Submitted to Prof.

N Rajkumar
By:
Group No. 8
Abhijeet (G15001)
Boben (G15016)
Himanshu (G15023)
Joy (G15026)

Abstract
Topic: Marketing Plan for Micromax Mobiles
Industry: Consumer Electronics
Segment: Portable Consumer Electronics>>Smart Phones

MICROMAX – MARKETING PLAN

Marketing Management (MKGG15-2)

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 Micromax – Marketing Plan

1.Abstract
In this project work, we seek to devise a marketing plan for Micromax Mobiles. Micromax Informatics operates in
consumer electronics industry. The company manufactures Computers & Peripherals and Portable Consumer Electronic
Devices. Smart Phones come under Portable Consumer Electronics Devices. Few key facts:
1. This company was established in the year 2000 as a software firm, headquartered at Gurgaon.
2. It later entered into mobile phone market in the year 2008.
3. The market share in 2010 was 4.1%.
4. As of now, holds the 2nd position in Indian Mobile market from market share perspective.

Micromax started as a small player in this highly competitive domain and went on to become 2 nd largest mobile
manufacturer. The current market stands at 15.7%. The largest firm in this domain is Samsung, whose market share
is 21.1%. Micromax has reached this position by overtaking major MNC Brands such as Nokia, LG, and Sony etc. It
also faces cut throat competition from home grown companies such as Karbonn, Lava etc. According to the report
released by Gartner, Micromax occupies the 11th position for maximum phone sales to end users in 2014 worldwide
with a market share of 2%.

This abstract discusses a feasible marketing plan for Micromax Mobiles. It has already seen a meteoric rise in Indian
mobile market. For this project plan, we will consider the set of smartphone offerings from Micromax and analyse how
we can use marketing strategies to help it climb further in the race.

The major competitors of this company can be listed as below:

Rank Firm Rank Firm Rank Firm Rank Firm

1 Samsung 7 Gionee 13 Xiaomi 19 Huawei
2 Micromax 8 LG 14 Videocon 20 Blackberry (RIM)
Motorola
3 Karbonn 9 Spice 15 Apple 21
Mobility
4 Lava 10 Sony 16 ZTE 22 Oppo
5 Intex 11 Celkon 17 HTC 23 One Plus
Microsoft
6 Corporation 12 Maxx Moblink 18 Lenovo
(Erstwhile Nokia)

Micromax's strategy has always been to deliver the right value at the right price. The company targeted the middle
class segment by offering feature rich mobiles at a lower price when compared to the other similar phones in the
market. Micromax maintains high product differentiation with a large range of mobiles in the market. The company
customizes its products as per needs of the target customer. For example, smartphones with camera, good battery life
and 3g connectivity for college youth.

Initially Micromax became more popular in the rural market, but then Micromax targeted the urban market by
launching feature rich flagship models at a lower price. In 2014 Micromax signed a contract with Hugh Jackman to
promote its flagship products, which was a first for an India mobile brand. The company has been able to build its
brand name and market size based on such and other strategies such as sponsoring cricket matches. Its tag
line-‘Nothing like anything’ reflects the uniqueness of all its products. The company has been able to keep up with
rapidly evolving mobile phone market with its innovations. The products reflect these innovations and the rapidly

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growing market share is an evidence for the same. The company also has its major operations based out of India and
has performed better than several established global brands in the Indian market. The target of the Micromax is to be
mobile market leader in India in coming days through introducing new smart phones with higher technical
specifications keeping the price low at the same technology range.
We intend to dive deeper into the company philosophy and marketing strategy. This would enable us to come up with
a marketing plan/strategy. The aim of our marketing strategy is to maintain & better its YoY growth in terms of
market share and revenues, eventually leading it to the first place in the mobile market.

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2.Situational Analysis
2.1. Product and the Competitors

In this project work, we seek to devise a marketing plan for Micromax Mobiles. Micromax Informatics operates in
consumer electronics industry. The company manufactures Computers & Peripherals and Portable Consumer Electronic
Devices. Smart Phones come under Portable Consumer Electronics Devices. Few key facts:

● This company was established in the year 2000 as a software firm, headquartered at Gurgaon.
● It later entered into mobile phone market in the year 2008.
● The market share in 2010 was 4.1%.
● As of now, holds the 2nd position in Indian Mobile market from market share perspective.

Micromax started as a small player in this highly competitive domain and went on to become 2nd largest mobile
manufacturer. The current market stands at 15.7%. The largest firm in this domain is Samsung, whose market share
is 21.1%. Micromax has reached this position by overtaking major MNC Brands such as Nokia, LG, and Sony etc. It
also faces cut throat competition from home grown companies such as Karbonn, Lava etc. According to the report
released by Gartner, Micromax occupies the 11th position for maximum phone sales to end users in 2014 worldwide
with a market share of 2%.

The major competitors of this company can be listed as below:

Rank Firm Rank Firm Rank Firm Rank Firm

1 Samsung 7 Gionee 13 Xiaomi 19 Huawei
2 Micromax 8 LG 14 Videocon 20 Blackberry (RIM)
Motorola
3 Karbonn 9 Spice 15 Apple 21
Mobility
4 Lava 10 Sony 16 ZTE 22 Oppo
5 Intex 11 Celkon 17 HTC 23 One Plus
Microsoft
6 Corporation 12 Maxx Moblink 18 Lenovo
(Erstwhile Nokia)

However, for the comparison purposes, we would mainly consider Samsung Mobiles from Samsung Electronics.

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2.2. Category Analysis

2.2.1. Aggregate Market Factors

a) Market Size:

Market size by number of handset sold

In terms of no. of mobile handset sales in India the current market size in 171838900 units. Among these units the
majority consists of Android Mobile handsets.

Source: Euromonitor

Market size by Distribution

Sales of Mobile handset occur through bellow mentioned Distribution channels. Major market for mobile handset is the
electronics and appliances specialist retailer’s with 81% followed by Internet retailing with 14%. Consumer prefer to
buy handset from electronics and appliances specialist retailer’s from which it can be inferred that the consumer want
to physically feel the handset which stratifies their need.

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Market Share by Companies in 2015

In terms of market share Samsung Corp has the highest market share of 21% followed by Micromax with 16% and
karbonn Mobiles India pvt ltd with 9%.

RELATIVE MARKET SHARE: MICROMAX SHARE/ (LARGEST COMPETITOR’S MARKET SHARE) = 12/ (21)
= 0.5714 = 57.14%

b) Growth

The below mentioned stats proves that volume of mobile handset in India for the period 2011 to 2015 , had grown till
2013 then there was decrease in the volume of mobile sold in 2014 t0 2014. Micromax volume i.e. Number of handset
sold in 2015 fell as compared to 2014. The same trend was scene in Retail value of mobile phone sold. Micromax
growth in 2013 was predominately because of 3G enabled less costly android mobile phone. Smartphone market is

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changing from high end phone to low cost feature rich mobile phones. Micromax mobile growth is because it has
introduced variety in mobile phone both in featured and smartphone.

Industry Growth:

Retails Value:

Micromax Mobile Volume:

Micromax Mobile - Retail 2010 2011 2012 2013 2014 2015

Volume 6163402.9 12644519 14250259 29126544 30893324 26978707
CGAR 34.351%
YOY GROWTH 105.15% 12.70% 104.39% 6.07% -12.67%

c) Replacement Cycle:

The Replacement cycle in India changed with the introduction of smartphone i.e. from 2010 to 2011. Technological
change in mobile handset, introduction of smartphone with internet service changed the replacement of mobile
phones in India. Over the period from 2012 to 2014 mobile phones were android based phones so consumer didn’t go
to replacement so we see a flat trend in replacement cycle.

