PROJECT REPORT

On

“MARKET POTENTIAL FOR SPICE PHONES

Submitted To: Submitted By:

Mrs. Shikha N. Khera Ravindra Kishore

Shubham Sharma
Karan Gupta
Darshan Jindal
Rachit Mehra
 ACKNOWLEDGEMENT

I am extremely grateful to Mrs, Shikha N. Khera, JIMS, Delhi for being a source of inspiration
and for her constant support and suggestions which benefited me a lot while doing this project
“TO check the market potential for spice mobile phones.”

I also want to thank Mr. Harsh and Mr. Jitender for guiding me to get primary data from the
respondents.

Through this column, it would be my utmost pleasure to express my warm thanks to all the
respondents of my survey for their valuable answers and time.

Date
 INDEX

1. Objective
2. Literature Review
3. Research Methodology
4. Data collection
5. Data Analysis & Interpretation
6. Conclusion
7. Recommendation
8. Bibliography
9. Appendices.
 OBJECTIVE

 To determine future prospects of Spice mobile phones

 To analyze the demand for the Spice mobile phones.
 Literature Review

Today, mobile handsets have not only metamorphosed from the huge briefcase size devices of
the 1980s to the ultra slim phones, but have also moved beyond being mere devices to make and
receive calls. with more & more features and technologies being added, mobile handsets are on
the way to be a single device serving the purpose of a phone, camera, MP3 player,GPRS ,games,
television and a lot more.
India has been the largest emerging mobile handset market in the last one year, surpassing China
and these super gadgets have already made inroads in the Indian market.
In India, there are already 250 million mobile customers, with 7 million more people every
month becoming mobile users. In 2007 itself, the mobile market in India grew to 120 million and
this growth is expected to cross 180 million units this year. with such an astonishing no. of
mobile users in India, and just a little over 31 million PCs,mobile handsets will soon replace the
personal computer.

In India, Nokia, Sony Ericsson, and Motorola are the frontrunners, along with a plethora of
players like Samsung, LG, Spice and Fly with other small players looking to grab place for them.

Nokia, over the years, has been tasting success with its focused product range, competitive
pricing and good Distribution Network. Sony’s brand identity of high memory phones & phones
with unique imaging solutions has been built with aggressive advertising and marketing strategy,
while Motorola has focused on building an Indian appeal and strong Indian connection with
products targeting the youths. Right from opening up experience stores to branded retail shops,
handsets makers are leaving no stones unturned. While Spice mobiles and fly mobiles are aiming
mainly at bottom of the pyramid. Though, Spice is also attracting customers through its dual
mobiles like D-88n.

Mobile phone giant Nokia’s market share in India has increased to 62.5 % 2007-08 from 53.6 %
in the previous year.Nokia’s revenue from the mobile segment stood at Rs. 15,000 crore, up by
30.6 %, compared to Rs. 11,486 crore in 2006-07.the company’s increased market share seems
to have come from the LG, Motorola and other players who have lost significant shares.
The market leader is followed by Sony Ericsson and Samsung at second and third place with
12.8 % and 7% market share respectively.

Motorola which is planning to sell the handset business also saw its share erode to just 5.9%,
losing revenue by almost 50%.while LG is the biggest loser with a market share of just 3.41%
and the comers like Spice have only 1.7% stake,thanks to its good position in Karnataka and
Punjab, being the second and fifth largest handsets provider there.

India’s telecom equipment revenue touched Rs. 95407 crore in 2007-08 driven by the rising
demand for mobile handsets and wireless infrastructure expansion by service providers.

In telecom equipment, Ericsson had revenue of Rs. 8,000 crore. Nokia Siemens network, the
merged entity between Nokia and Siemens had revenues of Rs.7779 crore and Alcatel Lucent
posted revenues of Rs.7,000 crore.

“While Nokia and Ericsson retained their positions as top players, Nokia Siemens Network,
struck major deals in the wireless segment. Expansion of mobile networks And broadband
infrastructure and the introduction of 3G technology will sustain the growth in the current year.”

Out of the total revenue of Rs. 95,407 crore, handsets business was Rs. 24,000 crore.the phone
segment contributed nearly one fourth to the total telecom equipment industry, Rs. 25,203 crore
recording a growth of 7 per cent.

In the handset segment, revenues of mobile handsets manufacturer grew 12% to Rs.24,003 crore,
while the fixed handsets sales decreased by 41% to Rs. 12,00 crore, over the same period last
year.

The Indian handset market recorded a 33% growth by volume with 95.6 million pieces sold
during the year against 71.8 million in the same period in the previous year.

