Project Title:

Mobile phone industry in India

Subject:

Marketing Management -1

Date :

24-08-2015

Section: F

Group Members: 5

Report By:
S.No
Name
.

Roll No.

1.

Moulik Shukla

2015347

2.

Nitesh Roy

2015351

3.

Pankaj Ahalawat

2015352

4.

Poonam Agarwal

2015353

5.

Preeti Dutta

2015355

Introduction:

Smart phone Market in India:

India, the second largest smartphone market globally, is expected to witness a manifold growth in the
number of smartphones to over 650 million in the next four years, a study by networking solutions
giant Cisco. According to the report by US-based firm's Visual Networking Index (VNI): "In India, the
number of smartphones grew 54 per cent during 2014, reaching 140 million in number and the number of
smartphones will grow 4.7-fold between 2014 and 2019, reaching 651 million in number."
Globally, the report forecasts that by 2019 there will be 5.2 billion mobile users (up from 4.3 billion in
2014).In 2014, nearly 59 per cent of the world's population (7.2 billion people) was comprised of mobile
users. By 2019, more than 69 per cent of the world's population (7.6 billion people) will be mobile users,
it said.
"In India, there were 590.3 million (47 per cent of India's population) mobile users in 2014, up 18 per cent
from 500 million (40 per cent of India's population) in 2013," the VNI report said. There will be 895.6
million (67 per cent of India's population) mobile users by 2019, up from 590.3 million in 2014, a CAGR
of 8.7 per cent, CISCO forecasted.
By 2019, there will be around 11.5 billion mobile-ready devices/connections, including 8.3 billion
personal mobile devices and 3.2 billion M2M (machine 2 machine) connections (up from 7.4 billion total
mobile-ready devices and M2M connections in 2014), it said.
"The ongoing adoption of more powerful mobile devices and wider deployments of emerging M2M
applications, combined with broader access to faster wireless networks, will be key contributors to
significant mobile traffic growth in the coming years," Cisco VP Products and Solutions Marketing Doug
Webster said.
Source: http://articles.economictimes.indiatimes.com/2015-02-03/news/58751662_1_networking-indexmobile-users-population
smartphones and data plans. SMS, email,
messaging and social networking apps are the
most popular used apps, while video streaming
and banking services are the least used apps.

India is making the transition from features

phones to smartphones rapidly. This is
accelerated by the availability of low-cost

Many handset manufacturers are making their

contribution towards mobile internet growth by
manufacturing affordable handsets supporting
vernacular content. The median price of
handsets has dropped significantly making
internet enabled devices affordable for the
masses. Several domestic handset manufacturers
are contributing to the increasing trend of
smartphone usage by selling high end phones at
lower price points. The report found that
smartphones seem to deliver a better user
experience and have the potential to accelerate
the adoption of mobile internet.

SAMSUNG
Introduction:
Samsung is a South Korean conglomerate company headquartered in Samsung Town, Seoul. With
diversified sectors and global presences it has been one of the best known and reliable companies across
the globe. Some of the subsidiaries of Samsung include:

Samsung Electronics
Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Heavy Industries

Samsung C&T Corporation

Samsung SDS
Samsung Techwin
Renault Samsung Motors

Samsung Electronics Co., Ltd. ("SEC") was incorporated under the laws of the Republic of Korea
in 1969 and listed its shares on the Korea Stock Exchange in 1975. Samsung which means TriStar in Korean has for the last 70 years been dedicated to making a better world through diverse
businesses that today span advanced technology, semiconductors, skyscraper and plant

construction, petrochemicals, fashion, medicine, finance, hotels, and more. Samsungs flagship
company, Samsung Electronics, leads the global market in high-tech electronics manufacturing
and digital media.

Through innovative, reliable products and services; talented people; a responsible approach to
business and global citizenship; and collaboration with their partners and customers, Samsung is
taking the world in imaginative new directions.

SEC operates between two main business units: DMC (Digital Media & Communications) and
DS (Devise Solutions). The DMC unit is subdivided into CE (Consumer Electronics) and IM
(Information technology & Mobile Communications) divisions. The CE division offers products
ranging from digital TVs, monitors, air conditioning systems, and refrigerators. The IM
(Information technology & Mobile Communications) division also offers a wide variety of
products including HHP (3G phone, smart phone), telecommunication systems, printers, and
computers.
Samsung
Electronics Co.,
Ltd.

Digital Media
Communication
s

Consumer
Electronics

Hand Held
Products
(Mobile Phones)

Devise
Solutions

Information
technology &
Mobile
Communication
s

Printers

Semiconductor

Computers

LCD divisions

Telecommunicat
ion Systems

The DS unit is also subdivided into Semiconductor and LCD divisions. The semiconductor
division manufactures and sells products such as memory and system LSI, while the LCD
division manufactures and sells products such as LCD display panels for TVs, monitors and
notebook PCs, and AMOLED panels for mobile devices. The company is domiciled in the
Republic of Korea and the address of its registered office is Suwon city, the Republic of Korea.

Ref:
http://www.samsung.com/us/aboutsamsung/ir/financialinformation/auditedfinancialstatements/do
wnloads/consolidated/2012_con_quarter01_note.pdf

Important facts:
Fastest rising brand on Interbrands List of the Top 100 Brands.

Mobile Industry in India growing @ 12-14% YOY. I.e. 6-7 million unit market for smart phones
In Q2 2015, Samsungs June market share crossed 40% as compared to Jan Market share : 35%.
Sixth consecutive MOM growth.
16 devices launched this year.
2100 exclusive Samsung Stores, 1500 Modern retail outlets
Pioneered in innovating technologies like: Samsung SideSync 3.0 , Samsung Smart Switch.

Ref:
1) Brand Success: How the worlds top 100 brands thrive and survive, Matt Haig, Page
No: 278,279

2)http://gadgets.ndtv.com/mobiles/news/samsung-claims-40-percent-share-in-indiansmartphone-market-in-june-723733

Vision:

As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World,
Create the Future."
This new vision reflects Samsung Electronics commitment to inspiring its communities by
leveraging Samsung's three key strengths: New Technology, Innovative Products, and
Creative Solutions. -- and to promoting new value for Samsung's core networks -- Industry,
Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world
and a richer experience for all.

As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in
revenue and becoming one of the worlds top five brands by 2020. To this end, Samsung has also
established three strategic approaches in its management: Creativity, Partnership, and
Talent.
Samsung is excited about the future. As we build on our previous accomplishments, we look
forward to exploring new territories, including health, medicine, and biotechnology. Samsung is
committed to being a creative leader in new markets and becoming a truly No. 1 business going
forward.
Ref: http://www.samsung.com/in/aboutsamsung/samsungelectronics/vision2020.html

Mission:

To inspire the world with innovative technologies, products and designs that enrich peoples lives
and contribute to a socially responsible, sustainable future.

Its an ever-changing world and Samsung wants to put you in the middle of it all. Were dedicated
to creating innovative technologies, processes and products that expand the horizon of whats
possible and enrich people's lives.

As per Peter Druckers classical Questions:

What is our business: Technological Products and designs

Who is the customer: people (global society)
What is the value of the customer: ever-changing world and people
What will our business be: inspire the world with innovative technologies
What should our business be: expand the horizon of whats possible and enrich people's lives

Ref:

1) http://www.samsung.com/in/aboutsamsung/samsungelectronics/vision2020.html

2) https://www.facebook.com/SamsungMobileIndia/info?tab=page_info

Market Share: (REF: IDC 2014 Q4 PRESS RELEASE)

Samsung dominated the smartphone

market in India in the Q4 of 2014 report
with the highest market share being 22%
and giving a tough fight to neck

competitor Apple. "Smartphone vendors

have been quick in gauging consumer
demand for 4G handsets. In percentage
terms, 4G handsets are still in single
digits, but vendors who are not yet ready
with a 4G portfolio are likely to miss the
next wave of smartphone growth,"
said Karan Thakkar, Senior Market
Analyst, IDC India.

