ASP Assignment

Advertising Strategies Employed By MicroMax Mobiles

By

Akshay Karawal A0102211230

MBA-M&S Class of 2013

Submitted to Ms. Aparna Goyal

at AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA

INTRODUCTION

Micro-Max Mobiles

Company Overview

Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across the

country and international offices in Hong Kong, USA, Dubai and now in Nepal. With a futuristic

vision and an exhaustive R&D at its helm, Micromax has successfully generated innovative

technologies that have revolutionised the telecom consumer space.

Mission

Micromax is on a mission to successfully overcome the technological barriers and constantly

engender “life enhancing solutions”.

Vision

The company’s vision is to develop path-breaking technologies and efficient processes that

incubate newer markets, enliven customer aspirations and continue to make Micromax a trusted

market leader amongst people. The Micromax ideology stems from its rooted belief in

‘Innovation’ and delivering “nothing short of the best”.

Idea Initiation & Success Story

Micromax is a challenger brand in the highly competitive mobile handset market. This Indian

firm is shaking up the market dominated by MNCs. Micromax was founded in 1991 by Rajesh

Agarwal . Micromax in its original avatar was a distributor of computer hardwares. In 1998,

three more people Sumit Arora, Rahul Sharma and Vikas Jain joined Micromax as co-

founders.The company branched out from a mere distributor to a marketer of telecommunication

equipments.

One of the highlight of their distribution strategy was that Micromax managed to make these

dealers pay in advance by offering them more margins. Marketers will vouch that the most

difficult part in managing distribution is the payment collection part. According to the news

report, Micromax managed this hurdle through this strategy of more margins for advance

payment. It is not a new strategy to offer such kind of discounts for advance payments (cash

discounts), but to make a retailer accept such an offer is indeed a remarkable feat (if the Forbes

report is true).

Unlike many challenger brands, Micromax was careful in its product strategy. Although all

Micromax products were towards the lower end of the pricing spectrum, the brand was focusing

on adding more features at a reasonable price . The focus was more on value than price. What I

have noticed while going through their product range was that there was some USP in their

products which offered more value. I think , that value orientation with a clear differentiation

was a significant factor that aided the significant growth of this brand in Indian market.

The company in their website claims to have invested heavily in the product development.

The brand boast of launching many firsts in the market like:-

30 day battery life

Affordable QWERTY phones

Affordable Double Sim etc

Besides the focus on product development, Micromax has invested heavily in brand building.

The brand is one of the big spenders in the current IPL. Micromax has centered much of its

brand building exercise around cricket. It was one of the principal sponsors in many of the

cricket tournaments.

Most of the brand promotion for Macromax is centered around products. I havn't seen a

corporate brand building campaign from Micromax. The ads are for individual products

highlighting the product features and USPs.

Micromax has the tagline " Nothing Like Anything " which initially appeared confusing. Perhaps

the brand wants to convey that every product from Micromax has something unique. It is not just

like any other product.

The brand's promotions , although heavy, is a big hit. Some of the campaigns are good but most

are excellent. Sometimes they are a failure. For example , the Micromax Facebook ad was

outright disgusting. Most of the campaigns like Gravity, MTV , EEZPad was very ordinary basic

ads. There was no brand building theme behind those ads. They talked about the product and that

is it. I feel a visible lack of creativity behind those ads.

In a big marketing move, Micromax roped in the Bollywood Action hero Akshay Kumar as the

brand ambassador. This move is going to boost the brand recall of Micromax to new heights.

Akshay Kumar has strong equity both in urban and rural markets. The association with such a

big star will also have a positive impact on the image of Micromax. The brand can now

overcome the perception of a low price product.

Micromax Mobile-“Nothing Like Anything”

Akshay Kumar is like wine, the older he gets the better he is whether in acrobatics or even in his

histrionics, except I must say in this ad.. This one which makes him laugh like an obtuse idiot

and that too for about 30 seconds in a 45 second commercial is just too much to endure.

Whatever the product is and whatever the new Gamolution thing that they want to sell (like

SKINNOCENCE this is a new ad word GAMOLUTION) 

This ad irritates, first by the absolute lack of any bit of creative spirit, second for the stupid laugh

which lurks like the one you get to hear in mad houses and third rate Hindi films and third and

most important, by the sheer senselessness with which this nerve breaker is aired again and again

as if they can bore, irritate and torture people to buy their stuff while people watch IPL 3 in all

peace and excitement. 