Of the total handsets sold, 68.3 million were GSM phones and 27.3 million phones are based on
CDMA technology
Youths have been the main target for the converged mobile phones. Handset makers have been
redefining the ways to crack the youth segment which is also the primary target for the
replacement market as young people have a tendency to change their handsets often. This has
seen companies launching new set of products every six months.
 RESEARCH METHODOLOGY:

INTRODUCTION
This chapter aims to understand the research methodology establishing a framework of
evaluation and revaluation of primary and secondary research. The techniques and concepts used
during primary research in order to arrive at findings; which are also dealt with and lead to a
logical deduction towards the analysis and results

RESEARCH DESIGN
The research design applied here was exploratory research and descriptive research.
Exploratory Research is one in we don’t know about the problem, we have to find about the
problem and then work on solving the problem. Whereas in case of descriptive research, we
know the problem, we just have to find the solution to the problem. Generally descriptive
research design is applied after exploratory research design.
Here, through primary research we came to know about the sales for different mobiles, customer
likings, problems faced by dealers and reasons for low sales of Spice mobiles.

SAMPLE SIZE
To complete the research, the questionnaire was filled by 30 respondents.

RESEARCH TOOL
The purpose is to first conduct a intensive secondary research to understand the major players
in the market, their sales, studying their handsets and their features, & full impact and
implication of this on their market and the customers. This helped us in the primary research to
ask the questions which are still unanswered & we can get only through primary study.
 DATA COLLECTION

DATA COLLECTION:

Both primary and secondary data have been collected very vigorously
Primary data: it is basically collected by getting the questionnaire filled by the respondents
selected for the research.
Secondary data: it is collected by the study of enormous material available on the company
websites and the previous researches related to mobile industry. The data was also collected from
the magazines and newspapers.

QUESTIONNAIRE METHOD
The questionnaire method has come to the more widely used and economical means of data
collection. The common factor in all varieties of the questionnaire method is this reliance on
verbal responses to questions, written or oral. We tried to make sure the questionnaire was easy
to read and understand to all spectrums of people in the sample. It was also important to respect
the samples time and energy hence the questionnaire was designed in such a way, that its
administration would not exceed 4-5 minutes. These questionnaires were personal administered.

Sample size: 30 respondents

No. of questions: 10
 Data Analysis

Reliability Statistics

Cronbach's
Alpha N of Items
.691 9

INTERPRETATION:
Cronbach's Alpha test is conducted in order to check the reliability of the data we have
collected.
If the value comes out to be greater than 0.7 then it shows that the data is highly
reliable and if the value comes out to be less than 0.7, it shows that either the
respondents have wrongly answered the questions or there is some manipulation in the
responses. And hence the data is not reliable.
In our research the value is coming out to be 0.691 which shows that the data is
reliable.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy. .523

Bartlett's Test of Approx. Chi-Square 50.259

Sphericity df 36
Sig. .058

Total Variance Explained

Compon
ent Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums
% of
Total Variance Cumulative % Total % of Variance Cumulative % Total % of V
1 2.197 24.411 24.411 2.197 24.411 24.411 1.950
2 1.737 19.295 43.706 1.737 19.295 43.706 1.927
3 1.377 15.304 59.010 1.377 15.304 59.010 1.433
4 .940 10.439 69.449
5 .859 9.541 78.990
6 .740 8.226 87.217
7 .589 6.539 93.756
8 .355 3.944 97.700
9 .207 2.300 100.000
Extraction Method: Principal Component Analysis.

Rotated Component Matrix(a)

Component
 1 2 3
BRAND AWARENESS -.237 .739 -.040
LOOKS .029 -.173 .867
SOUND .502 -.159 -.265
BATTERY BACKUP .438 -.449 .255
PRICE .845 .292 -.026
ADVERTISMENTS .356 .585 -.089
SCHEMES .776 -.254 .212
COMPETITION -.074 .662 .258
SALES OF SPICE
MOBILE -.023 .441 .652

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 6 iterations.

Correlations

INTERPRETATION:
KMO & Bartletts Test are conducted to find if the data is ready for factor analysis or not.
Basically the test confirms if the existing variables form Identity matrix or not.
If Identity matrix is formed it means that the data cannot be reduced & that the tools
have to be straight away applied to the existing data. And if Identity matrix is not formed
the data can be reduced i.e. it is ready for factor analysis.
Further if the value of KMO comes out to be less than 0.5, it is not considered good. If
it comes out to be between 0.5 & 0.75, it is considerable and if it exceeds 0.75, it is
very good.
In our research KMO is coming out to be 0.523 which shows that the data is
considerable.