For the Indian Smartphone Vendor

share,
Samsung
maintained
its
leadership position in

Q4 2014. Apple presented stiff competition for Samsung during this time, while "online
exclusive" brands are hurting the brand in the value for money category.

On the other hand, For the Global 2015 Q2 review IDC said Samsung sold 82.4 million
smartphones in the first three months of the year 2015, for a 24.6 percent market share. Even
though the number sold was down seven percent from a year ago, it outpaced Apple, whose
iPhone sales slipped slightly from the final quarter of 2014. Apple held an 18.3 percent market
share in early 2015 after selling 61.2 million iPhones. The figures were impacted by seasonal and
other factors. Samsung notably launched its flagship Galaxy S6 and Galaxy S6 Edge phones at
the end of the quarter in April, while Apple iPhone sales dipped compared with the stronger

holiday quarter. In the fourth quarter, Apple and Samsung were virtually tied with around 20
percent of the market each, according to several surveys.

Ref: http://www.idc.com/prodserv/smartphone-market-share.jsp

SWOT Analysis:
Strengths:
Largest share in mobile phones and
pioneer in smartphone sales
Hardware integration with Android OS
Excellence in engineering
Focused on environment
Innovation and design
Low production cost
Ability to market the brand
Pioneer in 4G supported phones in India

Opportunities:
Indias growing smartphone market
Increased demand for quality and
sustainable products
Patent acquisitions
Growing mobile advertising industry
4G network support segment
Increased demands for innovative
solutions.

Weakness:
Patent infringement lawsuit
Profit margin limited to higher end
feature phones.
Lacks own OS
Diversified segment approach
Biggest competitor in Mobile segment is
also biggest customer for Chip Segment

Threats:
Saturated
smartphone
market
in
developed countries
Declining margin on hardware production
Breached patents
Apples I Phone 6 launch
Price wars

Marketing Strategies adopted:

Objective:
Retain the market leader position.
Smart innovations at smart price.

The smartphone industry has been witnessing a phenomenal growth globally over the past few
years. This growth can be attributed to the revolutionary technological developments taking place

in this industry. The revolution brought by the digital technology has enabled the smartphone
sector to profit from the growing interaction of digital applications in Mobile phone industry.

As per the Indian Market Analysis for both Q4 2014 as well as Q2 2015, Samsung has been the
market leader in both the quarterly reports. With main focus on meeting the needs of diversified
customers across India thorough strategic weighing between the technological advancement made
available at affordable price to the consumers across various strata , Samsung has proved to be
the emergent leader in the smartphone and Hand-Held Devices segments in India only on the
support provided by two main pillar of growing customer satisfaction and innovation through
continuous effort.

Segmentation:
One
of
the
fundamental
principles
of
marketing is the
segmentation of
the
market.
Segmentation
means the splitting
of the market into
groups of end
users who are:

1.
Maximum
similarity within

each group

2. Maximum difference between groups.

Market segmentation has three levels including
1.

Strategic Segmentation-vision, strategic intent and product benefits

2.

Managerial Segmentation-resource allocation, alignment and planning

3.
Operational Segmentation-Marketing programs such as advertising, sales and
distributions.
Segmentation in the market-driven strategy process is segments, value opportunities, new market
space, matching value requirements with capabilities, market targeting and strategic positioning.

Activities of market segmentation are:

1.

Defining the market to be segmented.

2.

Identifying market segments

3.

Forming market segments

4.

Finer segmentation strategies

5.

Selecting the segmentation strategy


The firm uses mainly lifestyle and demographic variables in segmenting their market . The firm
should however lay more emphasis on the changing lifestyles of the young generation and cater for
their ever changing needs. In order to retain the market share, the company should continue to
segment the market into rural and urban people. The rural targets will help increase the market share.
The urban should comprise mainly the people aged 15-30. This ought to be their main segment in
order to compete favorably with brands in the same market segment. This target group of people
focuses mainly on music, leisure and has the flair for hip gadgets in the market.
Levels of segmentation
Samsung is targeting the customer market by dividing it into different segments and offering each
segment different product based on their common characteristics

Segment Marketing

Segment
Marketing

Niche
Marketing

Local
Marketing

Individual
Marketing

Bases for Segmenting Consumer Markets

The consumer market for Samsung products has been divided using four schemes of
segmentation variables i.e. geographic, demographic, psychographic and behavioural.

Geographic Segmentation
Samsung is targeting different countries of Asia differently by dividing as different markets such
as Indian Market, China market. Again within India, It has Samsung Guru Segment for rural areas
as well as Galaxy segment for urban areas. Samsung is one of the largest manufacturers of mobile
phones and it shares the highest cell phone customers with Nokia in India. It has something for
everyone.

Demographic Segmentation
Age- age factor is not really involved in Samsung segmentation but its most users are adults
enthusiastic people.

Family size- Samsung Products are offered for all family sizes.

Gender- Samsung home theater system is equally beneficial for both males and females.

Income- Samsung Products are offered with varying features to different peoples based upon their
income level.

Occupation- Samsung has divided the consumer into different categories based upon their
occupation i.e. businessman, self-employed, students and teachers.

Education- Samsung is also keen to know about the education level of its target market i.e.
illiterate, school 5 to 15, under graduate, graduate and postgraduate

Samsung has mobile phones for youth, age of 16-29, for businessmen etc. for middleclass youth
it has Samsung Guru which is for govt. and economic class customers also. Guru has many
variants. It is a great option if you want to get a cheap 3G handset. Samsung Galaxy is a good
option for youth as it has many attractive features as Wi-Fi, 3G and 4G. Galaxy is also for
Businessmen.

Samsung has partnered with IT industry leaders to bring you the most relevant enterprise
solutions and the most comprehensive mobile implementation of Samsung SideSync and
Samsung Smart Switch. Decidedly adept in security concerns and the answer to your every
business need, the Galaxy S 6 and S6 Plus is ready for serious enterprise usage.

Psychographic Segmentation
Lifestyle- Samsung is also classifying customers on different levels based on different lifestyle of
the people i.e. culture oriented, sports oriented, outdoor oriented

Personality- customers are differentiated on the varying level of personality such as compulsive
ambitious

Samsung mobile is available for those customers too who have their choice based on their
lifestyle. Samsung came with some so fancy mobile phones specially for teenagers and young
adults and also revolutionized the smartphone industry by coming up with very economic touch
screen stylish phones so that everyone can enjoy touch screen at a very nominal rate. Samsung
has its range of mobile phones start from INR. 3000 to INR. 69,000.

Behavioral Segmentation

Benefits : Consumer are also targeted differently based upon the benefits that are seeking in
Samsung electronics i.e., some people may want good quality , some may want low services and
some want good services.

User Status : Samsung is keen to know user status of its target consumer in order to better offer its
product and therefore they are divided into ex-user, potential user, first time user and regular user.

Loyalty Status : Target market of Samsung may contain people with different loyalty status and
therefore Samsung is targeting these customer differently based on their loyalty i.e., hard core
loyalist, split loyalist, shifting loyalist, switchers.

Unique Selling Proposition for Samsung

Innovation.

