Subject : Management Control SystemSubject : Management Control System

Micromax is a challenger brand in the highly competitive mobile handset market. This Indian firm is shaking up the market dominated by MNCs. Micromax was founded in 1991 by Rajesh Agarwal . Micromax in its original avatar was a distributor of computer hardwares. In 1998, three more people Sumit Arora, Rahul Sharma and Vikas Jain joined Micromax as co-founders.The company branched out from a mere distributor to a marketer of telecommunication equipments.

It was in 2008 that Micromax ventured into the mobile handset market. The brand wanted to create a base before taking on the large players . Hence as a go-to- market strategy, Micromax concentrated on the rural market first. It was a different move altogether since most of the marketers tend to concentrate on the urban markets then move to the rural markets.

History

Software designSoftware design

Computer PeripheralsComputer Peripherals

MobilesMobiles Wireless Data CardWireless Data Card

PrinterMonitorscanner

Developing Software to various industry

X1iC200Q5BlingX600X800

USB drive,Fixed Wireless Drive,Data Cards

Rajesh Agarwal, Sumeet Arora, Rahul Sharma and Vikas Jain(from left)

30-DAY BATTERY PHONES April 2008: Rs 2,249; Now: Rs 1,999 The X1i, Micromax’s first phone, had a battery

that could give 17 hours of talk time and go 30 days on a single charge.

DUAL-SIM PHONES July 2008: Rs 1,999-12,999 For those who want two numbers but one handset.

PHONE-CUM-REMOTE May 2010: Rs 2,999 A mobile that can switch TV channels and even change the AC

temperature

PHONE-CUM-STEREO Feb 2010: Rs 4,999 With 3D surround sound, fed by Yamaha and Wolfson

BLING Feb 2010: Rs 5,500 A big hit with women, comes with Swarovski embellishments.

MOSQUITO-REPELLANT PHONE. A mosquito-repellent phone. A phone that can be used as a computer mouse.

Micromax has a lot of “firsts” to its credit on their versatile product portfolio. It was the first to introduce: Handsets with 30 days battery backup, Handsets with Dual SIM / Dual Standby, Handsets Switching Networks (GSM - CDMA), Aspirational Qwerty Keypad Handsets, Operator Branded 3G Handsets, OMH CDMA Handsets, etc.

With a 360 degree advertising and marketing strategy sketched out, the company has an optimistic outlook for the telecom consumer space. Currently present in more than 40,000 stores across the country, the company plans to have an aggressive market incursion to reach out to its customers through 70,000 operational stores in the coming year.

One of the major aspects that contribute towards the substantial monthly growth of Micromax is its 80% sales in the rural areas.

After building a strong presence in the rural market, where the prominence of both subscribers and operators is rapidly increasing.

In 2008 Micromax ventured into the mobile handset market

The brand wanted to create a base before taking on the large players

GO-TO- MARKET STRATEGY--Micromax concentrated on the rural market first.

Micromax launched its first phone in the rural market with a very unique USP- 30 days battery standby time

The first product was a big success -- Micromax X1i priced at Rs 2150 was lapped up by rural market.

Micromax is currently the third-largest GSM vendor in the Indian market,

A share of 8.1%, behind Samsung

Samsung at the second position has 10.4% control, as per market reports.

Nokia with 52.7% share is the number 1 vendor

Source : Forbes India, 27 Feb. 2010

Entry into the Mobile industry? - Many big players in this industry had already captured

their market share such as Nokia, Samsung etc., - The mother company Micromax Informatics had studied

this industry deeply for last 6 years and accordingly they took the steps to enter into this market.

- The company first made an entry through the rural markets targeting the rural people by providing the low cost mobiles with strong back up battery.(Because,rural areas are still facing shortage of electricity supply).Micromax Company provides the best quality, equipped with latest technology mobile phones at affordable prices with easy availability. 

Micromax is on top position in Indian telecom space with 80% growth in rural areas while Nokia market share is going down. Nokia share fell from 64% in fiscal year 2008 to 52 in 2009. Local mobile manufactures have 17.5% market share in which Micromax Company has 4.1% and with time its ratio is increasing

Company’s QWERTY mobile handsets are being chosen as the best alternative to Nokia N-series models and other brands. Nokia revenue from Indian domestic mobile market was Rs 14,100 crore in 2009-10 fiscal years, down from Rs 16,567. Thus Micromax is the new mobile giant in Indian domestic market ,now beating Nokia.

Entry into the urban market? - After getting successful results from rural

market company targeted urban market. For this they launched QWERTY keypad mobiles with special features, innovative design etc..

- Company found out the different ways to enter the same. Bollywood’s most bankable star Akshay Kumar was signed on as the brand ambassador six months ago. More recently, his wife Twinkle Khanna was engaged to promote Micromax’s Bling phone that comes with Swarovski crystals and a vanity mirror.

SUSTAINANCE AND INNOVATION As new players are entering the market, competition is

becoming more stiff. To sustain in the market one has to be always come up with innovative mobiles. For that lot of money have to be incurred in R&D process. Micromax had to face the same difficulty.

That’s why company has plan to raise money from stock market by way of IPO. Company Micromax IPO, Forthcoming IPO 2011India’s biggest domestic mobile handset seller Micromax Informatics is expected to go public early in 2011. The company filed its prospectus late last month. The company is expecting to raise 426 crore through the offer. The company will use 50 percent of the IPO proceeds to set up a handset manufacturing plant in India while the rest would be spent in areas such as marketing and expansion.

Micromax, according to IDC, has a 8.1 percent market share in India and is now valued at over $1 billion. JM Financial, Citigroup, Edelweiss and Nomura are the book running lead managers to the issue. For the year ended March 2010, Micromax had sales of 1,600 crore on selling over 70 lakh handsets, with a net profit of 200 crore, as against revenue and profit of 350 crore and 35 crore respectively for the previous year.

Open Communication. Active Participation. Adv. Of LTQ. Accepting Changes. Business Division.

Leadership Through Quality. Standard Reporting with Informal Trust and

Freedom. Competitive Benchmarking. Proper Goal Setting. Technological Innovations.

There are three segments of handsets that it works with:

For the premium category, which is solely comprised of QWERTY keypad handsets, the focus will still remain 'easy chatting'. In fact, Micromax will tie up with social networking sites such as Facebook to ensure better connectivity and continuous communication for its QWERTY keypad model users.

• In the multimedia segment, it will offer innovation and variety in its features such as radio, MP3 player and camera. Here, it plans to launch co branded phone along with MTV as 'MTV Music Phones'. The purpose is to add an oomph factor and gel well with the young consumers.

Micromax managed to make dealers pay in advance by offering them more margins. It offered higher margins of 15 % margin, which is higher than the industry average of 6-10%.

Micromax managed this hurdle through strategy of more margins for advance payment.

It is not a new strategy to offer such kind of discounts for advance payments (cash discounts), but to make a retailer accept such an offer is indeed a remarkable feat .

To increase penetration in the Indian telecom market, Micromax Is bundling with telecom operators such as Aircel.

For better accessibly and prominence in the market, Micromax is coming up with 150 experience zones (exclusive stores) across the nation, in addition to ensuring bigger presence at the multi branded stores.

Micromax products were towards the lower end of the pricing spectrum, the brand was focusing on adding more features at a reasonable price .

The focus was more on value than price.

A clear differentiation was a significant factor that aided the significant growth of Micromax brand in Indian market.

The company in their website claims to have invested heavily in the product development.

The brand boast of launching many firsts in the market PRECISELY for this reason.

Besides the focus on product development, Micromax has invested heavily in brand building.

◦ Also targeting niches such as exclusive Women’s phones

◦ We can see from the history that they were already into the wireless devices industry so they had a prior ‘Learning’ about the mobile industry.

◦ They have built a solid base for a full scale assault on the market leader.

Micromax is well known brand in electronic market. Micromax is in both direct market as well as open market in mobile segment. Collaborations with Aircel, MTS (SSTL), Virgin mobile. Large range of CDMA mobile product from 1K to 14K. Strong National distribution channels.

Micromax is well known brand in electronic market. Micromax is in both direct market as well as open market in mobile segment. Collaborations with Aircel, MTS (SSTL), Virgin mobile. Large range of CDMA mobile product from 1K to 14K. Strong National distribution channels.

Micromax ’s late entry in Indian mobile market.

Micromax has less service centers,compared to other big players.

Less investment in R&D as compared to biggies like NOKIA,SAMSUNG.

Micromax ’s late entry in Indian mobile market.

Micromax has less service centers,compared to other big players.

Less investment in R&D as compared to biggies like NOKIA,SAMSUNG.

Strengths

Weakness

Tele density is increasing in Indian telecom market.

CDMA mobile would play a major role in rural penetration.

3G service availability. Falling ARPU’s of Indian telcos.

Foreign telcos are coming into Indian market would be opportunity for direct market.

Tele density is increasing in Indian telecom market.

CDMA mobile would play a major role in rural penetration.

3G service availability. Falling ARPU’s of Indian telcos.

Foreign telcos are coming into Indian market would be opportunity for direct market.

Popularity of GSM mobile.Competitors are focusing only in telecom segment.Entry of foreign player in mobile equipment market.Threats from Chinese mobile market

Popularity of GSM mobile.Competitors are focusing only in telecom segment.Entry of foreign player in mobile equipment market.Threats from Chinese mobile market

Threats

Opportunities

This is going to change………one slide only..

Micromax & Cricket

Micromax is also planning an innovative activation across the cricket season, breaking away from the vanilla branding that we are all used to. Activation will see some intelligent product placements, on ground- on air integrated product coverage and mentions, crowd branding and the brand will be visible on a digital platform on the ground throughout, adding to the technology stand point.

It was one of the principal sponsors of the South Africa VS India ODI series in 2010.

In the just concluded ‘Micromax cup’ as the name suggests it was the chief sponsor.

Most of the brand promotion for Micromax has been centered around products till last year

The ads are for individual products highlighting the product features and USPs.

Micromax, has shelled out a whopping Rs 100 crore for its brand building initiative. It is targeting a wide base of new and existing subscribers, using a 360 degree media approach via multiple platforms.

It has allotted Rs 60 crore for ATL (above the line) advertising, of which print will take the maximum share, followed by TV and radio. Another Rs 40 crore will go into the BTL (below-the-line) initiatives. The communication has been launched in the beginning of 2010.

In 2009, the campaign was mostly product centric but this year, the efforts will be to create a brand that is aspired by all. Consumers have already experienced Micromax as a handset. Now, it is time for the consumers to remember ‘MICROMAX’ the brand.

Campaigns Micromax Facebook ad Gravity MTV , (Co-Branded phones) EEZPad

Advertising

Broadcast media micromax use television to broadcast their advertisements.

Apart from using cricket, films, celebrity micromax also advertise through news papers.

They also utilize hoarding and bill boards to advertise their products.

Prime site recently kicked off a month-long campaign for Micromax mobile phones in Delhi, executed mostly through hoardings. Going further, this promotion will be extended to the other regions of northern India as well.

Corporate Level strategies:Expansion strategyResource allocation: heavy investment in R&D,

lately heavy investment in brand building.Wide portfolio catering to diverse segments.

Business Level strategies:Unique Fusion of Cost Leadership and Product

Differentiation.Following a Frontal and Flanking attack strategy.Products are mostly in the embryonic and growth

stages.

Micromax is gaining ground at a tremendous rate in the domestic as well as global mobile market.

Micromax showing good sign of grabbing every possible opportunity at its hand (e.g IPL 2010)

If the strategies are implemented effectively,it may clinch up the ladder,to become the leader in domestic market in coming few years.

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