Source : Euromonitor

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e) PROFIT:

Micromax Informatics has posted profit since its inception, the profit registered is primary due to increase in the sale
of affordable mobile phone. Micromax offered variety of phones both in Featured and smartphone segment with low
to affordable price range. Micromax faced competition with Samsung mobiles in both segments. Micromax focused it
target consumer to youth segment (Low disposable Income segment). Youth segment wanted affordable smartphone
with maximum features like internet connectivity, camera etc. It promoted products two tier, 3 tier and rural areas of
India.

-Profit is due to low cost of manufacturing, manufacturing plants in china and availability of cheap labor.
-Large scale promotion of mobile phone though famous celebrity like Hugh Jackman and through TV channels like
MTV, both of which are targeted for youth segment.
-Micromax mobile handsets doesn’t use very high end components as used by premium mobile manufactures like
Samsung, LG.

f) STAGE IN PRODUCT LIFE CYCLE

Product life cycle can be predicted to the basis of BCG Matrix. Different products manufactured by the company can
categorized on the basis of Relative Market Size and Market Growth. We have assumed product instead of SBU.

A product life cycle in a market can be pictured as

QUESTION MARK → STAR → CASH COW → DOG

(Introduction) (Growth) (Maturity) (Decline)

Introduction Stage: Entry into high growth with low market share aiming to create awareness and develop market
for product. Micromax entered into the market in the year 2008, Micromax target consumer demographic was the
India’s youth. With affordable price and feature like dual sim phone it heavily promoted its brand with endorsing
movies stars like Akshay Kumar.

Growth Stage: Micromax was able to source and work with OEM partners to offer cost-competitive products as
Indian consumers do not buy subsidised phones as part of mobile contract. The company’s cost-competitive phones
will be attractive in other emerging markets as consumers in these markets will be price sensitive, hence willing to try
new brands. Micromax has now become the 2 nd highest market shareholder in whole mobile market, 2 nd in smartphone
market, 3rd in featured mobile phone market

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Maturity Stage: Micromax has already reached in the maturity stage in the Featured mobile phone. Most of the
sales are in the two & three tier cities and rural areas.

Decline Stage: Since the company is new and no product as reached the final stage.

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2.2.2. Category Factors

INDUSTRY/MARKET
# Oligopolist - Competing with Karboon, Spice, Motorola, etc.
# High barrier to entry - Technology Cost
# Competing on Cost and Differentiation (though most phones are identical)
# Rapidly Changing Technology (what's in today, is out in few months)
# Robust Demand, with Telecom Services growing over 25% year on year basis
# Huge Potential Rural Market accounting for 70% of the population
# Proactive Goverment heavily promotiong telecommunication services
# India is world Second Largest Telecom Market
# Mobile banking, increasing internet coverage , need to stay is fuelling smartphone demands

THREAT OF ENTRANT SUPPLIER BARGAING

# Low from local player POWER
BUYER BARGAING POWER THREAT OF SUBSTITUTE
# High from international # Medium - Bargaining
#High, primarily due to # Fixed Line
player Power of Suppliers has
plethora of options with
# Web-only launches is # VOIP Service gone down after Micormax
available with them.
bringing down the cost for started operations in local
new entrants. Rudraprayag factory.

CURRENT RIVALRY IN CATEGORY

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2.2.3. Environmental Factors

Serial Environmental
Micromax Mobiles
No. Factors
Demography is the study of human population in terms of age,
gender, occupation, density, size, location etc. Demographic
environment is extremely important to Micromax as the entire
positioning of the brand is on youth.
Micromax makes products which can address the needs of the
young generation such as- photography, internet, screen size etc.
This market segment is price sensitive too, and usually places
1 Demographic
price over the quality.
Micromax has hit the target here and this is one of the reasons
for its success. Location also plays a role, as the requirements of
semi urban and rural areas differ widely from the urban areas.
Micromax has also managed to capture and address these
requirements to a great extent, without compromising too much
on the quality front.
The economic environment consists of factors that affect the
consumer purchasing power and spending norms. Micromax has
been able to address this factor as well.
The young buyers are price conscious. This also holds true for
2 Economic
the semi urban and rural markets.
However, for the consumers who seek quality, it also launched
high end phones which were competing with the other
established brands such as Samsung, LG, Nokia etc.
Natural environment involves the usage of natural resources in an
eco-friendly manner. It entails usage of mostly eco-friendly
components & renewable/biodegradable materials and improving
energy efficiency. These steps create a positive brand image of
3 Natural the company.
Micromax has been proactive on this front. Various steps taken
include- energy efficient chargers, using recyclable materials (in
product and packaging), adhering to safety/environmental norms
etc.

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Technological environment is probably the most important factor

in the mobile industry today. The technology is moving at a very
fast pace and governed by Moore's law, the products get
outdated rapidly. The users are attracted to the brands which can
give them the latest technological features at an affordable cost.
Micromax has kept itself in the race by consistently adopting the
newest technology in their products at affordable price. Micromax
phones have always been competitive with other brands in the
terms of specifications and performance. There are several
4 Technological unique innovations by Micromax in their products - such as high
battery capacity to address markets who faced power outages,
dual sim support to capture users who used more than two
phone numbers etc. It also had products to address specific
needs such as- Phones with QWERTY Keyboards, Utility, 3G,
gaming, multimedia usage etc.
Micromax also focused on the customer service aspect and
improved it. It has also been quick in updating its products and
launching new products. This has enabled it to keep the interest
levels of consumers high.
Political Legal environment plays a major role in the marketing
decisions of the company. Recently Micromax was entangled in a
5 Political Legal legal controversy regarding one of its brands (YU) with another
company (OnePlus). However, this issue was resolved. Any
political and legal hassles tarnish the brand name adversely.
Cultural and Social environment affect the thoughts and
consumption pattern of the consumers. This environment is made
up of institutions and other forces that affect the basic values,
perceptions, behaviors and preferences.
Micromax operates in a diverse cultural market. Market, when
classified on the cultural and social basis, has its own unique and
6 Social Cultural specific requirements in terms of the language, promotion, and
distribution channels. For example, a rural buyer will buy the
mobile phone from nearest available brick and mortar shop, while
the urban buyers would prefer shopping malls and internet.
For promotion in Indian Market, famous actor Akshay Kumar and
Hugh Jackman have been hired. Association with a foreign actor
provides the brand with much needed global image.

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2.3. Company & Competitor Analysis

Serial No. Criteria Micromax Samsung Motorola Xiaomi

Though Motorola has huge
Samsung has wide range of mobile phones up
range of phone all its sleeves with various
features that are needed features like dual sim and
Micromax has number
by market. However, in QHD screen, it is primarily
of product with dual-
terms of product mix to concentrating in promoting
sim, high battery life, Handful of phone se
price ration they lag handful of devices labelled
5-inch screen provided which are not too
behind other phone as moto E, moto G, and
at strategic prices. This different from each
makers in the price moto X. Thus, its other
defines the making of other. Its phone ha
Product conscious consumer product has low visibility.
1 Micromax as top mobile dual sim, or 5 inch
Feature segment. Overall, the The moto E, moto G, and
seller in India in 2014. screen but loses in
premium phone moto X has found flavour in
Micromax has been range to cater to
segment, with its phone Indian tech savvy middle
able to cater unmet different market
providing many cutting class market with good
needs of Indian rural segment.
edge technologies like price to quality
and urban consumer
curved edge, modular combination. However,
segment.
screen, writing pen, it is aesthetics apart it phones
a strong player in India are not much dissimilar
market. from Xiaomi, including
online only supply strategy.
To find and meet High Quality Techno
To bring new To be an innovative
2 Objectives various unique needs that doesn't cost a
technology company.
to in market. fortune
3 Strategies Micromax being an Samsung claims to bring Simple products, giving Reduce Cost by cut
Indian company has more cutting edge more importance for cost on advertiseme
brought Indian context technology at the hand features valued most by no frill packaging,
to the marketing table of consumers. It aims to customers thus bring down decoupling accessor
in the mind-set of be leader of the pack as the cost. cutting down
Indian consumers, far as technological distributors by using
despite of the fact that innovation is concerned, direct shipment, an
majority of its cell as is the case when they the same time
phones are introduced their curved maintaining the qua
manufactured by edge phone S6 in the
Foxconn, China. It has market.
spent heavily on
advertisement through
celebrity endorsement
like Jack Hughes, and
sponsoring of Cricket
Events.
Differentiator -
# Micromax has
targeted unique needs
such providing low cost
and high battery life
phones to rural market
# Introduced First Dual
SIM, DUAL Mode

