Project Title:Mobile phone industry in India
Subject:Marketing Management -1
Date : 24-08-2015
Section:FGroup Members: 5
Report By:S.No.NameRoll No.
1.Moulik Shukla2015347
2.Nitesh Roy2015351
3.Pankaj Ahalawat2015352
4.Poonam Agarwal2015353
5.Preeti Dutta2015355
Introduction: Smart phone Market in India: India, the second
largest smartphone market globally, is expected to witness a
manifold growth in the number ofsmartphonesto over 650 million in
the next four years, a study by networking solutions giantCisco.
According to the report by US-based firm'sVisual Networking
Index(VNI): "In India, the number of smartphones grew 54 per cent
during 2014, reaching 140 million in number and the number of
smartphones will grow 4.7-fold between 2014 and 2019, reaching 651
million in number."Globally, the report forecasts that by 2019
there will be 5.2 billion mobile users (up from 4.3 billion in
2014).In 2014, nearly 59 per cent of the world's population (7.2
billion people) was comprised of mobile users. By 2019, more than
69 per cent of the world's population (7.6 billion people) will be
mobile users, it said."In India, there were 590.3 million (47 per
cent of India's population) mobile users in 2014, up 18 per cent
from 500 million (40 per cent of India's population) in 2013," the
VNI report said. There will be 895.6 million (67 per cent of
India's population) mobile users by 2019, up from 590.3 million in
2014, a CAGR of 8.7 per cent, CISCO forecasted.By 2019, there will
be around 11.5 billion mobile-ready devices/connections, including
8.3 billion personal mobile devices and 3.2 billion M2M (machine 2
machine) connections (up from 7.4 billion total mobile-ready
devices and M2M connections in 2014), it said."The ongoing adoption
of more powerful mobile devices and wider deployments of emerging
M2M applications, combined with broader access to faster wireless
networks, will be key contributors to significant mobile traffic
growth in the coming years," Cisco VP Products and Solutions
Marketing Doug Webster said.Source:
http://articles.economictimes.indiatimes.com/2015-02-03/news/58751662_1_networking-index-mobile-users-population
India is making the transition from features phones to
smartphones rapidly. This is accelerated by the availability of
low-cost smartphones and data plans.SMS, email, messaging and
social networking apps are the most popular used apps, while video
streaming and banking services are the least used apps. Many
handset manufacturers are making their contribution towardsmobile
internet growth by manufacturingaffordable handsets supporting
vernacular content.The median price of handsets has dropped
significantly making internet enabled devices affordable for the
masses.Several domestic handset manufacturers are contributing to
the increasing trend of smartphone usage by selling high end phones
at lower price points.The report found that smartphones seem to
deliver a better user experience and have the potential
toaccelerate the adoption of mobile internet.
SAMSUNGIntroduction: Samsung is a South Korean conglomerate
company headquartered inSamsung Town,Seoul. With diversified
sectors and global presences it has been one of the best known and
reliable companies across the globe. Some of the subsidiaries of
Samsung include: Samsung Electronics Samsung Life Insurance Samsung
Fire & Marine Insurance Samsung Heavy Industries Samsung
C&T Corporation Samsung SDS Samsung Techwin Renault Samsung
Motors
Samsung Electronics Co., Ltd. ("SEC") was incorporated under the
laws of the Republic of Korea in 1969 and listed its shares on the
Korea Stock Exchange in 1975. Samsung which means Tri-Star in
Korean has for the last 70 years been dedicated to making a better
world through diverse businesses that today span advanced
technology, semiconductors, skyscraper and plant construction,
petrochemicals, fashion, medicine, finance, hotels, and more.
Samsungs flagship company, Samsung Electronics, leads the global
market in high-tech electronics manufacturing and digital
media.Through innovative, reliable products and services; talented
people; a responsible approach to business and global citizenship;
and collaboration with their partners and customers, Samsung is
taking the world in imaginative new directions.SEC operates between
two main business units: DMC (Digital Media & Communications)
and DS (Devise Solutions). The DMC unit is subdivided into CE
(Consumer Electronics) and IM (Information technology & Mobile
Communications) divisions. The CE division offers products ranging
from digital TVs, monitors, air conditioning systems, and
refrigerators. The IM (Information technology & Mobile
Communications) division also offers a wide variety of products
including HHP (3G phone, smart phone), telecommunication systems,
printers, and computers.
The DS unit is also subdivided into Semiconductor and LCD
divisions. The semiconductor division manufactures and sells
products such as memory and system LSI, while the LCD division
manufactures and sells products such as LCD display panels for TVs,
monitors and notebook PCs, and AMOLED panels for mobile devices.
The company is domiciled in the Republic of Korea and the address
of its registered office is Suwon city, the Republic of Korea.Ref:
http://www.samsung.com/us/aboutsamsung/ir/financialinformation/auditedfinancialstatements/downloads/consolidated/2012_con_quarter01_note.pdfImportant
facts: Fastest rising brand on Interbrands List of the Top 100
Brands. Mobile Industry in India growing @ 12-14% YOY. I.e. 6-7
million unit market for smart phones In Q2 2015, Samsungs June
market share crossed 40% as compared to Jan Market share : 35%.
Sixth consecutive MOM growth. 16 devices launched this year. 2100
exclusive Samsung Stores, 1500 Modern retail outlets Pioneered in
innovating technologies like: Samsung SideSync 3.0 , Samsung Smart
Switch. Ref: 1) Brand Success: How the worlds top 100 brands thrive
and survive, Matt Haig, Page No: 278,279
2)http://gadgets.ndtv.com/mobiles/news/samsung-claims-40-percent-share-in-indian-smartphone-market-in-june-723733
Vision:
As stated in its new motto, Samsung Electronics' vision for the
new decade is, "Inspire the World, Create the Future."This new
vision reflects Samsung Electronics commitment to inspiring its
communities by leveraging Samsung's three key strengths: New
Technology, Innovative Products, and Creative Solutions. -- and to
promoting new value for Samsung's core networks -- Industry,
Partners, and Employees. Through these efforts, Samsung hopes to
contribute to a better world and a richer experience for all.
As part of this vision, Samsung has mapped out a specific plan
of reaching $400 billion in revenue and becoming one of the worlds
top five brands by 2020. To this end, Samsung has also established
three strategic approaches in its management: Creativity,
Partnership, and Talent.Samsung is excited about the future. As we
build on our previous accomplishments, we look forward to exploring
new territories, including health, medicine, and biotechnology.
Samsung is committed to being a creative leader in new markets and
becoming a truly No. 1 business going forward.Ref:
http://www.samsung.com/in/aboutsamsung/samsungelectronics/vision2020.html
Mission: To inspire the world with innovative technologies,
products and designs that enrich peoples lives and contribute to a
socially responsible, sustainable future.Its an ever-changing world
and Samsung wants to put you in the middle of it all. Were
dedicated to creating innovative technologies, processes and
products that expand the horizon of whats possible and enrich
people's lives.As per Peter Druckers classical Questions: What is
our business: Technological Products and designs Who is the
customer: people (global society) What is the value of the
customer: ever-changing world and people What will our business be:
inspire the world with innovative technologies What should our
business be: expand the horizon of whats possible and enrich
people's livesRef: 1)
http://www.samsung.com/in/aboutsamsung/samsungelectronics/vision2020.html
2)
https://www.facebook.com/SamsungMobileIndia/info?tab=page_info
Market Share: (REF: IDC 2014 Q4 PRESS RELEASE)
Samsung dominated the smartphone market in India in the Q4 of
2014 report with the highest market share being 22% and giving a
tough fight to neck competitor Apple. "Smartphone vendors have been
quick in gauging consumer demand for 4G handsets. In percentage
terms, 4G handsets are still in single digits, but vendors who are
not yet ready with a 4G portfolio are likely to miss the next wave
of smartphone growth," saidKaran Thakkar,Senior Market Analyst, IDC
India.For the Indian Smartphone Vendor share, Samsung maintained
its leadership position in Q4 2014. Apple presented stiff
competition for Samsung during this time, while "online exclusive"
brands are hurting the brand in the value for money category.
