimated to have sold about 130 million handsets units in the last calendar year alone, which implies, that if we were to consider just the sales during the past 12 months, Micromax has a market share of 9. 3%, much closer (as compared to the previously stated 8. 1%) to the 10. 4% share of Samsung! And there is a lot more to be had from a handset market that currently, only has a tele-density of 49. 5% and has supposedly clocked a turnover of over Rs. 200 billion over last year. Little wonder, that many global bigwigs like Nokia, Samsung, LG Sony Ericsson have time and again referred to India as one of their key markets. But with great opportunities, come greater challenges, and the same is true for the Once, Micromax was a challenger; today it is also being challenged by many entrants like Karbonn, Lava, Maxx, Intex, Lemon, Gee Pee, Videocon, Usha Lexus, Orpat, Airfone and many more. Consumers’ feedback analysis As per the study conducted in the market taking a random sample of around 40 people the following points are found regarding the acceptance of Micromax mobile in the market. †¢ More than 70% people are interested to buy Micromax due to its cheap price. †¢ While 65-70 % are happy with the value for price of the mobile, 25-30 % still need some more additional feature like torch, additional ear phone etc. †¢ Around 25% are still unaware of the brand. And 20-30% still believes the brand is not good as compare to Nokia or Samsung may be due to no advertisement by the company regarding brand. †¢ More than 40% people are not happy with the information provided with the mobile at the time of purchase. †¢ Many people complain about the reach ability (coverage) of the mobile, as per them they have to move around 30 to 40 Km in order to get a mobile of Micromax. †¢ But the most and very important accept of the survey that almost all the customers are not happy with the post sales service provided by the company. †¢ And many of the people are quite confused with the meaning of the tag line of the company i. e. Nothing like anything. Distributors’ feedback analysis From another survey that had been conducted over 10 dealers/retailers regarding the acceptance of the mobile in the market as pre the selling point of view, the following points were being founded. †¢ All most all dealers/retailers are happy to sell Micromax mobile due to its increasing demand †¢ Many dealers/retailers are happy with the margin rate in the product. †¢ While many of the dealers/retailers are ok with the offers and promotion of the product almost all complain about the unavailability of the product to meet the demand in time. †¢ Some of the dealers/retailers want to have some extra commotion or margin to be applied by the company who used to sell some more no of unit as compare to other. Though they agree that it is steel behind from companies like nokia and Samsung in terms of brand name and post sales service still they appreciate the way the company is growing and trying to solve the issues SWOT analysis The SWOT analysis of the company is as fol low: Strengths The following are the strengths of the company ? Latest technological advancements ? Innovative technologies. ? Mobiles having 30 day battery life ? Affordable QWERTY phones ? Affordable Double Sims phones ? Has 23 domestic offices ? More than 40,000 stores of Micromax all over the country ? a 360 degree advertising and marketing strategy ? High penetration into rural market ? Mobiles specially designed according to Indian market Weaknesses’ No corporate brand building campaign. ? Confusing tagline. ? Low brand image as compare to nokia. ? Poor after sales service with just 450 service centers in the country. ? Fewer products targeting high end customers. Opportunities There is a huge opportunity there in the market for the company as the Indian mobile market is quit price sensitive and growing in a grate pace. The company with its new and innovative ideas and with value for price strategy can really do well in this market having heavy potential Threats Though there is a huge potential in the Indian market for mobile phone the competition is also getting tougher day by day new player entering the market. Earlier there were fewer companies like Nokia, Samsung, and LG etc but now there are around 72 companies which provide mobiles in the countries among them some are also have good brand image like Onida, Spice, i-ball etc Beside this low priced chinies sets are also a main threat for the company and big boys’ like Nokia and Samsung are also coming with low end phones with good features and there brand name can help them to get benefit from this also. Finding and suggestions From the above study the finding can be pointed as mentioned below: ? The company is the 3rd largest in the company after nokia and Samsung ? The company is first to invent some new features. ? The company has a high presence in the rural market. The company strategy is to give value for money with its cheap mobiles with compare to its competitors. ? The company’s distribution marketing is impressive. ? The company has already made its presence in abroad. ? The company has currently 23 domestic offic es, 40000 retailers and around 450 service stations across India. ? The company is going to increase its business with some tie up with international telecom companies as well wants to increase its market share to become second largest company in the country. Suggestions ? The company needs to increase its no of service centers in the country. ? Need to provide good after sales service to customers ? Need to be more informative regarding the product features. Need to maintain the current growth rate. ? Need to promote the brand to create brand awareness among the people ? Need to more innovative with new players coming to the market. Conclusion 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 favor 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 ve ry 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. But still there is log way to go for the company due heavy change in demand and due to the innovation of new technologies day by day. References Books and journals ? Marketing research project â€Å"Content analysis Brand recall of Ad’s in IPL-3 by Group-J (09-11)†. ? Marketing fundamentals by Kottler. ? Nielsen Info. From the official website of The Nielsen Company. ? Economic Times ? Business Economics ? Business world (9th Dec 2010) Web sites like ? www. micromaxinfo. com ? www. google. com ? www. yahooanswers. com ? www. draftfcbulkacomstrat. com ? http://en. wikipedia. org ? www. 2dix. com