Micromax: Phone for masses

going global
Case writing
1/31/2014
IIM
Ranchi
C Aishwarya (M068/12)
Submitte t!" #r!$% Sasahar
&era
ABSTRACT
Micr!ma'( an Inian m!bi)e hanset manu$acturer starte
!*erati!n in +ur,a!n as an embee s!$tware esi,n $irm% It then m!-e t! #C
harware business an )ater !n entere ce))*h!ne manu$acturin, r!))in, !ut its $irst
*r!uct in 2008% In a sh!rt s*an !$ $i-e years( it ha create a bran name $!r itse)$ an
is in 2
n
*!siti!n ne't !n)y t! Samsun,( in this hi,h)y c!m*etiti-e m!bi)e hanset
inustry% It was ab)e t! achie-e this success because !$ ri,ht)y ta**in, c!nsumer.s
nees( *r!uct cust!mi/ati!n with an e$$icient su**)y chain% It a)s! c!ntinu!us)y $!cuses
!n 360 e,ree branin, an channe) mar0etin,% Recent e-e)!*ments are that it is
,!in, t! start assemb)in, its units in +ur,a!n which was initia))y !ne in China% A)s!( the
c!m*any is aimin, t! ,! ,)!ba) by startin, t! enter 1ur!*ean an !ther $!rei,n mar0ets%
2his case etai)s ab!ut the !*erati!na) success !$ Micr!ma' an its mar0etin,
strate,ies an ta0es a ste* $urther t! e-a)uate its strate,ic ecisi!n !$ ,!in, ,)!ba)%
PROBLEM STATEMENT
Micr!ma' is a bran $!r the masses *r!ucin, chea* *h!nes% 2his is h!w it ca*ture a
ma3!r rura) an )!wer4strata inc!me mar0et% &ut n!w it is aimin, t! ,! ,)!ba) with a
*h!ne in *remium se,ment( Can-as% 2his i-erse shi$t !$ $!cus $r!m ine'*ensi-e
*h!nes $!r masses t! the *remium se,ment $!r hi,h en mar0et is a *!int in 5uesti!n
which ecies the $uture !$ the c!m*any% Is this ecisi!n t! *)ay a,ainst its stren,th !$
)!w *rice hanset mar0et ri,ht( is what the case e-a)uates%
LEARNINGS
2his case is aime at )earnin, the mar0etin, strate,ies !$ Micr!ma' $!r its branin, an
a)s! ce)ebrity ambassa!rs% It a)s! nees the a**)icati!n !$ strate,y c!nce*ts $!r
e-a)uati!ns !$ its m!-e t!wars ,)!ba) mar0et with *remium se,ment *h!nes% It is !n
the wh!)e mar0etin, cum strate,y case stuy%
CASE:
INTRODUCTION
Micr!ma'( an Inian m!bi)e hanset manu$acturer starte !*erati!n in +ur,a!n as an
embee s!$tware esi,n $irm% It then m!-e t! #C harware business an )ater !n
entere ce))*h!ne manu$acturin, r!))in, !ut its $irst *r!uct in 2008% In a sh!rt s*an !$
$i-e years( it ha create a bran name $!r itse)$ an is in 2n *!siti!n ne't !n)y t!
