ANALYZING THE MARKETING STRATEGIES AND GROWTH OF

MICROMAX MOBILES

GROUP-D7

Aishwarya Usgaonkar (2016194)

Alankrita Mishra (2016195)

Ankit Sen (2016198)

Joshua Desouza (2016216)

Shobhini Rai (2016236)

Shubham Ghosh (2016238)

Table of Contents

1. Objective and Scope of the Project ................................................................................................... 3

2. Introduction ........................................................................................................................................ 3

3. Company Profile ................................................................................................................................. 3

4. Products ............................................................................................................................................... 4

5. History of the Industry (Mobile Handsets) ....................................................................................... 6

6. Evolution of Micromax Mobiles ........................................................................................................ 6

7. Value chain and Value proposition ................................................................................................... 7

8. Environmental Factors ....................................................................................................................... 8

8.1. Political Factors ........................................................................................................................... 8

8.2. Environmental Factors ................................................................................................................ 8

8.3. Socio-Cultural Factors ................................................................................................................ 9

8.4. Technological Factors .................................................................................................................. 9

8.5. Legal Factors ................................................................................................................................ 9

8.6. Economic Factors......................................................................................................................... 9

8.7. Micro factors ................................................................................................................................ 9

9. Consumer Behaviour .......................................................................................................................... 9

9.1. Factors affecting Consumer Behaviour: .................................................................................. 10

10. Segmentation, Targeting and Positioning (STP) ............................................................................ 11

10.1. Segmentation ............................................................................................................................ 11

10.2. Targeting .................................................................................................................................. 12

10.3. Positioning ................................................................................................................................ 12

11. Marketing Strategies ........................................................................................................................ 12

12. Marketing Orientation ..................................................................................................................... 14

13. Product Life Cycle ............................................................................................................................ 15

14. Forecasting ........................................................................................................................................ 17

15. Competitive Marketing Strategy Assessment ................................................................................ 19

16. References .......................................................................................................................................... 20

17. Annexures .......................................................................................................................................... 21

17.1. Annexure A (SWOT Analysis) ............................................................................................... 21

17.2. Annexure – B (Handset Manufacturers’ Market Share) ..................................................... 22

17.3. Annexure C (Product line of Micromax in Feature Phones) ............................................... 23

1. Objective and Scope of the Project

The objective and scope of the project is to analyse the marketing strategies and growth of Micromax

mobiles as a brand in the consumer mobile handset market.

2. Introduction:

Micromax Informatics Limited was incorporated on 29th March 2000 as IT Solutions Company. The idea for

Micromax mobiles originated in the city of Baharampur in the state of West Bengal. Rahul Sharma, co-

owner of Micromax, saw a payphone in the local PCO being charged by a truck battery. He observed that the

owner of the payphone used to haul the battery every day to the adjoining village, charge it and bring it back

to Baharampur. Rahul’s idea of creating a battery powered phone with a long backup was inspired by this

observation. Their first device named Micromax X1i boasted a month long battery backup. Someone rightly

said “If Newton would have ignored the apple that fell on him; we still would have been unaware of

gravitational force.” In a similar manner, if Rahul Sharma had ignored how the payphone was being charged

with the support of truck battery; there wouldn’t have been a challenger that would oust a market leader in

the days to come.

Micromax created history when it dragged down the top mobile vendor of India, Samsung, to the second

place in 2012. Samsung had never seen such a major downfall in the past. After the mind-blowing Canvas

series, Micromax rose to prominence and witnessed doubling-up of their sales in the financial year of 2012-

13. By catering to the needs of the common man and some excellent marketing strategies, Micromax has

climbed to the second spot in the Indian market.

Micromax was the second largest player in the mobile handset and smartphone market as on April 2016

which were both led by Samsung. Micromax, in the first quarter of 2016 had a market share of 14% of the

total handsets market in India and a 17% market share of the smartphone market in India. In the report

published by counterpoint market research, Micromax saw an annual increase of 19% annually in the

handsets sold. (Annexure B)

3. Company Profile:

Micromax Informatics Limited is one of the leading consumer electronics company in India, and the 10th

largest mobile phone player in the world. Over the past decade, Micromax has pioneered the democratisation

of technology in India - by offering affordable innovations through their product offerings and removing

barriers for large scale adoption of advanced technologies. Micromax is currently the 2nd largest smartphone

company in India. Micromax is a brand which is close to the heart of the youth, and celebrates the vibrancies

of life and empowerment.3

3.1. Vision:

To be amongst the top 5 mobile device brands in the world.

