8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 1/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

19th November 2011

[http://4.bp.blogspot.com/-Q6flcCy33Pk/TsaHfwO-17I/AAAAAAAACfg/-0TrsTH8XKs/s1600/179859%252Cxcitefun-

micromax-bling-q55-mobile-1.jpg]

[http://3.bp.blogspot.com/-

IUp6hi9FMKA/TscepzitzLI/AAAAAAAACgI/AbQ558apIU0/s1600/micromax1.jpg]

Gurgaon based Micromax Mobile is no ordinary brand and the way it is growing, soon it will find a place in

text books of all MBA schools in India. Read four facts about the brand and decide for yourself.

1. It was launched in 2008 and within 3 years has become the No. 3 player in the Indian Mobile

Handset market (source [http://www.business-standard.com/india/news/micromax-growsfast/450416/] ) behind

Nokia (39%) and Samsung (17%). It has a share of 8%.

2. It's sales turnover was around Rs. 350 crores in 2009-10 which skyrocketed to Rs. 1600 crores in

2010-11. It is projected to touch Rs. 2500 crore this year .

3. It is exported to 12 countries already and gets 20% of its total sales from exports.

4. In 2010, Micromax was the 4th most searched keyword on Google India.

Brand Story: Micromax Mobile

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 2/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

Micromax Mobile is a young and profitable brand which targets the value conscious Indian

consumer. The brand is growing at a rapid pace and is likely to challenge the leaders within a few years

time.

This makes us wonder, how? In a market flooded with brands how did Micromax manage to do so well.

There are so many brands in India; Nokia, Samsung, Blackberry, LG, Sony Ericsson, Karbonn, G'Five,

Lava, Spice, the list goes on. What did Micromax do which other challenger brands did not?

Micromax: Innovative Products, Value for Money (VFM) & Smart Strategy

Micromax has launched a range of innovative phones in the market. Most of these products were the first

of its kind. Take a look.

Phone with 30 day battery backup for rural India, cheap QWERTY phone, phone targeted only at women

(Bling), phone which becomes a universal remote for all appliances, phone which switches sim cards by

turning it upside down, GSM and CDMA in one phone, shake the phone and its sim card changes, phone

whose Bluetooth gets charged along with the phone. It is developing a water-proof phone targeted at

fishermen. The list goes on.

[http://4.bp.blogspot.com/-

Q6flcCy33Pk/TsaHfwO-17I/AAAAAAAACfg/-0TrsTH8XKs/s1600/179859%252Cxcitef un-micromax-bling-q55-mobile-1.jpg]

Micromax has given what people wanted. Their 30 day battery back up phone succeeded because people

in rural India wanted it. While Micromax has been innovating, they have never lost sight of value

Indians are value conscious consumers and Micromax has thus kept the prices affordable. The

average sale price of a Micromax phone is around Rs. 2300. Yet at this price they are selling phone

loaded with features.

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 3/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

K V Sridhar of Leo Burnett talks [http://www.rediff.com/business/report/tech-which-one-to-choose-cheap-or

affordable/20110207.htm] about why Micromax has clicked. The essence of his point is - Indian's do not

want cheap stuff. They want good quality at low prices. They want to see value in your offering.

Micromax offers that value to consumers.

The Indian handset market is divided into three segments (data from Micromax IPO prospectus

[http://www.google.co.in/url?

sa=t&rct=j&q=micromax%20ipo%20prospectus&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.sebi.g

ov.in%2Fdp%2Fmicromaxdraft. pdf&ei=l4_GTs-CJM3qrQetv6S_Dg&usg=AFQjCNEKWJIxPzOS0rGNitJk58SxY8MiHw] ):

[http://1.bp.blogspot.com/-

qxz8ZNpdmPQ/TsaO-kWlo_I/AAAAAAAACfo/ysZDNHqd3kY/s1600/market1.PNG]

As on Dec 2009, out of total market size of 1.51 crore handsets 68 lakh handsets were priced between Rs2000 to Rs. 5000. This is the largest chunk of the market. This is the value for money segment which is

being targeted by Micromax from the very start. Bloomberg Businessweek wrote this

[http://www.businessweek.com/magazine/content/10_34/b4192036523358.htm] about the brand back in Augus

2010: "Micromax is gaining market share in India by making cheap phones with long battery life

and offering other features local consumers want." Micromax has indeed been listening to its

consumers and giving them what they want.