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Smartphone
# First Universal
Remote Phone

Product: Smartphones,
feature phones, basic
phone
Product: Cutting edge
Price: Strategically Premium Smartphones,
Product: Smartphon
priced to penetrate the Smartphones, feature Product: Smartphones,
only
market. phones, basic phones feature phones, basic
phones
Price: Penetrative
Promotion: Heavy Price: Skimming prices,
pricing
spend on little higher compared to Price: Penetrative pricing
advertisement using competition.
4 Marketing Mix Promotion: Light
TV, Internet, Paper Promotion: Light promotion
promotion to keep t
magazines, billboards, Promotion: Moderate to to keep the cost down.
cost down.
and point of purchase Heavy promotion using
advertisement. all channels Place: Available Online
Place: Available Onl
Celebrity endorsement, through vendor of choice,
through vendor of
Cricketing event Place: Online, retail retail stores
choice.
sponsorship. stores, supermarkets,
own outlets.
Place: Available Online,
retail stores,
supermarkets.
Strategically priced
product. Micromax has
Additional profits comes
traditionally given At Xiaomi, additiona
from little premium over Use of strategic margin
higher margins to profit (above norma
other brands with over cost, designed to
5 Profits distributors (10-12% profits) are driven b
assurance of quality of penetrate the market
compared to industry efficiency in keeping
product, and after sales further.
average of 5-6%) in cost of final down.
support.
order to penetrate the
market.

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Global Sourcing + In- Global sourcing>>

Foxconn, China>> Global Sourcing + In-house
house development>> Xiaomi Assembly,
Micromax Assembly, development>> Motorola
6 Value Chain Samsung China>>Online
India>>Distribution Assembly>>Distribution
Assembly>>Distribution Distribution through
channels channels
channels Flipkart, India
Micromax strength lies Samsung is a big player,
in innovation using and global leader with Xiaomi produces no
various mix of proven huge spends on smartphones using
Ability to Motorola with its long
technologies. IT is not research and existing technologie
7 design new history in mobile
into research and development of new has relatively small
products manufacturing
development of new products such has first range of smartphon
material/ machine for curved screen market.
its smartphone range. smartphone.
Ability to Has good tie-ups’ with Strong network with Xiaomi is based in
No local aftersales service
8 deliver the local market for after own service point in China, and has no l
points
services sales services. various cities aftersales service po
Huge Marketing spends
with celebrity
endorsements, and use
of many advertisement
Xiaomi follows
channels. It has made
Samsung has made philosophy of keepi
the product available
huge marketing spends. With online only presence prices low with low
online, at retails stores,
Ability to It go to market strategy in smartphones, Motorola is spending on periphe
9 Kiosk at supermarket.
Market includes supermarket, not into traditional activities including
It has more
retail stores, own stores, marketing. marketing. It largely
aggressively opened
and online distribution. depends online pres
outlets and service
and word-of-mouth
centre across Indian
Cities than any other
mobile player in the
market.
Micromax may be new
to mobile phone and
lately television market,
but it in new company.
Company has been in
Xiaomi is asset light
business in computer
company as far as i
peripheral business Samsung is big brand, Being one of the largest
Indian operations a
since 1991. Being one coupled with its strong mobile manufacturer in the
Ability to concerned. Being a
10 of the top 10 presence in India, its world, Motorola is expected
Finance online only player, i
smartphone ability to finance its to flex it financial muscles
need to finance are
manufactures in the strong as needed
limited, and restrict
world, micromax has
need arises.
created huge brand
equity. Thus can source
funds both internally,
and externally with
relative ease.

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Micromax has grown

very rapidly. This has
led to situation such as
stock out. It, also,
Lack of local outlets / With firm well
means constant need
Ability to Samsung has strong services chains hinders entrenched in China
11 of hiring and more
Manage presence in India. away the ability to manage ability to manage In
managers in its ranks.
at the last mile. operations is restric
This, though tough but
is good position to be
in rather than facing
issue of surplus.
Motorola seems too Being online player
concentrated on Moto E, limited set of produ
Expected Expect continuous Samsung expected to Moto G, and Moto X further is expected to just
12 Future product flux with continue to innovate in development /improvement upgrade the existin
Strategies innovative targeting. premium end. / enhancement. New mobiles. New produ
product launches are not launches are not
expected. expected.

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2.4. Customer Analysis

Customer analysis:

In customer analysis, target customers are identified, the needs of these customers are ascertained, and then it is
specified how the product satisfies these needs. We made a survey to look after various customer needs and tried to
analyze the data based on some pre-defined parameters.

Sample size of the survey: 68

Range of age: 20-45

SEGMENTATION OF MICROMAX MOBILE MARKET:

“Market segmentation involves viewing a heterogeneous market as a number of smaller homogeneous markets, in
response to differing preferences, attributable to the desires of consumers for more precise satisfaction on their
varying wants”

Micromax Informatics Limited is one of the leading consumer electronics company in India and the 10 th largest
mobile phone player in the world & The country’s second-biggest mobile handset vendor.

Identification of the correct market segment is an important step to enter any market.

Present market segmentation of Micromax is as follows:

Dimension variables market trend In house data

demographic Age Micromax is a youth

oriented brand. Its
target customers are of
the age group 15-35.

Income Micromax phones are

range more popular in low to
mid-price range. Hence
its most popular brand
in socio economically
weak class. Though
there are some
premium phones which
are liked by high
income persons.

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Behavioral Common opinion

attitude towards Micromax
toward mobile is, it’s a great
product product at low price.

Brand value scale

User Demand of smart

status phones has increase
significantly in past 3-4
years. Users are
getting more prone
towards using internet
services through
phone.

CONSUMER BEHAVIOUR:

Behavioral segmentation focuses on the behaviors that consumer’s exhibit in marketplace. Behavioral variables
represent an excellent segmentation tool, for as data are collected concerning the manner in which consumers actually
behave in the marketplace.

Factors affecting customer behavior are:

● Age
● Income
● Price
● brand
● after sale service

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Based on these parameters we tried to trend the behavior of the mobile phone customers through several questions,
as followed:

Question asked Customer response

What is your favorite mobile brand

Do you feel after sell service important

for you?

What age group you belong to?

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How you buy a phone?

If you buy a smart phone what feature

you look for?

Another approach to understand the market segmentation of Micromax in mobile market is through CLUSTER analysis.

SEGMETATION:

We tried to determine the position Micromax as a brand in the mobile market in India. For the purpose of analysis we
used several parameters to determine the perceptual mapping.

