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 companys 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 cofounders.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 dont 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 Jains 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, theyve moved into a much more vibrant state and theres 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 Indias 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 Internetbased 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 Googles Android and Microsofts 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 isnt 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 companys 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 than 20%

less

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 PS
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.