Micromax has also been good at strategy. They divided the Indian market into three

groups; Rural, Urban Youth, and High Profile Consumers (source [http://www.afaqs.com/news/story.html?sid=25698] ). The rural consumers are simple and want a regular phone. The urban youth desired memory

cards, music, camera, etc. The high profile user wanted the latest in technology. The brand gave No

1 priority to rural consumers, No. 2 to urban youth and No. 3 to high profile consumers. In line with

strategy, Micromax first went after the rural consumers. It did not look at metros and built its business in

rural India. It worked and today 60% of its sales comes from rural India.

They also approached distribution differently. When other companies were offering extended credi

period, Micromax went with a cash and carry model. No credit. It gave it dealers better margin against

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 4/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

upfront payment. It also ensured regular supply to dealers so their investment in stock was low and they

had no pileup of unsold stocks. This was a tough move but clicked for them. Today the brand has healthy

cash flows and zero risk of bad debts.

Brand Consultant Cajetan Vaz has nicely summarised [http:/ /www.afaqs.com/news/story.html?sid=29298] the

reasons why Micromax has done so well. "The main reason for Micromax doing well in the handset

business is because it focused on handsets with special features. Then the company kept a very

sensible pricing strategy that also worked for it. Communication strategy and distribution

rounded off a successful approach. Another factor which worked for the company is that Nokia

has lost its connect with the consumer."

Micromax has used cricket to build its brand. Cricket is costly but gives instant reach among young

consumers (especially male). Micromax also tied up wit MTV and launched a special phone. All this to

target its core TG (target group) youth.

Micromax has done well by being innovative, offering what the consumer wanted, by

being affordable and by having good distribution. The last point, however is to me the mos

important. Nokia's failure to react is what led Micromax snatch market share from it.

Nokia came up with a dual sim phone long after dual sim became a common feature in all phones. Nokia

was late in launching affordable QWERTY phones and it was also late in lauching affordable touch

phones. It was Nokia's failure to react which let Micromax (and Samsung) race through. This is a surprise

because a smart market leader always reacts to competitor moves. A small example, when Horlicks

Foodles [http://themarkmanager.blogspot.com/2011/11/brand-story-horlicks-foodles.html] was launched with four-

grain, Maggi replied immediately with its own version of 'Multigrainz'.

Brand Micromax Today

Micromax is a youth brand. The company in its IPO prospectus mentions about the brand attributes. I

calls its brand - Innovative, Youthful, Real and Aspirational. The brand today is in the growth phase

and is gaining acceptance extremely fast. The company is investing heavily in brand building. The brand

has a 100 crore annual marketing budget for financial year 2011-12 (around 4% of its sales turnover)

The budget was Rs. 50 crores in 2010-11. The communication of the brand was earlier focussed on its

products but off late the company has also started talking about brand Micromax. A good move. Watch its

new TVC here.

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 5/8

The print advertising of the brand has been good. Look at this ad for Micromax A60 (its first Android

phone).

[http://4.bp.blogspot.com/-

PxT8rZ2KtVs/TsadWLfmLLI/AAAAAAAACf4/oXDUt9V74f8/s1600/A60.png]

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 6/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

Now look at this cheeky one. Again for its Android A70.

[http://2.bp.blogspot.com/-

e2RIY6nOxoI/TsadlcC6HQI/AAAAAAAACgA/X2G77Vtxf0Q/s1600/i.jpg]

This advertising has surely clicked with the youth. Micromax has kept its Android phone under Rs. 10,000

and created a lot of buzz around the same. The brand has so far lived upto its tagline; "Nothing like

Anything."

Micromax: What Lies Ahead?Micromax is a fast growing profitable brand which understands its consumers. It develops products very

fast and hence can react to competition quickly. It also has an aggressive marketing budget and good

distribution. It claims to reach 70,000 retail outlets which is 60% of all mobile selling outlets in India. It has

everything going for it. However I foresee two problems for Micromax.

1. Moving up the ladder (from making cheap phones to costly ones)

2. Continuous R&D to stay ahead of competition

Let me address the first issue. Micromax has started from the bottom. Selling affordable phones which

are not high tech. It is now trying to move up the ladder and launch costlier phones (high tech). As I write

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 7/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

this post, Micromax has launched [http://www.themobileindian.com/news/3891_Micromax-officially-launches-A85

X78] A85, an android based touch phone at Rs. 18,990. It is also planning

[http:/ /www.lightreading.in/document.asp?doc_id=214396] to launch a tablet. If a brand which is identified at

the lower end of the market tries to go to the top end, the journey is always considered tough (if

not impossible). We have to wait and see how Micromax manages to pull it off. It has to live upto its

brand promise of 'value for money' and give consumers a great phone. As it stands today, consumers at

the high end who can afford a Rs. 18,990 phone do not consider Micromax as a high tech

company (my personal view). To change this perception, the A85 better be great. Being good will not help

change perceptions.