3.2. Mission:

We will adapt and innovate to provide unique consumer experiences, based on:

Strong, engaged customer communities

Insightful analytics

Win-win partnerships

World-class capabilities

3.3. Core Values:

Customer-first: Putting the customer first when taking decisions. We don't invest in things that don't

matter to customers

Entrepreneurship: Identifying opportunities, being nimble, passionate and taking risks

Inclusiveness: Being respectful, collaborative and embracing diversity

Execution: Managing by facts, cross-functional working, end-to-end ownership and speed / timely

action

Innovation: Creative disruption, learning, and embracing change in all dimensions of business

4. Products

Micromax products identify as an extension of today’s youth and their dynamic way of life. The company

identifies Innovation as one of its core values and over the years has been a pioneer in introducing new

products with new features. Some of the firsts attributed to Micromax’s products include 30-day battery

backup, Dual SIM Dual Standby phones, QWERTY keypads, universal remote control mobile phones & first

quad-core budget smart phone.

Today, Micromax has a broad product portfolio with more than 60 handset models. They include

Smartphones (with various features and model types), cheaper feature phones, tablets, phablets, LED TVs,

Air Conditioners, Computer Monitors, Laptops and Data cards. “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.”3

Smartphones Feature Phones

Tablets LED TVs

Air Conditioners Laptops

Monitors Data Cards

5. History of the Industry (Mobile Handsets)

6. Evolution of Micromax Mobiles

1991• Micromax started by Rajesh Agarwal to deliver IT peripherals

2000

• On 29th March 2000, Micromax was incorporated as Micromax Informatics Ltd.

• In the same year, Nokia signed up with Micromax to serve as the all India machine to machine devices' distributors - product included landlines customized to run on mobile networks.

2008

• Entered the mobile handset business.

• Launched X1i, the first telephone with a month long battery backup.

2009

• Micromax diversified their product lines with QWERTY phones and expanded their Dual Sim phone range

2010

• Micromax entered the tablet business with the Funbook series.

• Launches Canvas series and Bling phone (exclusively for women)

2012

•Micromax emerge as the handset manufacturer with the largest market share (16.6%) ousting Samsung, the market leader

•Micromax launches Canvas 2, one of its successful handset models.

2014-15

•Micromax launch multiple models catering to different segments such as youth and professional with products such as Nitro series, Unite series, Canvas 4 series with superior performance at low cost.

2015-Present

• Launch world's slimmest phone, Canvas Sliver 5 and Canvas 6, one of the premium low cost phone.

1995

Entry of

Nokia into

handset

market

2002

10 million

mobile

handsets sold

2005

High growth

of mobile

subscribers

and handsets

to 55 million

2007

Introduction

of the IPhone

to

revolutionize

the

smartphone

industry

2013

Entry of the

low cost

smartphone

manufacturer

s into the

Indian

market

7. Value chain and Value proposition

7.1. Value chain:

Micromax, as initially indicated in the history of the company, was an information technology (IT) partner that

dealt in the distribution of computer peripherals and entered into an agreement with Nokia to distribute

landlines. Post this, they ventured into the mobile handset industry in 2008 with their first model X1i.

7.2. Suppliers, Manufacturing and Assembly

Micromax, today uses the model of outsourcing manufacturing and domestic assembly. Micromax outsources

the manufacturing of the handset to various Chinese and Taiwanese factories to ensure lower cost and higher

efficiency. As the Chinese and the Taiwanese factories possessed the competence as well as the scale to ensure

higher quality at a lower cost. Prior to 2012, Micromax completely outsourced the production and manufacture

of the handsets to these companies and they reboxed and sold it in the Indian market. Post 2012, the company

altered their model to include purchasing of key components from manufacturers from across the globe for the

higher end handsets it was introducing. In order to facilitate this model Micromax initiated the current model

which was to assemble the handsets in India. Additionally, throughout the years, Micromax has additionally

invested in development of manufacturing facilities in order to hedge against supply uncertainties. In 2011,

they invested in a manufacturing facility in Himachal Pradesh and also plan on setting up facilities in

Hyderabad and Rajasthan as they focus on the ‘Make in India’ campaign.

Micromax is currently present in a number of Asian countries such as Bangladesh, Nepal, Sri-Lanka and a

number of Middle Eastern countries like UAE, Saudi Arabia, Oman, Qatar, Afghanistan and also Brazil.