Design a phone that is revolutionary, something like its never done before. This is very critical
because, other companies can easily compete on almost every other parameter, right from cost,
screen, battery etc.

Product Range:

Targeting: After segmenting the market based on the different groups and classes, the targets

need to be chosen. Samsung mobiles have the following target customers:

Trendy young people.

Professionals.
Organizations such as: services to public safety, the government, and both utility and manufacturing
enterprises.
Customers from various economic classes
Target is not only number driven but also about acquiring and retaining customers.

Positioning : Positioning is about the customer perception about the brand as being different
from the other brands on specific dimension including product attributes.

The strategies adopted by Samsung to position itself in the Mobile Phone market are as follows:
It focuses more on the real margin which comes from mid-to-high-end segments
Samsung Concept Store
Market making & category creation in small towns
Wider Care Network
Access to Samsung care line
Pioneering in the 4G segment of mobile phones.
Branded itself as a synonym for innovation and quality.
Created a Unique Brand Image for itself as a high end value driven brand.

a) Positing Statement: Through innovative, reliable products and services; talented people; a
responsible approach to business and global citizenship; and collaboration with our partners and
customers, Samsung Smartphones are taking the world in imaginative new directions.

Questions positioning statement should answer:

For whom: global citizen
What Value: innovative, reliable products and services
Why and How: Through innovative, reliable products and services; talented people; a

responsible approach
Relative to Whom: Smartphones

Marketing Mix:
The benefit of Samsung in terms of its product is that there is a trust on all Samsung products
because of the way Samsung products have performed in the last few years. Problems with the
products has been negligible. And with its Smart phones, Samsung has achieved a status symbol
for its customers. At the same time, Samsung is known for its service and people know that
Samsung gives a very fast service for any of its product. Thus in the marketing mix of Samsung,
the product portfolio is one of the strongest point for Samsung.

Product :

Samsung is present through various channels in the market. It works on the channel
marketing concept wherein there are three segments. Sales and service dealers, Modern retail and
Distributors.

The sales and service dealers handle key accounts for Samsung and are involved in corporate
sales. These dealers may also open exclusive Samsung showrooms.

The Modern retail segment includes large retailers like Croma, Hypercity, Vijay sales, Viveks
and any others who are present in the modern electronic retail chain. Samsung being such a
branded product, the retailers are bound to keep Samsung as an alternative for their customers.

The distribution network is the most interesting in the case of Samsung. In several cities,
Samsung has a single distributor through whom they distribute throughout a territory. For
example In Mumbai, Samsung has SSK distributors who are distributors for all Samsung
products. This distributor has a huge investment in Samsung and both, the distributor and the
company, go hand in hand for the sale of Samsungs products. Thus all material of Samsung will
be sold to a single distributor who in turn will sell it forward to retailers.

Pricing :

Skimming price Samsungs smart phones are one of the best in the market and are the market
leader in terms of the features and USPs that they provide. The recent Samsung Note 3 + Gear is
another entrant in the market which is catching peoples eyes. Thus Samsung uses Skimming
price for these products wherein it tries to get a high value in the start before competitors catch
up. Once the model is old or any competitor has launched a similar product, Samsung
immediately drops the price.

Competitive Price for all the new smartphones specifically made keeping in mind the customers
at the rural, tier 3, tier 2 and tier 1 cities.

Place:

Huge distribution channel right from tier 1 cities to tier 3 cities.

Multiple Sales and retail outlets across cities, town and urban areas.

Strategic marketing and advertising utilized in order to gain maximum impact on the consumers

Marketing Communication (Promotion):

Samsung uses multiple forms of promotions. Samsung as a company believes in pulling the
customer to themselves through advertising but at the same time uses strong tactics to push the
product to the customer through sales promotions. Thus on one hand, Samsung uses various
marketing vehicles across the year covering festive season as well as non-festive time. On the
other hand, it gives many offers and discounts to its trade partners to motivate them to sell
Samsung above competition. With such a strategy, Samsungs brand is on the rise so that both, the
pull as well as push strategy is working simultaneously in Samsung.

MICROMAX

Introduction:

Micromax started as an IT software company in the year 2000 working on embedded

platforms. By 2008, it entered mobile handset business and by 2010 became the largest
Indian domestic mobile handsets company. This transformation was steered by four
friends who divided responsibilities on functional lines, which havent changed since:

Rajesh Agarwal, 47, Managing Director,

Rahul Sharma, 37, Executive Director,

Vikas Jain, 37, Business Director.

Micromax has pioneered the democratization of technology in India by offering

affordable innovations through their product offerings and removing barriers for large
scale adoption of advanced technologies. . Micromax is a brand which is close to the
heart of the youth and celebrates the vibrancies of life and empowerment. Micromax is
currently the 2nd largest Smartphone Company in India. Micromax has also started
growing itself in LED and data card section.

Micromax
Informatics
Limited

Mobile

featured
Phone

LED TV

Data cards

Tablet

smartphon
es

Micromax sells around 2.3 million Mobility Devices every month, with a presence in
more than 560 districts through 1, 25,000 retail outlets in India.

Important facts:
Micromax within 6 years of it journey has been able to be 2 nd largest smart phone company in
India.
Micromax through its product strategy and innovation have been able to compete with big giants
player like Samsung, Nokia, LG.
As per IDC report of 2015 company held 17% share in Indian market and is just behind by 5%
from the leader and Company has grown up to be 10th biggest mobile player in the world.
Micromax is the first innovative company to launch various products. The company has many
firsts to its credit when it comes to the mobile handset market including the 30-day battery
backup, Dual SIM Dual Standby phones, QWERTY keypads, universal remote control mobile
phones, first quad-core budget smart phone etc.

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.

Mission:

Micromax is on a mission to successfully overcome the technological barriers

and constantly engender life enhancing solutions.

As per Peter Druckers classical Questions mission should answer the following :

What is our business: To provide revolutionary technology to consumer

Who is the customer: youth of the nation, woman
What is the value of the customer: affordable technology
What will our business be: Consumer electric products
What should our business be: constantly engender life enhancing solutions

Market Share: (REF: IDC 2014 Q4 PRESS RELEASE)

According to the International Data Corporation (IDC), the India smartphone market
experienced a shipment contraction in the fourth quarter of 2014 for the first time ever on
a quarter over quarter basis.

This was largely due to a high channel inventory at the beginning of the quarter among
general trade, which in turn was caused by the surge witnessed in online sales during
festive season.

Micromax has made it to the top 10 vendors in terms worldwide mobile phone sales in
the first quarter with 1.8 percent market share, according to data released by the research
firm. Gartner also has claimed that the worldwide Smartphone sales saw a 19 percent
growth in the fourth quarter of 2014. Micromax in a press statement revealed that it

received overwhelming response to the Canvas series including the new handsets such
as Canvas Spark, Canvas Knight, and Canvas Fire among others.

The brand witnessed an inventory correction in Q4 2014 owing to high inventories

pumped into the channels during the previous quarter.

SWOT Analysis:

The SWOT analysis of Micromax proves that the brand is here to stay and that it will
give tough competition to the likes of Samsung and even Apple due to its price
competitiveness as well as sourcing genius. Here is the Micromax SWOT analysis.

Strengths

1. Provide simple functions at much lower costs e.g.- Loud speakers, wireless FM, ultra long
lasting battery life
2. Regional languages support, Indian calendars, Torch
3. Most phones are dual SIM/Triple SIM phones
4. Celebrity brand ambassadors have helped the brand grow
5. Support to various operating systems like android, cynge,Microsoft,java.