On the other hand, For the Global 2015 Q2 review IDC said
Samsung sold 82.4 million smartphones in the first three months of
the year 2015, for a 24.6 percent market share. Even though the
number sold was down seven percent from a year ago, it
outpacedApple, whose iPhone sales slipped slightly from the final
quarter of 2014. Apple held an 18.3 percent market share in early
2015 after selling 61.2 million iPhones. The figures were impacted
by seasonal and other factors.Samsungnotably launched its flagship
Galaxy S6andGalaxy S6 Edge phones at the end of the quarter in
April, while Apple iPhone sales dipped compared with the stronger
holiday quarter. In the fourth quarter, Apple and Samsung were
virtually tied with around 20 percent of the market each, according
to several surveys.Ref:
http://www.idc.com/prodserv/smartphone-market-share.jsp
SWOT Analysis:Strengths:
Largest share in mobile phones and pioneer in smartphone sales
Hardware integration with Android OS Excellence in engineering
Focused on environment Innovation and design Low production cost
Ability to market the brand Pioneer in 4G supported phones in
India
Weakness:
Patent infringement lawsuit Profit margin limited to higher end
feature phones. Lacks own OS Diversified segment approach Biggest
competitor in Mobile segment is also biggest customer for Chip
Segment
Opportunities:
Indias growing smartphone market Increased demand for quality
and sustainable products Patent acquisitions Growing mobile
advertising industry 4G network support segment Increased demands
for innovative solutions.
Threats:
Saturated smartphone market in developed countries Declining
margin on hardware production Breached patents Apples I Phone 6
launch Price wars
Marketing Strategies adopted: Objective:
Retain the market leader position. Smart innovations at smart
price.
The smartphone industry has been witnessing a phenomenal growth
globally over the past few years. This growth can be attributed to
the revolutionary technological developments taking place in this
industry. The revolution brought by the digital technology has
enabled the smartphone sector to profit from the growing
interaction of digital applications in Mobile phone industry.As per
the Indian Market Analysis for both Q4 2014 as well as Q2 2015,
Samsung has been the market leader in both the quarterly reports.
With main focus on meeting the needs of diversified customers
across India thorough strategic weighing between the technological
advancement made available at affordable price to the consumers
across various strata , Samsung has proved to be the emergent
leader in the smartphone and Hand-Held Devices segments in India
only on the support provided by two main pillar of growing customer
satisfaction and innovation through continuous effort.
Segmentation: One of the fundamental principles of marketing is
the segmentation of the market. Segmentation means the splitting of
the market into groups of end users who are:1. Maximum similarity
within each group2. Maximum difference between groups.Market
segmentation has three levels including 1.Strategic
Segmentation-vision, strategic intent and product
benefits2.Managerial Segmentation-resource allocation, alignment
and planning3.Operational Segmentation-Marketing programs such as
advertising, sales and distributions.Segmentation in the
market-driven strategy process is segments, value opportunities,
new market space, matching value requirements with capabilities,
market targeting and strategic positioning.
Activities of market segmentation are: 1.Defining the market to
be segmented.2.Identifying market segments3.Forming market
segments4.Finer segmentation strategies5.Selecting the segmentation
strategy
The firm uses mainly lifestyle and demographic variables in
segmenting their market . The firm should however lay more emphasis
on the changing lifestyles of the young generation and cater for
their ever changing needs. In order to retain the market share, the
company should continue to segment the market into rural and urban
people. The rural targets will help increase the market share. The
urban should comprise mainly the people aged 15-30. This ought to
be their main segment in order to compete favorably with brands in
the same market segment. This target group of people focuses mainly
on music, leisure and has the flair for hip gadgets in the market.
Levels of segmentationSamsung is targeting the customer market by
dividing it into different segments and offering each segment
different product based on their common characteristics
Segment
MarketingIndividualMarketingLocalMarketingNicheMarketingSegmentMarketing
Bases for Segmenting Consumer MarketsThe consumer market for
Samsung products has been divided using four schemes of
segmentation variables i.e. geographic, demographic, psychographic
and behavioural.Geographic SegmentationSamsung is targeting
different countries of Asia differently by dividing as different
markets such as Indian Market, China market. Again within India, It
has Samsung Guru Segment for rural areas as well as Galaxy segment
for urban areas. Samsung is one of the largest manufacturers of
mobile phones and it shares the highest cell phone customers with
Nokia in India. It has something for everyone.
Demographic SegmentationAge- age factor is not really involved
in Samsung segmentation but its most users are adults enthusiastic
people.Family size- Samsung Products are offered for all family
sizes.Gender- Samsung home theater system is equally beneficial for
both males and females.Income- Samsung Products are offered with
varying features to different peoples based upon their income
level.Occupation- Samsung has divided the consumer into different
categories based upon their occupation i.e. businessman,
self-employed, students and teachers.Education- Samsung is also
keen to know about the education level of its target market i.e.
illiterate, school 5 to 15, under graduate, graduate and
postgraduateSamsung has mobile phones for youth, age of 16-29, for
businessmen etc. for middleclass youth it has Samsung Guru which is
for govt. and economic class customers also. Guru has many
variants. It is a great option if you want to get a cheap 3G
handset. Samsung Galaxy is a good option for youth as it has many
attractive features as Wi-Fi, 3G and 4G. Galaxy is also for
Businessmen.Samsung has partnered with IT industry leaders to bring
you the most relevant enterprise solutions and the most
comprehensive mobile implementation of Samsung SideSync and Samsung
Smart Switch. Decidedly adept in security concerns and the answer
to your every business need, the Galaxy S 6 and S6 Plus is ready
for serious enterprise usage.
Psychographic SegmentationLifestyle- Samsung is also classifying
customers on different levels based on different lifestyle of the
people i.e. culture oriented, sports oriented, outdoor oriented
Personality- customers are differentiated on the varying level of
personality such as compulsive ambitiousSamsung mobile is available
for those customers too who have their choice based on their
lifestyle. Samsung came with some so fancy mobile phones specially
for teenagers and young adults and also revolutionized the
smartphone industry by coming up with very economic touch screen
stylish phones so that everyone can enjoy touch screen at a very
nominal rate. Samsung has its range of mobile phones start from
INR. 3000 to INR. 69,000.
Behavioral SegmentationBenefits : Consumer are also targeted
differently based upon the benefits that are seeking in Samsung
electronics i.e., some people may want good quality , some may want
low services and some want good services.User Status : Samsung is
keen to know user status of its target consumer in order to better
offer its product and therefore they are divided into ex-user,
potential user, first time user and regular user.Loyalty Status :
Target market of Samsung may contain people with different loyalty
status and therefore Samsung is targeting these customer
differently based on their loyalty i.e., hard core loyalist, split
loyalist, shifting loyalist, switchers.
Unique Selling Proposition for Samsung
Innovation.
Design a phone that is revolutionary, something like its never
done before. This is very critical because, other companies can
easily compete on almost every other parameter, right from cost,
screen, battery etc.