I even know of people who said that if IPL 3 so far has any irritant so far, it is this laughing ad. 

The mobile handset market already has players such as Nokia, Motorola, Samsung and Sony

Ericsson, and these players already enjoy great allegiance and loyalty among consumers..

Unquestionably that is….. It would have been a big challenge for any new player (this guys are

new in this market) to shift this loyalty to them.. a lot of work should have gone in …..A dual

GSM-dual standby QWERTY keypad phone at less than Rs 5000, and such stuff that Micromax

offers are definitely a thing that could have changed the game had they got into the right game….

If their advertising is any indication, it seems quite unlikely… Some of their ads are good

enough to sit and watch (done then by Draft FCB) but the Akshay one is for sure a de-seller and

the game seems to be lost even before it has begun …

Big brands, big budgets… Niching seemed to be the only option and guess they were into it but

with an advertising budget of Rs 50 crore plus as per industry sources, the blitzkrieg is to

continue and even aggravate through other media as well.. I hope they don’t carpet bomb me

from the likes of Facebook and twitter… 

A big thumbs down to Lowe (the agency) for the creative impotency, and sub-primary school

level imagination and a ‘shame on you’ to the media planner (who cares the name) for this

nothingness which proclaims ‘nothing like anything’ as its tag line.. How true… !!!

Types of Advertisements-Micro Max

1) Print Advertising - Newspapers, Magazines, Brochures, Fliers

Print media has always been a popular advertising option. Advertising products via

newspapers or magazines is a common practice. In addition to this, the print media also

offers options like promotional brochures and fliers for advertising purposes. Often,

newspapers and magazines sell the advertising space according to the area occupied by

the advertisement, the position of the advertisement in the publication (front page/middle

page, above/below the fold), as well as the readership of the publications.

2_) Outdoor Advertising - Billboards, Kiosks, Trade-shows and Events

It makes use of several tools and techniques to attract the customers outdoors. The most

common examples of outdoor advertising are billboards, kiosks, and also events and

trade-shows organized by the company. Billboard advertising is very popular.

3) Broadcast Advertising - Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes several

branches like television, radio or the Internet. Television advertisements have been very

popular ever since they were introduced. The cost of television advertising often depends

on the duration of the advertisement, the time of broadcast (prime time/lull time),

sometimes the show on which it will be broadcast, and of course, the popularity of the

television channel itself. The radio might have lost its charm owing to new age media.

Scope of Micromax Mobile Into Rural Markets

According to reports of the Telecom Regulatory Authority of India (TRAI) there are

approximately 500 hundred million people in India who are yet to have a mobile phone.

While the wireless tele-density in the urban areas have crossed the 100% limit and reached a

level of 150%, the corresponding figure for the rural areas is merely 33%. The Government

of India has plans of increasing this level of rural tele-density to 60% by the year 2017 and

finally to 100% by the year 2020. Although it might seem to be a difficult target with most

of the rural population living under poverty levels, it is not an impossible target to achieve.

MICROMAX RURAL INITIATIVE

It was in 2008 that Micromax ventured into the mobile handset market. The brand wanted to

create a base before taking on the large players . Hence as a go-to- market strategy,

Micromax concentrated on the rural market first. It was a different move altogether since

most of the marketers tend to concentrate on the urban markets then move to the rural

markets.

Micromax launched its first phone in the rural market with a very unique USP- 30 days

battery standby time. The brand was launched from a consumer insight that most of the rural

households do not get enough electricity to recharge phones on a daily basis . Hence a phone

with a 30 day battery standby would be a worthwhile differentiation. The first product was a

big success. The first product Micromax X1i priced at Rs 2150 was lapped up by rural

market.

The success of X1i enthused the company to go aggressively into the market. But tapping

the rural market is not an easy task. There is severe logistics pressure in servicing these

markets. One of the first things that Micromax did was to establish the distribution network .

According to a report in Forbes India ( March 5,2010), Micromax created a distribution

network comprising of 34 super distributors, 450 distributors and around 55,000 retailers.

The brand could also take advantage of the inroads made by other brands into advantage.

MICROMAX MOBILE AD FOR RURAL MARKETS

Micromax X259 solar phone launches in India at Rs. 2,499

Micromax has launched its first 'green phone', called X259. Priced at Rs. 2,499, the

Micromax X259 comes with a solar panel that allows users to charge battery using solar

energy. The company says its solar-powered mobile phone will be highly useful in rural

areas of the country where power cuts are high.