Samsun,( in this hi,h)y c!m*etiti-e m!bi)e hanset inustry% It was ab)e t! achie-e this
success because !$ ri,ht)y ta**in, c!nsumer.s nees( *r!uct cust!mi/ati!n with an
e$$icient su**)y chain% It a)s! c!ntinu!us)y $!cuses !n 360 e,ree branin, an channe)
mar0etin,% Recent e-e)!*ments are that it is ,!in, t! start assemb)in, its units in
+ur,a!n which was initia))y !ne in China% A)s!( the c!m*any is aimin, t! ,! ,)!ba) by
startin, t! enter 1ur!*ean an !ther $!rei,n mar0ets%
BACKGROUND: CELL PHONE INDUSTRY
2he mar0et !$ a $eature *h!ne is im*r!-in, in numbers in the mar0et ins*ite !$ the hu,e
u*sur,e !$ the Smart*h!ne mar0et% 2he reas!n $!r this is that the !-era)) m!bi)e *h!ne
mar0et has !n)y reache the sur$ace% 2he t!ta) m!bi)e hansets *enetrati!n is !n)y
ab!ut 266 !$ the t!ta) *!*u)ati!n where Inia is the sec!n )ar,est c!untry in the w!r)
in terms !$ *!*u)ati!n ne't !n)y t! China% 2his resu)ts t! near)y 400 mi))i!n uni5ue
m!bi)e subscribers as s*eci$ie by 2e)ec!m Re,u)at!r Auth!rity !$ Inia (2RAI)%
2hese $eature *h!nes cater t! the nees !$ the subscribers in 2ier 2 an 2ier 3 cities
since the e-e)!*ment !$ techn!)!,y in$rastructure is mea,er in these cities%
2he recent u*sur,e in the Smart*h!ne mar0et in Inia is *!ise t! ,r!w $urther( ,i-in,
!ut c)ear si,ns !$ mar0et *er$!rmance between 7anuary 8 A*ri) 2013( se))in, 9%4 mi))i!n
Smart*h!nes c!m*are t! 6%6 mi))i!n in the *re-i!us $isca) 5uarter% 2he !-era)) m!bi)e
hansets mar0et ,rew by 11%16 !n y4!4y basis%
2he :!rean m!bi)e hanset ma0er Samsun, is )eain, the mar0et in Smart*h!nes(
whi)e the Inian *h!ne ma0ers Micr!ma' an :arb!nn ,rab the ne't tw! s*!ts% 2he
,r!wth !$ these
Inian *)ayers came at the )!ss !$ ;!0ia an S!ny C!r*( which
were !nce the mar0et )eaers in the inustry%
2he $eature *h!ne user mi,rati!n is ri-in, the ,r!wth !$ the entry )e-e) Smart*h!nes%
2his is resu)tin, in mi,rati!n t!wars )!w4ran,e Smart*h!nes by Inian Manu$acturers%
2his u)timate)y is )eain, t! the users stic0 t! the res*ecti-e ma0ers *r!3ectin, that the
Smart*h!ne mar0et in Inia is $!r,in, ahea t! new hei,hts%
<eature *h!ne mar0et in Inia has mature an there is a risin, tremen!us *!tentia)
,r!wth $!r smart*h!nes% 2his is enc!ura,in, the new entrants such as Micr!ma' an
:arb!nn c!me u* with Smart*h!nes $!r the entry )e-e) users wh! w!u) )i0e t!
e'*erience the s!*histicate m!bi)es%
MICROMAX: THE IN AND OUT
Micr!ma' c!mmence the manu$acturin, !$ the m!bi)e *h!ne !*erati!ns in 2008 when
-ari!us mu)tinati!na)s ru)e the inustry% =a-in, unerst!! the e-er4chan,in,
c!nsumer *re$erences c!mbine with the )atest techn!)!,ies( Micr!ma' has
i$$erentiate itse)$ $r!m the !ther *)ayers with the )!w *ricin, strate,ies%
Micr!ma' is !ne !$ the bi,,est *r!uct techn!)!,y successes
Inia has witnesse )ate)y% It is a)reay the c!untry.s sec!n4
)ar,est m!bi)e *h!ne se))er in terms !$ -!)ume( ne't !n)y t! Samsun,% At the time !$ the
)aunch !$ its !*erati!ns( the m!bi)e mar0et was !minate by n!te *)ayers which
inc)ue Samsun,( ;!0ia( S!ny 1riccs!n( >+ an !ther 0ey c!m*anies% &ut then Inia
misse a *)ayer wh! c!u) cater t! the nees !$ Inians s*eci$ica))y% ?hen Micr!ma'
was sur-eyin, am!n, )!ca) cust!mers t! ienti$y their s*eci$ic nees( it has !n)y mae
b!!ste their c!n-icti!n because many !$ the ,)!ba) m!bi)e *h!ne se))ers are
intr!ucin, the best4se))in, m!e)s t! the Inian mar0et but were $ai)in, t! aress the
)!ca) nees%
A)) these e-e)!*ments starte with a battery !$ a truc0 in 200@( in the *!wer e*ri-e
city !$ &aharam*ur( ?est &en,a)% Mr% Rahu) Sharma ha**ene t! see an Airte)#ay
#h!ne bein, *!were by a truc0 battery% 2he #CA !wner w!u) e-ery ni,ht carry the
battery 12 0m t! an a3!inin, -i))a,e !n his bicyc)e( char,e it !-erni,ht( an carry it bac0
t! &erham*ur in the m!rnin,% Rahu) was amuse by the inn!-ati-e a**)icati!n t! c!*e
u* with the t!u,h c!niti!ns that was em*)!ye by the *ay*h!ne !*erat!r% =is interest
,rew m!re when he )earnt that the !*erat!r was ab)e t! earn s!me *ennies $!r his
)i-in,% Rahu)( base !n his e'*erience !$ inn!-ati!n which ar!se $r!m c!nstraint(
)aunche Micr!ma'( which was a $irst *h!ne with a battery bac04u* !$ !ne m!nth( ca))e
B1i% In a c!untry )i0e Inia( which su$$ers $r!m *!wer e$iciency( this st!! as a
mar-e)!us in-enti!n%
2he 0ey $eature that mae Micr!ma' *!*u)ar in the )!w4en se,ment is its -a)ue4$!r4
m!ney *r!*!siti!n in any *r!3ect the c!m*any ta0es u*% It is a)s! re-e))e that the
c!m*a ny.s en,ineers a)ways en,a,e in *ushin, themse)-es bey!n the )imits t!
