10/14/2014 BrandStory:MicromaxMobile

http://themarkmanager.blogspot.in/2011/11/brandstorymicromaxmobile.html?view=timeslide 1/8
19thNovember2011
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GurgaonbasedMicromaxMobileisnoordinarybrandandthewayitisgrowing,soonitwillfindaplacein
textbooksofallMBAschoolsinIndia.Readfourfactsaboutthebrandanddecideforyourself.
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.businessstandard.com/india/news/micromaxgrowsfast/450416/] ) behind
Nokia(39%)andSamsung(17%).Ithasashareof8%.
2. It's sales turnover was around Rs. 350 crores in 200910 which skyrocketed to Rs. 1600 crores in
201011.ItisprojectedtotouchRs.2500crorethisyear.
3.Itisexportedto12countriesalreadyandgets20%ofitstotalsalesfromexports.
4.In2010,Micromaxwasthe4thmostsearchedkeywordonGoogleIndia.
BrandStory:MicromaxMobile
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Micromax Mobile is a young and profitable brand which targets the value conscious Indian
consumer.Thebrandisgrowingatarapidpaceandislikelytochallengetheleaderswithinafewyears
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,thelistgoeson.WhatdidMicromaxdowhichotherchallengerbrandsdidnot?
Micromax:InnovativeProducts,ValueforMoney(VFM)&SmartStrategy
Micromaxhaslaunchedarangeofinnovativephonesinthemarket.Mostoftheseproductswerethefirst
ofitskind.Takealook.
Phonewith30daybatterybackupforruralIndia,cheapQWERTYphone,phonetargetedonlyatwomen
(Bling), phone which becomes a universal remote for all appliances, phone which switches sim cards by
turningitupsidedown,GSMandCDMAinonephone,shakethephoneanditssimcardchanges,phone
whose Bluetooth gets charged along with the phone. It is developing a waterproof phone targeted at
fishermen.Thelistgoeson.
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Micromaxhasgivenwhatpeoplewanted.Their30daybatterybackupphonesucceededbecausepeople
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
loadedwithfeatures.
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K V Sridhar of Leo Burnett talks [http://www.rediff.com/business/report/techwhichonetochoosecheapor
affordable/20110207.htm] about why Micromax has clicked. The essence of his point is Indian's do not
wantcheapstuff.Theywantgoodqualityatlowprices.Theywanttoseevalueinyouroffering.
Micromaxoffersthatvaluetoconsumers.
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_GTsCJM3qrQetv6S_Dg&usg=AFQjCNEKWJIxPzOS0rGNitJk58SxY8MiHw]):
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AsonDec2009,outoftotalmarketsizeof1.51crorehandsets68lakhhandsetswerepricedbetweenRs.
2000 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 August
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
consumersandgivingthemwhattheywant.
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]).Theruralconsumersaresimpleandwantaregularphone.Theurbanyouthdesiredmemory
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,Micromaxfirstwentaftertheruralconsumers.Itdidnotlookatmetrosandbuiltitsbusinessin
ruralIndia.Itworkedandtoday60%ofitssalescomesfromruralIndia.
They also approached distribution differently. When other companies were offering extended credit
period,Micromaxwentwithacashandcarrymodel.Nocredit.Itgaveitdealersbettermarginagainst
10/14/2014 BrandStory:MicromaxMobile
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upfrontpayment.Italsoensuredregularsupplytodealerssotheirinvestmentinstockwaslowandthey
hadnopileupofunsoldstocks.Thiswasatoughmovebutclickedforthem.Todaythebrandhashealthy
cashflowsandzeroriskofbaddebts.
Brand Consultant CajetanVaz has nicely summarised [http://www.afaqs.com/news/story.html?sid=29298] the
reasonswhyMicromaxhasdonesowell."The main reason for Micromax doing well in the handset
businessisbecauseitfocusedonhandsetswithspecialfeatures.Thenthecompanykeptavery
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
haslostitsconnectwiththeconsumer."
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
targetitscoreTG(targetgroup)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 most
important.Nokia'sfailuretoreactiswhatledMicromaxsnatchmarketsharefromit.
Nokiacameupwithadualsimphonelongafterdualsimbecameacommonfeatureinallphones.Nokia
was late in launching affordable QWERTY phones and it was also late in lauching affordable touch
phones.ItwasNokia'sfailuretoreactwhichletMicromax(andSamsung)racethrough.Thisisasurprise
because a smart market leader always reacts to competitor moves. A small example, when Horlicks
Foodles [http://themarkmanager.blogspot.com/2011/11/brandstoryhorlicksfoodles.html] was launched with four
grain,Maggirepliedimmediatelywithitsownversionof'Multigrainz'.
BrandMicromaxToday
Micromax is a youth brand. The company in its IPO prospectus mentions about the brand attributes. It
calls its brand Innovative, Youthful, Real and Aspirational. The brand today is in the growth phase
andisgainingacceptanceextremelyfast.Thecompanyisinvestingheavilyinbrandbuilding.Thebrand
hasa100croreannualmarketingbudgetforfinancialyear201112(around4%ofitssalesturnover).