Weaknesses

1. Micromax has still not been able to establish itself well in the urban market.
2. Micromax has a manufacturing unit set up in china which has sink the name of micromax.
3. Low price means low quality The price vs quality debate is always on in the mind of the
customer when purchasing electronic products. Because of its low price, Micromax is several
times considered as low in quality.
4. Not preferred by Tech-Savvy people: Although Micromax is successful in emerging as 2 nd largest
handset player but they are not able to create trust among the tech-savvy users about the handset
quality.

Opportunities

1.

Market Expansion: Entering in developed nations like US & European nations will be the
future strategy of Micromax which will bring advanced capabilities to even home nations & this
will help Micromax in creating trust among its users.

2.

Penetrating the Urban market: Further penetration in the urban market just like they have
done in rural market will help in the growth of the company.

3.

Improving the brand perception: Working on changing the brand positioning will help the
company in changing its brand image in the urban markets where it is perceived as a low quality
mobile.

Threats

1.

Competition from national & global players: Handset market is going through intense
transformation & all the national & international players are leaving no stone unturned to
increase their market share. Price wars & eating up each other market share is a common
scenario.

2.

Dynamic tech environment: Continuously changing technological environment can be

serious threat to the Micromax. Since already established players like Samsung, LG etc. can cope
with this, it will difficult for Micromax to handle this challenge.

3.

Replication of business model: The strategy used by Micromax is itself commendable but
lots of other Local & Chinese handset mobile makers like Geonee, Lava etc. can imitate their
business models which will have adverse effect on existing players and Micromax will not be an
exception in such a scenario.

Marketing Strategies adopted:

Objective:

Focus on urban market specially youth 18-25 years

As smart phone is going to be the future of mobile market, Micromax has started focusing on
smart phones as well as tablets
On capturing major share of urban youth market, for next two years Micromax needs to focus
on urban market at large
Focus on expand to international markets and enter into neighboring Indian countries, south
African countries etc.

As smart phone is going to be the future of mobile market, Micromax has started
focusing on smart phones compared to feature phones segments. It has launched more smart
phones in the market. Further penetration in the urban market just like they have done in rural
market will help in the growth of the company. The company can be a major challenger in future
if it keeps its record moving and try to maintain a brand positioning in urban market.

Segmentation: At its most basic level, the term market segmentation refers to
subdividing a market along some commonality, similarity, or kinship. That is, the
members of a market segment share something in common. The purpose of segmentation
is the concentration of marketing energy and force on the subdivision (or the market
segment) to gain a competitive advantage within the segment. The purpose of
segmentation is the concentration of marketing energy and force on the subdivision (or
the market segment) to gain a competitive advantage within the segment.
Identification of the correct market segment is an important step to enter any market.

Geographic segmentation is when a business divides its market on the basis of

geography. There are several ways that a market can be geographically segmented. You can
divide your market by geographical areas This is perhaps the most common form of market
segmentation, wherein companies segment the market by attacking a restricted geographic area.


Rural and semi urban Market area
The primary target for Micromax was the
rural market, which it catered to by arming itself with a 30-day long battery phone and
dual Sim phones. Both of them were a hit and that too at affordable prices. This
entailed them with a market of their own. Its not that other established players like
Nokia or Samsung didnt cater to this market. But Micromax was laced with more
features, which the basic phones of these brands couldnt offer. The rural population
which chose features at lower cost over brand value, turned out to be a good start for
micromax.

Urban Market area

Micromax is using the strategy to make it base in urban area
by promotion and giving itself a brand image change the company has various devices
in it list for Urban youths, Professionals and womans. the devices are the under the sub
umbrella brand canvas like canvas S%, Knight,doodle. To target urban youth they have
come up new segment YU. For urban market youth they have started projecting
themselves as adventure brand

Demographic segmentation is extremely important to all marketing departments since the

data is easily available and does drastically affect buying patterns. Age, income, gender, ethnic
background and family life cycle are all important factors of demographic segmentation.
1. Age- The age group targetedis youth between the range of 18-34 yeras.
2. Gender-as the product are unisex they can be used by any gender but the company was
first to target specifically woman by introducing their bling series which had girly features
to attract ladies.
3. Income- Micromax targets on lower middle class and lower class people and tries to give
affordable solution to them.
4. Occupation- Micromax has divided the consumer into different categories based upon
their occupation i.e. Employee, businessman, self-employed, college
5. Education- Micromax mobile have come up with fun book tablets targeting education
with fun for children.

Unique Selling Proposition for Micromax technological advances at low price

Design phones that have affordable innovations through their product offerings and
removing barriers for large scale adoption of advanced technologies. The company has
always tried to give value for money phones and tried to give maximum inputs.

Target Market:

A target market is a group of customers a business has decided to aim its marketing
efforts and ultimately its merchandise towards. A well-defined target market is the first
element of a marketing strategy.

 The target market for micromax are:

1.
2.
3.
4.

Youth of the nation

Fashion savvy woman
Professionals
Lower class and middle class customers

The organization has adopted mass marketing with Differentiated marketing

strategy the One where the company decides to provide separate offerings to each different
market segment that it targets. It is also called multi segment marketing and as is clearly seen
that it tries to appeal to multiple segments in the market. Each segment is targeted uniquely as
the company provides unique benefits to different segments. It increases the total sales but at the
expense of increase in the cost of investing in the business.

Micromax trying to show how affordable it is to buy its brand mobile and targeting lower
class

Positioning :

Positioning is a marketing strategy that aims to make a brand occupy a distinct position,
relative to competing brands, in the mind of the customer. Companies apply this strategy
either by emphasizing the distinguishing features of their brand (what it is, what it does
and how, etc.) or they may try to create a suitable image (inexpensive or premium,
utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is
positioned, it is very difficult to reposition it without destroying its credibility.

Positioning stratergy adopted by Micromax:-

Promotional campaigns: It has targeted Cricket and bollywood as the basis of

promotions for itself, which is directly catering to the Indian market as it is these
associations, which has garnered it the visibility and also helped it shed its image of a
Chinese phone to a Brand on its own. Recently it associated itself with a fashion show,
where designers used its latest Canvas Turbo with full HD in the designing of their

apparels. Of late, it has relied on premium associations so as to continue re-positioning

itself, and shed its long standing image of a low-price player.

Product rollout: Where big international brand requires roughly 18 months for a
similar product to go through the retail pipeline, Micromax takes barely a month or two
to launch products. This has ensured that variety as well as new-technology adoption,
which helps offer the customers something new regularly. Even the Canvas series, which
has been selling like hot cakes, has helped it to scale up the brand value and reposition
itself as not just a cheap handset maker. The pricing strategy adopted for this has
helped it a lot too. The products, even its high priced Canvas are lower than Samsungs
Galaxy series.

Branding: Micromax has plans to dive into international markets starting from Russia
and Romania and it is here that Wolverine (Hugh jackman) will act as its global face. The
thumb rule of celebrity endorsements says that celebrity should be well known . The
advertisement may not work out fully for the Indian market as Hollywood stars still dont
have a strong appeal in India. The brand may appeal to opinion-makers as the
advertisement has been successful in creating the buzz. For Indian market the brand
ambassador is aksay kumar aweell known personality in rural an urban india. Micromax
is trying to change the chiness perception in mind of people by going international

Positing Statement:

Micromax is a brand which is close to the heart of the youth and celebrates the vibrancies
of life and empowerment. It has pioneered the democratization of technology in India by
offering affordable innovations through their mobile phones and other product offerings
and removing barriers for large scale adoption of advanced technologies.