Before proceeding in the perceptual mapping we tried to analyse the data through Scree plot, where We get K=3.

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From Scree plot we found that, we can perform the perceptual based on two or three parameters.

The analysis is given as follows:

CLUSTER ANALYSIS

The final cluster analysis show that distribution among 3 clusters. The Cluster show the segmentation with respect to
Price, Brand Loyalty, Service and Involvement. The change in the Initial and Final clusters Centres show that the data
set i.e. the results from the survey are segmented in 3 cluster in equal numbers. The Graph between Price and Brand
loyalty shows the concentration of data set point in Medium and affordable price range. Which also shows that for
given price range customer prefer Micromax mobile and also like to be affiliated with it. In this we removed the Age
and Income data as these two data set where similar to each other in most cases

Final Cluster Centers

Cluster

1 2 3

Price 5000 25000 11200

BrandLoyalty
3 3 3

Service 6 5 5

Involvement 5 6 5

Number of Cases in each Cluster

Cluster 1 12.000

2 14.000

3 40.000

Valid 66.000

Missing .000

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The regression curve between Involvement and Price changes as the price changes, with given factor customer are
more involved in affordable and medium priced phone i.e. the number of buyer is very high when the mobile phone is
in either affordable price range and medium price range.

TARGETING:

Micromax uses SINGLE SEGMENT BUT FULL LINE PRODUCT strategy to capture the mobile market in India. They
targeted almost all possible segments in mobile market. The Company’s first bet was on feature loaded feature
phones. The aim was Nokia phones that were the bestselling phones in India during 2008-2011.This was the time
when Samsung was introducing Smartphone’s that were priced at premium price points.

One of the earliest phones Micromax introduced was X1i that promised 30 days battery backup. After this it
introduced the first dual-sim dual-standby phone, the X600 Gravity. Then there was a phone for gamers, a phone with
built-in Bluetooth and the journey took to new heights by the year 2012.

In a market where there were almost no gadgets aimed at ladies, the company took the courage to introduce a phone
aimed at ladies only. The company launched Q55 and A55 in its Bling series especially for women, without the fear of
being branded as sexiest.

The Company needed to find a suitable peg to shake the Indian urban market while also gaining on sales figures. With
Samsung as the only company selling 5-inch Galaxy S3 (4.8-inch) and a bigger Note (5.3-inch) in India at premium
prices, Micromax zeroed-in on the 5-inch segment. The target it laid for it was making a 5-inch device affordable to
everyone who wants one.

PERCEPTION MAPPING ON BASIS OF 2 PRINCIPLE COMPONENT ANALYSIS

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2 factor P:

Rotated Component Matrix

Component
1 2
Brand Loyalty -0.01 0.82
Service -0.07 0.59
Involvement 0.72 -0.09
Price 0.58 -0.29

Factors Positioning
Factor F1 (Brand, Service) Dissonance Reducer
Factor F2 (Price, Involvement) Value Seekers

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3.Objectives
3.1. Corporate Objectives
Corporate Objective: “The Generation Y device “

In India 50% of population is below 25 years of age “THE YOUTH”, we want to create a product for the youth that
caters their needs. A mobile device for every youth in this country that represent the independence, energy, speed,
dynamic of the youth. As the market leader in the smartphone we want to inspire the youth of this country.

Through our core value and commitment, will challenge ourselves to create product that

1. Caters to the needs of youth

2. Increases the market share of company

3. Affordable Phone with no compromise in technology.

Corporate Objective
In India 50% of population is below 25 years of age ,the youth.We want to create a
product for the youth that caters their needs. A mobile device for every youth in this
country that represent the independence, Style,Speed, Trend of the youth. As the market
leader in the smartphone we want to inspire the youth of this country with “The
Generation Y device “

Divisional Objective
Divisional Objectives are aims and visions which are put by structured business
organizations over certain sectors or divisions of a business. This is done to effectively
increase the output of each sector, to manage its expectations and aims which are put in
place by the managers.

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 Micromax – Marketing Plan

3.2. Divisional Objectives

Various divisions of Micromax are:

Micromax

Consumer
Phones Laptab Tablet
Electronics

LED
Smart Phone Feature Phone
Television

Bolt Canvas
Smartphone Smartphones

● Presently Micromax holds the biggest position in the smart phone market in terms of market capital in India.
Starting as a mobile phone manufacturer, Micromax expanded its business in other verticals of consumer
electronics also. (As shown in above)

We concentrate our report on the divisional objective of phone segment of the company.

Division Present status Objective

Smartphon ● Micromax has 12 smartphone ● Micromax’s growth is expected to

e models. continue in its domestic market
● The company has recently set and international expansion
up a merger and acquisition targeting affordable price range
team to scout for start-ups phones
working on new and interesting ● The company will launch nearly
technology that could add value four new handsets every quarter
to its business. catering specifically to needs to
● Presently ranked 10th in the the younger generation.
global smart phone market with ● Preparing to expand business
a share of 1.8%. beyond Indian soil. Russia, the
● Micromax accounted for 22% of next destination of Micromax
India’s smartphone market mobile.
share in the October-December ● Micromax will keep updating its
2014 quarter (Q4,2014) product portfolio with the latest
technology (Hardware &
Software) available in the
market.

Future projects/plans:

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 Micromax – Marketing Plan

As growth has slowed and competition intensified in smartphones, manufacturers have started to look to wearable
electronics to generate revenue growth.

3.3. Marketing Objectives

3.3.1. Volume & Profits
India mobile phone industry in 2014 -2015 has reached a matured stage compared where it was at 2011.
Smartphones have reached more urban and rural households. Last 5 years have seen a great deal of activities,
wherein establish players like Nokia, a dominant mobile phone player in 2005, have disappeared, and each year couple
of new players like Xiaomi, Micromax are entering the market. Technological improvements have drastically reduced
price of ownership of smartphone. Today, a good quality smartphone can be purchased at Rs. 5000, or even cheaper
while availing an exchange offer. This is a category traditionally been owned by feature phones. This present a unique
opportunity to Micromax to leverage Its Brand to capture bigger market share. At the same time, Micromax executive
should be vary of slew of android phones coming each year with increasing higher technology. Given below are
growth volume projection both for Industry and Micromax, calculated using weight average method.

Industry – Volume Forecast -

Growth 2011 2012 2013 2014 2015 2016
YoY Growth 22% 22% 13% -20% -14% -7.93%
Weightage 0.12 0.18 0.27 0.42 0.65

Micromax – Volume Forecast -

Growth 2011 2012 2013 2014 2015 2016
YoY Growth 105% 13% 104% 6% -13% 37.46%
Weightage 0.12 0.18 0.27 0.42 0.65

The decreasing volume in last two years are due to complex interplay between technological advances, maturing
target market, and gradually shift toward high end phones. The customer, on back of increasing salaries, and dropping
prices are looking to buy premium phones. The trend is visible in case of increasing net profit (Rs. Cr.).

Micromax - Profit 2011 2012 2013 2014 2015 Forecast - 2016

Net Profit (Rs. Cr.) 178.00 180.00 12.30 185.00 282.00 317.62
Weightage 0.12 0.18 0.27 0.42 0.65

Based on this projection, the forecast / objective for Micromax in 2016 is an increase in volume sold of 37.46%, an
increased figure 0f 317.62

3.3.2. Time Frame

Given phone is a high flux industry, 1 year can be considered to a long term time frame, and used in case of
Micromax.