e'*)!re the *!tentia) !$ the m!bi)e *h!ne bey!n -!ice( ata an SMS%
2his unre)entin, an su*eri!r $!cus !n the *r!uct en,ineerin, t!wars caterin, t! the
)!ca) nees has ser-e the c!m*any ,i-in, ,!! resu)ts% <!r instance( Micr!ma' was
the $irst in the c!untry t! )aunch a *h!ne su**!rtin, tw! +SM SIM cars% 2!ay(
ma3!rity !$ Micr!ma' hansets ha-e this $eature whereas the c!m*etit!rs sti)) stru,,)e t!
! s!%
In the initia) sta,es( Micr!ma' main)y $!cuse !n rura) mar0ets(
says its c!4$!uner Ci0as% =e a)s! re-ea)s that this a))!we the
c!m*any t! bui) an un*ara))e)e netw!r0 !$ istribut!rs an retai)ers which has
bec!me the 0ey t! its mete!ric success%
Its ne't tar,et se,ment was the y!uth% <!r this se,ment wh! wants 24/@ c!nnecti-ity(
the c!m*any re)ease a D?1R2E *h!ne with se-era) attracti-e s!cia) meia
a**)icati!ns an chat( e'c)uin, e4mai)% 2he c!m*any c!unts ar!un @ D?1R2E
m!e)s in its *r!uct *!rt$!)i! that su**!rt a ran,e !$ i$$erent $eatures( ser-in, i$$erent
mar0ets% >ater in 2011( Micr!ma' $!ra,e int! the *hab)et mar0et with its Can-as
series% 2he c!m*any has a)s! entere the smart*h!ne se,ment an tries t! s*rea a
messa,e that techn!)!,y an inn!-ati-e s!)uti!ns can be !btaine at a$$!rab)e *rices%
In the *resent ay scenari!( the c!m*any is ta0in, ste*s t!wars $!rayin, acti-e)y int!
the urban mar0ets% Its $irst *h!ne )aunche in this se,ment was the *!*u)ar &)in, which
was en!rse by the &!))yw!! actress 2win0)e :hanna% &)in, was bui)t 0ee*in, in
min the min $ashi!n c!nsci!us urban w!men% 2his hanset was a bi, hit with m!re
than a mi))i!n hansets s!) s! $ar in the c!untry( estab)ishin, $irm)y Micr!ma'.s arri-a)
int! the urban )ansca*e%
?ith the ne't bi, chan,e c!min, $r!m the a**)icati!n ec!system $ue))e by hi,h4
banwith c!nnecti-ity( Micr!ma' c!ncentrates !n a**s that wi)) ! the best( which
enab)es *e!*)e t! ! a )!t !$ thin,s !n the ,! because these are the !nes that wi)) ser-e
the ai)y nees !$ the c!nsumer%
Micr!ma' withrew its 4%66 bi))i!n ru*ees initia) *ub)ic !$$erin, !n 28 7u)y 2011( ue t!