Questions positioning statement should answer:

For whom: Youth of the nation.
What Value: innovative, technologically advanced at affordable price.
Why and How: celebrates the vibrancies of life and empowerment by offering advanced
innovative technology at affordable price.
Relative to Whom: Smartphones

Marketing mix
Marketing Strategy Our marketing strategy is to improve the visibility in the urban
markets by improving awareness of customers for our products and also building brand
image.


1. Product Strategy

On the product side, Micromax has a wide range of phones with different features and
thus offering variety to the customers. Micromax believes that consumers in India have
unique preferences with respect to mobile handsets such as long battery life, dual GSM
capability, low-cost QWERTY phones, universal remote control and gaming phones.
Also, the company has invested heavily in the product development as of now to capture
market share in urban market it is coming out with new models: Micromax realized that
intense competition between telecom service providers forced customers to maintain two
connections, and hence it launched a wide range of dual-SIM phones, which forms
almost 85% of its product portfolio. Android based operating system phones are a
proving to be a huge success and a craze in youth market and professionals because of its
vast applications and new applications which are developed on an everyday basis. And
also office documents support, push mail, etc also help in satisfying the needs of
professionals in a handy way.

2. Pricing Strategy:

Its at the core of Micromax to serve the customers by proving them with lower cost,
value for money products. Thus Micromax will adopt penetration pricing in the urban
market because placing our product at a lower cost will serve our purpose and make the
customer rethink before buying other competitors product.

3. Promotion Strategy

The motive of our strategy is to increase our visibility in the urban markets. So making

people aware about Micromax we will incur high promotional expenses and these will be in
terms of:
1. Hoardings and banners outside colleges, in public places, corporate places and malls with
latest products and updates.

2. Advertising online which include buying up space in highly browsed sites such as rediff,
yahoo, etc. It has planned to improve its visibility by blogs sites and also on the sites
dedicated to reviews and comments of mobile phones.
3. It is aiming at bundling with telecom providers like Vodafone and Airtel which will serve
as a base in building brand image by associating our names with them.
4. They have also aimed at higher advertisements through TV, radios,etc which serve large
number of customers.

Currently competitors are proving with only 1 year warranty so this will provide

us first mover advantage and also create brand image into the minds of customers.

4. Place

1. Strong Distribution channels: Micromax sells around 2.3 million Mobility Devices every
month, with a presence in more than 560 districts through 1, 25,000 retail outlets in India.
The company follow this distribution channel so it is easy for them to reach rural market. The
company follows the below distribution channel

2. Using online site The company has been providing service to buy product online using
various sites at a very discounted price.

3. Using warm channels Micromax mobile can be found in various electronic retaillike croma ,
mobile store, e zone etc. and these can target urban market

APPLE

Introduction

The Company designs, manufactures, and markets mobile communication and media
devices, personal computers, and portable digital music players, and sells a variety of
related software, services, peripherals, networking solutions, and third-party digital
content and applications. The Companys products and services include iPhone, iPad,
Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the
iOS and OS X operating systems, iCloud, and a variety of accessory, service and support
offerings. The Company also sells and delivers digital content and applications through
the iTunes Store, App Store, iBooks Store, and Mac App Store. The Company sells its
products worldwide through its retail stores, online stores, and direct sales force, as well
as through third-party cellular network carriers, wholesalers, retailers, and value-added
resellers.

Vision

We believe that we are on the face of the earth to make great products and thats not
changing. We are constantly focusing on innovating.

We believe in deep collaboration and cross-pollination of our groups, which allow us to

innovate in a way that others cannot.

Mission

Apple designs Macs, the best personal computers in the world, along with OS X, iLife,
iWork, and professional software.

Apple leads the digital music revolution with its iPods and iTunes online store.

Apple reinvented the mobile phone with its revolutionary iPhone and App Store and has
recently introduced its magical iPad which is defining the future of mobile media and
computing devices.

Position Statement

For students, educators and creative professionals.

What Value: Recognized Brand reputation in the mobile segment

How: Innovative hardware, software and Internet offerings

Marketing Mix

Product:

Innovative product design The sleek look and various colour options attract the
customers easily.

Software Apple provides its customers with exclusive features such as iTunes and
AppStore. These are installe don the phone and are cost free .

Price:

Value based pricing model - Apple products are good in quality and technology so the
price of the products are higher.

There is little explanation required for the price of Apple Iphone. With a premium target,
and with the product and promotions to support the targeting, Iphone has a skimming
price. It is of higher price as compared to most phones in the market. Samsung has
recently introduced many phones to rival with Iphone. However, Apple customers are not
budging and they are very much loyal to the Apple brand and to Iphone.

Fixed pricing overall -Another interesting thing to observe in Iphone pricing policy is that
it does not offer any discounts. A standard price is maintained across the market.

Promotion:

ATL Promotions of Iphone are known to be fantastic and might range from a full front
page ad on the launch of the product, promotions in the radio, the television and what not.

Whenever a new phone is being launched, be sure to see Iphone everywhere, on each and
every ATL platform. Because they are targeting a premium segment, the presence of
Apple Iphone is higher in the ATL segment than in the BTL segment. The interesting
thing here is the taglines in newspaper ads because many of the Iphone ads are known to
come up with the most interesting taglines for the new phone.

BTL For BTL marketing, Iphone uses out of home advertising with hoardings and point
of sale advertising in major retail outlets. It also uses various forms of sales promotions
and exchange offers to lure in the customer via BTL marketing.

Place:

Involvement of third party wholesaler - All modern retail outlets are distributed the
Iphone through a carrying and forwarding agent. On the other hand, individual retailers
are given the product through distributors.

Branches located everywhere - Iphone has named its retail counter as I store keeping in
line with the complete product line of Apple which starts with I resulting in an immediate
personal connect with the customer. These I stores of Apple are found in malls and
premium areas in premium cities across the complete country wide network.

Marketing Strategy

Apple strategy was to develop and sell brand new, innovative products of which blended
art and technology in order to provide a simple and streamlined user experience.

Segment

Stylish and smart touch phones

Target Group

Urban young from middle and upper class

Positioning

Device which is helps in communication and also serves as an entertainment device

XIAOMI

INTRODUCTION

Xiaomi was founded in April 6, 2010 by serial entrepreneur Lei Jun, who is one of
Chinas top 20 richest person with net worth US$ 9.1 billion according to Forbes (Olson,
2014). It crafted smartphone hardware, software, and internet services as well as
accessories with the help of smart and talented people that it hired from Google,
Kingsoft, Microsoft, Motorola, Yahoo and other successful technology companies around
the globe.

Xiaomi has sold more than 60 million smartphones worldwide in 2014, with more than
18 million handsets in China alone, resulting in US$ 12 billion revenue. Their presence is
mainly in the Asian region such as China, Malaysia, Singapore and Philippines. Xiaomis
focus is to produce reliable, user friendly, mobile applications and affordable phones to
customers. Xiaomi is currently the third largest smartphone producer in the world with
over 5,000 employees worldwide.

As of December 2014, Xiaomi has achieved the status of the most valuable technology
start-up in the world after it successfully secured US$1.1 billion investment with a
company valuation of US$ 45 billion (Shih, 2015).