7.3. Distribution and retail network

Initially, Micromax with their lower price range products mainly targeted the rural and semi urban

customers. In order to have the reach then in a market which was completely unpenetrated, Micromax relied

on a traditional distribution strategy which included an intensive focus on distributers and retailers. The

network consisted of 30 super distributers, 450 distributers and 55,000 retailers. Additionally, they offered a

higher commission of 5% to each of the distribution partners as compared to Nokia and other competitors at

that time that offered 1%. As the brand increased its visibility and the company launched a number of

products targeting different segments, Micromax also tied up with large electronic retail outlets such as

Croma, Ezone, Reliance Webworld, Next, Planet M, Reliance Digital, Tata Indicom, The Mobile Stores, etc.

Currently, Micromax as is the case with almost all handset retailers is increasing its presence on the e-

commerce sites. Micromax handsets are currently available on all the leading e-commerce websites.

Additionally, Micromax has a 3 tier distribution network in India, which extends across 65 super distributers,

1500 micro distributors and over 100,000 retailers. To enhance brand cognizance and retail strength,

Micromax has a chain of exclusive retail outlets, owned by third party.

7.4. Value Proposition

8. Environmental Factors

8.1. Political Factors

Factors such as government policies affect the company. In case of Micromax, the Make in India campaign

of the Indian Government has had a positive effect. The state of Telangana strongly believes in the vision of

Make in India and encourages corporates to establish factories and R&D centres in the state. Accordingly,

Micromax has chosen Telangana for setting up its manufacturing facility.

8.2. Environmental Factors

Environmental Factors include issues such as global warming, resource utilization and sustainability. Some

companies come up with certain initiatives to make environmental friendly changes. Micromax has been

working in the area of safe disposal of electronic waste. This is in accordance with the company’s global

policy of seeking shared responsibility and cooperation from customers in reducing the environmental

impact of their products. Micromax has authorized an e-waste company named 3R Recycler, to collect,

dismantle and dispose e-waste collected from all over India.

8.3. Socio-Cultural Factors

Factors like status symbol, peer pressure and attitudes of customers have an impact on the company.

Customers who are conscious of their status in the society would prefer a mobile phone that would suit their

personality. Peers influence and act as initiators, and hence peer pressure also influences customers to choose

mobile phones having specific features as against the mobile phones without those features. These factors

form the attitudes of the customers which ultimately results in buying behaviour.

8.4. Technological Factors

Technological factors affect the manufacturers, customers, competitors and suppliers. Micromax practices

planned obsolescence by outdating their own products and thus shortening the product life cycles of their

mobile phones. The company has done this for models like Canvas 1, Canvas 2 to come up with new and

improved versions of mobile phones.

8.5. Legal Factors

Factors such as laws and regulations related to consumer protection affect the business. The company has to

abide by the rules of institutions like SEBI for day to day trading in the share market. It also has to follow the

rules and regulations of intellectual property rights such as patents and trademarks. Micromax is committed

to adhere to the highest standards of legal conduct of business operations and in order to maintain these

standards, the company encourages the employees to voice their genuine concerns.

8.6. Economic Factors

Disposable incomes and the economic scenario (recession, booms) cast a huge influence on the purchasing

patterns and even for the expansion of the company.

8.7. Micro factors

Suppliers: Oppo, Coolpad, and Gionee are the Original Equipment Manufacturers which may affect them

through their bargaining power and raw material costs

Competitors: It faces great competition from Samsung, Lava and many others who are always ready to tap

over their disadvantages

Customers: Customers evaluate the product on their list of economic and technological criteria and select

which suits their preferences best

9. Consumer Behaviour

In the decision making process, the influencers including peers, internet sites, blogs, expert opinions cast a

huge impact on the purchase decision making. The customers search for information and make a

comprehensive evaluation of alternatives, which ultimately leads to purchasing decision. When it comes to

mobile phones, customers have a wide variety to choose from and are highly involved in the purchasing

process so that they do not face post purchase cognitive dissonance. In terms of high involvement, the

customers have parameters such as high perceived risk, time and effort in searching for the right mobile

phone including gathering information about the product. Certain offers of the company like providing

products on EMI to customers help in forming a positive attitude of customers towards the brand, ultimately

resulting in purchasing decision. Micromax provides certain models of mobile phones such as Canvas 4 on

Equated monthly instalment (EMI)

9.1. Factors affecting Consumer Behaviour:

Social Factors

Customers perceive different products to be appropriate for different social classes. Consumers in the

working class segment evaluate mobile phones based on the utility rather than style.

