india part 2
Post on 26-Jan-2015
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Diana Berger
Larry Cenotto
Target Market
• Young professionals in predominantly urban settings– India’s average age: 26
• Exploding cellular market– 58 million current users (up from 5.5 million in 2000)– Adding 2.9 million new cell phone users a month– 100 million more expected next 2 years
• Growth similar to China’s• Tech Savvy• Demanding latest technologies
Cellular Coverage in India
Cell Phone Market Growth
Growth in Target Market Size
Marketing Objectives
• Focus on gaining market share over immediate profit– Market share currently around 9%– Current market saturation
• Segment the market– High end phones– Economical phones
• Build brand loyalty
Indian Consumer Behavior Analysis
• High degree of value orientation• High degree of family orientation
– Extended family as well as immediate
• Selective on quality of products and services• Price sensitive• Knowledgeable about
technology, products,
and market conditions
Indian Consumer Behavior Analysis
• Urbanization in India– Showing positive attitudes towards Western products– More open-minded and experimental than before– Growing desire for self-gratification (Hedonism)
Indian Consumer Behavior Analysis
• Different segments of Indian consumers– Socialites
• Shop in specialty stores• Spend a good amount of money on
luxury goods• Very brand conscious
– Beneficial for Motorola
Indian Consumer Behavior Analysis• Different segments of Indian consumers
– Conservatives• Reflection of traditional Indian culture • Cautious about purchases• Focus on saving• Look for durability and functionality
– Rich• Status conscious• Spend more on leisure and entertainment activities
Our Product as an Innovation
• Well accepted by target market– High functionality
• Allows families to stay in touch• Photos, music, etc.
– High status good– Brand name– Phones as status symbols
Product Modification
• Cell phone itself doesn’t need to be changed• Software differences
– Different languages in some regions
Product Comparison
• Main competitors: Nokia, Samsung, Ericsson• High R&D investments (10% of revenue)
– Slew of new products– Mp3 technology
• ROKR with iTunes
Technical Support & Services Required
• Some required due to technological nature– Telephone customer service center – Online service center – “Brick and mortar” stores
Typical Industry Distribution Patterns
• Most entrants import– Relaxed government import duties
• Decreased illegal channels of distribution• Lower costs = Lower prices = More sales
• Most still wary about producing in India– Nokia, Motorola are testing the waters
Distribution of Our Product
• Recent Alliance with Bharti Teletech– Opens up Bharti’s 200 distributors & 12,000 retail outlets – Over 11,000 channels of distribution
• Ship parts to India by sea– Cheaper than flying– Bharti assembles product
• Cheaper wages in India
Our Promotional Methods
• Build trust in brand among Indian consumers– “Made in India” labels– Product launches in India
• ex. Motorola L6– Long stay in India
• Indians appreciate loyalty and respect
Our Promotional Methods
• Cricket promotions– National sport– Universally popular throughout India– Offer tickets to matches or other
contests
• MTV Moto-Alert– Offers downloadable ringtones,
contests, giveaways– Attracts youthful teenage audience
Competitors’ Prices
• Range anywhere from 2,000 to 40,500 Rs. ($43 to $875)
• Dropping prices– Increased competition– Lowered costs– $20 cell phones possible in future
Our Pricing
• High end models– Marketed towards tech savvy
consumers particular about having the latest technology (status symbol)
– Between 15,000 and 22,000 Rs. ($320-450)
• Economical models– Marketed toward first time buyers
more conscious of buying an phone to serve their basic communication needs
– Between 1,150 and 1,500 Rs. ($25-33)
Terms of Sale
• CFR, or cost and freight – We must arrange and pay for the main carriage of our product,
but do not assume the risk of carriage – Buyer bears the cost of insurance – Since import duties have been lowered, we can therefore import
our product at a much lower cost than ever before
Methods of Payment
• Letters of credit– Offers the greatest degree of protection for seller – Buyer’s credit risk shifted to the bank issuing letter of credit – Both interests of the seller (us) and the buyer protected – Lot of work, but offers a lot of protection
• Irrevocable letter of credit strategy – Once we have accepted the credit, the buyer cannot alter it in
any way without our permission
• Requiring the buyer to confirm the letter of credit through a bank of the United States
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