hi,h -!)ati)e mar0et% 2he b!ar rec!mmene the withrawa) s! as t! $!cus !n new
*r!uct e-e)!*ment an )aunches%
In Act!ber 2013( Micr!ma' ann!unce that =u,h 7ac0man( the we)) *r!c)aime
=!))yw!! act!r wi)) be en!rsin, its new )aunch Micr!ma' smart*h!ne Can-as 2urb!%
Micr!ma' w!u) s!!n r!)) !ut Anr!i 4%3 7e))y&ean $!r se)ecte *h!ne m!e)s which
inc)ue a wie ran,e !$ its Can-as smart*h!ne -ariati!ns%
Marketing Strategy !r r!"ing in H#g$ %a&k'an:
?hen Micr!ma' $irst came !ut with the Can-as *h!ne
a-ertisement starrin, =u,h 7ac0man( it mae *e!*)e stan u* an ta0e n!tice !$ its
increasin, ambiti!ns t! bec!me a ,)!ba) *)ayer an the esire t! $in a new *!siti!n in
the mar0et% &ut the cru' !$ the issue )ies here that can Micr!ma' rea))y hera) a new
tren $!r the Inian mar0ets an bransF 2he *resence !$ a ,)!ba) $ace as a bran
ambassa!r ensures an immense *ub)icity creatin, a *!siti-e bu// ab!ut the bran(
he)*in, t! ca*ture the min !$ the c!nsumers% Ain, t! it( i$ the c!m*any has ,)!ba)
as*irati!ns( it he)*s t! create a *resence in the $!rei,n mar0ets as the bran $!rays
ahea with the *!siti-e ima,e !$ the ambassa!r%
Such s!rt !$ an a-ertisement is a sure4sh!t way !$ re*!siti!nin, in the mar0et% #ri!r t!
this Micr!ma' was seen as a chea*er bran m!bi)e *h!ne manu$acturer which is n!w
tryin, t! be *ercei-e as a ,)!ba) bran% #e!*)e wh! w!u) !therwise ba)0 at an Inian
*r!uct w!u) see it i$$erent)y i$ it c!mes with the bac0in, !$ a $am!us =!))yw!! $ace(
=u,h 7ac0man%
#re4,)!ba)isati!n the Inian -iewer was !b)i-i!us t! what went !n !utsie the nati!na)
b!rers an the brans were a)s! nati!na) which is why Inian ce)ebrities were the
*re$erre ch!ice% 1-er since the ays !$ G!!rarshan a-ertisements( mae by Inians
t! be c!nsume by Inian with a istinct )ac0 !$ $!rei,n $)a-!urs% 2his tren has
c!ntinue uncha))en,e $!r the *ast $ew ecaes main)y because n! !ne saw any rea)
nee t! brea0 away $r!m it% An n!w it has bec!me ee*)y in,raine int! the Inian
*syche%
<r!m the !utsie the Inian mar0et seems u*war)y m!bi)e with m!re an m!re *e!*)e
wi))in, t! s*)ash !ut !n e'*ensi-e *remium items but the rea)ity is that it is sti)) a
*ri-i)e,e $ew wh! can a$$!r t! bet !n hirin, a $!rei,n ce)ebrity t! w!! such a sma))
secti!n !$ the *!*u)ati!n( is inee a ris0y m!-e% 2he mar0eter nees t! $u))y
unerstan the *r!s an c!ns !$ enterin, the mar0et with such a-ertisement as there is
a ris0 that it w!u) ha-e !n)y )imite a**ea)% 1-en ,)!ba) brans such as Aishwarya Rai(
S!nam :a*!!r an <reia #int! are a**rehensi-e t! star in their Inian s*eci$ic
a-ertisements as they 0n!w that there is a hi,h *r!babi)ity that the c!nsumers w!u)
n!t re)ate with $!rei,n ambassa!rs wh! s*ea0 a i$$erent )an,ua,e an ! n!t )!!0
Inian%
1-en am!n, the e)ite wh! ha-e the *!wer t! buy *remium
,!!s( there is a -ery hi,h *r!babi)ity that many ! n!t 0n!w
wh! =u,h 7ac0man !r #ene)!*e Cru/ is% 2hat is entire)y ue t! cu)ture an en-ir!nment
that we ha-e ,r!wn u* in surr!une by Sharu0h :han( Sa)man :han an the )i0es%
It is !n)y the current ,enerati!n am!n, wh!m these names are c!nsiere t! be
c!mm!n 0n!w)e,e an that is because !$ the e'*!sure that they ha-e ha ue t!