Back in April, Micromax had revealed its plans of launching a phone with built-in solar

charger. The Micromax X259 is a dual-SIM phone, featuring a 2.4-inch display with

240x320p resolution and 118mm X 50mm X 16mm dimensions. It has a 0.3MP camera.

Micromax's X259 multimedia features include audio and video player and FM radio with

recording. The device supports GPRS and Bluetooth. The X259 comes with a 1,000mAh

battery, which is rated to deliver 4.5 hours of talktime and 200 hours of standby time.

Specifications of the Micromax solar phone are apparently nowhere close to the

smartphones we have in the market currently. But then solar phones is quite an innovative

concept, especially for countries like India grappling with acute electricity shortage.

Hopefully, manufacturers come up with solar-powered smartphones in India in near future.

It's notable that Micromax's X259 isn't the first solar phone in India. In 2010, Vodafone had

launched a solar powered mobile phone called VF 247. The Vodafone device, however, cost

much cheaper at Rs. 1,500. Samsung India had also introduced a solar phone in 2010 called

Solar Guru E1107 with a price tag of Rs. 2,799. 

Innovation and Initiations of Micromax Mobile

Micromax has a lot of interesting and thoughtful products to its credit on their versatile

product portfolio. It was the first to introduce:

1. Handsets with 30 days battery backup

2. Handsets with Dual SIM / Dual Standby

3. Handsets Switching Networks (GSM - CDMA) using gravity sensors

4. Aspirational Qwerty Keypad Handsets

5. Operator Branded 3G Handsets

6. OMH CDMA Handsets, etc.

With a 360 degree advertising and marketing strategy sketched out, the company has an

optimistic outlook for the telecom consumer space. Currently present in more than 40,000

stores across the country, the company plans to have an aggressive market incursion to reach

out to its customers through 70,000 operational stores in the coming year. One of the major

aspects that contribute towards the substantial monthly growth of Micromax is its 80% sales

in the rural areas. After building a strong presence in the rural market, where the prominence

of both subscribers and operators is rapidly increasing, Micromax is now progressively

moving towards establishing its foothold in the competitive urban towns as well. Micromax

recently ventured into the telecommunication industry with an end-to-end solution of Fixed

Wireless Devices and Wireless Data Cards. In the year 2008, after delivering upon the

technology of fixed wireless-powering desired products, the company forayed into one of

the most predominant genres of telecommunication – Mobile handsets. Since then

Micromax has received commendable response for its unique and interesting handsets.

Innovation, Cost-Effective, Credible and an Insightful R&D are given high emphasis at

Micromax in the telecom vertical. Micromax as a ‘Brand’ in the Media Posted: Monday,

February 8, 2010. 10:45 PM IST on livemint.com (website of the famous B- newspaper):

“Micromax challenges Samsung, LG in mobile phone stakes”. The news further elaborates

that Citigroup Global Markets Inc. has confirmed Jain’s assertion in a 3 February report,

which said Micromax had a 10% market share, putting it at No. 3 behind Nokia and

Samsung, which had 12-13%. The success of Micromax prompted US private equity group

TA Associates to buy “less than 20%” of the firm for around $45 million (Rs210 crore

today) in December, valuing it above $225 million and indicating confidence in its growth

potential. Jain estimated that the firm will close the fiscal with sales at around Rs1,500

crore.The Brand Micromax has now started gaining acceptability not only with the

consumers but also with the images, which now has started portraying it with a positive

image. Whereas increased consumer sales support the acceptance among the consumes,

following quoted are some extracts from the news reports that show that media is also

looking up to this brand.

Micromax seems to have taken a breath of fresh air and totally remade their presence. From

their previously drab website, they’ve moved into a much more vibrant state and there’s

clearly a significant difference in their mobiles as well, at least cosmetically(model X360).

Micromax has also tied up some pretty big brands like Yamaha for enhancing their audio

experiences and the X360 comes with an MTV branding and Micromax spent heavily on

branding during the recent India exclusive content.