The second challenge is R&D. Micromax needs to invest in R&D and maintain its edge. Today's success

is no guarantee of tomorrow's success. Nokia is a live example. The market is ever changing and

Micromax needs to remember that. In Samsung it has a formidable competition. We cannot even write off

Nokia. It can make a comeback afterall it is the most trusted brand in the mobile market even now

Continuous innovation is the only way out.

Will an Indian company be able to fight global giants? We have to wait and see. I will be tracking this brand

very closely.

Source: The facts have been gathered from scores of websites (mostly news and marketing sites). Here are most of the links: 1

[http://m.economictimes.com/PDAET/articleshow/msid-10488247,curpg-2.cms] 2 [http://m.economictimes.com/PDAET/articleshow/msid-6165036,curpg-2.cms] 3

[http://m.economictimes.com/PDAET/articleshow/msid-5865603,curpg-1.cms] 4 [http://m.economictimes.com/PDAET/articleshow/msid-7793841,curpg-4.cms] 5

[http://m.economictimes.com/PDAET/articleshow/msid-6164139,curpg-2.cms] 6 [http://m.economictimes.com/PDAET/articleshow/msid-6103620,curpg-3.cms] 7

[http:/ /www.afaqs.com/news/story.html?sid=29298] 8 [http:/ /www.afaqs.com/news/story.html?sid=25698] 9 [http:/ /www.afaqs.com/news/st ory.html?sid=29056] 10

[http://www.thehindubusinessline.com/todays-paper/tp-brandline/article1011017.ece] 11 [http://www.thehindubusinessline.com/todays-paper/article1013382.ece

12 [http://www.exchange4media.com/e4m/news/fullstory.asp?news_id=39914&section_id=1&tag=6514] 13

[http://www.businessweek.com/magazine/content/10_34/b4192036523358.htm] 14 [http://www.dnaindia.com/money/interview_we-never-thought-we-would-sell-1-8

million-handsets-a-month-micromax-co-founder_1559418] 15 [http://marketingpractice.blogspot.com/2010/03/micromax-nothing-like-anything_16.html] 16

[http://www.business-standard.com/india/news/micromax-growsfast/450416/] 17 [http://www.business-standard.com/india/technology/news/indian-mobile-handset

mkt-grows-by-15-to-rs-33171-cr-in-fy11/139455/on] 18 [http://www.business-standard.com/india/news/reconnect/432525/] 19 [http://www.business

standard.com/india/news/forsquaresavvy/ 398072/] 20 [http://www.business-standard.com/india/news/%5Cwho-else-makesmobile-cum-remote%5C/390474/] 21

[http:/ /www.business-standard.com/india/news/cheap-vs-affordable/424219/] .

Posted 19th November 2011 by Vivek Singh

Labels: Brand Story, Indian Brands, Micromax, Young Brands

2 View comments

Gubba unleashed November 19, 2011 at 5:02 PM

Good Analysis -I think in a fish market like india's mobile phones.. micromax did well only because theyhave matched core requirement of youth. otherwise think about nokia..look at their cheap mobile- they

8/10/2019 Brand Story_ Micromax Mobile

http://slidepdf.com/reader/full/brand-story-micromax-mobile 8/8

10/14/2014 Brand Story: Micromax Mobile

http://themarkmanager.blogspot.in/2011/11/brand-story-micromax-mobile.html?view=timeslide

Enter your comment...

Comment as: Google Accou

Publish

Preview

still market it as a green mobile.. youth's main requirement is not green. Also- nokia's phones are durable but thats what youth does not want. they like to switch phones.. newcolor new mobile..that's what is missing with nokia..the image durable phone doesnt work with youth..

Reply

Vivek Singh November 19, 2011 at 9:31 PM

Great point. The brand promise of Nokia is 'durable' but this is not helping it any more. I was reading

somewhere that average age of a mobile in India is 18 months. In developed countries its even less.

It implies - when people are changing phones every year or so, being durable is no advantage. It is better to buy a Micromax mobile which is flashy and has all features even though it lasts only two years.

Reply