Product Range:
Targeting: After segmenting the market based on the different
groups and classes, the targets need to be chosen. Samsung mobiles
have the following target customers:
Trendy young people. Professionals. Organizations such as:
services to public safety, the government, and both utility and
manufacturing enterprises. Customers from various economic classes
Target is not only number driven but also about acquiring and
retaining customers.
Positioning : Positioning is about the customer perception about
the brand as being different from the other brands on specific
dimension including product attributes.
The strategies adopted by Samsung to position itself in the
Mobile Phone market are as follows: It focuses more on the real
margin which comes from mid-to-high-end segments Samsung Concept
Store Market making & category creation in small towns Wider
Care Network Access to Samsung care line Pioneering in the 4G
segment of mobile phones. Branded itself as a synonym for
innovation and quality. Created a Unique Brand Image for itself as
a high end value driven brand.
a) Positing Statement: Through innovative, reliable products and
services; talented people; a responsible approach to business and
global citizenship; and collaboration with our partners and
customers, Samsung Smartphones are taking the world in imaginative
new directions.
Questions positioning statement should answer: For whom: global
citizen What Value: innovative, reliable products and services Why
and How: Through innovative, reliable products and services;
talented people; a responsible approach Relative to Whom:
Smartphones
Marketing Mix:
The benefit of Samsung in terms of its product is that there is
a trust on all Samsung products because of the way Samsung products
have performed in the last few years. Problems with the products
has been negligible. And with its Smart phones, Samsung has
achieved a status symbol for its customers. At the same time,
Samsung is known for its service and people know that Samsung gives
a very fast service for any of its product. Thus in themarketing
mix of Samsung, the product portfolio is one of the strongest point
for Samsung.
Product : Samsung is present through various channels in the
market. It works on thechannel marketingconcept wherein there are
three segments. Sales and service dealers, Modern retail and
Distributors. The sales and service dealers handle key accounts for
Samsung and are involved in corporate sales. These dealers may also
open exclusive Samsung showrooms. The Modern retail segment
includes large retailers like Croma, Hypercity, Vijay sales, Viveks
and any others who are present in the modern electronic retail
chain. Samsung being such a branded product, the retailers are
bound to keep Samsung as an alternative for their customers. The
distribution network is the most interesting in the case of
Samsung. In several cities, Samsung has a single distributor
through whom they distribute throughout a territory. For example In
Mumbai, Samsung has SSK distributors who are distributors for all
Samsung products. This distributor has a huge investment in Samsung
and both, the distributor and the company, go hand in hand for the
sale of Samsungs products. Thus all material of Samsung will be
sold to a single distributor who in turn will sell it forward to
retailers.Pricing : Skimming price Samsungs smart phones are one of
the best in the market and are the market leader in terms of the
features and USPs that they provide. The recent Samsung Note 3 +
Gear is another entrant in the market which is catching peoples
eyes. Thus Samsung uses Skimming price for these products wherein
it tries to get a high value in the start before competitors catch
up. Once the model is old or any competitor has launched a similar
product, Samsung immediately drops the price. Competitive Price for
all the new smartphones specifically made keeping in mind the
customers at the rural, tier 3, tier 2 and tier 1 cities.Place:
Huge distribution channel right from tier 1 cities to tier 3
cities. Multiple Sales and retail outlets across cities, town and
urban areas. Strategic marketing and advertising utilized in order
to gain maximum impact on the consumers
Marketing Communication (Promotion): Samsung uses multiple forms
of promotions. Samsung as a company believes in pulling the
customer to themselves through advertising but at the same time
uses strong tactics to push the product to the customer through
sales promotions. Thus on one hand, Samsung uses various marketing
vehicles across the year covering festive season as well as
non-festive time. On the other hand, it gives many offers and
discounts to its trade partners to motivate them to sell Samsung
above competition. With such a strategy, Samsungs brand is on the
rise so that both, the pull as well as push strategy is working
simultaneously in Samsung.MICROMAX
Introduction: Micromax started as an IT software company in the
year 2000 working on embedded platforms. By 2008, it entered mobile
handset business and by 2010 became the largest Indian domestic
mobile handsets company. This transformation was steered by four
friends who divided responsibilities on functional lines, which
havent changed since: Rajesh Agarwal, 47, Managing Director, Rahul
Sharma, 37, Executive Director, Vikas Jain, 37, Business Director.
Micromax has pioneered the democratization of technology in India
by offering affordable innovations through their product offerings
and removing barriers for large scale adoption of advanced
technologies. . Micromax is a brand which is close to the heart of
the youth and celebrates the vibrancies of life and empowerment.
Micromax is currently the 2ndlargest Smartphone Company in India.
Micromax has also started growing itself in LED and data card
section.
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.
Important facts: Micromax within 6 years of it journey has been
able to be 2nd largest smart phone company in India. Micromax
through its product strategy and innovation have been able to
compete with big giants player like Samsung, Nokia, LG. As per IDC
report of 2015 company held 17% share in Indian market and is just
behind by 5% from the leader and Company has grown up to be 10th
biggest mobile player in the world. Micromax is the first
innovative company to launch various products. The company has many
firsts to its credit when it comes to the mobile handset market
including the 30-day battery backup, Dual SIM Dual Standby phones,
QWERTY keypads, universal remote control mobile phones, first
quad-core budget smart phone etc.
Vision: The companys 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.
Mission: Micromax is on a mission to successfully overcome the
technological barriers and constantly engender life enhancing
solutions.As per Peter Druckers classical Questions mission should
answer the following : What is our business: To provide
revolutionary technology to consumer Who is the customer: youth of
the nation, woman What is the value of the customer: affordable
technology What will our business be: Consumer electric products
What should our business be: constantly engender life enhancing
solutions
Market Share: (REF: IDC 2014 Q4 PRESS RELEASE)According to the
International Data Corporation (IDC), the India smartphone market
experienced a shipment contraction in the fourth quarter of 2014
for the first time ever on a quarter over quarter basis.
This was largely due to a high channel inventory at the
beginning of the quarter among general trade, which in turn was
caused by the surge witnessed in online sales during festive
season.Micromax has made it to the top 10 vendors in terms
worldwide mobile phone sales in the first quarter with 1.8 percent
market share, according to data released by the research firm.
Gartner also has claimed that the worldwide Smartphone sales saw a
19 percent growth in the fourth quarter of 2014. Micromaxin a press
statement revealed that it received overwhelming response to the
Canvas series including the new handsets such asCanvas Spark,Canvas
Knight, andCanvas Fireamong others.The brand witnessed an inventory
correction in Q4 2014 owing to high inventories pumped into the
channels during the previous quarter.SWOT Analysis:The SWOT
analysis of Micromax proves that the brand is here to stay and that
it will give tough competition to the likes of Samsung and even
Apple due to its price competitiveness as well as sourcing genius.
Here is the Micromax SWOT analysis.Strengths 1. Provide simple
functions at much lower costs e.g.- Loud speakers, wireless FM,
ultra long lasting battery life2. Regional languages support,
Indian calendars, Torch3. Most phones are dual SIM/Triple SIM
phones4. Celebrity brand ambassadors have helped the brand grow5.
Support to various operating systems like android,
cynge,Microsoft,java.Weaknesses 1. Micromax has still not been able
to establish itself well in the urban market.2. Micromax has a
manufacturing unit set up in china which has sink the name of
micromax. 3. Low price means low quality The price vs quality
debate is always on in the mind of the customer when purchasing
electronic products. Because of its low price, Micromax is several
times considered as low in quality.4. Not preferred by Tech-Savvy
people: Although Micromax is successful in emerging as 2nd largest
handset player but they are not able to create trust among the
tech-savvy users about the handset quality.Opportunities1. Market
Expansion: Entering in developed nations like US & European
nations will be the future strategy of Micromax which will bring
advanced capabilities to even home nations & this will help
Micromax in creating trust among its users.2. Penetrating the Urban
market: Further penetrationin the urban market just like they have
done in rural market will help in the growth of the company.3.