Social classes also have an impact on the customers’ decision. Different categories of social class include:

Upper Class

Upper Middle Class

Middle Class

Lower Class

Customers belonging to middle and lower class are more cautious while making their purchasing decisions,

since they tend to be more price sensitive.

Reference Group

Reference groups have a direct or indirect influence on the attitudes or behaviors of customers. While

making purchasing decisions, customers take inputs from reference groups, which consist of the following:

Family:

Family is one of the most influential primary reference groups. Members in the family play different roles in

the purchase decision making process, like:

The Initiator, who feels the need of the mobile phone

The influencer, like peer groups, who largely influence the customer in the decision making process by

providing information about various mobile phones available that the customer can choose from

The buyer, who actually purchases the mobile phone, and the User, who uses the mobile phone

The involvement of family members in purchasing decisions is high in India. Since almost every member in

the family owns a mobile phone, they provide their opinions on the benefits of various models of mobile

phones and thus aid in the decision making process.

Aspirational Groups:

Customers who don’t own a smartphone would want to own one as new technology comes into picture and

more and more people start owning smartphones. The customers would thus aspire to be part of the group

that owns smartphones.

The secondary data collected by us involves a survey conducted on the consumers’ attitudes and intentions to

purchase mobile phones. A large part of the customers surveyed were students; the others were employees in

the private as well as government sector. There were a set of questions regarding ownership and level of

satisfaction from mobile phone, that were asked to customers and their responses were recorded. The

questions and their results are as follows:

1. Do you own a mobile phone?

2. If yes, are you satisfied with your mobile phone?

3. Would you like to switch to another brand with additional features?

4. How much are you willing to pay for the mobile phone?

5. Does the country of manufacture or the size of the manufacturer matter?

6. Are your decisions influenced by word of mouth?

7. Are your decisions influenced by advertisements and brand ambassadors?

8. Do the after sales services provided by manufacturers have an effect on your decisions?

Most of the respondents owned a mobile phone and were mostly satisfied with the brand that they owned.

When given an option of a mobile phone with additional features, the respondents would not hesitate in

switching the brand. When asked how much the respondents were willing to pay for mobile phones, the

range varied from Rs 5,000 to Rs 20,000. Most of the respondents preferred international mobile phone

companies over Indian brands, and said that they are more or less influenced by word of mouth of family

members and social groups. Also, the respondents were moderately influenced by advertisements and brand

ambassadors of the mobile phone companies, as well as the after sales services provided by the companies.

10. Segmentation, Targeting and Positioning (STP)

10.1. Segmentation:

The company divides the market into segments having customers who are homogeneous according to their

needs, in the following way:

Geographic Segmentation: The division of market by Micromax, based on the location of customers

includes two segments- Urban and Rural.

Demographic Segmentation: Under demographic segmentation, the company has divided the market

based on the following factors:

o Age : The company has divided the market into segments like youth, which is based on age

of the customers

o Gender: Other segments that the company identifies include male and female

Psychographic Segmentation: Micromax divides the market based on the attitudes and lifestyles of

customers. It offers smartphones to the segment which is more into social networking and is more

tech savvy, and feature phones to the segment which uses mobile phones for basic functions like

calling and text messaging.

10.2. Targeting:

The target customers of Micromax include:

Youth: One of the target markets of Micromax is the Youth segment. The company targets this

segment with Selfie Phones, which has models like Juice, Amaze and Pulse

Women: Micromax targets women with the Bling model, which attracts this segment mainly through

the design and aesthetics of the mobile phone

Rural Segment: Micromax targets the rural segment through feature phones such as X Series and CG

series, which provide basic functions and a long battery life. It also offers low-end smartphones to

target this segment

Tech Savvy: Micromax targets this segment through smartphones with the Android operating system

10.3. Positioning

Micromax positions itself as a brand that offers good quality and functionality at affordable prices

The company differentiates itself from its competitors by:

Providing low end smartphones to cater to the rural segment

Being the first brand to launch a smartphone specifically targeted at women

Providing a mobile phone model with a 30-day battery backup

The points of parity between Micromax and its competitors are as follows:

It offers Octa Core processors, which helps in quick processing of data

It offers mobile phones which support regional languages

It offers smartphones with Android OS

11. Marketing Strategies

Starting as a software development company, Micromax progressed to embedded technology and moved

onto hardware with a thoughtful entry into mobile handset manufacturing. The motto of the company in

entering the mobile phone market against the 4-5 multinational giants was ‘create a product which can help

the consumers in day to day life’ and the company launched its product with a ONE month battery backup

phone as against the battery backup of 2-3 days that others provided. Over the years, Micromax followed its

goal of finding the untapped and unaddressed; Innovation was made the Ethos of the organisation. Micromax

decided to be an integrator in the vast and growing mobile phone market. The first innovation of the

company was a mobile phone with ONE month battery backup that was ideated while travelling in Rural

India and realising that no one is meeting the requirement of the huge rural population. Micromax made

10,000 phones which were sold in less than 10 days without any advertisement, at least partially fulfilling the

very real need gap in the market. It is this innovative bent of mind which made Micromax the first to

introduce both the 30-day battery recharge followed by a dual SIM phone with a single baseband, given the

huge number of telecom service providers in India. From feature phone to smart phone, Micromax moved

fast, and realised that speed is always important.

11.1. Marketing mix of Micromax

Micromax offers a variety of products which include mobile phones (smartphones, feature phones, phablets),

tablets, laptops, consumer electronics including air conditioners and LED TV, and IT related products such

as monitors and data cards. For the purpose of this project, we are focusing on the mobile phone category of

Micromax.

11.1.1. Product in the Marketing mix of Micromax

Micromax’s extensive range of mobile phones (Canvas

series, Unite series, Bolt series, etc.) with different features

serving a wide variety of customers has managed to cater to

different needs of customers.

It offered mobile phone with a long battery life of around 30

days, which mainly targeted the rural customers.

With the android OS in its smartphones, Micromax targeted the urban customers by providing it at

affordable prices. It also develops models that are at par with its competitors from the phone’s

functional point of view. The company has launched many types of dual-SIM phones, android

phones.

With the launch of its latest Unite series smartphones which supports a variety of Indian languages at

the system level it aimed to target the untapped non-English speaking consumers.

Micromax Informatics Limited is currently the 10th largest mobile phone player globally and is

currently the 2nd largest smartphone company in India.

Micromax was chosen by Google for the launch of android one, a low priced, high performance

smartphone as manufacturer and retail partner.

Micromax had the customer centric approach. It took the inputs from the customer and designed and

developed its products accordingly. (Eg. Canvas 3, Canvas 4)

11.1.2. Place in the Marketing mix of Micromax

During its initial stage, Micromax targeted the rural market with its product Micromax X1i which

had 30 day battery backup unlike its competitors. It also offered incentives to distributors who paid

them in advance. It also entered the urban market with the android OS. Placing products in the

popular retail stores like Croma and on online websites, Micromax has earned a good revenue.

11.1.3. Promotions in the Marketing mix of Micromax

Micromax had signed Akshay Kumar as the brand ambassador of Micromax to attract customers. It

also created awareness among customers about the 30 day battery backup and dual SIM phone. It

launched its bling model focusing mostly on women with Twinkle Khanna as the brand ambassador.

It has sponsored IPL matches and has bagged the rights as the title sponsor for Asia T20 cup. It

signed Hugh Jackman as the brand ambassador with

an objective to expand its footprint across the globe.

The decision did not yield the expected results.

Online marketing, billboards were also used by

Micromax as a part of its promotional activity. It

focused on movie, music and the cricket.

The ‘Micromax Unite Cricket Anthem’ recreated

from the Hindi song, ‘Chale Chalo’ from the iconic cricket movie, Lagaan garnered the attention of

the youth. It also gained popularity among the youth by associating itself with MTV, Sunburn, music

concerts.

11.1.4. Pricing in the Marketing mix of Micromax

Micromax has priced its products at an affordable price to its customers. Penetration pricing strategy

has been adopted by Micromax for its both rural and urban market. Pricing was relatively low

because of supply chain considering the import of some of its components from the Chinese market.

Providing the same functions for a mobile with lower cost has helped Micromax outperform Nokia

and Samsung, gaining the second position in the smartphone category in India. This has also helped

it raise its market share.

12. Marketing Orientation

According to Kotler (1977), an organization needs to be market oriented. In order to do that, he suggested a

few pointers that any organization should follow. According to him market orientation includes:

A consumer centric philosophy,

An integrated marketing focused organisation,

Adequate market information,

Strategic orientation,

Operational efficiency.