3.3.3. Customer Retention

To maintain customer base, following strategy points can be utilized:

i. After Sales Service: After Sales Service is a huge pain when it comes to Mobile devices. If found to be even a
bit of hassles, customers would choose to replace their phone. This may lead to decrease in the customer
base. Therefore, after sales service must be improved and new innovations must be brought to make after
sales service a better experience. Micromax needs to work on it’s after sales service strategy to better it. Some
points that can be useful are listed below:

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● Provide a comprehensive warranty including accidental damages. This is currently being offered by some
of the major brands in foreign markets, whereas it will be a relatively new concept in India. If executed
with due diligence, this can boost revenues and improve customer satisfaction, thereby bettering customer
retention.
● Improvement in Product Quality: Gradual improvement in product quality will lead to lesser after sales
service incidents being logged
● Opening up of more service centres: Micromax has a good presence in rural and semi urban area also.
This is imperative that these locations be covered by service centres.
ii. Exchange Offers: This is a good business idea, to improve customer retention. As new mobiles are launched,
customers can be given a choice to trade in their old mobile phones to get a loyalty discount on the new
products. This will better customer retention. The experience of changing over to a new Micromax phone can
also be enhanced through software.

3.3.4. Intermediary Retention

Intermediaries are very important components of the value chain, and it is through them the customers search, select
and buy the products. Therefore it is critical that Micromax pays attention to retaining the intermediaries. Few points
in this regard are summarized below:

● Improving brand image: Brand image plays an important role in the customer’s decision process, especially in
urban and semi urban markets. Improving the brand image will improve the sales and make the job of
intermediaries easier. Also, intermediaries would prefer the phones that get sold out quick.
● Improving product quality: Improvement of product quality would better the image of the intermediaries as
well, especially in the rural market- where sales happen through word of mouth publicity and based on
personal relationships.
● Training the distributors and dealers: Place and promotion are very important aspects of the products under
consideration. Proper training would enable the dealers to pitch the right product to right customers.
Additionally, the sales for mobile phones also depend on the technical know-how of the salesmen, how they
are able to compete against the similar performing mobile phones of other brands
● Promotion: Better promotion leads to better recognition of the brand name and the dealers spend lesser time
convincing the customers to buy the products
● Distribution Efficiency: Micromax has to analyse and forecast the demands from different regions and enable
supply accordingly so that stock outs do not happen. Stock outs can have negative effect on the brand image
and dealer’s reputation.
● Incentives over online sale portals: In today’s context, a majority of customers are buying through online
stores who offer them very competitive prices and quick delivery. Brick and mortar stores are slowly getting
affected by this trend. Hence Micromax should encourage and offer its dealers and distributors special
incentives to stock and sell its phones.

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4.Product Strategy
4.1. Customer Targets

Driven by growing aspirations of the Indian mobile users, Micromax has geared up to bring about a paradigm shift in
the way cell phones are used by introducing ground-breaking mobile solutions technology. The company’s success
could be attributed to the ‘Out of the Box’ thinking and thus providing Innovative & insightful products to the masses.
For Micromax, the target audience is youth who want innovative, stylish phones that are affordable. Today the mobile
phone category is driven by youth, with about 60% of the users under the age group of 20-35 yrs. and Micromax
utilizes every opportunity to connect with the youth. Micromax understands that building connect is all about being
involved with the customers and also giving them the value for money. Micromax segments the young “GEN next”
Indian population in majorly 3 parts as follows:

college/ school student

GEN next ladies
working professionals
rural market

Target the college/school going youth:

Micromax understood the pulse of today’s youth of age group 16-25, which are information savvy, internet alcoholic,
and tech geeks in terms of understanding and handling technology on their tip of fingers. So they tried to capture the
market of smart phones suitable for everyone’s pocket. The major differentiating factor of Micromax is that it has
managed to distinguish different unique needs of customers and offer a product that solves them such as providing
rural customers with long battery life, and providing urban customers with the best variety at least cost with excellent
quality of smart phones.

Target the GEN next girls and women:

Micromax grabbed the insight that GEN next girls are technologically smart and stylish and that the mobile phones
have become a new fashion accessory, so girls love to flaunt them. Micromax is the first mobile handset making
company who targeted the women customers of India through their unique value proposition.

Micromax launched its Q55 IIFA limited edition handset at the IIFA award function on June 5, 2010 in Sri Lanka. The
dream of the company was to have a phone chiefly targeted at women and make it feature rich to make it a popular
hit within the female community

Target the working professionals:

Present day working professionals are driven by some expectations from their mobile phone

multiple sim mail & document

long battery power smooth operation multitasking
processing

Taking care of all these requirements, Micromax came up with CANVAS series, which provides all customer needs in a
single unit. In fact they gauged a fact that this generation of youngsters are prone to try new products with better
feature very frequently. Hence they came up with strategy of releasing a new model every now and then. In 2015, up

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to September they has released 55 smartphones in various categories. In 2014 the figure was 67. This indicates how
they are populating Indian mobile market with their brand.

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Rural market customers:

While featured phones with basic features of other phone manufacturers are getting obsolete with time, Micromax is
strongly present in this category with a whole range of models that caters the basic needs of the rural India. Looking
at the needs of the market, Micromax has launched their cheapest phones: Joy X1800 and Joy X1850. These are
basic feature phones, which have been packed in a pouch, instead of a box. Again, one of the firsts that Micromax has
introduced in India’s fiercely competitive phone market. 68% of all phones sold in India are feature phones and
Micromax want to capture this market with their low end feature phones. Their low cost feature phones can be
described as yet another attempt to increase their reach and market share in rural as well as technologically
challenged customers and an attempt to become a mass player in this segment.

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4.2. Competitor Targets

erial
Feature/Brand Micromax Samsung Motorola Xiaomi
No.

1 Product Stage Growth Maturity Maturity Introduction

Advertisement
2 Heaviest heavy low low
Budget

Very Large covering Very Large number of SKU's

Small number of
3 SKU's needs lower class to covering needs of lower middle only couple of SKU's
SKU's
upper middle class. class to Upper class.

Good assortment
Samsung research capabilities Efficient no-frill
covering both rural and Efficient no-frill
enables it to bring latest manufacturing and
4 Strength urban needs coming manufacturing and cost-
technologies first to the cost-effective
through innovative effective distribution
market. distribution
designing.

SKU's with similar value 1. Only couple of SKU's

Different SKU's are all
No SKU in the upper proposition are expensive 2. Different SKU's are all
too similar with just
5 Weakness premium segment compared to other brands. too similar with just
incremental feature
(>35000). SKU's are not customize as per incremental feature
addition.
Indian needs addition.

Growing demand for Growing demand for smart Growing demand for Growing demand for sma
6 Opportunities
smart phones phones smart phones phones

Price Based: Micromax Brand Image: Samsung targets

target is to capture largest number of segment on Price Based: Xiaomi
Competitor Price Based: Motorola
Indian Mobile market by back of its brand image as provide no-frill but high
7 Strategy provides no-frill
providing product company that brings the new quality product at a low
Targets products.
customized to the local technologies faster to the cost.
needs at a low cost. reality

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 Micromax – Marketing Plan

4.3. Product/Service Features

The customer segment for Micromax has been defined in the earlier submissions. The various product features for the
Micromax devices required to target the defined customers are listed out below:

a. Build Quality & Performance:

● Although Micromax targets the customers who are price sensitive, but build quality & performance are
important factors for them.
● With advancement in technology and economies of scale, these features can be easily incorporated in the
products. Some of the competitors like Samsung, Xiaomi, and Motorola etc. have already incorporated these
qualities in their own products.
● Cell Phone manufacturers are using metallic/hardened poly carbonate shells for their phones. Also, the touch
screens are made of hardened and scratch proof glasses.
● Performance is important because of increased focus of customers towards gaming, multitasking etc. The
phone should have enough firepower to bring out the software features.
b. 4G connectivity:
● Cellular operators like Airtel are pushing hard for its 4G services which are better in performance compared to
3G and are priced equal to 3G services. Reliance is soon going to launch its 4G Services in the country.
● 4G will soon become the norm for connectivity and hence a deciding criteria for the purchase by the
customers.
● Another issue is the battery drain while using 3G/4G services. The offered products should have capability to
handle the battery drain suffered and provide a better battery backup.
c. Camera:
● The mobile devices have started doubling as full-fledged cameras for all practical purposes and hence cameras
have become an important selling point in the mobile market.
● Micromax should work on improving the camera quality of the phones, at least for the flagship models.
● Some competitors have come up with innovative features like front camera with flash, which enables taking
selfies even in dark conditions. Micromax could also provide such features in few of its phones.
● Additionally, the camera is also used in several video conferencing apps such as Skype and hence the camera
quality becomes all the more important.
d. Accessories:
● The mobile phone market today is also driven by accessories available for the phones. The accessories include
a wide variety of products from camera add on to selfie sticks to colourful panels. The accessories enhance
the customer experience. The mobile phones complement and drive the sales of accessories and vice versa is
also true to some extent.
● Micromax should introduce such accessories, which are innovative in nature and enhance the customer
experience.
e. Software features:
● One of the USP’s of cellular phones today are the software features. Almost all manufacturers tweak the stock
operating system and provide some key functionalities to attract the users. Micromax should work on the
some innovative features and bundle it along with the phone.
● Security is an important concern for everyday users. The phones must have basic security features. Although
currently Micromax is not targeting enterprise customers, providing better security features would attract them
even.

The various services features for the Micromax devices required to target the defined customers are listed out below:

a. After Sales Services

● After Sales Services play an important role in building the brand of the manufacturer. A poor after sales
service can destroy the reputation of the brand. Micromax should look at improving their after sales services
and several innovations can be made in this aspect.

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● For example, the service centres could provide free pick up and drop services for the defective and repaired
phones respectively.
● For most needed parts, an inventory can be maintained at local service centres and there can be regional
repair centres for the heavy repairs instead of having a central repair centre.
b. Showrooms and Service Centres
● Showrooms push the brand image of the firm. Micromax should plan and open company owned showrooms
and stores in metros. Each metro should have at least one showroom at the primary business locality.
● Service Centres are important because they are instrumental in providing the after sales services. Their
number in the given city should be in proportion to the volume sold. The staff must be trained to handle the
issues and customers. For premium phones, the service centres should provide a standby phone to the users,
until their phones have been repaired.

4.4. Core Strategy

4.4.1. Value Proposition

o Affordable: Micromax offers the best mobile phone with the most affordable price in the market, the tag line
“Nothing like anything” self-explains this. Now days mobile phones have become a common part of our lifestyle
with high speed internet technology mobile is not limited to making call rather than it serves functions like internet
communications, office application. But the question is how much are you going to pay for a mobile phone?
Micromax Mobile phones ranges from 5000INR to 21000INR. A price for each category of customer. Micromax has
also tied up with google and launched android one mobile phone in India.
o Two in One: Dual sim phones enable you enjoy the advantage of two mobile in one. Use one sim for data
package and another to make call.
o Powerful and Slim: Micromax Mobile phone uses latest mobile computing technology, new Octacore chipset as
soon as the chipset is launched, and new hardware. Addition of new hardware like snapdragon and mediatek
processor has significantly increased processing power of mobile Phone. Micromax mobile phone have always
improved its design feature, trying to reduce the weight and thickness of its mobile phone. Micromax “Knight”
series mobile phone is one of the light weight phones in the market with full HD IPS technology and stunning
design.
o Stay updated with latest technology: All the smartphones are android based phone, all phones are updated
with latest updates of android operating system. Micromax has incorporated new corning gorilla glass feature in all
its smartphone which provide safety to mobile screen against scratches. Expandable Memory with use of micro –
SD card you can store all your music, photos and documents
o Don’t miss to capture any moment: All smartphone have both front and rear camera, 16 megapixel camera
with fast image capturing and low light performance enable to take image anywhere anytime. Front camera for
Selfie and rear camera for HD video shoot.
o Do more with efficient battery: With large battery power Micromax mobile phones offers stand by time of
175hrs and talk time for 8 hrs. Perfectly for full day use with no compromise on performance. Software and
hardware coupled such that is minimizes the battery consumption.

4.4.2. Product Positioning

In India the Distribution\ Buying of Mobile phones primarily takes place at electronic retail stores and then through
online shopping. Approximately 81 % through Electonic Reatailer and 14% through online.So micromax offers its
product mainly through its Retail outlets and through online sites like flipkart, ebay and amazon. Micromax has also
increased its no. of reatils stores in semi urban and rural areas. Micromax also has an extensive distribution network
with presence in more than 560 districts through 125,000 retail outlets in India, allowing the company to sell to
second- and third-tier cities and thus, expanding its reach and market share.

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5.Marketing Programmes: Strategy

5.1. Integrated Marketing Communications Programmes

Several successful marketing strategies has been implemented to take Micromax in first 3 position in mobile market.
Here are the marketing strategies which Micromax followed:

a. Sponsoring Indian Cricket Matches

In India CRICKET is synonymous to religion. But Micromax knew that Indian people love cricket more than any
other game and serial. So they sponsors a lot of domestic cricket series. With this strategy they reached to millions
of customers. In 2014-15 they paid 20m INR to BCCI per match.

b. Reach to Indian market

Soon after launching their own mobile handsets in the market they started opening outlets all across Indian cities.
They opened outlets and service centres more aggressively than any other mobile company even beating Nokia.
Through this they become a household name in all cities and quickly made its own identity.

c. Right product strategy

Micromax knows what Indian wants. Cheap in price and high in quality. What Micromax does is “Right product at
right time at right price”. Of course their product’s quality is lesser than that of some of the premium brands, but
the product lives of all companies are same. May be not more than one or two years. Every quarter they bring a
new handset, only competitor in terms of launching handset is Samsung. They have product for all categories and
for all type. Now they have started selling product in Russia as well.

d. Introduction of Celebrity

They roped in some of the biggest celebrities to attract customers. Introducing Huge Jackman as brand
ambassador for canvas series of mobiles and roping in Twinkle Khanna for their woman oriented phones they
created an environment of trust among the customers.

e. Media channels:

Micromax targeted all available customer promotion option to reach their customer. From print media (like
newspaper promotion) to electronic media (like online promotion in various blogs and social media), from visual
media to (like television) to promotion through online shopping stores (like flipkart), they have touched all corner
stones to reach to customers in big way.

f. Innovative packaging:

Micromax attracted customers through their innovative packaging strategies. Recently The Company unveiled its
first two handsets in the series – the X1800 & X1850, first ever pouch packaging phones in the market offering
unparalleled value to consumers.

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g. Special promotion through online shopping stores:

Micromax tried to reach new age netizens through attractive offers and exclusive promotions in online shopping
stores. They provided an opportunity to the millions of Canvas Spark fans, by offering its first ever open sale for
the smartphone on Snapdeal.com to ensure that Micromax fans are able to successfully purchase the product. On
the same note, Micromax had exclusively tied up with Flipkart.com, India’s largest e-commerce marketplace to
launch its latest smartphone, the Canvas Xpress.

h. Innovative promotion platforms:

Micromax, introduced Micromax MAd, a unique application designed for those who love ads, which comes pre-
loaded on its latest smartphone Micromax MAd A94. With a simple 4 step process, MAd allows users to watch
advertisements and earn points from every advertisement one views, which then can be converted into rupees.
The money eventually credited into their post-paid/prepaid accounts. With one time registration, the service
worked for all opted-in subscribers across all telecom operators.