Xiaomis Company Mantra

Always believe that something wonderful is about to happen

MARKETING ENVIRONMENT ANALYSIS

Analysis of the General Environment

In order to analyse the general environment, the PESTEL analysis is used as a

framework tool to study the external marketing environment by examining the macro
factors of political, environmental, social, technological, ecological and legal. This report
focuses the analysis on two factors which are considered most relevant and crucial for
Xiaomi:

the social factor

the technology factor

Social Factor

The Indian market is dominated by many foreign phone makers such as Samsung,
Lenovo, Apple, HTC and Nokia, who have been controlling 70 percent of the market
since the past few years. Thus, the time and sentiment is ripe for the emergence of a
national identity brand which will allow user to enjoy the full benefits of advanced latest
smart phone, yet with cheaper price. Considering typical per capita income levels, in
order to be labelled as middle income, one needs to make $34,000 per year not a very
large figure for most developed countries. However, for most people in India and across

Asia (and indeed in most developing countries in the world), very few people can achieve
this level of income. As such, there is a tremendous demand for technologically advanced
smartphones and accessories, but yet at a price point which is low enough to be
affordable to the working class people in the developing countries.

This represents a tremendous opportunity for Xiaomi. While the average selling price for
Apple iPhones is very high, Xiaomi could offer their advanced smartphone below the
prices of even other competing Android phones.

Xiaomi Price Compared with Apple and Android Handsets (Source: Mims, 2015)

Considering the number of mobile users in India, there is a market potential of 980.6
million buyers. Thus, the market in India itself is enormous, and when combined with the
other Asian countries population who also need cheaper smartphones; the social factor
driving the growing market for Xiaomi is incredibly positive (Mims, 2015)

Technology Factor

Xiaomi has made use of the Android system to ensure that they meet the expected
specifications for user friendliness and great performance. Additionally, their line of
smartphones which use Android support the cause for open source systems which are
being championed by many technology-savvy people, as compared with Apple which
strongly protects its proprietary and closed system. Xiaomi has aggressively offered
MiUI which lets its users take the lead in customising their own user experience with
unparalleled flexibility (Xiaomi, 2015). Thus, its technology captures the heart of its
customers by allowing them more freedom than Apples iOS or even the standard
Android handsets. Thus Xiaomi capitalises on user innovation, which is one of the main
factors that drives the Xiaomi fortune today.

Since the mobile phone market is saturated with Apple and Samsung technology, people
will always tend to look for something new. Although Xiaomi has been called Apple of
China sometimes derisively, the technology shift does work well, and many people flock

to Xiaomi in order to try something new, especially since it is much cheaper. Another
strong point is that Xiaomi promotes online shopping which erases the cost for
intermediaries. Asian internet services are better day by day; this online ordering platform
is able to reach more and more customers every day.

Analysis of the Industry Environment

In order to analyse the industry environment, the Porters Five Forces tool is used to
analyse the various competitive forces which are operating in this industry that Xiaomi is
in, with a focus on the competition which influences and relates to all five categories.

The Threat of New Entrants: MEDIUM

Xiaomi has been facing the threat of new entrants. The potential market and promising
technology landscape has brought many competitors to try and grab market share in
India. Other entrants such as Lenovo and HTC have also begun to make cheap and
creatively designed models using the same strategy as Xiaomi hence this has become a
threat to Xiaomi. The entry barrier is high as new entrants would need to have deep
pockets to build the necessary factory and infrastructure for development, but this is
definitely viable for other established companies such as Lenovo and HTC. Xiaomi
would need to ensure that it continues to supply more high quality products and services
to its customers.

The Threat of Substitutes: HIGH

Xiaomis rivals, Lenovo and HTC have also begun to offer a series of cheaper products
under their brands. These products can easily be substitutes to the products offered by
Xiaomi. At similar price points and with technical specifications, it is easy for customers
to be swayed and to choose the competitors products. Xiaomi has to ensure that its
selling price offers to the customers remain competitive, and that it can offer superior
value, so that it can combat this threat. Not only the price must be improved, but also
service and products must be improved to compete with other competitors.

Power of Suppliers: MEDIUM

Xiaomi sources its supply of raw materials such as electrical components and other
materials such as plastic, steel and other products primarily from China and other Asian
countries. By using several different suppliers, Xiaomi can ensure that its supply lines are
always sufficient regardless of unforeseen shortages, quality issues or even if some of the
suppliers attempt to raise their prices. Furthermore, by not relying on only a few main
suppliers, Xiaomi can increase its bargaining power in purchasing, and thus it can
improve its bottom line and reduce operational costs.

Power of Customers: LOW

Xiaomi has sold more than 60 million smartphones worldwide in 2014, with more than
18 million handsets alone in China, resulting in US$12 billion revenue. Their meteoric

rise is in part due to the fact that besides Xiaomi, customers have currently no other
choice in the market for high quality, well designed beautiful smartphones with latest
high technical specifications but at such as cheap price. In fact, any other products at that
low price are usually a cheap knock-off with very poor specifications or quality. Hence
the power of customers can be considered low for the moment. The challenge is for
Xiaomi to capitalise on this as fast as possible by building their customer base. After that,
Xiaomi needs to quickly spread

internationally by conquering markets in Northeast Asia, Southeast Asia followed by the

rest of Asia by offering lowest prices and highest quality goods. In pursuing this
objective, Xiaomi has produced many cheaper products which can substitute for the more
expensive international brands in areas such as smartphones, tablet, activity tracker,
power bank and other accessories. Xiaomi has also successfully mastered Internet
marketing and is using it to generate awareness and publicity to customers all over the
world. In particular, Xiaomi makes good use of Facebook and Twitter to make
announcements to the public on product launches, features and functions. This is a
strategy which attracts a lot of customer attention and grabs their interest.

Intensity of Rivalry: HIGH

The competition in this industry is very intense and almost brutal. Xiaomi not only faces
threats from huge competitors such as Apple and Samsung, but also many other
companies such as HTC, Lenovo, Huawei and other technology companies who have
seen the tremendous market potential. Besides that, there are also many other smaller
players such as Oppo and Oneplus who are also trying to get a piece of the pie. Xiaomi
understands that it is not in their best interest to compete head-on with its strong
competitors, thus it has created a strategy where its products meet the needs of the market
in developing countries which may not be able to afford the premium products offered by
its competitors.

Analysis of the Companys Core Competencies

A companys core competency is the most important asset as it is a set of core resources
and practices which provide the company with its competitive edge, and which its
competitors would have difficulty in imitating or replacing. For Xiaomi, their core
competency is in their ability to design and produce high-end technology products, and to
market them at such low prices which are unimaginable to their competitors. Every
product of Xiaomi is cheaper than any other equivalent competitor product with similar
specifications.

Furthermore, Xiaomi always updates and improves their products and services.
Therefore, since Xiaomi products are cheap, customers will not mind to try the product.
After trying out the product, customers will realise that the product works well and is
good value for the money. Xiaomi will continue to acquire new customers since the
product is good value, and this will increase Xiaomis brand image and further improve

product sales. The key will be to serve all the customers well and continue to provide
superior value for them.