Improving the brand perception: Working on changing the brand
positioning will help the company in changing its brand image in
the urban markets where it is perceived as a low quality
mobile.Threats1. Competition from national & global players:
Handset market is going through intense transformation & all
the national & international players are leaving no stone
unturned to increase their market share. Price wars & eating up
each other market share is a common scenario.2. Dynamic tech
environment: Continuously changing technological environment can be
serious threat to the Micromax. Since already established players
like Samsung, LG etc. can cope with this, it will difficult for
Micromax to handle this challenge.3. Replication of business model:
The strategy used by Micromax is itself commendable but lots of
other Local & Chinese handset mobile makers like Geonee, Lava
etc. can imitate their business models which will have adverse
effect on existingplayers andMicromax will not be an exception in
such a scenario.Marketing Strategies adopted: Objective: Focus on
urban market specially youth 18-25 years As smart phone is going to
be the future of mobile market, Micromax has started focusing on
smart phones as well as tablets On capturing major share of urban
youth market, for next two years Micromax needs to focus on urban
market at large Focus on expand to international markets and enter
into neighboring Indian countries, south African countries etc.As
smart phone is going to be the future of mobile market, Micromax
has started focusing on smart phones compared to feature phones
segments. It has launched more smart phones in the market. Further
penetrationin the urban market just like they have done in rural
market will help in the growth of the company. The company can be a
major challenger in future if it keeps its record moving and try to
maintain a brand positioning in urban market.Segmentation: At its
most basic level, the term market segmentation refers to
subdividing a market along some commonality, similarity, or
kinship. That is, the members of a market segment share something
in common. The purpose of segmentation is the concentration of
marketing energy and force on the subdivision (or the market
segment) to gain a competitive advantage within the segment. The
purpose of segmentation is the concentration of marketing energy
and force on the subdivision (or the market segment) to gain a
competitive advantage within the segment.Identification of the
correct market segment is an important step to enter any
market.
Geographic segmentationis when a business divides its market on
the basis of geography. There are several ways that a market can be
geographically segmented. You can divide your market by
geographical areas This is perhaps the most common form of market
segmentation, wherein companies segment the market by attacking a
restricted geographic area.
Rural and semi urban Market area The primary target for Micromax
was the rural market, which it catered to by arming itself with a
30-day long battery phone and dual Sim phones. Both of them were a
hit and that too at affordable prices. This entailed them with a
market of their own. Its not that other established players like
Nokia or Samsung didnt cater to this market. But Micromax was laced
with more features, which the basic phones of these brands couldnt
offer. The rural population which chose features at lower cost over
brand value, turned out to be a good start for micromax.
Urban Market areaMicromax is using the strategy to make it base
in urban area by promotion and giving itself a brand image change
the company has various devices in it list for Urban youths,
Professionals and womans. the devices are the under the sub
umbrella brand canvas like canvas S%, Knight,doodle. To target
urban youth they have come up new segment YU. For urban market
youth they have started projecting themselves as adventure
brand
Demographicsegmentation is extremely important to all marketing
departments since the data is easily available and does drastically
affect buying patterns. Age, income, gender, ethnic background and
family life cycle are all important factors of demographic
segmentation.1. Age- The age group targetedis youth between the
range of 18-34 yeras.2. Gender-as the product are unisex they can
be used by any gender but the company was first to target
specifically woman by introducing their bling series which had
girly features to attract ladies.3. Income- Micromax targets on
lower middle class and lower class people and tries to give
affordable solution to them.4. Occupation- Micromax has divided the
consumer into different categories based upon their occupation i.e.
Employee, businessman, self-employed, college5. Education- Micromax
mobile have come up with fun book tablets targeting education with
fun for children.
Unique Selling Proposition for Micromax technological advances
at low priceDesign phones that have affordable innovations through
their product offerings and removing barriers for large scale
adoption of advanced technologies. The company has always tried to
give value for money phones and tried to give maximum inputs.
Target Market: A target market is a group of customers a
business has decided to aim its marketing efforts and ultimately
its merchandise towards. A well-defined target market is the first
element of a marketing strategy.The target market for micromax
are:1. Youth of the nation2. Fashion savvy woman 3. Professionals
4. Lower class and middle class customersThe organization has
adopted mass marketing with Differentiated marketing strategy the
One where the company decides to provide separate offerings to each
different market segment that it targets. It is also called multi
segment marketing and as is clearly seen that it tries to appeal to
multiple segments in the market. Each segment is targeted uniquely
as the company provides unique benefits to different segments. It
increases the total sales but at the expense of increase in the
cost of investing in the business.Micromax trying to show how
affordable it is to buy its brand mobile and targeting lower
class
Positioning : Positioningis amarketing strategythat aims to make
abrandoccupy a distinct position, relative to competing brands, in
the mind of the customer. Companies apply this strategy either by
emphasizing the distinguishing features of their brand (what it is,
what it does and how, etc.) or they may try to create a suitable
image (inexpensive or premium, utilitarian or luxurious,
entry-level or high-end, etc.) throughadvertising. Once a brand is
positioned, it is very difficult to reposition it without
destroying its credibility. Positioning stratergy adopted by
Micromax:-Promotional campaigns: It has targeted Cricket and
bollywood as the basis of promotions for itself, which is directly
catering to the Indian market as it is these associations, which
has garnered it the visibility and also helped it shed its image of
a Chinese phone to a Brand on its own. Recently it associated
itself with a fashion show, where designers used its latest Canvas
Turbo with full HD in the designing of their apparels. Of late, it
has relied on premium associations so as to continue re-positioning
itself, and shed its long standing image of a low-price
player.Product rollout: Where big international brand requires
roughly 18 months for a similar product to go through the retail
pipeline, Micromax takes barely a month or two to launch products.
This has ensured that variety as well as new-technology adoption,
which helps offer the customers something new regularly. Even the
Canvas series, which has been selling like hot cakes, has helped it
to scale up the brand value and reposition itself as not just a
cheap handset maker. The pricing strategy adopted for this has
helped it a lot too. The products, even its high priced Canvas are
lower than Samsungs Galaxy series.Branding: Micromax has plans to
dive into international markets starting from Russia and Romania
and it is here that Wolverine (Hugh jackman) will act as its global
face. The thumb rule of celebrity endorsements says that celebrity
should be well known . The advertisement may not work out fully for
the Indian market as Hollywood stars still dont have a strong
appeal in India. The brand may appeal to opinion-makers as the
advertisement has been successful in creating the buzz. For Indian
market the brand ambassador is aksay kumar aweell known personality
in rural an urban india. Micromax is trying to change the chiness
perception in mind of people by going international
Positing Statement: Micromax is a brand which is close to the
heart of the youth and celebrates the vibrancies of life and
empowerment. It has pioneered the democratization of technology in
India by offering affordable innovations through their mobile
phones and other product offerings and removing barriers for large
scale adoption of advanced technologies.
Questions positioning statement should answer: For whom: Youth
of the nation. What Value: innovative, technologically advanced at
affordable price. Why and How: celebrates the vibrancies of life
and empowerment by offering advanced innovative technology at
affordable price. Relative to Whom: SmartphonesMarketing mix
Marketing Strategy Our marketing strategy is to improve the
visibility in the urban markets by improving awareness of customers
for our products and also building brand image.