Micromax’s growth and surge to one of the leading manufacturers of the mobile handset industry in India

could be attributed to a sound marketing strategy and marketing orientation of the company. An astounding

growth rate of Micromax from 2008 (as a new entrant in the market) to ousting the existing market leader

and gaining the maximum market share by 2012 is a testament to a fine combination of both marketing

strategy and orientation. In this section we attempt to analyse the core values of Micromax and how it is

aligned with its goals and consumers’ desires, needs and requirements.

12.1.1. Customer Centric Philosophy: Micromax’s core value is ‘Customer First’. Keeping in line with

this value, Micromax has always catered to its target customers with its low lost, durable and

innovative models. It has adopted the philosophy of ‘leave no segment’ and was one of the first

handset manufacturers to exclusively design a phone for women. Apart from that, it has a diverse

product line targeting the dynamic youth (through features such as better display, advanced RAM

and processor, phones meant for gamers, amateur photographers) as well as the professionals

(Canvas 6 series, QWERY series). They have been working hard to improve the after sales

experience for their customers.

12.1.2. Integrated Marketing: As discussed under marketing strategies, Micromax has effectively aligned

its goals and objectives keeping the 4Ps in mind.

12.1.3. Adequate Market Information: As a new entrant, to challenge market leaders such as Samsung and

Nokia, adequate market information is necessary in order to take them head on. Capitalizing on the

information such as growing rural market, consumers’ preference to low costs and innovative

designs, Micromax was able to take on the market leaders and build on its market share.

12.1.4. Strategic Orientation: Strategic Orientation of Micromax is discussed under the SWOT Analysis

(Annexure A)

12.1.5. Operational Efficiency: Micromax has attained superior operational efficiency through its effective

supply chain and operation management strategies. As discussed under value chain, over the years, it

has opened up factories in China and Taiwan to meet lost cost production expenses. They have also

invested in R&D units in India and planning to expand in the near future. This also gives Micromax

an advantage over its competitors to align to its core values of Innovation and Execution.

13. Product Life Cycle

Any product launched by a company has a limited life. After its launched, it goes through different stages,

each stage posing different challenges, problems and opportunities, each stage requiring different marketing

strategies, as the profits earned by the company first increases, and then eventually either become stagnant,

or fall. These stages can be identified as Introduction, Growth, Maturity and Decline. And all these four

stages are collectively called the Product Life Cycle (PLC).

The Product life cycle of Micromax has passed the Introduction stage and reached its Growth stage. Maturity

stage and Decline stage is yet to come for Micromax. Below, we explain all of these four stages of Product

Life Cycle with respect to Micromax:

13.1.1. Introduction Stage

As mentioned earlier, Micromax got into the business of mobile telephones in 2008, well after its

competitors launched their first mobile phones into the market. Therefore, even though this period is

characterized by slow sales growth with probable negative profits, Micromax was able to overcome the

difficulties by adopting certain strategies as elaborated below:

Product – Micromax came into the market with innovative products offering impressive features like 30-day

standby battery life, aspirational QWERTY keypads, dual SIM etc. at a much lower price than its

competitors. Every Micromax product could differentiate itself from its competing products as better and

cheaper, in a market flooded with mobile phone handsets and still launching more every other day.

Price – Keeping in mind that the consumers in India do not have a high purchasing power, Micromax offered

entry-level and mid-range products ranging Rs 1,800 to Rs 2,400.

Place – As the urban markets in India were already dominated by Nokia and other brands, Micromax decided

to focus on rural markets for the first year or so and then proceed to other markets.

Promotion – Micromax mobiles endorsed Akshay Kumar, a big brand

in himself, to help attract customers. Micromax also adopted an

aggressive advertisement strategy to attract customers.

In this stage, advertising, events and experiences, and publicity have the

highest cost effectiveness followed by personal selling and direct

marketing. Advertising, Marketing and Distribution expense of

Micromax increased from Rs.13.3 million in FY2007-08 to Rs. 1,065.3

million in FY2009-10. Corresponding to this, Sales increased from Rs.1326.8 million in FY2007-08 to Rs.

15,659.2 million in FY2009-10 and Profit after tax increased from Rs.156.9 million in FY2007-08 to Rs.

2,003.1 million in FY2009-10.

13.1.2. Growth Stage

This period has been characterized by rapid market acceptance and substantial profit improvement.