SWOT Analysis

The SWOT analysis provides a way to examine the strengths, weaknesses, opportunities
and threats which the company is facing. The summary of SWOT for Xiaomi is as
follows:
STRENGTHS

Trusted brand in China

Innovative marketing approach
Effective online business model
Flexible and customisable products
WEAKNESSES

Difficulty to obtain loyal fan base and brand advocates in India

Low cost distribution strategy may not be effective
Quality and after sales services are weak
OPPORTUNITIES

Expansion to retail channels

Build a core set of hard-core fans
Create a strong user experience and unique branding and ecosystem
THREATS

Price war from other low cost competitors

Large competitors moving into low cost market (Samsung)
Potential loss of control over supply chain
Over reliance on e-commerce as primary distribution channel
Patent litigation battles

Xiaomi has a number of very good strengths. It is the market leader and a trusted brand in
China which has made the country proud. It has been extremely successful using its
innovative marketing approach to sell its products online. Therefore, with its flexible and
customisable products, it has the opportunity to create a unique brand with a superior user
experience by building and capitalising on its own MiUI ecosystem. However, Xiaomi
needs to overcome its weaknesses in terms of quality and after sales services. Also, it
may need to learn how to adapt its strategies to other markets, as they may not work so
effectively outside of China. At the same time, it needs to deal with threats such as
increasing competition both from low cost players, as well as major competitors such as
Samsung who are moving into the market. Also, the increasing patent litigation issues
may slow down its growth and hamper its ability to move into certain markets.

 MARKETING STRATEGY

Potential Target Segments

In their segmentation strategy, they are using geographic, demographic and

psychographic segmentation to classify and build their target segments to consider for
selection.

Geographic segmentation

Demographic segmentation Their

Psychographic segmentation They target

Selected Target Segment

The framework used to select the target segment is the STP framework. The
segmentation, targeting and positioning for the Xiaomi is as summarised in the following
diagram.

Their primary segmentation which is in Singapore, Asia.

Singapore is one of the countries with the highest GDP in the world and consumers have
huge spending power. They offer a cheaper range of price compared to their competitors.
target is towards the 20-34 and 35-49 years old range for
both genders as they are capable of buying as they are professionals working in steady
job and stable income without much commitments.
customers that are middle & working class as they
are working and have a good lifestyle. Examples like achievers, strivers and survivors.
The following sections provide an analysis of three potential target segments.

Segmentation, Targeting and Positioning (STP) for Xiaomi

Targeting

Based on the MI features, it would make the most impact on young adults & working
adults between (20-29 years old and 30-45 years old). This is technology-savvy target
segments who are middle class and have a good income to spend on these sorts of
products. This target segment is a key audience for retail, consumer goods, and
technology products, as such, they can be sometimes sceptical of advertising due to the
fact that they have been overexposed and bombarded with all kinds of marketing

messages. Therefore, it is vital that Xiaomi must deliver the right message at the right
time to this targeted segment.

The following shows some additional information about the viability of this target
segment:

Ownership of either a mobile phone or smart phones is at least 90% in all 14 Asian Cities,
thus making them a prime target for MI as a complementary product.
Both genders in their 20s drive smartphone ownership in Asia; mainly use them for social
media tools. Apps and friendliness for media tools is the important factor for marketing
for which Xiaomi has strong competencies in.
Television, computer, and smartphone have become the Big Three Media in cities with
high smartphone ownership. Thus, marketing channels should emphasize on these media
platforms which is good for Xiaomi which specialises on nonretail sales and ecommerce.

Furthermore, for cities with at least 60% of smartphone ownership such as Seoul, Hong
Kong, Singapore, and Taipei, the smartphones user age group extends to 50s, thus falling
neatly into the proposed target market segment. It is also interesting to note that female
smartphone users are in higher volume in Bangkok and Jakarta. This additional
information can serve as a guide for Xiaomis marketing mix strategy.

MARKETING MIX FOR NEW PRODUCT

New Product Development Strategy

The new product development process is a key process in technology companies where
innovation and new ideas are produced, monitored and pushed through a series of steps in
order to test their validity and viability prior to development and commercialisation. This
formal process then helps the company to achieve the following innovation goals:

To encourage the generation of the widest and largest possible number of ideas for testing
To have a structured process to review and select the most commercially viable ideas for
further review so that the limited R&D funds can be channelled to the best ideas

This process helps the company to save money because if ideas with weak or poor
commercialisation potential are developed only to fail later on, this becomes very costly
and wasteful for the company. At the same time, by focusing resources and effort on the
best ideas, the company is able to fast track the time to market for new products, thus
helping them to gain an edge over their competitors. The process also contains a feedback
loop so that the company can continuously learn and improve the new product
development strategy.

New Product Development Process

The process resembles a funnel where the largest possible number of ideas is encouraged
to enter the conceptualisation stage. At every stage, there is a review gate (stage gate
process) where the idea is reviewed according to specified criterion in order to make a
decision to proceed or to drop the idea.

One of the most important stages is the testing stage as it would determine if the proposed
product would work as expected and advertised. Usually the first level testing is
conducted by the product development team which performs unit testing on their product
to check the features and functionality. After the product prototype has been created, the
product is tested by the testing group. The specialised testing group would create test
cases whose objective is to test the product in all possible situations (even situations
which the product development team might not have thought of). This enable gaps in
requirements to be identified and addressed accordingly.

In scheduling for the testing, there are two methodologies which may be followed,
waterfall methodology, and agile methodology. In the traditional waterfall methodology,
the testing stage only begins after the product development is completed. Therefore, the
testing happens prior to product release. However, this approach is rigid and if problems
are found during testing, the product needs to be reworked before it is tested again, thus
incurring substantial cost and loss of time.

In the agile methodology, testing is conducted as soon as any functioning part if built.
Therefore, the product may be tested in several portions before the whole product is
assembled and tested as a whole. This has the advantage of quickly identifying problems
and areas to improve so that the issues can be addressed very quickly. As such, the
product can go through much iteration in a short time, thus ensuring that a good quality
product can be designed and developed much more quickly.

Marketing Mix

Xiaomi is positioning itself at the top spot of smartphone market in China. Currently, it is
the worlds fourth largest smartphone manufacturers after only 4 years from emerging
into the market, beating Apple and Samsung in this arena. It is not coincidence or
unexpected that Xiaomi became so successful because of their brilliant marketing
strategies and marketing mix.

Product

Good quality phone, low prices.

Having a cheap price in market does not always refer to the low quality. Xiaomi prices
are lower than their two big competitors, Apple and Samsung. Presenting itself as the
good quality phone with the low prices is the good strategy that drives Xiaomi to the top
spot in the smartphone industry in China. The phone consists of good quality robust case,
high resolution screen, reasonable battery, and runs on the Android-based OS operating
system called MIUI. It has more special features than the standard Android phones and
has options for customization. The biggest key that drives Xiaomi becoming successful is
the software rather than the hardware.

Price

Selling low today, but gaining more in the future.

Xiaomi sells their phones at the price that just covers the cost of the device rather than
their actual cost because it is not sustainable for their long term strategies. They are
focused more on selling the phones at the low price today but gaining more in the future
from selling contents such as applications, services, and accessories. Moreover, Xiaomi
mostly sells their products online which can reduce costs of opening the stores, hiring
staff, and inventory keeping, and also reduce the problems in communication when
dealing with distributors and retailers.

Place

Expanding to 11 different countries.

There are many countries outside China that the smartphone market is dominated by
Apple and Samsung. This is the main obstacle for Xiaomi in expanding their markets
internationally. Xiaomi already has a strong base in the homeland China and has

emerged into 11 countries namely Malaysia, Singapore, Philippines, India, Indonesia,

Thailand, Vietnam, Russia, Turkey, Brazil and Mexico. Most of these countries are
located in South East Asia and BRIC countries.
Xiaomi mostly sells their products online instead of opening physical stores. This is a
win-win situation for both the company and consumers. The company can save lot of
money from building the stores while consumers can easily access the products. Because
the company spends less money, the price of the phones will also be cheaper.

Promotion

Power of word of mouth.