1. Product Strategy On the product side, Micromax has a wide
range of phones with different features and thus offering variety
to the customers. Micromax believes that consumers in India have
unique preferences with respect to mobile handsets such as long
battery life, dual GSM capability, low-cost QWERTY phones,
universal remote control and gaming phones. Also, the company has
invested heavily in the product development as of now to capture
market share in urban market it is coming out with new models:
Micromax realized that intense competition between telecom service
providers forced customers to maintain two connections, and hence
it launched a wide range of dual-SIM phones, which forms almost 85%
of its product portfolio. Android based operating system phones are
a proving to be a huge success and a craze in youth market and
professionals because of its vast applications and new applications
which are developed on an everyday basis. And also office documents
support, push mail, etc also help in satisfying the needs of
professionals in a handy way.
2. Pricing Strategy:Its at the core of Micromax to serve the
customers by proving them with lower cost, value for money
products. Thus Micromax will adopt penetration pricing in the urban
market because placing our product at a lower cost will serve our
purpose and make the customer rethink before buying other
competitors product.
3. Promotion Strategy The motive of our strategy is to increase
our visibility in the urban markets. So making people aware about
Micromax we will incur high promotional expenses and these will be
in terms of: 1. Hoardings and banners outside colleges, in public
places, corporate places and malls with latest products and
updates. 2. Advertising online which include buying up space in
highly browsed sites such as rediff, yahoo, etc. It has planned to
improve its visibility by blogs sites and also on the sites
dedicated to reviews and comments of mobile phones.3. It is aiming
at bundling with telecom providers like Vodafone and Airtel which
will serve as a base in building brand image by associating our
names with them. 4. They have also aimed at higher advertisements
through TV, radios,etc which serve large number of customers.
Currently competitors are proving with only 1 year warranty so this
will provide us first mover advantage and also create brand image
into the minds of customers.
4. Place
1. Strong Distribution channels: 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. The
company follow this distribution channel so it is easy for them to
reach rural market. The company follows the below distribution
channel
2. Using online site The company has been providing service to
buy product online using various sites at a very discounted
price.3. Using warm channels Micromax mobile can be found in
various electronic retaillike croma , mobile store, e zone etc. and
these can target urban market
APPLE
IntroductionThe Company designs, manufactures, and markets
mobile communication and media devices, personal computers, and
portable digital music players, and sells a variety of related
software, services, peripherals, networking solutions, and
third-party digital content and applications. The Companys products
and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio
of consumer and professional software applications, the iOS and OS
X operating systems, iCloud, and a variety of accessory, service
and support offerings. The Company also sells and delivers digital
content and applications through the iTunes Store, App Store,
iBooks Store, and Mac App Store. The Company sells its products
worldwide through its retail stores, online stores, and direct
sales force, as well as through third-party cellular network
carriers, wholesalers, retailers, and value-added resellers.
VisionWe believe that we are on the face of the earth to make
great products and thats not changing. We are constantly focusing
on innovating.We believe in deep collaboration and
cross-pollination of our groups, which allow us to innovate in a
way that others cannot.
MissionApple designs Macs, the best personal computers in the
world, along with OS X, iLife, iWork, and professional
software.Apple leads the digital music revolution with its iPods
and iTunes online store.Apple reinvented the mobile phone with its
revolutionary iPhone and App Store and has recently introduced its
magical iPad which is defining the future of mobile media and
computing devices.
Position StatementFor students, educators and creative
professionals. What Value: Recognized Brand reputation in the
mobile segmentHow: Innovative hardware, software and Internet
offerings
Marketing MixProduct:Innovative product design The sleek look
and various colour options attract the customers easily.Software
Apple provides its customers with exclusive features such as iTunes
and AppStore. These are installe don the phone and are cost free .
Price:Value based pricing model - Apple products are good in
quality and technology so the price of the products are higher.
There is little explanation required for the price of Apple Iphone.
With a premium target, and with the product and promotions to
support the targeting, Iphone has a skimming price. It is of higher
priceas compared to most phones in the market. Samsung has recently
introduced many phones to rival with Iphone. However, Apple
customers are not budging and they are very much loyal to the Apple
brand and to Iphone.Fixed pricing overall -Another interesting
thing to observe in Iphone pricing policy is that it does not offer
any discounts. A standard price is maintained across the
market.Promotion:ATL Promotions of Iphone are known to be fantastic
and might range from a full front page ad on the launch of the
product, promotions in the radio, the television and what not.
Whenever a new phone is being launched, be sure to see Iphone
everywhere, on each and every ATL platform. Because they are
targeting a premium segment, the presence of Apple Iphone is higher
in the ATL segment than in the BTL segment. The interesting thing
here is the taglines in newspaper ads because many of the Iphone
ads are known to come up with the most interesting taglines for the
new phone.BTL For BTL marketing, Iphone uses out of home
advertising with hoardings and point of sale advertising in major
retail outlets. It also uses various forms of sales promotions and
exchange offers to lure in the customer via BTL marketing.
Place:Involvement of third party wholesaler - All modern retail
outlets are distributed the Iphone through a carrying and
forwarding agent. On the other hand, individual retailers are given
the product through distributors.Branches located everywhere -
Iphone has named its retail counter as I storekeeping in line with
the complete product line of Apple which starts with I resulting in
an immediate personal connect with the customer. These I stores of
Apple are found in malls and premium areas in premium cities across
the complete country wide network.
Marketing StrategyApple strategy was to develop and sell brand
new, innovative products of which blended art and technology in
order to provide a simple and streamlined user
experience.SegmentStylish and smart touch phonesTarget GroupUrban
young from middle and upper classPositioningDevice which is helps
in communication and also serves as an entertainment device
XIAOMIINTRODUCTION Xiaomi was founded in April 6, 2010 by serial
entrepreneur Lei Jun, who is one of Chinas top 20 richest person
with net worth US$ 9.1 billion according to Forbes (Olson, 2014).
It crafted smartphone hardware, software, and internet services as
well as accessories with the help of smart and talented people that
it hired from Google, Kingsoft, Microsoft, Motorola, Yahoo and
other successful technology companies around the globe. Xiaomi has
sold more than 60 million smartphones worldwide in 2014, with more
than 18 million handsets in China alone, resulting in US$ 12
billion revenue. Their presence is mainly in the Asian region such
as China, Malaysia, Singapore and Philippines. Xiaomis focus is to
produce reliable, user friendly, mobile applications and affordable
phones to customers. Xiaomi is currently the third largest
smartphone producer in the world with over 5,000 employees
worldwide. As of December 2014, Xiaomi has achieved the status of
the most valuable technology start-up in the world after it
successfully secured US$1.1 billion investment with a company
valuation of US$ 45 billion (Shih, 2015). Xiaomis Company
MantraAlways believe that something wonderful is about to happen
MARKETING ENVIRONMENT ANALYSIS Analysis of the General Environment
In order to analyse the general environment, the PESTEL analysis is
used as a framework tool to study the external marketing
environment by examining the macro factors of political,
environmental, social, technological, ecological and legal. This
report focuses the analysis on two factors which are considered
most relevant and crucial for Xiaomi: the social factorthe
technology factor Social Factor The Indian market is dominated by
many foreign phone makers such as Samsung, Lenovo, Apple, HTC and
Nokia, who have been controlling 70 percent of the market since the
past few years. Thus, the time and sentiment is ripe for the
emergence of a national identity brand which will allow user to
enjoy the full benefits of advanced latest smart phone, yet with
cheaper price. Considering typical per capita income levels, in
order to be labelled as middle income, one needs to make $34,000
per year not a very large figure for most developed countries.