The budget was Rs. 50 crores in 201011. The communication of the brand was earlier focussed on its
productsbutofflatethecompanyhasalsostartedtalkingaboutbrandMicromax.Agoodmove.Watchits
newTVChere.
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The print advertising of the brand has been good. Look at this ad for Micromax A60 (its first Android
phone).
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Nowlookatthischeekyone.AgainforitsAndroidA70.
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Thisadvertisinghassurelyclickedwiththeyouth.MicromaxhaskeptitsAndroidphoneunderRs.10,000
and created a lot of buzz around the same. The brand has so far lived upto its tagline "Nothing like
Anything."
Micromax:WhatLiesAhead?
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.Itclaimstoreach70,000retailoutletswhichis60%ofallmobilesellingoutletsinIndia.Ithas
everythinggoingforit.HoweverIforeseetwoproblemsforMicromax.
1.Movinguptheladder(frommakingcheapphonestocostlyones)
2.ContinuousR&Dtostayaheadofcompetition
Letmeaddressthefirstissue.Micromaxhasstartedfromthebottom.Sellingaffordablephoneswhich
arenothightech.Itisnowtryingtomoveuptheladderandlaunchcostlierphones(hightech).AsIwrite
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this post, Micromax has launched [http://www.themobileindian.com/news/3891_MicromaxofficiallylaunchesA85
X78] A85, an android based touch phone at Rs. 18,990. It is also planning
[http://www.lightreading.in/document.asp?doc_id=214396] tolaunchatablet.Ifabrandwhichisidentifiedat
thelowerendofthemarkettriestogotothetopend,thejourneyisalwaysconsideredtough(if
notimpossible). We have to wait and see how Micromax manages to pull it off. It has to live upto its
brandpromiseof'valueformoney'andgiveconsumersagreatphone.Asitstandstoday,consumersat
the high end who can afford a Rs. 18,990 phone do not consider Micromax as a high tech
company(mypersonalview).Tochangethisperception,theA85betterbegreat.Beinggoodwillnothelp
changeperceptions.
ThesecondchallengeisR&D.MicromaxneedstoinvestinR&Dandmaintainitsedge.Today'ssuccess
is no guarantee of tomorrow's success. Nokia is a live example. The market is ever changing and
Micromaxneedstorememberthat.InSamsungithasaformidablecompetition.Wecannotevenwriteoff
Nokia. It can make a comeback afterall it is the most trusted brand in the mobile market even now.
Continuousinnovationistheonlywayout.
WillanIndiancompanybeabletofightglobalgiants?Wehavetowaitandsee.Iwillbetrackingthisbrand
veryclosely.
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/msid10488247,curpg2.cms] 2 [http://m.economictimes.com/PDAET/articleshow/msid6165036,curpg2.cms] 3
[http://m.economictimes.com/PDAET/articleshow/msid5865603,curpg1.cms] 4 [http://m.economictimes.com/PDAET/articleshow/msid7793841,curpg4.cms] 5
[http://m.economictimes.com/PDAET/articleshow/msid6164139,curpg2.cms] 6 [http://m.economictimes.com/PDAET/articleshow/msid6103620,curpg3.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/story.html?sid=29056] 10
[http://www.thehindubusinessline.com/todayspaper/tpbrandline/article1011017.ece] 11 [http://www.thehindubusinessline.com/todayspaper/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_weneverthoughtwewouldsell18
millionhandsetsamonthmicromaxcofounder_1559418] 15 [http://marketingpractice.blogspot.com/2010/03/micromaxnothinglikeanything_16.html] 16
[http://www.businessstandard.com/india/news/micromaxgrowsfast/450416/] 17 [http://www.businessstandard.com/india/technology/news/indianmobilehandset
mktgrowsby15tors33171crinfy11/139455/on] 18 [http://www.businessstandard.com/india/news/reconnect/432525/] 19 [http://www.business
standard.com/india/news/forsquaresavvy/398072/] 20 [http://www.businessstandard.com/india/news/%5Cwhoelsemakesmobilecumremote%5C/390474/] 21
[http://www.businessstandard.com/india/news/cheapvsaffordable/424219/].
Posted19thNovember2011byVivekSingh
Labels:BrandStory,IndianBrands,Micromax,YoungBrands

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Gubbaunleashed November19,2011at5:02PM
GoodAnalysisIthinkinafishmarketlikeindia'smobilephones..micromaxdidwellonlybecausethey
have matched core requirement of youth. otherwise think about nokia..look at their cheap mobile they
10/14/2014 BrandStory:MicromaxMobile
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stillmarketitasagreenmobile..youth'smainrequirementisnotgreen.
Also nokia's phones are durable but thats what youth does not want. they like to switch phones.. new
colornewmobile..that'swhatismissingwithnokia..theimagedurablephonedoesntworkwithyouth..
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VivekSingh November19,2011at9:31PM
Great point. The brand promise of Nokia is 'durable' but this is not helping it any more. I was reading
somewherethataverageageofamobileinIndiais18months.Indevelopedcountriesitsevenless.
Itimplieswhenpeoplearechangingphoneseveryyearorso,beingdurableisnoadvantage.Itisbetter
tobuyaMicromaxmobilewhichisflashyandhasallfeatureseventhoughitlastsonlytwoyears.
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