Xiaomi uses flash sales, a means of selling their product in limited quantities within a
limited period as part of their sales strategies. This strategy enables Xiaomi to save
money from doing advertisement because it creates the anticipation and urgency on
consumers. Only limited quantities are available in the markets and they will be sold out
quickly that many people have to wait for the next slot. This strategy therefore makes
people talk a lot all over India including in the social media. This also grabs lot of the
consumers attention and makes the advertising less important for Xiaomi in promoting
the launch of new products.

Active use of Social Media.

Xiaomi uses social media not only broadcasting messages to actively get in touch with their
customers, but the Engineers from Xiaomi also use this platform to routinely communicate directly
with users to get feedback. Engineers listen to the consumers needs and refine the software to
complete those needs weekly. This distinguishes Xiaomi from other brands because they show that
they are always concerned about their customers and immediately take actions to make the better
products.

Big fan base

Xiaomi is very successful in making their fan base. There are many Xiaomi fans out there that always
show support in the Xiaomi events. Moreover, they are always present in the new product launches

like the Apple fans, where they are known that many people are interested in and in the end create the
loud cheering and applauding.

CEO as the face of the brand

Lei Jun, the CEO of Xiaomi, is the talented charismatic boss that put his face to a brand and make the
brand look cool and international. He always talks confidently and passionately about the brand which
many new generations has him as their inspiration.

Market Share

Recent news says that, China's Xiaomi has become the world's third-largest smartphone vendor just
three years after first hitting the market, trailing only Samsung Electronics and Apple, according to a
new
industry
study.
Strategy Analytics said Xiaomi accounted for 6% of all 320 million smartphones shipped during JulySeptember. It replaces LG, which is now the fourth-biggest manufacturer with 5% market share.
Samsung made up 25%, down from 35% a year earlier due to rising competition from several
directions. Apple, the second-biggest smartphone maker, saw its market share dip from 13.4% to
12.3%.

USP For Xiaomi

Display

Adding to the fame of Xiaomi is the display quotient, which will be the first a customer will be seeing.
MI 4i has a 5-inch JDI/sharp display with full high definition resolution, which is complemented by
Corning OGS glass for protection.

The display has Sunlight Display Technology a unique feature that place Mi 4i above other models
in the budget range. The technology makes use of a hardware-level mechanism to shape the contrast
level for every pixel in real time. With which the display has enhanced readability under direct
sunlight and also the viewing angle (178 degree) is wide enough to watch out from any practical
angle. Possessing a saturation of about 95 percent of colours from NTSC spectrum and a pixel density
of 441 ppi, makes pretty much the display a rejuvenating upgrade to its other models.

Battery

Powered with a Li-ion 3120 mAh battery, Xiaomi MI4i can work all day without power loss
interruptions. Also the processor is such that four core of the original octa core clock at 1.1 GHz to
save
power
consumption.
The Xiaomi Mi4i has a thin frame of 7.8mm which can be charged quickly as the phone has the
Quick Charging feature that result in 40 percent of charging within an hour of charging.

Xiaomi has a unique business model and a very interesting method which is disrupting the smartphone
and technology world. It has been successful at incorporating a crowd sourcing strategy into its
product development process. At the same time, it has dispensed with all traditional marketing
methods and is fully engaged in utilising online communities and social marketing for its marketing.
With this innovative model, it has taken the world by storm and has created a huge cult following in
its native country of China.

In just 4 years after its founding, it has already become the worlds third largest smartphone maker,
and is the worlds most valuable technology start-up company which has just been valued at US $46
billion.

Introduction:

Vertu is a British manufacturer and retailer of luxury, handmade mobile phones established
by Finnish mobile-phone manufacturer Nokia in 1998. In October 2012 Nokia sold Vertu to private
equity group EQT VI for an unspecified amount (rumored to be $200 million) but will retain a 10%
share. By the end of 2013, the company had around 350,000 customers, and phones were on sale in
500 retail outlets, including 70 run by the company. The phones are most popular in Russia, Asia and
the Middle East.

Concept:

According to The Economist the concept was to market phones explicitly as fashion accessories,
with the idea "if you can spend $20,000 on a watch, why not on a mobile phone? Vertu phones, or
"'mobile
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Crookham, Hampshire, England. Handsets are sold through an emphasis on craftsmanship, style
and service, rather than mobile phone functions. In 2006, the most expensive model it had ever made
was the Signature Cobra, at 213,000 (~$310,000); the most expensive 2006 regular model was the
Signature Diamond at 55,000 (~$83,000). In 2006, prices started at 3,500 for the Constellation
model.

Product Range:

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Important facts:

Parent Company

EQT VI

Tagline/ Slogan

Life beautifully arranged

USP

Luxury mobile phones with unique services

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Vision:

Vertu aims to deliver the worlds best luxury mobile phone experience for its customers by combining
expert craftsmanship and peerless materials with innovative technology and unique
services.

Mission:

Vertu's stated mission is to apply 'authentic time-honored traditions and craftsmanship to mobile
technology" and "bring artistry and personal significance to an everyday object, elevating it to the
level of the finest timepiece."

As per Peter Druckers classical Questions:

What is our business: Luxury phones

Who is the customer: High networth individuals
What is the value of the customer: Customer is at the top most priority as the main aim of the
company is to provide worlds best luxury phone
What will our business be: Best in handmade luxury phone
What should our business be: The company should focus on reaching more and more potential
customers in order to maintain its position

Segments Being Served:

Vertu being a luxury brand only serves to high networth individuals for whom their status in the
society matters the most. With phones starting from a price tag of 3.5 lakhs only the upper class
people or the super-rich individuals who are capable of purchasing these phones.

SWOT Analysis:

Strength:
1.
2.
3.
4.
5.

Premium positioning coupled with its unique designs

Exclusive services to owners like Vertu Concierge etc
High quality and handmade craft phones
High quality advertising through niche luxury magazines
The phones have a high popularity in Russia, Asia and Middle East

Weakness:

1. Phones are comparatively underpowered technically

2. Vertu phones have been described as "tasteless trash" by Wired Magazine
3. High production costs and lower functional benefits

Opportunities:

1. Changing consumer lifestyles and increased spending on luxury products

2. Shift to Android OS from Symbian for better operating performances
3. New business opportunities in emerging economies

Threats:

1. Counterfeit products being sold

2. Competition from other mainstream phone makers

Marketing Strategies adopted:

Objective: To deliver the worlds best luxury mobile phone experience

Segmentation: Luxury mobile phones
Targeting: High Networth individuals
Positioning : Luxury phones
b) Positing Statement:
c) Questions positioning statement should answer:
For whom: Worldwide
What Value: Luxury mobile phones with unique services
Why and How: (Reasons customers should believe)
Relative to Whom: Goldvish, Gresso,Mobiado
Marketing Mix:
a) Product: Luxury Mobile Phones
b) Pricing: Pricing is as per high networth individuals which usually starts from 3,50,000
c) Distribution (Place):Vertu has its distribution network worldwide but the phones are most
popualar in Russia, Asia and the Middle East.
d) Marketing Communication (Promotion): Vertu uses Digital marketing in order to create
awareness among potential customers

Strategy adopted by vertu:

Plan for the strategy:

Using a mix of channels to evaluate effectiveness;

SMS Targeting of O2 customers (HNWI and who have roamed extensively
abroad)
Location Targeting using Navteq and based on close proximity to Vertu
Boutiques
Sponsorship of FT.com, Net-A-Porter and Vogue iPad Apps (linking to
Constellation TPO movie)
Mobile Web Display Banners on news outlets in key HNWI postcodes.