Micromax products are currently at this stage in its PLC.

Product – Micromax is still as innovative as before and coming up with features like T.V. remote control etc.

at the same time retaining as well as improving its original features.

Price – Since the beginning, Micromax has been able to offer its products at a cheaper price with respect to

its competitors.

Place – Micromax has now moved on to other segments of the market (from the rural market). Distribution

channels have increased in number and many more smartphones and other high end phones have been

launched.

Promotion – Micromax sponsored IPL India – South African Series. Of its product Bling, Twinkle Khanna

has been launched as the brand ambassador.

In a 2013 commercial, Hugh Jackman became the brand ambassador for Micromax’s flagship and first

smartphone, Canvas Turbo A250. By 2014 Q3, Micromax was tenth largest smartphone vendor in the world.

Future Plans and Expectations – In April 2016, Micromax announced that it has plans to invest in India, Rs.

20,000 million on development of its manufacturing facilities along with establishing a mobile phone

ecosystem. It plans to move on from assembling devices (tablets, mobile handsets etc.) to manufacturing

accessories and spare parts for its products, with an aim to achieve high-precision components for its

devices. Micromax revenue was reported approx. Rs.120,000 million for FY2015-16 and it is expected to

grow 25% to Rs.150,000 million during FY2016-17.

13.1.3. Maturity Stage

This period is characterized by slowdown in sales growth and decline in profits because of increase in

competition. Micromax has not reached this stage as its sales and profits are still growing significantly. This

stage is further divided into three phases: growth, stable, and decaying maturity. In the first phase, the sales

starts to slow. In second, sales per capita flattens because of market saturation and in the third, decaying

maturity phase, absolute level of sales decline and customers begin switching to other products. Three ways

of change the course are Market, Product, and Marketing Program Modification.

13.1.4. Decline Stage

In this period sales decline to a point where profitability will reduce and eventually erode leading to the end of the

product in the market.

14. Forecasting

Measurement of opportunities

The Indian handset market has seen a significant growth over the past couple of years. The market has

increased from 110 million handsets in 2008 to 305 million handsets in 2015.The handset market had seen a

couple of major shifts in consumer preferences. Currently with the introduction of smartphones the consumer

preferences are clearly shifting towards smartphones.

This astounding growth phase had significant positive effects on Micromax. Micromax had become one of

the leading handset producers in the Indian market due this growth phase. Handsets sold by Micromax had

grown by around 19% in the year 2015-16. Currently, the handset market is filled with opportunities from

both the urban and the rural geographies.

Large demographic advantage – A large part of the targeted customers of Micromax consists of

the youth. India’s population consisting of a large part of population between the age of 15 – 60, and

the population that is entering this age category is increasing which results in an increasing customer

base of Micromax.

Reliance Jio – With the introduction of Reliance Jio, the improved connectivity across India and the

low cost to the subscribers would definitely increase the rural penetration of the mobile handset

market. The market tele-density of rural areas is around 60% and is expected to increase significantly

over the upcoming years due to the vast connectivity of Reliance Jio.

Growth of Smartphones – In the recent years the consumers opting for smart phones has

significantly increased from 20 million units in 2011 to about 75 million units in 2015.Micromax

with its varied categories of smart phones and high user experience would be able to garner a large

part of the rapidly growing smartphones

Make in India – With the increased thrust of Make in India, Micromax has invested over 1000 crore

in the development of factories in Rajasthan and Hyderabad. These factories have capacity of

producing over 500,000 units a year. With the promotion of the ‘Make in India’ and the increase

emphasis on the consumption of Indian made goods, Micromax would have an added advantage in

increasing sales.

Forecasting technique – In order to forecast the sales of Micromax we suggest a trend analysis for

forecasting. The mobile handset market being in its growth cycle and expected to be in the growth phase for

next 5 years, we feel that a trend analysis technique to estimate the growth is justified. Additionally, the

growth rate to forecast the sales would have to account for the various opportunities mentioned above in

order to determine the suitable growth rate.