However, for most people in India and across Asia (and indeed in
most developing countries in the world), very few people can
achieve this level of income. As such, there is a tremendous demand
for technologically advanced smartphones and accessories, but yet
at a price point which is low enough to be affordable to the
working class people in the developing countries.This represents a
tremendous opportunity for Xiaomi. While the average selling price
for Apple iPhones is very high, Xiaomi could offer their advanced
smartphone below the prices of even other competing Android
phones.
Xiaomi Price Compared with Apple and Android Handsets (Source:
Mims, 2015)Considering the number of mobile users in India, there
is a market potential of 980.6 million buyers. Thus, the market in
India itself is enormous, and when combined with the other Asian
countries population who also need cheaper smartphones; the social
factor driving the growing market for Xiaomi is incredibly positive
(Mims, 2015) Technology Factor Xiaomi has made use of the Android
system to ensure that they meet the expected specifications for
user friendliness and great performance. Additionally, their line
of smartphones which use Android support the cause for open source
systems which are being championed by many technology-savvy people,
as compared with Apple which strongly protects its proprietary and
closed system. Xiaomi has aggressively offered MiUI which lets its
users take the lead in customising their own user experience with
unparalleled flexibility (Xiaomi, 2015). Thus, its technology
captures the heart of its customers by allowing them more freedom
than Apples iOS or even the standard Android handsets. Thus Xiaomi
capitalises on user innovation, which is one of the main factors
that drives the Xiaomi fortune today. Since the mobile phone market
is saturated with Apple and Samsung technology, people will always
tend to look for something new. Although Xiaomi has been called
Apple of China sometimes derisively, the technology shift does work
well, and many people flock to Xiaomi in order to try something
new, especially since it is much cheaper. Another strong point is
that Xiaomi promotes online shopping which erases the cost for
intermediaries. Asian internet services are better day by day; this
online ordering platform is able to reach more and more customers
every day.Analysis of the Industry EnvironmentIn order to analyse
the industry environment, the Porters Five Forces tool is used to
analyse the various competitive forces which are operating in this
industry that Xiaomi is in, with a focus on the competition which
influences and relates to all five categories.The Threat of New
Entrants: MEDIUM Xiaomi has been facing the threat of new entrants.
The potential market and promising technology landscape has brought
many competitors to try and grab market share in India. Other
entrants such as Lenovo and HTC have also begun to make cheap and
creatively designed models using the same strategy as Xiaomi hence
this has become a threat to Xiaomi. The entry barrier is high as
new entrants would need to have deep pockets to build the necessary
factory and infrastructure for development, but this is definitely
viable for other established companies such as Lenovo and HTC.
Xiaomi would need to ensure that it continues to supply more high
quality products and services to its customers.The Threat of
Substitutes: HIGHXiaomis rivals, Lenovo and HTC have also begun to
offer a series of cheaper products under their brands. These
products can easily be substitutes to the products offered by
Xiaomi. At similar price points and with technical specifications,
it is easy for customers to be swayed and to choose the competitors
products. Xiaomi has to ensure that its selling price offers to the
customers remain competitive, and that it can offer superior value,
so that it can combat this threat. Not only the price must be
improved, but also service and products must be improved to compete
with other competitors.Power of Suppliers: MEDIUM Xiaomi sources
its supply of raw materials such as electrical components and other
materials such as plastic, steel and other products primarily from
China and other Asian countries. By using several different
suppliers, Xiaomi can ensure that its supply lines are always
sufficient regardless of unforeseen shortages, quality issues or
even if some of the suppliers attempt to raise their prices.
Furthermore, by not relying on only a few main suppliers, Xiaomi
can increase its bargaining power in purchasing, and thus it can
improve its bottom line and reduce operational costs.Power of
Customers: LOW Xiaomi has sold more than 60 million smartphones
worldwide in 2014, with more than 18 million handsets alone in
China, resulting in US$12 billion revenue. Their meteoric rise is
in part due to the fact that besides Xiaomi, customers have
currently no other choice in the market for high quality, well
designed beautiful smartphones with latest high technical
specifications but at such as cheap price. In fact, any other
products at that low price are usually a cheap knock-off with very
poor specifications or quality. Hence the power of customers can be
considered low for the moment. The challenge is for Xiaomi to
capitalise on this as fast as possible by building their customer
base. After that, Xiaomi needs to quickly spreadinternationally by
conquering markets in Northeast Asia, Southeast Asia followed by
the rest of Asia by offering lowest prices and highest quality
goods. In pursuing this objective, Xiaomi has produced many cheaper
products which can substitute for the more expensive international
brands in areas such as smartphones, tablet, activity tracker,
power bank and other accessories. Xiaomi has also successfully
mastered Internet marketing and is using it to generate awareness
and publicity to customers all over the world. In particular,
Xiaomi makes good use of Facebook and Twitter to make announcements
to the public on product launches, features and functions. This is
a strategy which attracts a lot of customer attention and grabs
their interest.Intensity of Rivalry: HIGH The competition in this
industry is very intense and almost brutal. Xiaomi not only faces
threats from huge competitors such as Apple and Samsung, but also
many other companies such as HTC, Lenovo, Huawei and other
technology companies who have seen the tremendous market potential.
Besides that, there are also many other smaller players such as
Oppo and Oneplus who are also trying to get a piece of the pie.
Xiaomi understands that it is not in their best interest to compete
head-on with its strong competitors, thus it has created a strategy
where its products meet the needs of the market in developing
countries which may not be able to afford the premium products
offered by its competitors.Analysis of the Companys Core
CompetenciesA companys core competency is the most important asset
as it is a set of core resources and practices which provide the
company with its competitive edge, and which its competitors would
have difficulty in imitating or replacing. For Xiaomi, their core
competency is in their ability to design and produce high-end
technology products, and to market them at such low prices which
are unimaginable to their competitors. Every product of Xiaomi is
cheaper than any other equivalent competitor product with similar
specifications.Furthermore, Xiaomi always updates and improves
their products and services. Therefore, since Xiaomi products are
cheap, customers will not mind to try the product. After trying out
the product, customers will realise that the product works well and
is good value for the money. Xiaomi will continue to acquire new
customers since the product is good value, and this will increase
Xiaomis brand image and further improve product sales. The key will
be to serve all the customers well and continue to provide superior
value for them.SWOT Analysis The SWOT analysis provides a way to
examine the strengths, weaknesses, opportunities and threats which
the company is facing. The summary of SWOT for Xiaomi is as
follows: STRENGTHS Trusted brand in China Innovative marketing
approach Effective online business model Flexible and customisable
productsWEAKNESSES Difficulty to obtain loyal fan base and brand
advocates in India Low cost distribution strategy may not be
effective Quality and after sales services are weakOPPORTUNITIES
Expansion to retail channels Build a core set of hard-core fans
Create a strong user experience and unique branding and ecosystem
THREATS Price war from other low cost competitors Large competitors
moving into low cost market (Samsung) Potential loss of control
over supply chain Over reliance on e-commerce as primary
distribution channel Patent litigation battlesXiaomi has a number
of very good strengths. It is the market leader and a trusted brand
in China which has made the country proud. It has been extremely
successful using its innovative marketing approach to sell its
products online. Therefore, with its flexible and customisable
products, it has the opportunity to create a unique brand with a
superior user experience by building and capitalising on its own
MiUI ecosystem. However, Xiaomi needs to overcome its weaknesses in
terms of quality and after sales services. Also, it may need to
learn how to adapt its strategies to other markets, as they may not
work so effectively outside of China. At the same time, it needs to
deal with threats such as increasing competition both from low cost
players, as well as major competitors such as Samsung who are
moving into the market. Also, the increasing patent litigation
issues may slow down its growth and hamper its ability to move into
certain markets.MARKETING STRATEGY Potential Target SegmentsIn
their segmentation strategy, they are using geographic, demographic
and psychographic segmentation to classify and build their target
segments to consider for selection.Geographic segmentation Their
primary segmentation which is in Singapore, Asia. Singapore is one
of the countries with the highest GDP in the world and consumers
have huge spending power. They offer a cheaper range of price
compared to their competitors.Demographic segmentation Their target
is towards the 20-34 and 35-49 years old range for both genders as
they are capable of buying as they are professionals working in
steady job and stable income without much commitments.Psychographic
segmentation They target customers that are middle & working
class as they are working and have a good lifestyle. Examples like
achievers, strivers and survivors. The following sections provide
an analysis of three potential target segments.Selected Target
Segment The framework used to select the target segment is the STP
framework. The segmentation, targeting and positioning for the
Xiaomi is as summarised in the following diagram.