cab)e 2C( 1n,)ish m!-ies an sitc!ms% S!( i$ there is a *r!uct that is ,eare s*eci$ica))y
t!wars such a mar0et( there is a ,!! chance that an a-ertisement with a 0n!wn
$!rei,n ce)ebrity w!u) ,et y!u the attenti!n an he)* y!u stan a*art $r!m the cr!w%
Strategi& i'"a&t:
2here are many *)us *!ints !$ hirin, a $!rei,n bran ambassa!r but -ery $ew
c!m*anies ha-e actua))y ,!ne a)!n, that r!a% Am!n, se-era) !ther reas!ns( the
im*!rtant thin, is that n!t many Inian c!m*anies ha-e the $inancia) abi)ity t! entice a
,)!ba) $ace as its ambassa!r% ;!r are Inian c!m*anies s! $am!us ,)!ba))y that they
c!m*ete in ,)!ba) mar0ets e'ce*t $!r I2 c!m*anies which !esn.t nee these mar0etin,
,immic0s% Ather reas!ns inc)ue a menta)ity !$ sa$ety $irst a**r!ach by hirin, Inian
ce)ebrities such a act!rs an cric0eters( re)yin, !n the truste $!rmu)a !$ success%
An!ther issue is that such stars can !n)y be ass!ciate with hi,h *rice *remium
*r!ucts which are n!t current)y s!) by many Inian c!m*anies% =!we-er( hirin, a
$!rei,n star $!r a mi ran,e *r!uct w!u) !n)y $urther create c!n$usi!n in the bran
*!siti!ns an n!t rea* the intene bene$its%
T$e (ay a$ea):
2he Inian mar0et is n!t current)y reay $!r such a-ertisements !n a wies*rea sca)e
b!th $r!m the *!int !$ -iew !$ a-ertisers an -iewers th!u,h there is a hu,e *!tentia)
t! ,r!w in this irecti!n% &rans that cater s*eci$ica))y t! such a cr!w an ha-e
*r!ucts )i0e c)!thes( watches !r m!bi)e *h!nes ha-e a ,!! !**!rtunity !$ uti)i/in,
$!rei,n ce)ebrities t! w!! these cust!mers%
It is an interestin, a-enue $!r a-ertisers t! e'*)!re but the
*r!uct( the bran( the ambassa!r an the tar,et mar0et
sh!u) a)) be in sync with each !ther% H)timate)y a ,!! a-ertisin, cam*ai,n is n!t
necessari)y ab!ut a ce)ebrity as sh!wn by Airte).s I=ar $rien /ar!!ri h!ta hai.( s! e-en i$
there is n! bran ambassa!r a ,!! a-ertisement wi)) sti)) ri-e h!me the messa,e%
A)s!( $!r a bran )i0e Micr!ma'( it is rather a-isab)e t! c!ncentrate !n the *r!$itab)e
Inian Mass Mar0et rather than the ris0y e'*)!rati!n !$ +)!ba) Mar0ets when there are
,iants )i0e A**)e( Samsun, an the )i0es ru)in, the ,ame !$ cuttin, e,e m!bi)e hanset
*r!-iers% Micr!ma' sh!u) ca*ture !ne mar0et an then enter int! an!ther as there is
t!! much s*ace $!r ,r!wth in these m!bi)e *h!ne mar0ets instea !$ i-ersi$yin, ra*i)y
t! ,)!ba) mar0ets with!ut ta**in, the current business t! its $u)) *!tentia)%
*#e+ti!n+:
1. Giscuss the mar0etin, strate,ies !$ Micr!ma'F
2. ?hat are the *r!b)ems Micr!ma' is $acin,F Is the strate,ic m!-e !$ Micr!ma'
ri,ht t! ,! ,)!ba)F
3. Is =u,h 7ac0man the ri,ht *ers!n t! be *ic0e as bran ambassa!r t! $u)$i)) the
m!ti-es !$ Micr!ma'F
4. ?hat ! y!u thin0 Micr!ma' sh!u) !F
Reeren&e+:
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A""en)i&e+:
2he st!ry !$ h!w Micr!ma' went -ira) with the un)eashin, !$ =u,h
7ac0man as the &ran Ambassa!r"