All these extensive promotion strategies made Micromax a leading mobile brand in India.

5.2. Pricing Strategy

Today the Entry level and smart phone market has a high number of firms jostling for market share and hence all
firms face cut throat competition from each other. This is where pricing strategy assumes prime importance. The
target customer base for Micromax is price as well as quality sensitive. Therefore it is very important to combine
pricing and quality of the product to arrive at the right proposition.

Micromax is an established brand now (2 nd in market share, only behind Samsung). Micromax adopted penetration
strategy in past to gain market share. In our opinion, they do not need to pursue this policy, as it does not contribute
to the bottom line of the firm. A firm needs to grow its bottom line for continued focus on R&D and thereby
improvement in products.

We suggest that Micromax continues to sell its product portfolio on the pricing strategy that it has been following. We
suggest that Micromax adds another product family of high end smart phones, which would rake in cash, thereby
improving the bottom line of the firm.

To make the new product family successful, they would need to focus on design, value add-ons and quality of the
product. This product family can be priced higher to target high earning customers. R&D is almost similar for the
entire product portfolio, hence it would benefit the entire product portfolio.

5.3. Channel Strategy

Micromax’s focus area currently is B2C segment. We suggest that it also focuses on B2C Segment. The channel is
depicted in the flow chart given below:

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 Micromax – Marketing Plan

Manufacturer

B2C Selling B2B Selling

Distributor Distributor

Dealer Customer

Retailer

Customer

The Channel is an important component of the marketing strategy for Micromax. Micromax mobiles are sold in shops
in Shopping Malls as well as small phone booths in villages. Hence efficiency of the channel is very critical for success.

The B2C Selling follows a longer channel route because of the huge geography and demographic spread. The key to
keep channel working in Micromax’s favour are incentives to the channel partners and constant demand. Customer
demand can only be generated if the products are successful. Incentives to channel partners can be increased if the
bottom line improves. Therefore Micromax needs to improve the bottom line and better the quality of the product.

B2C selling can be done directly through Distributors. The enterprise is a market segment which Micromax hasn’t
focussed on yet. With increasing acceptance of mobile devices in corporate workings and BYOD, this segment could
prove very profitable for Micromax. Also, this segment requires a shorter and therefore channel that has a higher
efficiency.

5.4. Customer Management Strategy

a) Customer value proposition: What we provide to customer to reduce their search in buying and associate their
values with our product. (Mobile Phone)

1) Multifunctional Phone : Easy to use i.e. functions like testing , internet browsing are very user friendly ,Capability
of handing dual sim, High Quality Audio-Video Quality, High end camera, Expanded memory for applications and
other things, keep all thing in one place , connected to cloud so can access your desktop or laptop.

2) Greater Durability: long lasting battery backup, Dust resistance, scratch resistance body, light weight but rigid,

3) Value for Money: As per your budget choose the best mobile Phone, Premium quality in affordable price with
latest technology, large number of product range.

4) Aesthetic appeal: Slim and sleek design, Light weight, multiple color options, Non Light reflective screen

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5) Free update: Pre installed software for office and personal use, free android update, Get paid for watching
add, Customizable home screen and navigation keys

6) After sales services: 1 year warranty on product and parts, complete replacement in case of defect, pick up service
for repair, large no. of after sales office across all cities,

b) Customer Centered Brand Management

1) Fast and Effective After sales and support services: Having captured the market and occupying large volume of
mobile handset in market doesn’t help to sustain the growth. Growth depend on the after sales and support service
what is provided. How fast Mobile handset is repaired or problem is solved such that it doesn’t spoil the name of
brand basically by word of mouth.

2) Durability: A Mobile is majorly targeted for youth segment it is expected to have a rough usage, product should be
built in such a way that it can withstand rough usage.

3) Making brand decisions subservient to decisions about customer relationships. Customer segment manger to have
high resources for creating information flow from bottom to up and in marketing.

4) Building on customer Experience: Hosting a website for customer to give feedback and providing a place for
interaction.

5) Experience design — Determine how to meet the segment-specific needs in each business segment, either by
improving existing approaches based on new insights from the architecture or by developing entirely new ones. All
the levers of customer experience — product, service, content, channels, touch points, pricing, facilities, sensory
engagement, etc. — should be considered and described in the design.

6) Retail Outlets and Supports stores should be located such that it can be accessed by customer easily, having a one
larger store in a city it’s better to have multiple small store across the city.

5.5. Research
Micromax has been very successful in understanding the market and capturing the essence into marketable products.
It has been a smart marketer of its brand and products. Smart marketer means-

a. Recognizing unmet needs of different market segments.

b. Selecting the needs that can be served leveraging the company’s capabilities.
c. Selecting the potential market segments
d. Designing products to serve the selected market segments unmet needs
e. Communicating the product features
f. Establishing the channels to reach the targeted customer segments.
g. Pricing to attract the customer to the point of sales.
h. Post purchase servicing to build brand loyalty.

Each of the above mention steps of customer need fulfilment value chain, is value point that can be developed to
attain higher efficiencies, and establish brand differentiation. Thus, firms Research and Development should not just
focus on the technological aspects – such as next generation product assemblies, and next-generation of operating
system, and hardware. It should also focus business re-engineering activities that embedded innovation as a culture
into all steps of the business value chain encompassing market research, operations, logistics, operations, quality,
supply chain etc.

A high number of Micromax product contents are sourced from foreign vendors. This exposes Micromax to foreign
exchange, socio-political, and country risk. Some of Micromax local competitors such Lava have recognized this need

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and have setup Research and Development centres in India to build in-house capabilities. The can further drive down
the cost of manufacturing and go to market activities by using greater localization. Micromax, though has taken some
initiative in the direction, however, much more is expected from Micromax if it need to build and retain its position as
Market leader. Micromax should loosen it purse to have higher expenditure on Research and Development activities.

It should be noted, that spend on Research and Development is need not just for bringing out better products, and to
develop smarter business process, but it is also a signal to market that the firm is serious endeavour to be innovative
leader of high quality products in its segment.

As mentioned earlier, Micromax has been highly successful in understanding the needs of its customers. This is an
area of core strength for Micromax. This is one area which many players have recognized as their key focus area.
There exists a market trend for greater involvement of customer / customer opinion in the product designing cycle.
Micromax needs to protect its core competence in this area by further integration customer through greater market
research, and application of behavioural economics, a field of social science that has been attracting most innovative
companies across the globe.

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6.Controls
6.1. Financial Controls
a. Budgeting: Financial budgeting for marketing is done by allocating a percentage of the actual or projected gross
revenue. Micromax spends about 2% of its sales on advertising and marketing. In 2014-15, it posted sales of over
Rs 10,000 crore. By March 2015, Micromax would spent about Rs 200 crore in promotions and advertising.
Micromax, used to spend about 10% of its marketing budget on digital media until 2014. Now, more than a third
of it goes towards online campaigns. 'Exclusive' online only smartphone sales have contributed to more than 20%
of the total smartphone sales between July and September so far, according to Counterpoint Research. The
budget allocation depends on several factors: present market trend, growth rate of the company, competitor’s
position in the market etc. This budget is split between:

1) Brand development costs (which includes all the channels those are used to promote Micromax brand such as
website, blogs, sales collateral, etc.), and

2) The costs of promoting business (campaigns, advertising, events, sponsoring cricket series etc.). Recently
Micormax has roped in actors like Kapil Sharma and Daggubati for a period of one year and have big plans for its Bolt
Range.