Segmentation, Targeting and Positioning (STP) for
XiaomiTargetingBased on the MI features, it would make the most
impact on young adults & working adults between (20-29 years
old and 30-45 years old). This is technology-savvy target segments
who are middle class and have a good income to spend on these sorts
of products. This target segment is a key audience for retail,
consumer goods, and technology products, as such, they can be
sometimes sceptical of advertising due to the fact that they have
been overexposed and bombarded with all kinds of marketing
messages. Therefore, it is vital that Xiaomi must deliver the right
message at the right time to this targeted segment.The following
shows some additional information about the viability of this
target segment: Ownership of either a mobile phone or smart phones
is at least 90% in all 14 Asian Cities, thus making them a prime
target for MI as a complementary product. Both genders in their 20s
drive smartphone ownership in Asia; mainly use them for social
media tools. Apps and friendliness for media tools is the important
factor for marketing for which Xiaomi has strong competencies in.
Television, computer, and smartphone have become the Big Three
Media in cities with high smartphone ownership. Thus, marketing
channels should emphasize on these media platforms which is good
for Xiaomi which specialises on nonretail sales and e-commerce.
Furthermore, for cities with at least 60% of smartphone
ownership such as Seoul, Hong Kong, Singapore, and Taipei, the
smartphones user age group extends to 50s, thus falling neatly into
the proposed target market segment. It is also interesting to note
that female smartphone users are in higher volume in Bangkok and
Jakarta. This additional information can serve as a guide for
Xiaomis marketing mix strategy. MARKETING MIX FOR NEW PRODUCT New
Product Development Strategy The new product development process is
a key process in technology companies where innovation and new
ideas are produced, monitored and pushed through a series of steps
in order to test their validity and viability prior to development
and commercialisation. This formal process then helps the company
to achieve the following innovation goals: To encourage the
generation of the widest and largest possible number of ideas for
testing To have a structured process to review and select the most
commercially viable ideas for further review so that the limited
R&D funds can be channelled to the best ideas This process
helps the company to save money because if ideas with weak or poor
commercialisation potential are developed only to fail later on,
this becomes very costly and wasteful for the company. At the same
time, by focusing resources and effort on the best ideas, the
company is able to fast track the time to market for new products,
thus helping them to gain an edge over their competitors. The
process also contains a feedback loop so that the company can
continuously learn and improve the new product development
strategy.
New Product Development Process
The process resembles a funnel where the largest possible number
of ideas is encouraged to enter the conceptualisation stage. At
every stage, there is a review gate (stage gate process) where the
idea is reviewed according to specified criterion in order to make
a decision to proceed or to drop the idea. One of the most
important stages is the testing stage as it would determine if the
proposed product would work as expected and advertised. Usually the
first level testing is conducted by the product development team
which performs unit testing on their product to check the features
and functionality. After the product prototype has been created,
the product is tested by the testing group. The specialised testing
group would create test cases whose objective is to test the
product in all possible situations (even situations which the
product development team might not have thought of). This enable
gaps in requirements to be identified and addressed accordingly.In
scheduling for the testing, there are two methodologies which may
be followed, waterfall methodology, and agile methodology. In the
traditional waterfall methodology, the testing stage only begins
after the product development is completed. Therefore, the testing
happens prior to product release. However, this approach is rigid
and if problems are found during testing, the product needs to be
reworked before it is tested again, thus incurring substantial cost
and loss of time. In the agile methodology, testing is conducted as
soon as any functioning part if built. Therefore, the product may
be tested in several portions before the whole product is assembled
and tested as a whole. This has the advantage of quickly
identifying problems and areas to improve so that the issues can be
addressed very quickly. As such, the product can go through much
iteration in a short time, thus ensuring that a good quality
product can be designed and developed much more quickly. Marketing
MixXiaomi is positioning itself at the top spot of smartphone
market in China. Currently, it is the worlds fourth largest
smartphone manufacturers after only 4 years from emerging into the
market, beating Apple and Samsung in this arena. It is not
coincidence or unexpected that Xiaomi became so successful because
of their brilliant marketing strategies and marketing mix.
ProductGood quality phone, low prices.
Having a cheap price in market does not always refer to the low
quality. Xiaomi prices are lower than their two big competitors,
Apple and Samsung. Presenting itself as the good quality phone with
the low prices is the good strategy that drives Xiaomi to the top
spot in the smartphone industry in China. The phone consists of
good quality robust case, high resolution screen, reasonable
battery, and runs on the Android-based OS operating system called
MIUI. It has more special features than the standard Android phones
and has options for customization. The biggest key that drives
Xiaomi becoming successful is the software rather than the
hardware.
PriceSelling low today, but gaining more in the future.Xiaomi
sells their phones at the price that just covers the cost of the
device rather than their actual cost because it is not sustainable
for their long term strategies. They are focused more on selling
the phones at the low price today but gaining more in the future
from selling contents such as applications, services, and
accessories. Moreover, Xiaomi mostly sells their products online
which can reduce costs of opening the stores, hiring staff, and
inventory keeping, and also reduce the problems in communication
when dealing with distributors and retailers.
PlaceExpanding to 11 different countries.There are many
countries outside China that the smartphone market is dominated by
Apple and Samsung. This is the main obstacle for Xiaomi in
expanding their markets internationally. Xiaomi already has a
strong base in the homeland China and has emerged into 11 countries
namely Malaysia, Singapore, Philippines, India, Indonesia,
Thailand, Vietnam, Russia, Turkey, Brazil and Mexico. Most of these
countries are located in South East Asia and BRIC countries.Xiaomi
mostly sells their products online instead of opening physical
stores. This is a win-win situation for both the company and
consumers. The company can save lot of money from building the
stores while consumers can easily access the products. Because the
company spends less money, the price of the phones will also be
cheaper.
PromotionPower of word of mouth.Xiaomi uses flash sales, a means
of selling their product in limited quantities within a limited
period as part of their sales strategies. This strategy enables
Xiaomi to save money from doing advertisement because it creates
the anticipation and urgency on consumers. Only limited quantities
are available in the markets and they will be sold out quickly that
many people have to wait for the next slot. This strategy therefore
makes people talk a lot all over India including in the social
media. This also grabs lot of the consumers attention and makes the
advertising less important for Xiaomi in promoting the launch of
new products.
Active use of Social Media.Xiaomi uses social media not only
broadcasting messages to actively get in touch with their
customers, but the Engineers from Xiaomi also use this platform to
routinely communicate directly with users to get feedback.