15. Competitive Marketing Strategy Assessment

Micromax

Samsung

LG

Intex

Karbonn

Lenovo

Category Indian International International Indian Indian Chinese

Market Share 1.8% 21.3% 4.3% <1% <1% 4.2%

Brand

Ambassador

Akshay Kumar,

Twinkle Khanna,

Hugh Jackman,

Chitrangada Singh

Aamir Khan John Abrahim,

Genelia D’Souza

and

Farhan Akhtar Virender Sehwag,

Gautam Gambhir

Ranbir Kapoor

Marketing

Strategy

Innovative

features at low

price, “Leave No

Segment” Strategy

Wide variety and

Brand recognition

Tie-up with

Google for Nexus,

leveraging LG’s

household brand

image

Traditional

Marketing and

focus on actual

sales figures

Sponsored ODI

series – India vs

Sri Lanka

(Karbonn Mobile

Cup)

Flash sales and

innovative

features

(Motorola)

Innovative

Smartphone

Features

Mosquito

repellent, TV-

remote control,

Cynogen Mod

Design,

Aesthetics and

cutting-edge

technology

Brighter Display,

better battery and

vernacular support

Durable

Free-call Nanu

(for 2G areas)

Nothing Different Fast charging

technology

Brand

Recognition

Not as popular as

Samsung or LG

Very High High Very Low Very Low High

Quality High Very High High Good Good High

Performance Good High High Low Low High

Reliability Good Very High High Very Low Very Low High

Drawbacks Low Brand

Recognition

- Limited variety

and restricted to

high price range

Limited presence

in south and

Low Brand

Recognition

Brand

Recognition

16. References

1. http://www.india.com/whatever/micromax-everything-you-want-to-know-about-the-top-

mobile-vendor-of-india-111651/

2. http://dazeinfo.com/2016/05/04/smartphone-market-india-q1-2016-samsug-micormax/

3. http://www.micromaxinfo.com/about-us

4. http://journals.dbuniversity.ac.in/ojs/index.php/JoMP/article/view/191

5. Prowess IQ

6. http://www.livemint.com/Consumer/NJWeTcXovj8YC7d7VN2TSN/Micromax-worlds-

10th-largest-mobile-phone-brand-in-Q1-Gart.html

7. http://www.fonearena.com/blog/100821/lenovo-india-picks-ranbir-kapoor-as-its-brand-

ambassador-for-smartphones.html

8. http://indianexpress.com/article/technology/technology-others/after-selling-3-5-mn-

smartphones-intex-eyes-top-3-spot-in-india/

9. http://www.business-standard.com/article/companies/lg-readies-for-smartphone-battle-in-

india-113111901305_1.html

10. http://economictimes.indiatimes.com/tech/hardware/micromax-once-a-rising-star-

struggles/articleshow/51377897.cms

11. http://www.ey.com/Publication/vwLUAssets/EY_-

_Handheld_devices_and_handsets/$FILE/ey-speeding-ahead-on-the-telecom-and-digital-

economy-highway-chapter-4-6.pdf

12. http://www.rediff.com/business/slide-show/slide-show-1-tech-how-micromax-used-china-

to-build-its-business/20130204.htm#5

17. Annexures

17.1. Annexure A (SWOT Analysis)

Strengths

•Low, affordable prices.

•Innovation as a core value of the company (reflected in the product line)

•Speed of Innovation: Regularly comes out with new and innovative models of mobile phones.

•Effective Marketing Channels through a strong retailer base in India. Exploring new markets in Russia and Middle east.

•Effective supply chain with a wide base of Suppliers and manufacturing units in India and China

•Scale of Operations of Micromax is huge and is in line with their growth strategy.

•Catering the lesser tapped and growing rural handset markets in India.

Weaknesses

•After Sales service had always been a weak area for Micromax. Although the company grew exponentially soon after its entry to the market in India, after sales service was poor. Micromax has been closely improving its after sales experience for the consumers ever since.

•Consumer perception of the brand in urban markets as a cheaper, low quality brand.

Opportunities

• Improving Market Penetration - Although primarily focussing on low, cheap, high durability phones catering to the rural markets, Micromax still has ample opportunities to tap into the fast growing market.

• International Market Penetration -Micromax has already started venturing out to International markets such as Russia, Middle East and ASEAN countries and has a lot of scope of expanding their businesses in the Global Markets.

Threats

• Large numbers of Indian and Chinese players such as Xiaomi, Lenovo, Lava, Oppo, Intex etc are entering and challenging the market share of Micromax based on the similar business model.

• Consumer perception in the urban markets could be another threat with the rapid urbanization and increasing income levels of the target markets like India, which may result in customers prefering more branded competetitors' products.

SWOT Analysis

17.2. Annexure – B (Handset Manufacturers’ Market Share)

17.3. Annexure C (Product line of Micromax in Feature Phones)