BRAND BATTERY ADVERTI

AWARENESS LOOKS SOUND BACKUP PRICE SMENTS
BRAND AWARENESS Pearson Correlation 1 -.168 -.096 -.158 -.081 .292
Sig. (2-tailed) .375 .612 .404 .671 .117
N 30 30 30 30 30 30
LOOKS Pearson Correlation -.168 1 -.078 .238 -.086 .010
Sig. (2-tailed) .375 .683 .206 .652 .958
N 30 30 30 30 30 30
SOUND Pearson Correlation -.096 -.078 1 .170 .295 -.056
Sig. (2-tailed) .612 .683 .369 .114 .769
N 30 30 30 30 30 30
BATTERY BACKUP Pearson Correlation -.158 .238 .170 1 .155 -.088
Sig. (2-tailed) .404 .206 .369 .412 .643
N 30 30 30 30 30 30
PRICE Pearson Correlation -.081 -.086 .295 .155 1 .326
Sig. (2-tailed) .671 .652 .114 .412 .079
N 30 30 30 30 30 30
ADVERTISMENTS Pearson Correlation .292 .010 -.056 -.088 .326 1
 Sig. (2-tailed) .117 .958 .769 .643 .079
N 30 30 30 30 30 30
SCHEMES Pearson Correlation -.384(*) .163 .197 .392(*) .502(**) .065
Sig. (2-tailed) .036 .389 .297 .032 .005 .731
N 30 30 30 30 30 30
COMPETITION Pearson Correlation .374(*) .065 -.206 -.236 .132 .131
Sig. (2-tailed) .042 .732 .275 .208 .487 .489
N 30 30 30 30 30 30
SALES OF SPICE Pearson Correlation .308 .339 -.078 -.131 .138 .030
MOBILE Sig. (2-tailed) .098 .067 .684 .490 .466 .874
N 30 30 30 30 30 30
* Correlation is significant at the 0.05 level (2-tailed).
** Correlation is significant at the 0.01 level (2-tailed).

INTERPRETATION:
Correlation is done to find out the relationship between two variables.
It has been observed that the prices of spice mobile and schemes provided by them
have a positive and strong correlation
Variables Entered/Removed(b)

Variables Variables
Model Entered Removed Method
1
COMPETITI
ON,
LOOKS,
ADVERTIS
MENTS,
SCHEMES,
SOUND, . Enter
BATTERY
BACKUP,
BRAND
AWARENE
SS,
PRICE(a)

a All requested variables entered.

b Dependent Variable: SALES OF SPICE MOBILE

Model Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate
1 .623(a) .389 .156 .70769
a Predictors: (Constant), COMPETITION, LOOKS, ADVERTISMENTS, SCHEMES, SOUND, BATTERY BACKUP,
BRAND AWARENESS, PRICE

ANOVA(b)

Sum of
Model Squares df Mean Square F Sig.
1 Regression 6.683 8 .835 1.668 .165(a)
 Residual 10.517 21 .501
Total 17.200 29
a Predictors: (Constant), COMPETITION, LOOKS, ADVERTISMENTS, SCHEMES, SOUND, BATTERY BACKUP,
BRAND AWARENESS, PRICE
b Dependent Variable: SALES OF SPICE MOBILE

Coefficients(a)

Unstandardized Standardized
Coefficients Coefficients t Sig.

Model B Std. Error Beta B Std. Error

1 (Constant) .497 1.102 .451 .657
BRAND AWARENESS .318 .147 .468 2.165 .042
LOOKS .436 .161 .508 2.716 .013
SOUND -.055 .125 -.083 -.441 .663
BATTERY BACKUP -.242 .187 -.257 -1.293 .210
PRICE .366 .229 .369 1.597 .125
ADVERTISMENTS -.220 .172 -.254 -1.282 .214
SCHEMES .008 .220 .008 .035 .972
COMPETITION -.054 .249 -.044 -.217 .831
a Dependent Variable: SALES OF SPICE MOBILE

Conclusion

 The Spice mobile lacks in the brand awareness with 73% dealers thinking it to be the
reason for its low sales.23% also feel that it hasn’t got lucrative looks which is a must to
attract youth customers.Thus, they must work on promotions by PAN India movement
and should offer some stylish mobiles.
 Moreover, the company should send their company executives to every dealer in order to
offer Spice mobile in each and every corner to all customers. As there are still many
shops which don’t have a Spice mobile because executives did not approach them.

It is concluded that within 10 years, the Spice mobile should overtake the likes of Samsung and
Motorola and will occupy the same position as in Karnataka.
 Recommendation

 Spice mobile should not stop the production of mobiles at a time when they are
having the maximum sales for them like they did with C-810 model. There was a
good demand for the model and thus, Spice should provide the stock to the
distributors.
 The company should work on its brand building if it really want to match the likes of
Nokia and infact should work on its models looks to catch the attention of youths.
 The company should open their own service centers as the customers face problems
to get their phones serviced in Hotspot which already offers service for a large no. of
players like Samsung , Nokia LG , Sony, and Fly.
 The company may offer some attractive offers with their mobiles like a Lucky Draw
winner to have a date with Spice’s brand Ambassador Katrina Kaif or the winner’s
photo to be displayed on one of its model’s box. That may cause a sudden rise in
sales.
 Bibliography

Websites
 www.marketresearch.com/product/
 www.spicempbile.in
 www.google.com
 QUESTIONNAIRE

Q.1 Which price range mobiles do you purchase?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree
Q.2 Does spice mobiles phones has the maximum sales?
a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.3 Do you agree that brand awareness of spice mobiles are high?
a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.4 Does spice mobiles has the best looks?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.5 Does spice mobiles has the best sound?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.6 Does spice mobiles has the best battery backup?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.7 Do you think that spice mobile have lowest prices?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree
Q.8 Do you agree lack of advertisement is the problem for low sales of spice
mobile?
a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.9 Do you agree new and improved schemes would increase the sales of mobiles?
a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.10 Is spice mobile giving tough competition to nokia and Samsung mobile
phones?
a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree