Diana Berger

Larry Cenotto

Target Market

• Young professionals in predominantly urban settings– India’s average age: 26

• Exploding cellular market– 58 million current users (up from 5.5 million in 2000)– Adding 2.9 million new cell phone users a month– 100 million more expected next 2 years

• Growth similar to China’s• Tech Savvy• Demanding latest technologies

Cellular Coverage in India

Cell Phone Market Growth

Growth in Target Market Size

Marketing Objectives

• Focus on gaining market share over immediate profit– Market share currently around 9%– Current market saturation

• Segment the market– High end phones– Economical phones

• Build brand loyalty

Indian Consumer Behavior Analysis

• High degree of value orientation• High degree of family orientation

– Extended family as well as immediate

• Selective on quality of products and services• Price sensitive• Knowledgeable about

technology, products,

and market conditions

Indian Consumer Behavior Analysis

• Urbanization in India– Showing positive attitudes towards Western products– More open-minded and experimental than before– Growing desire for self-gratification (Hedonism)

Indian Consumer Behavior Analysis

• Different segments of Indian consumers– Socialites

• Shop in specialty stores• Spend a good amount of money on

luxury goods• Very brand conscious

– Beneficial for Motorola

Indian Consumer Behavior Analysis• Different segments of Indian consumers

– Conservatives• Reflection of traditional Indian culture • Cautious about purchases• Focus on saving• Look for durability and functionality

– Rich• Status conscious• Spend more on leisure and entertainment activities

Our Product as an Innovation

• Well accepted by target market– High functionality

• Allows families to stay in touch• Photos, music, etc.

– High status good– Brand name– Phones as status symbols

Product Modification

• Cell phone itself doesn’t need to be changed• Software differences

– Different languages in some regions

Product Comparison

• Main competitors: Nokia, Samsung, Ericsson• High R&D investments (10% of revenue)

– Slew of new products– Mp3 technology

• ROKR with iTunes

Technical Support & Services Required

• Some required due to technological nature– Telephone customer service center – Online service center – “Brick and mortar” stores

Typical Industry Distribution Patterns

• Most entrants import– Relaxed government import duties

• Decreased illegal channels of distribution• Lower costs = Lower prices = More sales

• Most still wary about producing in India– Nokia, Motorola are testing the waters

Distribution of Our Product

• Recent Alliance with Bharti Teletech– Opens up Bharti’s 200 distributors & 12,000 retail outlets – Over 11,000 channels of distribution

• Ship parts to India by sea– Cheaper than flying– Bharti assembles product

• Cheaper wages in India

Our Promotional Methods

• Build trust in brand among Indian consumers– “Made in India” labels– Product launches in India

• ex. Motorola L6– Long stay in India

• Indians appreciate loyalty and respect

Our Promotional Methods

• Cricket promotions– National sport– Universally popular throughout India– Offer tickets to matches or other

contests

• MTV Moto-Alert– Offers downloadable ringtones,

contests, giveaways– Attracts youthful teenage audience

Competitors’ Prices

• Range anywhere from 2,000 to 40,500 Rs. ($43 to $875)

• Dropping prices– Increased competition– Lowered costs– $20 cell phones possible in future

Our Pricing

• High end models– Marketed towards tech savvy

consumers particular about having the latest technology (status symbol)

– Between 15,000 and 22,000 Rs. ($320-450)

• Economical models– Marketed toward first time buyers

more conscious of buying an phone to serve their basic communication needs

– Between 1,150 and 1,500 Rs. ($25-33)

Terms of Sale

• CFR, or cost and freight – We must arrange and pay for the main carriage of our product,

but do not assume the risk of carriage – Buyer bears the cost of insurance – Since import duties have been lowered, we can therefore import

our product at a much lower cost than ever before

Methods of Payment

• Letters of credit– Offers the greatest degree of protection for seller – Buyer’s credit risk shifted to the bank issuing letter of credit – Both interests of the seller (us) and the buyer protected – Lot of work, but offers a lot of protection

• Irrevocable letter of credit strategy – Once we have accepted the credit, the buyer cannot alter it in

any way without our permission

• Requiring the buyer to confirm the letter of credit through a bank of the United States