They have kept it as their flagship product and has diverted 60-70% of their marketing budgets towards it. However,
the rest of the marketing spends will be for the Canvas Range, which is already paying good dividends to the brand.

6.2. Marketing Matrix

Defining Marketing Metrics for micromax mobiles. From the below mentioned data we can that the sale of mobiles
mostly takes place from Electronic appliance and specialist retailers.The % of sales through internet has also incresed
from 9% in 2014 to 12.8% 2015.So it would be much wiser to target these two areas under maeketing metrics.

Source : Euromonitor.

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Sale promotions, Advertisement can affect the consumer in following ways:

a) Change in Awarness : Micromax has not yet evolved as big indian brand , consumer associate it with only
medium (less costly )range mobile phone even though it sells high end phone. Since the popularity of micromax as
medium range mobile maker cannibalize the sales of high end mobile phone. Through Advertisement and Sales
promotion micromax should increase the awarness about its higher end mobile phone and other product. Promotion in
reatils store and internet should be used. Currently micromax uses celebrity endorsement for only one product and
same celebrity for upcoming product which may produce confusion among consumers.

b) Change in Perception: Micromax should try to change the perception in which consumer associate its products
with them. The question to be answered is that are the purchases made accounts to the loyal customers or it is the
new customer population which is buying product, what is the repurchase time or cycle time of purchase of consumer.

c) Change in Behaviour: sales promotion and advertisement should change the buying behaviour of product , new
phones should be promoted such that consumer should be willing to buy the new phone rather than sticking to old
phone. The frequency of new phone should be matched properly if the product launch is fast then loyal consumer or
current consumer may not buy the phone. Addition of new features and upgrading technology in product and lauching
then at regulat interval should be used. Currently micromax new phone frequency is high.

These three parameters should be applied to smartphone and featurephone , as currently the feature phone is higher
than smatphone but consumer are switching to smarthphoen because of technological factor and internet based
communications.

Measurement of sales promotion and advertisement : Simply allocating budget and doing the promotion and
adverstisement will not increase the sles , micromax should measur the effect of promotion and advertisements with
keeping following points

a) Defining the potential growth which the programme intend to produce.

b) Analyzing actual results and determining whether your program promoted them.

c) Tuning up your program based on the sales tracking; doing more of what works well.

d) Analyzing Return on marketing investment (ROMI) , marginal change is sales due change is marketing investment.

e) The matric should be such that it can measure the average value of a sale, average number of sales to each
customer per year and average number of years a customer stays with your company.

f) Discount and other benefits given on seasonal sale (festive season) in oder to maximize sales in short period.

g) Valuable service to loyal customer and providing distinctive offers to maximize the number of product user.

h) Analyzing data from web, postpurchase surveys, customer relationship management (CRM) system, call center,
email.

i) Analyzing and determing campaign key performance indicators (KPIs) ahead of launch, and ensure proper
measurement across multiple internal and third party data sources.

j) Matric should be simple, replicable and sholud have information that drives the sales. Feedback on failure should be
included in the matric

Parameters Measurements

Revenue Indicator How much extra revenue has the programme generate

ROMI Increase in sales wrt. marketing investment

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Marketing Performance No. of new consumer attracted and No. of consumer left

Profit Per Customer Profit on selling price per product per customer

Average life of product , Average no. years for which customers uses the
Time Line
product

Target Area of
change in sales from specific area i.e. retail outlet and online portal
advt./Promotion
because of advt./Promotion and marketing Investment on these specific

Micromax’s marketing plan comprises advertising in print media, electronic advertising, television campaigns, and
endorsement by famous Indian personalities who participate in its marketing campaigns, and sponsorship of
prominent sporting and film events in India. Micromax advertisement and promotion expenses were Rs. 501.38 million
and Rs. 55.76 million during fiscal 2010 and 2009, respectively and constituted 3.20% and 1.62% of its sales. Rebates
and discounts increased from Rs. 112.70 million in fiscal 2009 to Rs. 160.60 million in fiscal 2010. As a percentage of
total expenditure, rebates and discounts however decreased from 3.75% in fiscal 2009 to 1.26% in fiscal 2010.

2010

Net Income (EBITDA) ₹ 3,278.23 million

Advertisement and Promotion Expenses ₹ 501.38 million

Rebates and Discounts ₹ 160.60 million

Selling and distribution ₹752.70 million

Total Marketing Expenditure ₹ 661.98 million

Mobile Units Sold 7.05 million Units

ROMI 622%

Customer Acquisition Cost ₹ 200.66

Marketing % of Customer Acquisition Cost (M%- 47% ( Marketing Cost ₹ 71.11 / Sale &
CAC) Marketing Cost ₹ 200.66)

ROMI of 622% with Marketing Cost per Unit Sold at ₹ 71.11 highlights the importance of Brand and promotion
activities for Micromax. Micromax would need to continue to sell focus on Brand and promotional activities to
supplement it product innovation and capacity upgrade plans to further penetrate the Indian market.

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7.Contingency Plans

Although Micromax has been very successful, but the mobile market is very uncertain and diversifying into several
domains makes sense for the firm. We suggest the following strategy for Micromax to diversify into related domains:

a. Consumer Electronics: Micromax has already ventured into consumer electronics domain. It has started offering
LED TVs, Data Cards etc. Electronic Goods like Data Cards also find customers in B2B selling. Micromax can also
venture into Internet Connected home appliances such as Smart TV etc.

A smart TV device is either a television set with integrated Internet capabilities or a set-top box for television that
offers more advanced computing ability and connectivity than a contemporary basic television set. Micromax can
collaborate with Google to power its TVs using Android Operating System.

b. Tabs: Although Tabs lies in a heavily crowded market segment, but there is still a lot of room for innovation and
there lies a potential business opportunity. The tab market is ruled by Samsung and Apple, which definitely have
better products in higher price segments but not in economy/value segment.

Micromax already sells tab in the entry level segment, but has not focussed on the same. It needs to revamp its
offerings and increase focus on this market segment. Tablets provide better utility compared to Phones in multiple
scenarios due to their large screen size. Tabs can be customized to suit the needs to various users/industries,
some of the probable examples are discussed below:

i. Tabs can be sold to enterprise clients in Education/Research Verticals as a part of smart classroom
programs.
ii. Tabs can be customized and sold to Enterprise clients to enable their sales force. Sales force is usually on
the move and carrying a laptop is inconvenient, hence Tabs provide a reliable alternative. IBM and Apple
have a collaboration for a similar motive, wherein all IBM Sales employees get an iPad customized to meet
their requirements. This serves dual purpose- it enables IBM employees to carry out their business
activities/tasks efficiently and serves as a proof of concept to possible Enterprise Customers for iPad Sales.
It also promotes BYOD concept in the organization.

c. Entry Level Laptops enabled by Cloud: The world is moving on to the cloud now. Google has been promoting
its Chrome OS, which works on laptops/notebooks with bare minimum configuration and builds on their cloud
infrastructure. Microsoft is also entering this segment with their cloud offerings. Internet penetration is on the rise
in India and this can prove to be a major business opportunity. Some industry segments can targeted specifically
and Micromax will have first mover’s advantage.

d. Software Innovations: Micromax is planning to launch its own version of customized Android Operating
System. This is a model followed by some of largest Smart Phone manufacturers such as Xiaomi, Meizu etc.
Launching phones with Customized OS is a huge differentiator in today’s markets and provides value addition to
customers. Having Customized OS allows manufacturers to incorporate the needs the target customers and
respond fast to their needs.

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