Micromax was recently in the news for its alliance with BSNL. State-owned Bharat Sanchar

Nigam Ltd. entered into an agreement with Micromax for sale and distribution of 3G data

card to its subscribers. As per the agreement, Micromax would sell and distribute 3G data

cards in the form of USB to the BSNL subscriber in various cities. In another venture,

Micromax launched the India’s first operator branded 3G mobile phone H360, in association

with MTNL. The H360, pre-loaded with applications to enable video calls, mobile TV,

social networking, wireless business solutions through web browsing and other Internet-

based services. Product Differentiation So, as listed Micromax has been quite effective in

the marking a difference with almost every product that it launched. The range that they

have covered varies quite a large variety. Right from the handsets with 30 days battery

backup, dual SIM, handsets switching networks (GSM - CDMA) using gravity sensors,

aspirational QWERTY keypad handsets to operator branded 3G handsets to the most

exciting OMH CDMA Handsets, etc. Every product of Micromax had the potential to grab

the attention of media as well as the consumers.

Image Differentiation & Threat to Competitor

From Rural to the Urban grounds Micromax specialized in entry-level and mid-segment

handsets priced between Rs1,800 and Rs2,400 when it started selling the devices in 2008,

confining itself to small towns and rural areas in the first 12-18 months. Encouraged by its

success, the firm expanded to larger cities and now has a distribution network of 55,000

retailers, which it plans to scale up to 70,000 by the end of March as part of its strategy to

raise sales to 1.5 million handsets a month. The journey is also now spans through the wide

range that Micromax plans to offer to its consumers in the coming period. Micromax is

planning to expand its range in keeping with new market demands. It is readying several

high-end handsets, including phones that will run on Google’s Android and Microsoft’s

Windows Mobile operating systems.

It has launched Fun-Book which is an Android phone, and is a great competitor to other

Samsung Galaxy Phones.

Channel Differentiation Micromax has invested Rs100 crore to set up a plant in Baddi in

Himachal Pradesh as it feels outsourcing manufacturing completely leaves the door open for

supply-side uncertainties. Production will be scaled up from an initial 50,000 per month if

everything goes right, by the third phase in March 2013, the Baddi plant will be making

about 500,000 handsets. If the plant isn’t able to cope with the numbers, the fallback plan is

to acquire a facility in South Korea, Taiwan or China, he added. Nokia has a plant in

Chennai, established in 2006 at a cost of around $150 million, from where it also exports.

Summary Till very recently, Micromax was seen as a second grade brand with hardly any

brand value. But with the recent reports listing the figures in the company’s favour as well

as the huge branding done by the company itself along with the interesting product portfolio

has taken the brand to a respect position. And the position is still is very promising for the

future. For a company which still has not been listed on any exchange, a turnover of about

1500 Cr. can be termed as huge. Certainly the company has the potential to be a threat to the

foreign giant as it has been successful in studying the Indian mindset better.

The success of Micromax prompted US private equity group TA Associates to buy

less than 20% of the firm for around $45 million (Rs210 crore today) in December,

valuing it above $225 million and indicating confidence in its growth potential.

MARKETING MIX:4 P’S

1. Product

Micromax has been effective in creating a splash with most of the products launched. The

range that they have covered varies quite a large variety. Right from the handsets with 30

days battery backup, dual SIM, handsets switching networks (GSM -CDMA) using gravity

sensors, aspirational QWERTY keypad handsets to operator branded 3G handsets to the

most exciting OMH CDMA Handsets, etc.

Micromax in fact has the ability to catch the attention of consumers in a market where there

is a new set almost every month

2. Price

Micromax specialized in entry-level and mid-segment handsets priced between Rs1,800 and

Rs2,400 when it started selling the devices in 2008, confining itself to small towns and rural

areas in the first 12-18 months. Encouraged by its success, the firm expanded to larger cities

and now has a distribution network of 55,000 retailers, which it plans to scale up to 70,000

by the end of March as part of its strategy to raise sales to 1.5 million handsets a month.

3. Place

Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across

the country and international offices in Hong Kong, USA, Dubai and now in Nepal.

Micromax has invested Rs100 crore to set up a plant in Baddi in Himachal Pradesh as it

feels outsourcing manufacturing completely leaves the door open for supply-side

uncertainties. Production will be scaled up from an initial 50,000 per month.

4. Promotion

Having gained traction, Micromax is also working on a strategy to create awareness in the

metros, which includes tying up with MTV for co-branded phones.

Micromax has also tied up with a Bollywood celebrity – Akshay Kumar as brand

ambassador.