Engineers listen to the consumers needs and refine the software to
complete those needs weekly. This distinguishes Xiaomi from other
brands because they show that they are always concerned about their
customers and immediately take actions to make the better
products.Big fan baseXiaomi is very successful in making their fan
base. There are many Xiaomi fans out there that always show support
in the Xiaomi events. Moreover, they are always present in the new
product launches like the Apple fans, where they are known that
many people are interested in and in the end create the loud
cheering and applauding.CEO as the face of the brand
Lei Jun, the CEO of Xiaomi, is the talented charismatic boss
that put his face to a brand and make the brand look cool and
international. He always talks confidently and passionately about
the brand which many new generations has him as their
inspiration.
Market Share
Recent news says that, China's Xiaomi has become the world's
third-largest smartphone vendor just three years after first
hitting the market, trailing only Samsung Electronics and Apple,
according to a new industry study.
Strategy Analytics said Xiaomi accounted for 6% of all 320
million smartphones shipped during July-September. It replaces LG,
which is now the fourth-biggest manufacturer with 5% market share.
Samsung made up 25%, down from 35% a year earlier due to rising
competition from several directions. Apple, the second-biggest
smartphone maker, saw its market share dip from 13.4% to 12.3%.
USP For Xiaomi
Display
Adding to the fame of Xiaomi is the display quotient, which will
be the first a customer will be seeing. MI 4i has a 5-inch
JDI/sharp display with full high definition resolution, which is
complemented by Corning OGS glass for protection. The display has
Sunlight Display Technology a unique feature that place Mi 4i above
other models in the budget range. The technology makes use of a
hardware-level mechanism to shape the contrast level for every
pixel in real time. With which the display has enhanced readability
under direct sunlight and also the viewing angle (178 degree) is
wide enough to watch out from any practical angle. Possessing a
saturation of about 95 percent of colours from NTSC spectrum and a
pixel density of 441 ppi, makes pretty much the display a
rejuvenating upgrade to its other models.
Battery
Powered with a Li-ion 3120 mAh battery, Xiaomi MI4i can work all
day without power loss interruptions. Also the processor is such
that four core of the original octa core clock at 1.1 GHz to save
power consumption.The Xiaomi Mi4i has a thin frame of 7.8mm which
can be charged quickly as the phone has the Quick Charging feature
that result in 40 percent of charging within an hour of
charging.
Xiaomi has a unique business model and a very interesting method
which is disrupting the smartphone and technology world. It has
been successful at incorporating a crowd sourcing strategy into its
product development process. At the same time, it has dispensed
with all traditional marketing methods and is fully engaged in
utilising online communities and social marketing for its
marketing. With this innovative model, it has taken the world by
storm and has created a huge cult following in its native country
of China.In just 4 years after its founding, it has already become
the worlds third largest smartphone maker, and is the worlds most
valuable technology start-up company which has just been valued at
US $46 billion.
Introduction: Vertuis a Britishmanufacturerand retailer of
luxury, handmade mobile phones established byFinnishmobile-phone
manufacturerNokiain 1998. In October 2012 Nokia sold Vertu to
private equity groupEQT VIfor an unspecified amount(rumored to be
$200 million)but will retain a 10% share.By the end of 2013, the
company had around 350,000 customers, and phones were on sale in
500 retail outlets, including 70 run by the company. The phones are
most popular in Russia, Asia and the Middle East.
Concept:According toThe Economistthe concept was to market
phones explicitly as fashion accessories, with the idea "if you can
spend $20,000 on a watch, why not on a mobile phone? Vertu phones,
or "'mobile communications instruments"are made in its factories
inChurch Crookham,Hampshire, England. Handsets are sold through an
emphasis on craftsmanship, style and service, rather than mobile
phone functions. In 2006, the most expensive model it had ever made
was the Signature Cobra, at 213,000 (~$310,000); the most expensive
2006 regular model was the Signature Diamond at 55,000 (~$83,000).
In 2006, prices started at 3,500 for the Constellation model.
Product Range: Phone modelScreen
typeReleasedTechnologyGenerationForm factor
Signature116x148 12-bit (4096)2002GSMSeries 40Candybar
Signature Touch1080*1920 FHD2013LTEAndroidCandybar
Constellation (2013)1080*1920 FHD2013LTEAndroidCandybar
Aster1080*1920 FHD2014LTEAndroidCandybar
Ascent (Gen 1)116x148 12-bit (4096)2004GSMSeries 40Candybar
Ascent (Gen 2)116x148 12-bit (4096)2005GSM/GPRSSeries
40Candybar
Constellation116x148 12-bit (4096)2004GSMSeries 40Candybar
Constellation AyxtaGSMSeries 40Candybar
Constellation Quest116x148 12-bit (4096)2007GSMSeries
40Candybar
Constellation (2011)2011GSMSeries 40Candybar
Vertu Ti2013GSMAndroidCandybar
Important facts:Parent CompanyEQT VI
Tagline/ SloganLife beautifully arranged
USPLuxury mobile phones with unique services
Vision: Vertu aims to deliver the worlds best luxury mobile
phone experience for its customers by combining expert
craftsmanship and peerless materials with innovative technology and
unique services.
Mission: Vertu's stated mission is to apply 'authentic
time-honored traditions and craftsmanship to mobile technology" and
"bring artistry and personal significance to an everyday object,
elevating it to the level of the finest timepiece."As per Peter
Druckers classical Questions: What is our business: Luxury phones
Who is the customer: High networth individuals What is the value of
the customer: Customer is at the top most priority as the main aim
of the company is to provide worlds best luxury phone What will our
business be: Best in handmade luxury phone What should our business
be: The company should focus on reaching more and more potential
customers in order to maintain its positionSegments Being Served:
Vertu being a luxury brand only serves to high networth individuals
for whom their status in the society matters the most. With phones
starting from a price tag of 3.5 lakhs only the upper class people
or the super-rich individuals who are capable of purchasing these
phones.
SWOT Analysis: Strength:1. Premium positioning coupled with its
unique designs2. Exclusive services to owners like Vertu Concierge
etc3. High quality and handmade craft phones4. High quality
advertising through niche luxury magazines5. The phones have a high
popularity in Russia, Asia and Middle EastWeakness:1. Phones are
comparatively underpowered technically2. Vertu phones have been
described as "tasteless trash" by Wired Magazine3. High production
costs and lower functional benefitsOpportunities:1. Changing
consumer lifestyles and increased spending on luxury products2.
Shift to Android OS from Symbian for better operating
performances3. New business opportunities in emerging
economiesThreats:1. Counterfeit products being sold2. Competition
from other mainstream phone makersMarketing Strategies adopted:
Objective: To deliver the worlds best luxury mobile phone
experience Segmentation: Luxury mobile phones Targeting: High
Networth individuals Positioning : Luxury phonesb) Positing
Statement: c) Questions positioning statement should answer: For
whom: Worldwide What Value: Luxury mobile phones with unique
services Why and How: (Reasons customers should believe) Relative
to Whom: Goldvish, Gresso,Mobiado Marketing Mix: a) Product: Luxury
Mobile Phonesb) Pricing: Pricing is as per high networth
individuals which usually starts from 3,50,000c) Distribution
(Place):Vertu has its distribution network worldwide but the phones
are most popualar in Russia, Asia and the Middle East. d) Marketing
Communication (Promotion): Vertu uses Digital marketing in order to
create awareness among potential customersStrategy adopted by
vertu:
Plan for the strategy: Using a mix of channels to evaluate
effectiveness; SMS Targeting of O2 customers (HNWI and who have
roamed extensively abroad) Location Targeting using Navteq and
based on close proximity to Vertu Boutiques Sponsorship of FT.com,
Net-A-Porter and Vogue iPad Apps (linking to Constellation TPO
movie) Mobile Web Display Banners on news outlets in key HNWI
postcodes.
